Building the Future,

Powering Transformation Centum Electronics Limited

Annual Report 2022-23
Contents We are Centum Electronics Limited
Corporate Overview
Centum was founded in 1994 in Bangalore,
We are Centum Electronics Financial Highlights 14 India. Since then, the Company has
Limited 01
Letter to Shareholders 16 rapidly grown into a diversified electronics
Major Events 02

Our Global Footprint 06

Board of Directors 18
Company with operations in North
Manufacturing Facilities 08
Leadership Team 21
America, EMEA and Asia.
Corporate Information 22
Our Services & Offering 10

Industries We Cater 12

Forward-Looking Statements

Certain statements in this Report,

including statements relating to
Centum’s expectations regarding
the future business, development

Our
and economic performance, that
are subject to risks, uncertainties
and other factors. Without
01-22
Vision
limitation, among the factors
that could cause actual results
to differ materially from those
indicated by such forward-looking
Management Reports Financial Statements
To create value
statements such as but not
limited to (1) competitive pressure;

by contributing
Management Discussion & Auditor’s Report on (2) legislative and regulatory
Analysis 23 Standalone Financials 93 developments; (3) global, macro The Company offers a broad range of track-record of high quality products &

to the success of
economic and political trends; products and services across different services and excellent execution ability.
Board’s Report 30 Standalone Financial
(4) fluctuations in currency industry segments. It has continuously
Statements 104
our customers,
Corporate Governance Report 48 exchange rates and general invested in strengthening its design & Centum currently has a team of 1800
Auditor’s Report on market conditions; (5) technical product development capabilities while employees including 650 design
Business Responsibility and
by being their
Consolidated Financials 169 developments; (6) litigations; developing deep domain knowledge in engineers. With a 30 years of domain
Sustainability Report 64
(7) adverse publicity and news the segments it operates in. Centum expertise in Electronics Design and
Consolidated Financial
innovation
coverage, etc. All forward-looking has also established truly world-class Manufacturing Solutions Centum has
Statements 178
statements reflect Centum’s manufacturing facilities with cutting edge provided its customers with Hi-Tech

partner for
Notice to AGM 256 expectations only as of the date infrastructure as well as a global supply and Hi-reliability products with flexible
of this Report and should not be chain capable of delivering products with engagement models and in the process

design &
relied upon as reflecting Centum’s high quality and reliability. developed a strong relationship with all
views, expectations or beliefs at the marquee global clients.

manufacturing
any date subsequent to the date A key contributor to Centum Group’s
of this release. Centum disclaims growth has been the strong relationships Our goal is to provide a comprehensive,
competitive and innovative set of
solutions in high
any obligation to update the forged with international customers
information contained in these and partners. This customer-focused solutions and give customers the
flexibility to choose what is best suited to
technology areas.
forward-looking statements approach coupled with Centum’s culture
whether as a result of new hinged on the core-values of Technology- their needs.

23-92 93-266 information, future events, or

otherwise.
Teamwork-Trust has resulted in a
Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Major Events
during Financial Year 2022-23

Centum Electronics Limited won Silver Award

consecutively for third year in SEEM Energy Awards
2021 conducted on 16th Sep'2022 under engineering
category, in recognition for its commitment towards
Sustainability manufacturing and carbon footprint
reduction.

Centum as a high technology manufacturing

organization always gives priority and is committed
to energy conservation, effective energy monitoring
and review mechanism, training of employees with
periodic energy audits and predictive maintenance
strategy, achieves energy excellence through
innovative practices.

Centum utilizes 90% renewable energy for its

manufacturing as a part of carbon reduction strategy
to comply with India’s climate pledges to reduce
Emissions Intensity of its GDP by 45 per cent by 2030.

Moment of great pride

and joy for Centum for
receiving the “Deliver
Innovation Solutions“
award from DANA
A moment of great pride and joy for every Centumite, as Mr. Apparao Mallavarapu - CMD, Centum Electronics and Honorary on 10th Aug’22 for
Consul of Brazil in Bangalore, was awarded the honorific 'Order of Rio Branco' by the Brazilian Government for his exemplary successful design and
work to bring Brazil and India together. development of MK2
Program.
The award was conferred by the Ambassador of Brazil to India.

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Major Events
during Financial Year 2022-23

Centum team had the privilege to host

Canada High Commissioner, Consul
General, Counsellor, Vice-Consul and
Trade Commissioner and showcase our
Devanahalli Facility and Infrastructure
along with our Capabilities and Global
Competencies.

This was followed by discussions with

CMD - Mr. Apparao V Mallavarapu & the
leadership team on opportunities to build
on our strong presence in Canada.

Centum had the honor to host the Ambassador of

Luxembourg at Devanahalli facility.

Centum had the honor to host the Ambassador of

Argentina, at Yelahanka facility.

Centum team had the privilege to host Consul General of Canada, Consul & Senior Trade Commissioner and Mr. Vittalnath He was happy to see the impressive facility, the
Devalla from the Canada Consulate Delegation team and showcase our Devanahalli Facility and Infrastructure along with capabilities and indigenization work going on in
our Capabilities and Global Competencies. Centum. The discussions included interesting topics
related to space.
This was followed by discussions with our CMD - Mr. Apparao Mallavarapu & the leadership team on opportunities to build Centum had the privilege to host Hitachi Energy team and
on our strong presence in Canada. showcase the capabilities and competencies to collaborate.

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Our Global Footprint

Canada
Centum’s
Belgium Competitive Edge

UK

25+ years of domain expertise Global Operations with strong Concept to Commissioning
USA
in Electronics Design & presence in India, Europe and capabilities
Manufacturing Solutions North America

1,800 Employees Flexible Engagement Models Strong Supply Chain Network

650 Designers

France

India
Strong relationship with Serving segments with Hi-Tech, Single Source Supplier
marquee global clients High Entry Barriers for ~80% of manufactured
products

Design Team

75% Revenues from Overseas Strong Corporate Governance

Customers in Advanced
Manufacturing Economies

Sales and support

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Manufacturing Facilities

INDIA: Bangalore FRANCE: Paris FRANCE: Toulouse

INDIA: Bangalore FRANCE: Grenoble BELGIUM: Waterloo

INDIA: Bangalore FRANCE: Lyon (Ecully) CANADA: Montreal

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Our Services & Offering

Engineering R&D Services Electronic Manufacturing Build to Specification (BTS)
(ER&D) Services (EMS)
Conceptualize Design Prototype & Pilot Mass Aftermarket
• Engineering Services involve • The company’s EMS Services include • The Built to Specification services
Specify Verify Production Production / Life Cycle conceptualizing, designing and manufacturing solutions focused on include taking a project from
Support certifying of Electronic Hardware, a High reliability, High Complexity conceptualization to mass production
Embedded Software, FPGA, Analog, products in the high technology quickly and efficiently. Centum’s
• Feasibility • Hardware • Electrical CAD • Qualification • Manufacturing • Value
Radio Frequency products, Power segment unique positioning with a full range
• Architecture design • Design For X batch • Release mgmt. engineering
Electronics, etc. • Centum offers a wide range of of integrated capabilities makes it
• System • Software (DFX) • Test tools • Documentation • Obsolescence the ideal product realization partner.
• Centum Group has a global manufacturing solutions from
development design • Mechanical acceptance mgmt.
• Product design strength of over 650 design Printed Circuit Board assemblies • Customers choose turn-key build to
• System • FPGA design CAD • First Article analysis • Cost analysis engineers and for the last 25 years, to Complex box builds, Line spec offering due to the convenience
simulation • Test tools • Prototyping review • Test tools the company has been helping Replaceable Units (LRU) and full of a Single Point of contact for
• Test tools
• Mock-up design • Bring up • Norms handling mgmt. customers turn their ideas into system integration. Design/Engineering, Industrialization
• Simulation compliance • Product products. • The company helps its customers and Manufacturing which reduces
• Test &
• Certification migration • Centum’s engineers work together realize challenging products by the need for multiple interfaces at
• Mechanical Verification
process in multidisciplinary teams to having customer-focused teams each stage of the project and also
design • Qualification
realize customized products for that leverage their streamlined fastens the products time-to-market
mission-critical applications in high processes and systems and adapt and facilitating a Design-To-Cost
technology segments. them to the specific requirements approach and reducing the Total
of the customer and product where Cost of Ownership. This engagement
• The company’s design centers are
necessary. model involves higher IP and value
located in Europe, North America
ER&D Services - 32% creation opportunities for both the
and India, which enable the company • By providing scalable manufacturing
customer and for Centum.
to work closely with international solutions and a flexible, proactive
EMS - 39% customers while bringing together approach to managing the • The company is also able to better
the best talent from around the supply chain and lifecycle related the product Lifecycle management by
world to work on complex problems challenges, Centum helps customers proactively and effectively managing
BTS - 29%
and provide a competitive solution achieve their goals of lower Total issues such as obsolescence,
by managing the optimal onshore/ Cost of Ownership and reduced time- performance upgrades, market-
offshore mix for the projects. to-market among others. specific localization and cost
reduction.
• Centum also provides flexible
engagement models depending on
the specific project requirements.
Defence Space Aerospace Transportation Automotive Industry & Healthcare Customers can choose between
Energy Consulting Engagements and Fixed
Price Contracts.

ER&D

EMS

BTS

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Industries We Cater Transportation • Centum is at the forefront of the in North America, Europe, Asia and
Transportation sector working very Australia for Signalling equipment
closely with the leading global OEMs and Passenger Information
and rail operators on developing Systems.
the next-generation technologies
Defence • Centum started its defence business • For the past two decades, Centum for rolling stock and signalling • In addition, Centum provides
in 2010 and it is today the largest has also been engaged in the applications. specialist engineering services
industry vertical for the company. development and manufacture of and manufacturing services to
Over the years the company has modules, subsystems for missiles, • Centum has developed proprietary help clients to meet operational,
been successful in developing and radars and military electronic technologies in two key product lines commercial and regulatory
manufacturing critical systems warfare communication applications listed below, where our products requirements.
for major Defence programs that for DRDO laboratories, Ordinance have been deployed on board trains
span across the land, air and Factories and other domestic
naval systems with applications in defence PSUs, and over the past
Missiles, Electronic Warfare, Radar, decade, Centum has become one Automotive • Centum, a specialist in electronics play a crucial role in last-mile
design and manufacturing services, connectivity.
Military Communications, and fire of the select few Indian partners to is actively involved in supporting
control amongst many. international defence OEMs as well. customers in the automotive • Additionally, Centum's manufacturing
industry as it undergoes a dynamic expertise enables them to
transformation. This transformation produce high-voltage inverters for
is marked by the entry of new electric buses, contributing to the
players who introduce disruptive advancement of e-mobility. Also
Aerospace • The Aerospace industry has several energy storage applications, Centum technologies, particularly in the delivered low-voltage inverters,
ongoing technological initiatives to is also developing activities in areas of autonomous driving, battery management systems, and
powertrain architecture, and sensors used in last-mile connectivity
make aircrafts more fuel-efficient, ground and flight testing -- using its connectivity, among others. solutions, further emphasizing focus
environmentally friendly and own test benches and simulators. on supporting the electric vehicle
safer, which involves incorporating • Centum leverages its strong ecosystem.
• Centum plays a key role in the global knowledge and experience in
more electronics on board, • Moreover, Centum's commitment
aerospace supply chain delivering developing products for safety
making avionics platforms more and critical applications to assist to high technological standards
configurable, and of course factoring critical electronics for cockpit automotive customers in designing is exemplified through their
computers, Air Traffic Management and producing high reliability contribution to the electronics
in environmental issues and
and also works closely with OEMs and technologically advanced used in hydrogen fuel cells. This
reducing human error to improve solutions. For instance, Centum involvement signifies their dedication
safety. to design next-generation flight has successfully developed and to pushing the boundaries of
controls, Power solutions among manufactured encoders for electric innovation and sustainability in the
• Alongside products for command various other technologies. three-wheeler applications, which automotive industry.
& control, power electronics and
Healthcare • The field of healthcare is rapidly automated pumps for drug injection,
adopting new technologies to ultrasound equipment, patient
Space • Space technology is progressing at of design, development, qualification
augment the quality of treatment monitoring devices, customized
a rapid pace driven by commercial and production of electronic
and create efficiencies for healthcare room controls for operation theaters
applications such as satellite modules, subsystems and systems
providers. among others.
broadcasting, communication, for multiple applications in satellites
Earth observation, geo-location, and and launch vehicles. Keeping • Centum has engineered a variety
global navigation equipment and in mind the growing number of of medical devices and equipment
services. missions of ISRO. for the Healthcare industry that
include digital radiography systems,
• Centum has established a credible • Centum has made significant
track record since 2002 in this investments to ensure that they
segment delivering complex can deliver products with the right
products that address applications quality, technology and in required
Industrial & Energy • The digital transformation in utilities, in automation, control and
infrastructure and manufacturing measurement, energy among others.
in launch vehicles, satellite quantities to be a trusted partner. among other industrial segments
payloads, satellite bus systems as It has delivered mission-critical is driving new products that are • Centum’s expertise in energy
well as ground equipment. electronics on almost all satellite smart, collaborative and result in conversion and storage technology
programs of ISRO including the efficiencies for end-users. has helped customers develop
• The company is also a leading ambitious Chandrayaan and customized Microgrid solutions as
electronics industry partner and one Mangalyaan projects, and also • Centum enables its customer to well as new solutions for railway
of the largest private contractors for delivered 300 to 500 components for realize such products for applications infrastructure projects.
ISRO, involved in its various stages almost every Indian space mission.

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Financial Highlights
- Consolidated

H in Millions

Statement of Profit & Loss Account 2022-23 2021-22 2020-21 2019-20 2018-19 Total Income EBITDA EBITDA Margin
Total Income 9,288 7,880 8,232 8,986 9,375 H in million H in million %

Earnings Before Interest Tax Depreciation and Amortization (EBITDA) 1

762 742 895 980 1,038

11.2%

11.1%

11.0%
9,375

8,986

8,232

7,880

9,288

1,038

9.5%

8.3%
980

895

742

762
Earnings Before Interest and Tax (EBIT) 2
382 391 500 720 831
Earnings Before Tax (EBT) 2
109 127 205 352 481
Earnings per Share(H) 7.55 (23.7) 13.3 15.8 30.5
Dividend per Share(H) 4.0 2.5 4.0 2.5 5.0
Book Value per Share(H) 164 158 186 178 189

H in Millions

Balance Sheet 2022-23 2021-22 2020-21 2019-20 2018-19

PPE,Intangible Assets, CWIP, Goodwill and IAUD 2015 2,032 2,162 2,222 2,186
Investments 96 73 488 401 120
Net Assets (Current and Non-Current) 3
2557 2,606 2,935 2,961 3,117
Net assets (held for disposal) - - - - 603

FY19

FY20

FY21

FY22

FY23

FY19

FY20

FY21

FY22

FY23

FY19

FY20

FY21

FY22

FY23
4,668 4,711 5,585 5,584 6,027
Share Capital 129 129 129 129 129
Other Equity and Non- controlling interest 1,912 1,856 2,272 2,171 2,309
Borrowings4 2,628 2,726 3,184 3,284 3,590
ROCE Net Working Capital7 Debt to Equity8
4,668 4,711 5,585 5,584 6,027 % Days H in million

16.1%

15.2%

10.6%

10.2%

10.1%

1.64

1.60

1.43

1.34

1.25
149

100

116

94

80
Key Ratios 2022-23 2021-22 2020-21 2019-20 2018-19
EBITDA1 (% to Revenue from Operations) 8.3% 9.5% 11.0% 11.1% 11.2%
Fixed Assets (No of times)5 4.6 3.9 3.8 4.0 4.3
EBT2 / Revenue from Operations 1% 2% 3% 4% 5%
Return on Capital Employed (%) 6
10.1% 10.2% 10.6% 15.2% 16.1%

Notes
1
Excludes exceptional item & share of profit / loss from associate / discontinuing operations/ finance income/other income
2
Excludes exceptional item & share of profit / loss from associate / discontinuing operations
Total assets excluding PPE and Intangible Assets and Investments - Total liabilities excluding Borrowing
3

4
Includes Current Maturity of long term borrwings & Interest accrued but not due on borrowings
5
Revenue from operations/ PPE, Intangible Assets, CWIP, Goodwill and IAUD
FY19

FY20

FY21

FY22

FY23

FY19

FY20

FY21

FY22

FY23

FY19

FY20

FY21

FY22

FY23
6
EBIT/ (Share capital, Other Equity, Non- controlling interest and Debt less Goodwill , Other intangible assets and IAUD)
(current assets - current liabilities excluding short term borrowings)*365/revenue from operation
7

8
Debt/ Equity share capital and other equity

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Letter to Shareholders
I hope this letter finds you in good health increased market opportunities, and a policy announcements, with new competitive edge, and continue to be a
and high spirits. As we reflect on the year vibrant ecosystem for innovation and customers coming on board and trusted partner to our valued customers.
22-23, we can acknowledge the progress entrepreneurship. placing purchase orders. Notably, we To remain competitive, we have embarked
made in overcoming the challenges brought have observed growth in new customer on the Industry 4.0 initiative, embracing
upon us by the global pandemic. The effects Several sectors are expected to drive segments such as clean tech, including automation, digitalization, and the latest
of COVID-19 are gradually diminishing, but economic growth in India, including electric vehicles and hydrogen fuel cells, AI tools to drive efficiency and customer
its memory still lingers. Fortunately, the clean technology, defense, aerospace, as well as Defense and Aerospace. satisfaction.
severity of supply chain disruptions has and transportation. The government's While we already generate substantial
reduced, partly due to increased capacity and focus on clean energy and sustainable revenues in the Canadian subsidiary Looking ahead, I am filled with optimism
a slowdown in consumption in certain sectors development presents significant from the transport vertical (metros, high- and excitement about the future of your
like consumer electronics and IT, which are opportunities, particularly in areas such speed trains, trams, etc.), our products company. We have identified numerous
major consumers of electronic components. as electric vehicles, hydrogen fuel cells, have replaced imports in India, thanks growth opportunities within the industry
and renewable energy. Furthermore, to the technologies developed by our segments we operate in, and our
While this is indeed positive news, we must the Defense and Aerospace sectors Canadian subsidiary. I am pleased to dedicated team is working tirelessly to
remain vigilant regarding the areas of the are poised for expansion, driven by inform you that we have received our first expand our market share and capitalize
supply chain that have not yet returned to indigenization efforts and collaborations orders from the Indian transport market, on emerging markets to meet evolving
normalcy. Such areas can still impact our with global OEMs. which continues to expand. customer needs.
production, and therefore, we must sustain
our focus on the supply chain. Additionally, I am delighted to report that the fiscal The opportunities stemming from the Our success is also attributed to the
we need to assess and mitigate the effects year 22-23 was a successful one for your positive indigenization list necessitate unwavering efforts of our talented
of ongoing geopolitical tensions, such as company. Our consolidated total income collaborations. On that note, I am workforce. We continue to invest in our
the Ukraine war and the US-China trade increased to H9,288 M, a remarkable 18% delighted to share that we have signed people, providing ongoing training and
tensions. These situations require careful growth compared to the previous year's two agreements with global OEMs to development opportunities to foster
evaluation and the development of strategies H7,880 M. EBITDA improved from H742 M provide technology for Defense and innovation and excellence.
to minimize negative effects while exploring in the previous year H762 M in FY 22-23. Space products in the Indian market. The
Consolidated Profit Before Tax (Before As part of our corporate responsibility,
potential opportunities that may arise for our Atmanirbhar policy of the Government
exceptional items) increased from H82 M your company remains committed
company. of India presents unprecedented
in the previous year to H121 M in to sustainability. We have actively
opportunities, and we plan to increase
Turning our attention to the world economic FY 22-23. In addition to revenue growth, integrated eco-friendly practices into
our revenues from the Indian market
forecast, global economic growth is we managed to reduce our debt by H98 M our operations, significantly reducing
from the current 20% to an ambitious
projected to gain momentum in the coming through better cash flow management. our environmental footprint. Presently,
40% in the coming years.
years. According to leading economists, 80% of the electric power we consume is
the world economy is expected to expand The supply chain challenges witnessed To enhance the competitiveness of our derived from solar or wind energy.
I am delighted to report that the fiscal year steadily, driven by robust recoveries in major in global markets in recent years have
prompted customers to plan more
French and Canadian subsidiaries, we
In conclusion, I would like to express
economies, increased vaccination rates, and have strategically transferred most of the
22-23 was a successful one for your company. supportive fiscal and monetary policies. While effectively. Consequently, we now enjoy test bench activities to India over the past
my heartfelt appreciation to our

Our consolidated total income increased to uncertainties remain, especially concerning improved visibility of customer demand, year. Leveraging Indian talent and cost
dedicated employees, valued customers,
and esteemed shareholders for your
leading to better material availability.
H9,288 M, a remarkable 18% growth compared the ongoing pandemic and potential
geopolitical risks, the overall outlook is As the intensity of these supply chain
advantages, we have already begun to
reap the benefits. Furthermore, we have
unwavering support and encouragement.

to the previous year's H7,880 M. EBITDA positive for the global economy. challenges diminishes (though not successfully completed the transfer of
Together, we will navigate the ever-
changing landscape of the Electronic
entirely resolved), coupled with improved
improved from H742 M in the previous year to In the case of the Indian economy, we are planning from customers, we anticipate
production for our Canadian subsidiary's
products to India, allowing for better
Design and Manufacturing Industry and
H762 M in FY 22-23. Consolidated Profit optimistic about its growth prospects for more predictable revenues and timely margin realization.
continue to position your company as a
leader in our field.
the next few years. The Indian government's delivery to our valued customers.
Before Tax (Before exceptional items) increased proactive measures, such as the "Make in The Electronic System Design and
Thank you once again for your trust and
from H82 M in the previous year to H121 M in India" initiative and the Atmanirbhar policy, In previous letters, I have emphasized
the significance of the "Make in India"
Manufacturing (ESDM) industry is
partnership.
have laid a strong foundation for the country's
FY 22-23. In addition to revenue growth, we economic development. These initiatives initiative. It is important to recognize
undergoing rapid evolution, influenced by
emerging technologies, shifting customer
managed to reduce our debt by H98 M through aim to boost domestic manufacturing, that there is a time lag between policy demands, and global market dynamics.
announcements and the realization of
better cash flow management. attract foreign investments, and enhance
self-reliance across sectors. As a result, we their benefits. We are now witnessing the
Your company has proactively adapted to
these trends, ensuring that we remain at
Yours Sincerely,

anticipate a favorable business environment, positive outcomes of the government's the forefront of innovation, maintain our Warm regads,

Apparao V Mallavarapu

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Board of Directors
Mr. Apparao V Mallavarapu (Rao) Mr. Emmanuel Macron. Champion of Ms. Tanya Mallavarapu she worked as a business analyst at Intuit
Chairman and Managing Director Innovation Award’ was given to Rao by the Director creating revenue models and marketing
Prime Minister of New Zealand H.E. John strategies to launch the newly developed
Apparao Mallavarapu (Rao) founded Centum Tanya is the founder of TMR Design Co LLP an GoPayment product.
Key at the New Zealand Innovation Showcase
Electronics in the year 1993. Under his interdisciplinary design firm that emphasises
event. ELCINA the largest Electronics
leadership Centum has grown to be a global on innovation, creativity and functionality in Tanya completed her Master’s Degree in
Industry body in India has awarded Rao with
Electronics Design and Manufacturing Company, a wide array of industries from healthcare, Economics from Duke University, in U.S. She
the “Electronics Man of the year” award.
with operations in India, France, Belgium and residential, commercial and hospitality. Prior graduated from the University of Southern
Canada. Eighty percent of Centum’s revenue Rao graduated with a Master’s degree to this Tanya served as a marketing executive California with a Bachelor’s Degree in
comes from Europe, USA, Canada and Israel. from Dal-Tech University in Canada and in the luxury retail industry, involved in Business Administration and was on the
Centum’s customers are fortune 500 companies received his Bachelor’s degree in Mechanical building marketing strategies for global retail Dean’s List.
like Thales, GE, Airbus, Safran, Rafael, Alstom, Engineering from Bangalore University. He is expansion. She launched an Indian based
etc. and Defense Public Sector units, ISRO, also a Ford foundation scholar. luxury brand across cities including New York,
DRDO etc., in India. Hong Kong, London and Delhi. Prior to this
Rao is on the Board of several Companies
The Embassy of Federative Republic of Brazil both Public and Private and on the Board
has appointed Rao as Honorary Consul of Brazil of Advisors of New Zealand Trade and
in Bangalore. He has been conferred with the Mr. Manoj Nagrath has performed a wide range of assignments
Enterprise.
prestigious ‘Order of Rio Branco’ by the Brazilian Independent Director in the above areas, including joint venture
government and The President of Brazil serves Due to his deep sense of responsibility consulting, planning for corporates and
Manoj Nagrath, Managing Partner of S.P. non-residents, structuring/ re-structuring
as the Grand Master of the Order. Rao has also towards children who are not so fortunate
Nagrath & Co., LLP, has a rich experience of businesses, strategic and business
been appointed the Officier de l’Ordre National he has been committed to philanthropic
of over 40 years as a practicing Chartered consulting, due diligence, business and
du Meìrite (Officer in the National Order of Merit) activities focused on Children.
Accountant in almost every facet of the property acquisitions and has appeared
by the President of the French Republic H.E.
practice relating to Direct Tax, Assurance, before various regulatory authorities in wide
Transactions and Corporate Advisory, ranging matters.
Accounting, Compliances and Arbitration. He
Mr. Nikhil Mallavarapu holds MSc and BSc Degrees in Electrical
Whole-time Director and Computer Engineering from Carnegie
Mellon University and an MBA from the Mr. Rajiv C Mody Transformation services. Prior to founding
Mr. Nikhil has been associated with Centum INSEAD Business School in France. Independent Director Sasken, he worked with corporations like
since 2012, has served in various leadership AMD, Seattle Tech Inc., and VLSI Technology
positions including overall business unit Mr. Nikhil was selected by the France-India Mr. Rajiv C Mody is the Founder, Chairman, Inc. Mr Mody has served as an Executive
management and group level Corporate & Foundation for its Young Leaders Program Managing Director & CEO, of Sasken Council Member of NASSCOM (2001-2008)
Strategy Development. Prior to joining Centum, by virtue of his exemplary contribution and Technologies Ltd. (Sasken). Under his and is part of the Harvard Business School
he worked at the multinational semiconductor remarkable achievements in the field of leadership, Sasken has grown into a global South Asia Advisory Board.
company- Analog Devices in Boston. Mr. Nikhil business. powerhouse in Product Engineering and Digital

Mr. Pranav Kumar N Patel including leading GE’s Healthcare Services

Dr. Swarnalatha Mallavarapu Albuquerque, the Indian Institute of Science Independent Director business in North America as well as Chief
Non-Executive Director in Bangalore and the R&D division of Bharat Marketing Officer at GE Aviation. Pranav has
Mr. Pranav is the founder and CEO of also co-authored 6 patents in the fields of
(upto 27th May, 2023) Electronics Limited. Her research in thin
MediTechSafe, USA an innovative healthcare- Microwave integrated circuits, multi-chip
films and devices for applications have been
Dr. Swarnalatha Mallavarapu (Latha) is the oriented cybersecurity company. Prior to this, module, packaging and energy storage
well recognized. Dr. Latha was a government
Managing Director of Centum Industries Private he has held various senior executive roles systems.
nominated member of the Syndicate of
Limited. Dr. Latha holds a Ph. D. in Physics Bangalore University and also served a
and has worked at premier research institutes Chairperson for FICCI Ladies Organization,
including the US Air Force Weapons Labs in Karnataka Chapter.

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Centum Electronics Limited Corporate Overview Management Reports Financial Statements
Annual Report 2022-23

Mr. P. Thiruvengadam
Independent Director
consulting with expertise in HR Strategy
& Talent Management, Business Process
Improvement and Strategic Planning
Leadership Team
Mr. Thiruvengadam was a National Director among other advisory services. He is a
at Deloitte Touche Tohmatsu India Pvt. Ltd Cost Accountant from The Institute of Cost
(DTTIPL) providing leadership to the HR Accountants of India and a graduate from
transformation practice. He has over 40 the Indian Institute of Technology, Madras.
years of global experience in management

Mrs. V Kavitha Dutt She has been involved in various business,

Independent Director social and cultural activities. She is a
Director-FLO Industrial Park, Hyderabad,
Mrs. V Kavitha Dutt is the Joint Managing and Vice President-World Telugu Federation.
Director at The KCP Ltd., an 80-year-old
diversified business group involved in the She has served as Chairperson-FICCI
manufacture of Cement, Tamil Nadu State Council; President-
Apparao V Mallavarapu K S Desikan Nikhil Mallavarapu
Madras Management Association;
Heavy Engineering, Sugar, Power Generation, National President-FICCI-FLO, and Vice Chairman & Managing Director, Group CFO, Head of Strategy & IT Whole-time Director, Centum Group
and hospitality. Chairperson-SCWEC-India. Centum Group

Eric Rouchouze Vinod Chippalkatti Jagadish Singh

CEO, Centum Adetel Group President, Strategic Electronics President, Electronic Manufacturing
Business Unit Services (EMS)

Nanda Kishore Vempati Sandhya Thyagarajan

Head HR Vice President, Strategic Electronics
Business Unit

20 21
Centum Electronics Limited
Annual Report 2022-23

Corporate Information
Board of Directors Cost Auditors CSR Committee
Mr. Apparao V Mallavarapu Messrs. K.S. Kamalakara & Co., Cost Mr. Thiruvengadam Parthasarathi
Chairman & Managing Director Accountants Chairman
#999/30, “Nithya Mansion”, 1st Floor, 1st Dr. Swarnalatha Mallavarapu
Mr. Nikhil Mallavarapu
Main, 4th Cross, Vijayanagar, Member
Whole-time Director
Bangalore - 560 040
Ms. V Kavitha Dutt
Mr. Pranavkumar Nalinkumar Patel
Member
Independent Director Secretarial Auditor
Mr. Thiruvengadam Parthasarathi Risk Management Committee
Ms. Aarthi G. Krishna
Independent Director
Company Secretaries, Mr. Pranavkumar Nalinkumar Patel
Mr. Rajiv Chandrakant Mody No. 328/B, 1st Floor, 5th Main, 14th Chairman
Independent Director Cross, Sadashivanagar,
Mr. Thiruvengadam Parthasarathi
Bangalore – 560 080
Mr. Manoj Nagrath Member
Independent Director
Audit Committee Mr. Nikhil Mallavarapu
Dr. Swarnalatha Mallavarapu Member
Non-Executive Director Mr. Manoj Nagrath Mr. K S Desikan
(upto 27.05.2023) Chairman Member
Mr. Apparao V Mallavarapu
Ms. V Kavitha Dutt
Member Registered & Corporate
Independent Director
Mr. Pranavkumar Nalinkumar Patel Office
Ms. Tanya Mallavarapu (from 27.05.2023) Member
No.44 KHB Industrial Area,
Mr. Thiruvengadam Parthasarathi Yelahanka New Town,
Chief Financial Officer Member Bangalore – 560 106

Mr. K S Desikan
Nomination & Equity Shares Listed at
Company Secretary & Remuneration Committee
National Stock Exchange of India Limited
Compliance Officer Mr. Manoj Nagrath (NSE)
Chairman BSE Limited (BSE)
Ms. Indu H S
Mr. Rajiv Chandrakant Mody
Member Registrar & Share Transfer
Statutory Auditors
Mr. Apparao V Mallavarapu
Agents
Messrs. S.R. Batliboi & Associates LLP Member KFin Technologies Limited
Chartered Accountants Selenium Tower B, Plot 31-32,
Ms. V Kavitha Dutt
UB City, Canberra Block, 12th & Gachibowli, Financial District,
Member
13th Floor No.24, Vittal Mallya Road, Nanakramguda, Hyderabad – 500 032
Bangalore – 560 001
Stakeholders’ Relationship Toll Free Number: 1800 309 4001
Committee Email Id.: [email protected]
Internal Auditors
Messrs. KPMG Assurance and
Mr. Manoj Nagrath Bankers
Chairman
Consulting Services LLP State Bank of India
Embassy Golf Links Business Park, Dr. Swarnalatha Mallavarapu
Kotak Mahindra Bank Limited
Pebble Beach, B Block, 1st and 2nd Member
HDFC Bank Limited
Floor, Off Intermediate Ring Road, Mr. Nikhil Mallavarapu
Bangalore - 560 071 Member

22
Corporate Overview Management Reports Financial Statements

Management Discussion & Analysis

1. Global Overview Your Company has an established global footprint with
multiple design & manufacturing locations in Europe, North
The global economy is yet again at a highly uncertain moment, America, and India. More than 70% of the Company's revenue
with the cumulative effects of the past three years of adverse is generated from international customers and markets.
shocks—most notably, the COVID-19 pandemic and Russia’s
invasion of Ukraine—manifesting in unforeseen ways. The Company’s mission is “To create value by contributing
Spurred by pent-up demand, lingering supply disruptions, to the success of its customers, by being their innovation
and commodity price spikes, inflation reached multidecade partner and offering design & manufacturing solutions in
highs last year in many economies, leading central banks to high technology areas.”
tighten aggressively to bring it back toward their targets and
The strategy over the years has been consistent and is
keep inflation expectations anchored.
based on innovation, advancing technology as the path to
Despite this global scenario, many market analysts believe differentiating value for customers, ensuring culture of
that this could well be India’s decade.1 And there are enough quality, while embracing the responsibility for the wellbeing
reasons and data to back this claim. Recent data revisions of our associates and communities
by India suggest that the economy has fared better than
Your company registered a revenue of INR 923 crores and
previously believed, despite continuing global uncertainties.
the revenue break-down for FY 23 is given below:
The International Monetary Fund (IMF) expects India to grow
by 5.9% in FY 2023–24 and growth estimates over the next Industry wise
five years range between 6.1% to 7%.
9%
While betting on consumption-driven growth is obvious, Defense, Space & Aerospace
given India’s large, young, and rising share of the upper 25%
middle–income population (with a high propensity to spend), Transport & Automotive
42%
we believe that investment will play an important role over Industrial & Energy
the next two years. It is investments, that will provide India
with necessary momentum to take off on a path of sustained Healthcare
domestic demand–led growth for decades to come. 24%

2. Company Overview
Geography wise
Centum Electronics Limited (Centum) is a leading Electronics 2%
System Design & Manufacturing (ESDM) Company providing 13%
Europe
mission critical services and solutions to customers
engaged in the Defence, Aerospace, Space, Medical, Mobility India
and Industrial segments that demand high reliability 58%
27% North America
products and services. With three decades of experience
in design, development, and manufacturing of complex Rest of the world
products, Centum is a strategic supplier and partner to
large global OEMs (including Fortune 500 companies) and Segment wise
public entities such as Indian Defense Public Sector Units
(DPSUs), Ordinance Factories (newly formed DPSUs), DRDO 32% Engineering R&D
and ISRO. 29%
services (ER&D)

Electronic Manufacturing
Services (EMS)

Built-To-Specification (BTS)
39%

India Economic outlook 2023 – Deloitte Insights

1

23
Centum Electronics Limited
Annual Report 2022-23

3. Industry Overview India's defence capex budget 23-24 is set at INR 1.62 lac
crores.4 India’s defence manufacturing sector is poised
The global electrical and electronic market is estimated to for a significant growth considering the increasing
be US$3.7 Trillion in 2023.2 According to Economic survey threats faced by India and thereby boosting demand for
2023, the Indian electronics industry was valued at US$118 defence equipment. Incentivised by various government
billion as of FY20. India aims to reach US$300 billion worth of reforms, India is quickly ramping up its manufacturing
electronics manufacturing and US$120 billion in exports by capacity. Pushing for ‘Aatmanirbhar Bharat’ (self-
FY26.3 reliant India), the Ministry of Defence, has set a target
of achieving a turnover of H 1.75 lakh crore in aerospace
The major drivers of growth of the electronics industry are mobile
and defence goods and services by 2024-25, including
phones, consumer electronics, and industrial electronics. The
exports of H 35,000 crore.5 The current value of defence
share of Indian Electronics production accounts for ~3% of the
production stands H 1,06,800 crore in FY 2022-23 which
global production. Further, the domestic demand for electronic
is an increase of more than 12 per cent over FY 2021-22,
products is catered by significant imports account for more
when the figure was H 95,000 crore.6
than 40% of domestic demand.
Government of India has, so far, released three positive
Several macro trends indicate very positive outlook for the
lists of products for indigenization to promote self-
Indian Electronics industry.
reliance and minimize imports. The updated Defence
• To make the nation “Self-Reliant”, Government of India Acquisition Procedures (the guiding document for all
has announced specific policies under “Atma Nirbhar Defence procurement) prioritize procurement under
Bharath” to promote manufacturing in India. Buy (Indian – IDDM), Buy (Indian) and Buy & Make
(Indian).
o Production linked incentive scheme and scheme to
incentivize capital investment, b. Space:

o Disincentivizing imports and negative list for The global space economy is estimated at ~US$400
defence billion in FY23 and expected to grow to US$1 Trillion
by 2040 . Accelerating adoption of small satellites for
• General geo-political climate has accelerated industries their lower cost potential offers the near-term growth
world over to de-risk their manufacturing and supply opportunities. There is a growing demand for new
chain footprint. It also has forced industries to ensure applications in this segment. Investments in the sector
business continuity plans are put in place. This has have significantly increased with several satellite
resulted in many companies moving to a “China plus constellation programs from large players like Spacex,
One” strategy with India being a strong contender. OneWeb etc as well as new startups with innovative
applications.
• Increase in adoption of clean and renewable energy.
The Indian space sector has been globally recognized
• Increase in investments for infrastructure projects
for building cost-effective satellites, launching lunar
towards electrification and increase in rail network.
probes, and taking foreign satellites to space. Currently,
• Increased demand for connectivity India constitutes 2-3% of the global space economy and
is expected to enhance its share to 9% by 2030. The
a. Defence & Aerospace demand for more satellites continues to remain strong
due to the following reasons:
With the recovery of air traffic and consequent ramp-up
of commercial aircraft production, the demand from the • Government has undertaken major Space
commercial aerospace sector is improving. Further, with reforms for participation of private enterprises
the current geopolitical situation (because of Russia- across all phases of Space activities to enable
Ukraine crisis), the demand from Defence segment is commercialization of Space technology and boost
also increasing due to the increased defence budgets in private investments in this sector.
many countries, especially in the EU.

Electrical and Electronics Global Market report

2

Economic Survey 2023

3

India Defence capex budget

4

Government sets target of achieving defence manufacturing worth H 1.75 lakh crore by 2024-25
5

Defence production crosses H 1 lakh crore mark for the first time ever
6

24
Corporate Overview Management Reports Financial Statements

• Ministry of Defense’s (MoD) objective to strengthen (EV) Indian EV market is expected to expand at a CAGR
India’s space warfare capabilities. of 49% from 2021 to 2030.8

c. Industrial: 4. Strategy & Business Outlook

The Industrial Sector address a wide range of You company’s strategy developed over many years is to
applications such as Oil & Gas, Industrial Automation focus on high reliability segments where entry barriers are
for process industries, Electrification, and Utilities. high due to product complexity, long life cycles and stringent
The increasing usage of automation and adoption of customer qualification and certification requirements.
smart manufacturing practices will further increase These segments are Defence, Space, Aerospace, Industrial,
the demand in these applications. The demand for Medical and Mobility.
Electrification and power grid infrastructure projects
are expected to remain strong. Transition to clean and Having established strong end to end capabilities from
renewable energy (like Hydrogen) will be another strong conceptualization to design, manufacturing and after
factor driving demand in this segment. market support, your company serves customers as a one
stop solution provider offering flexible engagement models
d. Medical: tailored to the specific project needs. These are Engineering
R&D Services, Electronics Manufacturing Services and
The growing prevalence of chronic diseases and the turnkey Build to Specification Solutions. As the delivery of
increasing emphasis of health care agencies towards these services is quite distinct, the company is organized
early diagnosis and treatment, is leading to an into 3 operating business units. This unique positioning of
increasing requirement of medical devices. To address being a full play ESDM with all the solutions under one roof
the same, a lot of R&D investments are being made is highly appreciated by customers and they view Centum’s
by leading market players to develop technologically value proposition as truly differentiated from pure play EMS
advanced equipment and innovative devices. or Engineering Service Providers.
India is the 4th largest Asian medical devices market The strategic initiatives undertaken by the company have
after Japan, China, and South Korea, and among the top yielded good results. For instance, in line with our strategy
20 medical devices markets globally. The Indian market to focus on clean-tech, we have onboarded and ramped
for medical equipment is predicted to increase to US$ up a major multinational customer for Electric Vehicles
50 billion by 2025 from US$ 12 billion in 2020.7 in the domestic market and also another customer in US
for Hydrogen Fuel cells. Your company also reviews and
India faces a considerable gap between the current
finetunes the strategic plan periodically in line with the
demand and supply of medical devices with an overall
changing markets.
75-80% import dependency on medical devices, which is
creating opportunities for manufacturing devices in India. a. Electronic Manufacturing Services: (EMS)
e. Mobility The company’s EMS business unit offers a wide range of
manufacturing services to realize and deliver electronic
Governments are expected to continue major
products for customers in the high reliability segments.
infrastructure projects across geographies to support
This includes full system integration, complex box
longer term objectives of managing mobility more
builds, and Printed Circuit Board Assemblies based
efficiently in cities and towns. Smart and Green mobility
on customer designs. The marquee customer list is
technologies will remain a focus in the years to come.
comprised of large global OEMS and consequently the
India, China, Egypt, Europe and Brazil are aggressively major share of the revenue is generated from exports
investing in development of Metro infrastructure. In of products to sites in Europe, North America and other
addition, USA is involved in redevelopment, expansion, countries in Asia including Israel and China.
and modernization of rail network. New metro lines
Over the past few years, the impetus towards Make in
are being equipped with more advanced systems to
India driven by various government policies has created
enhance the passenger experience and safety.
a large opportunity for Indian ESDM companies to work
Another key shift in the mobility segment driving large on import substitution of electronics products across
opportunities, is the rapid adoption of Electric Vehicles sectors. In addition, India has also emerged as a front

Medical Devices Industry in India

7

India’s EV Economy: The Future of Automotive Transportation

8

25
Centum Electronics Limited
Annual Report 2022-23

runner as global supply chains are being recalibrated to b. Engineering R&D Services:
de-risk the reliance on China. This is especially true in
the electronics industry where global OEMs see India as Your Company’s ER&D Business Unit provides advanced
a capable and competitive alternate to China. design and engineering services to help customers
conceptualize and realize the next generation of products
To capitalize on these macro trends, your company has or re-engineer and add value for existing products. Our
put in place a focused strategy to identify and convert team of about 650 design engineers spread across the
opportunities. world, work hand in hand with our customers, which
are large global OEMS. Your company has established
a) to augment the revenue contribution from the a strong and differentiated reputation as a technology
Indian market. leader and specialist in safety critical electronics
and embedded systems design for high reliability
b) to add new customers and gain share from existing
applications. With domain experts with 30+ years of
customers that are pursuing a China +1 strategy.
design experience and teams of highly skilled engineers
c) to prioritize medium to higher volume products to in critical disciplines of High-speed digital design, FPGA,
enable faster scaling of the business. Power Electronics, Embedded and Application Software,
Cybersecurity among others, your company is involved in
Your company’s efforts to address these opportunities many leading-edge R&D programs. Engagement models
have begun to yield results in the past year with the range from consulting services to fixed-price projects
ramp up of new customers in the E-mobility, clean and turnkey Build-To-Spec contracts.
tech and electrification segments resulting in revenue
growth compared to the previous year. Choosing to focus This business unit also develops Public Address &
specifically on these high growth industry sectors has Passenger Information Systems (PAPIS) for the rail
also yielded great results in terms of significant increase transportation market with the goal of providing real-
in order book over the past year, paving the way for time information access and security to commuters.
revenue growth and margin improvement going forward. Centum has established a proven track-record of
successfully deployed systems in the European, North
Centum has also established itself as a strategic American, and Asian transport markets.
partner to global Defence & Aerospace OEMS and is
now well integrated into the global supply chain of these Considering the strong and differentiated capabilities
companies. Demand growth from these legacy defence that exist in this business unit, it has not performed to
customers as result of increased defence budgets in expectation and therefore, certain key leadership and
Europe and the conflict in Ukraine also contributed to strategic changes were undertaken to ensure improved
order book growth. performance and better positioning to capitalize on the
growth opportunities.
A key challenge for execution over the past year has
been the supply chain disruption, as a result of severe • A more critical risk assessment process has
semiconductor shortage. The effects of this crisis been put in place while bidding on new fixed price
have been especially protracted in the long-life cycle projects to ensure we cut down cost overruns which
product segments we operate in, as the designs call for has been a major contributor for margin erosion in
components manufactured on older technology nodes. these past years.
Your company has taken and continues to take various
• A more focused approach and process to improve
measure to mitigate these supply chain risks and this
the onshore-offshore mix has also been undertaken
remains the highest operational priority for the coming
and has progressed well over the past year. The
year. There does seem to be an easing in the severity of
India design center has significantly ramped up.
the issue and the expectation is for lead times to reduce
A dedicated test system development facility was
to more manageable levels towards the end of the year.
inaugurated to support the transfer of this activity
Furthermore, a significant amount of time and effort is from France to India. For the PAPIS business, the
being spent on digitalization, automation of processes transfer of the manufacturing and supply chain
and implementation of industry 4.0 best practices to management from Canada to India was completed
improve productivity and margins, product quality and in the past year and a ramp up of the engineering
ultimately customer satisfaction. Strengthening of capability for this activity in India was also done.
teams at all levels is also being done in preparation for Centum will be the first company to fully design
the expected growth in the business. and manufacture this critical system from India for
the domestic and global market.

26
Corporate Overview Management Reports Financial Statements

• Enhancing the value proposition to customers opportunities directly with the Armed forces. Investment
through a focused capability and capacity in sales & marketing and increased engagement with
enhancement in critical areas of cybersecurity, end users in defense sectors has brought significantly
IoT and connectivity solutions as well as improved larger opportunities at the platform level which are
competitiveness through global delivery centers expected to fructify in the coming 2-3 years. Where
has resulted in new business wins. Major new necessary, specific partnerships have been established
programs with the top aerospace and rail transport with global OEMs in the form of MoUs and teaming
OEMs were won in the past year which also agreements, as well as with very innovative startups
contributed to the order book growth. to co-develop products and bridge internal technology
gaps to address larger opportunities.
The steps taken have set this business on the right
track and should result in sustainable revenue growth Your company continues to work towards mitigating the
and margin improvement in the subsequent years. risks associated with the increased lead times of the
semiconductor and electronics components and work
c. Strategic Electronics: innovatively to address the Indian defense, space, and
aerospace requirements. The team is also working to
Strategic Electronics Business Unit is focused on the
leverage its vast design and other technical capabilities
development of products in the high reliability and
developed over the years to address some of the export
high technology areas of Indian Defence, Space and
requirements by leveraging the strong customer
Aerospace sectors. This division works on Indigenization
relationships that exist with other business units.
of electronic systems and subsystems for customers
in the strategic sector to enable self-reliance and the 5. Risk Factors
mode of engagement is “build to specification” starting
from design to qualification and manufacturing. In the Built to Spec (BTS) business, some customers in D&A
Ensuring products are designed for harsh environments segment, claim ownership of the design without paying for
and supporting them over a long lifecycle are important the same. Also, the additional risk is that the customer may
activities of this group. IP creation, many of which are a use our design and attempt to procure subsequent supplies
first in India, is a core value that this division brings both through public tender as Built to Print products. Thus
to Customers and to Centum. Centum will not be able to capture the value over the life
cycle of the project.
With the increased focus on Make in India and
Atmanirbhar Bharat policies of the Government, this In the D&A segment, sometimes the projects that are
division has tremendous opportunities in the domestic awarded as Build To Print (BTP), may involve additional work
defence sectors. These policies provide access to many since the designs may not be complete in all respects and
programs, which were otherwise generally imported Centum needs to spend additional efforts to complete the
or open only to DPSUs. The opening up of the space design. Due to this reason, the costs may increase and result
economy to private players in India has also presented in time delays.
an excellent opportunity for your company which is a
recognized leader in the country with a credible history Under the Govt of India procurement policy, generally the L1
of delivering space systems. bidder (least cost) is awarded the business. Although there
are processes and procedures for Technical Evaluation to
A clear strategy has been put in place to capitalize on qualify the bidder, sometimes bidders who don’t have the
this opportunity. Investment in R&D has been ramped required capabilities are allowed to bid. Such bidders may bid
up to undertake larger new projects and enhance the low without knowing the difficulties and complexities of the
product range in the segment. The recent indigenization project. This may impact the opportunities for your Company.
efforts in addressing electronics in land systems such as
Radars and Tanks are resulting in the initial production Since the products and services offered by the Company
opportunities reaffirming the technical and commercial are hi-tech and complex, there may be inordinate delays
capability of the company. In the past year, your company in approvals and certification which can impact the timely
delivered payloads for a major defence space program deliveries and result in levy of Liquidated damages.
which again was a first for the country. This remains
In the Engineering R&D services business, we undertake
a major focus area for the government and larger
fixed price projects and sometimes due to change of
opportunities in the same domain are in the bid stages.
specifications midway by the customer or underestimation
Another key initiative being worked on is to move up the of work involved, we could have project overruns that create
value chain from subsystems to systems and address profitability issues.

27
Centum Electronics Limited
Annual Report 2022-23

In the Transport business, there are long-term fixed-rate Your company has institutionalized the Kaizen, 5S and Lean
contract projects that may run for several years, the material Six Sigma initiatives, which have continuously helped in
cost may increase resulting in adverse impact on profitability. improving operational excellence.

BTP business was severely affected in the past couple of 7. Internal control systems and their adequacy
years due to shortage of electronic components. Though the
situation improved in the later part of FY 23, the shortage of Your Company has placed strong emphasis and effort on the
electronic components still poses some risk in this business. internal control systems. The internal checks and balances
are augmented by a formal system of Internal Audit by
Generally, in the BTP business the customer provides KPMG. The company also has an in-house internal auditor
forecasts of demand (to facilitate material planning) to check the controls and strengthen the systems and
and converts them to orders over a period. Materials processes. Additionally, the Internal Financial Controls are
are procured based on the forecast. If the forecast is not checked by the management and validated by the Statutory
converted to customer purchase orders, we can get into auditors.
excess and obsolete material issues. Although we have
agreements and checks & balances with the customers Financial condition
on these issues, sometimes there is a possibility of these
A. Consolidated
issues becoming contentious.
i. Share capital
While we have a strong IT & Cyber security infrastructure
and protocols and your company is also certified ISO The share capital of the Company stands at H 129 million.
27001 (Information Security Management Systems), as the
increasing cyber security threats may lead to data loss and ii. Borrowings
operational disruptions.
The Loans have been reduced by H 98 million from H 2,726
The increased demand for skilled manpower poses the million as on March 31, 2022 to H 2,628 million as on
risk of talent retention to your Company. Several programs March 31, 2023.
to attract, retain and develop talent are pursued on a
iii. Fixed Assets
continuous basis.
The Capital expenditure in relation to Property, Plant &
It may be noted that the Company has constituted a Risk
Equipment for 2022-23 is H 122 million.
Management Committee (as a subcommittee of the Board)
to enhance the Risk Management capabilities with high iv. Working Capital
focus and mitigate the risks mentioned above.
Inventories has increased by H 363 million from H 2,248
6. Human Resources million as on March 31, 2022 to H 2,611 million as on
March 31, 2023.
Your Company is committed and focused in building a strong
organization by hiring, managing, developing, and retaining Receivables have increased by H 1,329 million from H 2,499 million
the most talented and experienced employees. Your company as on March 31, 2022 to H 3,828 million as on March 31, 2023.
has some of the best talent coming from various domains.
Special attention is given to training and upgrading of peoples’ Current liabilities have increased by H 1,649 million from
skills, providing excellent working conditions, benchmark H 5,792 million as on March 31, 2022 to H 7,441 million as on
with other large companies while rewarding the employees. March 31, 2023.
Lot of emphasis is placed on ensuring a rewarding experience
to the employees in your Company. As on March 31, 2023, the v. Cash flows
employee strength of the Company was 1724.
Particulars J in Million
You company continues to strengthen its partnership with Operating activities 709
reputed academic institutes such as IISc (India Institute of Financing activities (740)
Science) and Reva university in multiple ways. To develop Investing activities (112)
talent, a joint program with REVA university was undertaken
vi. Results of Operations
in the past year to create a curriculum around advanced
digital design and train young engineers to better prepare The business operations for 2022-23 resulted in the
them to work on critical projects. The first batch of graduates Company achieving total income of H 9,288 million as against
from this program has yielded excellent results. H 7,880 million for 2021-22.

28
Corporate Overview Management Reports Financial Statements

The Profit/(Loss) before tax before Exceptional items for the year Receivables has increased by H 1,197 million from H 898
2022-23 is H 121 million as against H 82 million for the year 2021-22. million as on March 31, 2022 to H 2,095 million as on March
31, 2023.
vii. Key financial parameters
Current liabilities has increased by H 1,316 million from
Particulars FY 23 FY 22 H 2,653 million as on March 31, 2022 to H 3,969 million as on
March 31, 2023.
Debt /Equity 1 1.25 1.34
Debtors Turnover Ratio(Days) 2 136 137 v. Cash flows
Inventory Turnover Ratio(Days)3 214 253
Current Ratio 4 1.00 1.01 Particulars J in Million
Interest Coverage Ratio without 1.40 1.48 Operating activities 214
exceptional items5 Financing activities (93)
Operating Profit Margin 6 4% 5% Investing activities (133)
PAT Margin7* 1% -7%
vi. Results of Operations
1
Non current borrowing + current borrowing / Equity attributable to equity
holders of the parent The business operations for 2022-23 resulted in the
2
Average receivables / revenue from operations x 365 days Company achieving total income of H 5,052 million as against
3
Average inventory/ (Cost of materials consumed + Decrease / (increase) H 3,538 million for 2021-22.
in inventories of work-in-progress and finished goods) *365
4
Current assets / current liabilities The Profit /(Loss) before exceptional item and before tax for
5
EBIT** / Finance cost the year 2022-23 is H 264 million as against H 172 million for
6
EBIT** / total income the year 2021-22.
7
PAT / total income
vii. Key financial parameters
Reason for variation (>25%):
* FY’22 decreased on account of exceptional items.
Particulars FY 23 FY 22
** Excludes exceptional item & share of profit / loss from associate /
discontinuing operations and including other income and finance income Debt /Equity 1
0.37 0.37
B. Standalone Debtors Turnover Ratio(Days) 2 109 99
Inventory Turnover Ratio(Days)3* 249 335
i. Share capital Current Ratio 4 1.22 1.26
Interest Coverage Ratio without 2.68 2.18
The share capital of the Company stands at H 129 million. exceptional items5
Operating Profit Margin 6 8% 9%
ii. Borrowings
PAT Margin7 4% 3%
The Loans have increased by H 80 million from H 979 million 1
Total Debt / Total Equity.
as on March 31, 2022 to H 1,059 million as on March 31, 2023. 2
Average receivables / revenue from operations x 365 days

iii. Fixed Assets

3
Average inventory / cost of goods sold x 365 days
4
Current assets / current liabilities
The Capital expenditure in relation to Property, Plant & 5
EBIT / Finance cost
Equipment for 2022-23 is H 100 million. 6
EBIT / total income
7
PAT / total income
iv. Working Capital
Reason for variation (>25):
Inventories has increased by H 329 million from H 1,987 million * Reduction on account of increase in cost of material consumed on
as on March 31, 2022 to H 2,316 million as on March 31, 2023. account of increase in operations/sales during the year.

By order of the Board

For Centum Electronics Limited

Place: Bengaluru Apparao V Mallavarapu Nikhil Mallavarapu

Date: May 27, 2023 Chairman & Managing Director Wholetime Director
DIN: 00286308 DIN: 00288551

29
Centum Electronics Limited
Annual Report 2022-23

Board’s Report
Dear Members,

We have pleasure in presenting the Thirtieth Annual Report on the Business and Operations of the Company together with the Audited
Statement of Accounts for the Financial Year ended March 31, 2023.

1. Financial Highlights:

A summary of the Standalone and Consolidated Financial Performance of your Company, for the financial year ended March 31,
2023, is as under:
(` in Millions)
Consolidated Standalone
Particulars
2022-23 2021-22 2022-23 2021-22
Total Income 9,288 7,880 5,052 3,538
Earnings Before Interest, Tax, 762 742 537 425
Depreciation & Amortisation (EBITDA)*
Depreciation 438 432 162 165
Interest 273 263 157 146
Profit Before Tax** 109 127 264 172
Profit After Tax*** 67 (535) 194 118
*
Excludes other income and finance income and exceptional item
**
Excludes exceptional item & share of profit/loss from associate
***
includes exceptional item & share of profit/loss from associates

The financials of the Company are prepared under Ind AS in pursuance of Section 133 of the Companies Act, 2013 and in compliance with the (Indian
Accounting Standards) Rules, 2015.

2. Business Performance: of H 382 million and earned a net profit after tax of H 18
During the current year of operations, your Company has million for the year.
registered a consolidated total income of H 9,288 million
c. Centum Adetel Group SA.
compared to previous financial year total income of H 7,880
million. Your Company has earned a Profit Before Tax of During the year, Centum Adetel Group SA. the
H 109 million. subsidiary company has registered total income of
H 4,218 million and incurred a net loss of H 97 million.
At standalone level, total income was H 5,052 million
compared to previous financial year total income of H 3,538 During the financial year, your Board of Directors had
million. Further, your Company has earned a net profit reviewed the affairs of the subsidiaries. The consolidated
before tax of H 264 million. financial statements of your Company are prepared in
accordance with Section 129(3) of the Companies Act,
3. Subsidiaries: 2013; and forms part of this Annual Report.
a. Centum Electronics UK Limited
A statement containing the salient features of the
During the year, Centum Electronics UK Limited, a financial statements of the subsidiaries, in the
wholly owned subsidiary company, has registered total prescribed format AOC-1, is appended as “Annexure-1”
income of H 1.88 million and incurred a net loss after tax to the Board’s Report.
of H 0.11 million.
The statement also provides the details of performance
b. Centum T&S Private Limited (Formerly, Centum and financial position of each of the subsidiaries.
Adeneo India Private Limited)
The separate audited financial statements in respect of
During the year, Centum T&S Private Limited, a wholly the subsidiary companies are available on the website
owned subsidiary company, has registered total income of your Company at www.centumelectronics.com

30
Corporate Overview Management Reports Financial Statements

4. Consolidated Financial Statements: 9. Share Capital:

The Consolidated Financial statements have been prepared During the year, there was no change in the share capital of
by the Company in accordance with the applicable Indian the Company. As on March 31, 2023 the Authorised Share
Accounting Standards (‘Ind AS’) and the same together Capital of the Company was H 15,50,00,000/- divided into
with the Auditor’s Report thereon is provided in the Annual 1,55,00,000 equity shares of H10/- each and Paid-up equity
Report. share capital of the Company is H 12,88,47,810/- divided into
1,28,84,781 equity shares of H 10/- each.
The Financial Statements of the subsidiaries and related
detailed information will be kept at the Registered Office 10. Debentures: Issue of Shares or Other Convertible
of the Company and will be available to investors seeking Securities:
information on all working days during office hours.
During the year under review, the Company has not issued
The Company has adopted a Policy for determining any Debentures or any other convertible securities. As
Material Subsidiaries in terms of Regulation 46 of the on date, the Company does not have any outstanding
SEBI (Listing Obligations and Disclosure Requirements) Debentures.
Regulations, 2015. The Policy, as approved by the Board, is
available on the Investor page at Company’s website www. 11. Depository System:
centumelectronics.com.
Your Company’s equity shares are tradable only in electronic
5. Dividend: form. As on March 31, 2023, 99.30% of the Company’s total
paid up equity share capital representing 1,27,94,412 shares
Your Directors are pleased to recommend a Dividend of H 4 are in dematerialised form.
per equity share (40%) having face value of H 10 per equity
share for the financial year ended March 31, 2023. The 12.
Transfer to Investor Education and Protection
final dividend recommended is subject to approval of the Fund:
Shareholders in the ensuing Annual General Meeting of the
Pursuant to the applicable provisions of the Companies
Company. The policy on Dividend Distribution is available on
Act, 2013 ("the Act") read with the Investor Education and
the Company’s website at www.centumelectronics.com
Protection Fund Authority (Accounting, Audit, Transfer and
The total dividend payout will be H 51.54 million for the Refund) Rules, 2016 ("the Rules"), all unpaid or unclaimed
financial year 2022-23 for 1,28,84,781 number of fully paid dividends are required to be transferred by the Company
up equity shares of H 10 each. to the Investor Education and Protection Fund (IEPF)
established by the Central Government, after completion
6. Material changes and commitments, if any, of seven years. Further, according to the Rules, the shares
affecting the financial position of the company, in respect of which dividend has not been paid or claimed
having occurred since the end of the Year and till by the Members for seven consecutive years or more shall
the date of the Report: also be transferred to the demat account created by the IEPF
Authority.
There have been no material changes and commitments,
which affect the financial position of the Company which The Company had sent individual notices and also advertised
have occurred between the end of the financial year to which in the newspapers seeking action from the Members
the financial statements relate and the date of this Report. who have not claimed their dividends for earlier years
mentioning the consequential impact for not claiming for
7. Change in nature of Business, if any: seven consecutive years or more.
There has been no material change in the nature of business During the year, the Company transferred H 4,47,756/- to
during the year under review. IEPF, (the amount in unpaid Final Dividend Account opened
in 2014-15 and the amount in unpaid 1st Interim Dividend
8. Reserves & Surplus:
Account opened in 2015-16) which was due & payable and
The Board of Directors have decided to retain the entire remained unclaimed & unpaid for a period of seven years
amount of profit under Retained Earnings. Accordingly, as provided under Section 124(5) of the Companies Act,
your Company has not transferred any amount to General 2013 read with the Investor Education and Protection Fund
Reserves for the year ended March 31, 2023. Authority (Accounting, Auditing, Transfer and Refund) Rules,
2016. The Company, pursuant to the circulars issued by
the Ministry of Corporate Affairs under the aforesaid rules
mandated the transfer of shares on which dividend has

31
Centum Electronics Limited
Annual Report 2022-23

not been paid or claimed by the Shareholders for seven the Company and wished her the best for future endeavors.
consecutive years or more to the demat account of the IEPF
Authority. The Company has accordingly transferred 9,284 The Board, based on the recommendations of the Nomination
shares to the demat account of the IEPF Authority. and Remuneration Committee Meeting held on 27th May,
2023, approved the appointment of Ms. Tanya Mallavarapu
Members / claimants whose shares, unclaimed dividend, (DIN: 01728446) as Additional Director with immediate effect
have been transferred to the IEPF Authority Demat Account subject to the approval of shareholders of the Company.
as the case may be, may claim the shares or apply for refund
by making an application to the IEPF Authority in Form IEPF- Ms. Tanya Mallavarapu is the daughter of Mr. Apparao V
5 (available on http:www.iepf.gov.in) along with requisite fee Mallavarapu and Dr. Swarnalatha Mallavarapu. Ms. Tanya
as decided by IEPF Authority from time to time. Mallavarapu is the sister of Mr. Nikhil Mallavarapu.

13. Internal Control Systems and their adequacy: None of the Directors of the Company are disqualified under
Section 164(2) of the Companies Act, 2013.
The Company has an Internal Control System, commensurate
with the size, scale and complexity of its operations. The In compliance with Section 203 of the Companies Act,
Company has appointed M/s. KPMG, Chartered Accountants, 2013, Mr. Apparao V Mallavarapu, Chairman & Managing
as its Internal Auditor. The Audit Committee defines the Director, Mr. K S Desikan, Chief Financial Officer and
scope and areas of Internal Audit. The Internal Auditor Ms. Indu H S, Company Secretary & Compliance Officer
audits the areas recommended by the Committee every year. are the Key Managerial Personnel in accordance with the
provisions of Section 203 of the Companies Act, 2013.
The Audit observations and corrective actions thereon are
being presented to the Audit Committee of the Board. Based a. Board Meetings:
on the report of Internal auditor, process owners undertake
The Board of Directors duly met four (4) times in respect
corrective action in their respective areas and thereby
of which proper notices were given and the proceedings
strengthen the controls. During the year, the Internal Audit
were properly recorded and signed in accordance with
was done on the areas recommended and no material
the provisions of the Companies Act, 2013 and rules
weakness was observed.
made thereunder.
Additionally, the company, also has an in-house Internal
The details of which are given in the Corporate
Auditor to check the controls and strengthen the systems
Governance Report.
and processes.
b. Declaration by Independent Directors:
14. Directors and Key Managerial Personnel:
The Company has received necessary declaration from
The Board of Directors of the Company as on March 31,
each of the Independent Directors under Section 149(7)
2023 comprised of 8 Directors out of which 2 are Executive
of the Companies Act, 2013, that they meet the criteria
Directors, 1 Non - Executive Director and 5 are Non-Executive
of independence as laid down under Section 149 (6)
Independent Directors. The composition of the Board of
of the Companies Act, 2013 and Regulation 25 of the
Directors of the Company is in accordance with the provisions
SEBI (Listing Obligations and Disclosure Requirements)
of Section 149 of the Companies Act, 2013 and Regulation 17
Regulations, 2015.
of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 with an appropriate combination of Status on Independent Directors’ proficiency test:
Executive, Non-Executive and Independent Directors.
The Independent Directors on the Board of the Company
Pursuant to the provisions of Section 152 of the Companies have the integrity, expertise & experience and the said
Act, 2013 Mr. Nikhil Mallavarapu (DIN: 00288551) will retire Directors have either cleared the proficiency self-
by rotation at the Thirtieth (30th) Annual General Meeting assessment test conducted by the Institute of Corporate
and being eligible, has offered himself for re-appointment. Affairs notified under sub-section (1) of section 150
of the Companies Act, 2013 or were exempted from
Dr. Swarnalatha Mallavarapu (DIN: 00288771), Non-
appearing for the proficiency self-assessment test.
Executive Non-Independent Director through a letter
dated 27th May, 2023, submitted her resignation from the c. Remuneration Policy:
Directorship of the Company.
The Board has, upon recommendation of the
The Board noted and accepted the resignation of Dr. Nomination & Remuneration Committee framed a
Swarnalatha Mallavarapu and thanked for her contribution to policy for selection and appointment of Directors, Senior

32
Corporate Overview Management Reports Financial Statements

Management and their remuneration as required under ii. that such accounting policies as mentioned in Note 1
Section 178(3) of the Companies Act, 2013. The Policy of the Notes to the Financial Statements have been
is available on the Company’s website https://www. adopted and applied consistently and made judgments
centumelectronics.com/investor-relations/. There has and estimates that are reasonable and prudent so as
been no change in the Policy since the last financial year. to give a true and fair view of the state of affairs of the
Company as at March 31, 2023 and of the profit of the
d.
Annual evaluation of Board, its Committees and Company for year ended on that date;
Individual Directors:
iii. that proper and sufficient care has been taken for
The Board of Directors has carried out an annual the maintenance of adequate accounting records
evaluation of its own performance, its Committees and in accordance with the provisions of the Act for
individual Directors pursuant to the requirements of safeguarding the assets of the Company and for
Section 134(3)(p) of the Companies Act, 2013 and the preventing and detecting fraud and other irregularities;
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. iv. that the annual financial statements have been prepared
on a going concern basis;
Further, Independent Directors have reviewed the
performance of the Board, its Chairman and Non- v. that proper internal financial controls were in place and
Executive Directors and other items as stipulated under that the financial controls were adequate and operating
Schedule IV of the Companies Act, 2013 and Regulation effectively;
17 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 at their separate vi. that systems to ensure compliance with the provisions
meeting held on 19 January, 2023. of all applicable laws were in place, were adequate and
operating effectively.
e. Committees of the Board:
Further, the Board of Directors confirm that the Company
Details with respect to the Audit Committee, has complied with the Secretarial Standards on the Board
the Nomination and Remuneration Committee, and General Meetings issued by the Institute of Company
the Stakeholders’ Relationship Committee, Risk Secretaries of India, as applicable to the Company, during
Management Committee and Corporate Social the financial year ended March 31, 2023.
Responsibility Committee and meetings of the said
Committees held during the year forms part of the 16. Particulars of Loans, Guarantees or Investments:
Corporate Governance Report annexed to this Report.
The particulars of loans given, investments made, securities
f. Risk Management: provided and guarantees given as required under Section
186 of the Companies Act, 2013 are provided in note 5, 6 and
The Company follows well–established and detailed risk 45(c)(i) forming part of the standalone financial statements.
assessment and minimization procedures, which are
periodically reviewed by the Board. The Company has 17.
Contracts and Arrangements with Related
in place a business risk management framework for Parties:
identifying risks and opportunities that may have a bearing
All related party transactions that were entered into during
on the organization's objectives, assessing them in terms
the financial year were in the ordinary course of business
of likelihood and magnitude of impact and determining
and were at arm’s length basis. There were no material
a response strategy. The details on composition and
significant related party transactions made by the Company
meetings of the Committee forms part of the Corporate
during the year with Promoters, Directors, Key Managerial
Governance Report annexed to this report.
Personnel or other designated persons which may have a
15. Directors’ Responsibility Statement: potential conflict with the interest of the Company at large.

Pursuant to Section 134(3)(c) of the Companies Act, 2013, All the related party transactions were placed before the
your Directors confirm: Audit Committee and also the Board for approval. Prior
omnibus approval of the Audit Committee is obtained for the
i. that in the preparation of annual accounts for the transactions which are of foreseen and repetitive nature in
year ended March 31, 2023, the applicable Accounting terms of Regulation 23(3)(a) of the SEBI (Listing Obligations
Standards have been followed along with the proper and Disclosure Requirements) Regulations, 2015
explanations relating to material departures;
The Company has framed a policy on dealing with the
related party transactions and the same is available on the

33
Centum Electronics Limited
Annual Report 2022-23

Company’s website https://www.centumelectronics.com/ 19. Corporate Governance:

investor-relations.
Your Company believes in adopting best practices of
Your Directors draw attention of the members to Note no. Corporate Governance. A report on Corporate Governance as
42 to standalone financial statements which sets out the required under the SEBI (Listing Obligations and Disclosure
related party disclosures. Requirements) Regulations, 2015 is forming part of this
Annual Report as “Annexure – 6”.
18. Auditors:
A certificate from the Practicing Company Secretary of
a. Statutory Auditors
the Company regarding compliance of the conditions
The Members at the Twenty Ninth Annual General stipulated for Corporate Governance as required under
Meeting of the Company held on August 12, 2022, Clause E of Schedule V read with Regulation 34(3) of the
approved the appointment of M/s. S.R Batliboi SEBI (Listing Obligations and Disclosure Requirements)
& Associates LLP, Chartered Accountants (Firm Regulations, 2015 is attached to this report. The declaration
registration number: 101049W/E300004) for second by the Managing Director addressed to the Members of the
term of five years as Statutory Auditors of the Company Company pursuant to Clause D of Schedule V Read with
to hold office from the conclusion of 29th Annual Regulation 34 (3), Chapter IV of the SEBI (Listing Obligations
General Meeting till the conclusion of the 34th Annual and Disclosure Requirements) Regulations, 2015 regarding
General Meeting. adherence to the Code of Conduct by the Members of the
Board and by the Members of the Senior Management
The Report of the Statutory Auditors for the financial Personnel of the Company is also attached to this Report.
year 2022-23 does not contain any qualification on the
financial statements of the Company. 20. Conservation of Energy, Technology absorption,
Research & Development and Foreign Exchange
The details of remuneration of the Statutory Auditors Earnings and Outgo:
with break-up of fee paid as required by the provisions of
SEBI (Listing Obligations and Disclosure Requirements) The particulars prescribed under Section 134(3)(m) of the
Regulations, 2015 for the financial year 2022-23 is given Companies Act, 2013 read with Rule 8 of the Companies
as part of the Corporate Governance Report. (Accounts) Rules, 2014, are enclosed as “Annexure-3” to
this Report.
b. Secretarial Audit
21. Corporate Social Responsibility:
In terms of Section 204(1) of the Companies Act,
2013, the Board had appointed Ms. Aarthi G Krishna, As part of the Company’s initiatives under “Corporate
Practicing Company Secretary (CP No.5645), to conduct Social Responsibility (CSR)”, the Company has funded
Secretarial Audit for the financial year 2022-23. The several projects that aid and improve education, literacy and
Secretarial Audit Report for the financial year ended healthcare for children. It has also funded and participated
March 31, 2023 is enclosed as “Annexure-2” to this in projects that support and aid children with disabilities.
Report.
The disclosures as required under Section 135 of the
The said Secretarial Audit Report does not contain Companies Act, 2013 read with Rule 8(1) of the Companies
any qualification, reservation or adverse remark or (Corporate Social Responsibility Policy) Rules, 2014 is
disclaimer made by the Secretarial Auditor. enclosed as “Annexure-4” to this Report.

c. Cost Auditors 22. Details of establishment of Vigil Mechanism:

As required under Section 148 of the Companies In accordance with Section 177(9) and (10) of the Companies
Act, 2013 the Board of Directors of the Company Act, 2013 and Regulation 22 of SEBI (Listing Obligations and
has appointed M/s. K.S. Kamalakara & Co., Cost Disclosure Requirements) Regulations, 2015, the Company
Accountants (Firm Registration No. 000296) as Cost has established a Vigil Mechanism and has a Whistle Blower
Auditors of the Company for the financial year 2023- Policy. The Policy is available at the Company’s website
24 at a fee of H1,00,000/- plus applicable taxes and out https://www.centumelectronics.com/investor-relations.
of pocket expenses. The ratification of remuneration
The Company did not receive any complaints during the year
payable to Cost Auditors is placed as an agenda item for
under review.
approval of shareholders at the ensuing annual general
meeting.

34
Corporate Overview Management Reports Financial Statements

23. Particulars of Employees: and Disclosure Requirements) Regulations, 2015 is forming

part of the Annual Report.
The information relating to remuneration and other details
as required pursuant to Section 197 of the Companies Act, 27.
Business Responsibility and Sustainability
2013 read with Rule 5(1) of the Companies (Appointment Report:
and Remuneration of Managerial Personnel) Rules, 2014, as
As required under Regulation 34 of SEBI (Listing Obligations
amended, is enclosed as “Annexure-5” to this report.
and Disclosure Requirements) Regulations, 2015, the
Further, the details of employees who are in receipt of Business Responsibility and Sustainability Report is provided
remuneration exceeding the limits prescribed under Section in a separate section and forms part of the Annual Report as
134 of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the “Annexure – 7”.
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 will be provided upon request.
28. Employee Stock Option Plan:

As a measure of rewarding the employees, your Company

In terms of Section 136(1) of the Companies Act, 2013 and
had introduced an Employee Stock Option Plan (ESOP)
the Rules made thereunder, the Annual Report is being sent
during the year 2013.
to the Shareholders and others entitled thereto excluding the
information on employees’ particulars. The same is available Further, “Centum Electronics Limited - Restricted Stock Unit
for inspection by the Shareholders at the Registered Office of Plan 2021” scheme was approved by the Shareholders of the
the Company during business hours on working days of the Company through the ‘Postal Ballot’ process on October 5,
Company up to the date of ensuing Annual General Meeting. 2021. BSE Limited and the National Stock Exchange of India
If any Member is interested in obtaining a copy thereof, such vide their letters dated October 28, 2021 and October 12,
Member may write to the Company Secretary in this regard. 2021 respectively have accorded their in-principle approval
for listing up to a maximum of 1,75,000 Restricted Stock
24. Prevention, Prohibition and Redressal of Sexual
Units under the scheme.
Harassment at workplace:
The certificate from the Secretarial Auditor on the
The Company has zero tolerance for sexual harassment
implementation of ESOP 2013 and RSU 2021 in accordance
at workplace and has formulated a Policy on Prevention,
with the SEBI (Share Based Employee Benefits and Sweat
Prohibition and Redressal of Sexual Harassment at
Equity) Regulations, 2021 has been uploaded on the website
the Workplace, in line with the provisions of the Sexual
of the Company at www.centumelectronics.com.
Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 and the Rules thereunder. The The particulars prescribed under Regulation 14 read with Part
Policy aims to provide protection to employees at the F of Schedule I of the SEBI (Share Based Employee Benefits
workplace and prevent and redress complaints of sexual and Sweat Equity) Regulations, 2021 has been uploaded on
harassment and for matters connected or incidental thereto, the website of the Company at www.centumelectronics.com.
with the objective of providing a safe working environment,
where employees feel secure. 29. Awards and Recognitions:

The Company has also constituted an Internal Complaints The Company is proud recipient of :
Committee, to inquire into complaints of sexual harassment
and recommend appropriate action. All the employees of - SEEM (Society of Energy Engineers & Managers’) Silver
the Company as a part of induction are sensitized about the Award for its energy conservation measures.
provisions of the said Act.
- ‘Deliver Innovation Solutions’ award from DANA.
The Company has not received any complaint of sexual
- ‘Localization Award’ for Electronics Relay modules by
harassment during the financial year 2022-23.
ABB at their Supplier Meet - 2022.
25. Annual Return:
30. General:
In accordance with the Companies Act, 2013, the annual
Your Directors state that no disclosure or reporting is
return in the prescribed format is available at https://www.
required in respect of the following items as there were no
centumelectronics.com/annual-return/.
transactions with regard to the following during the year
26. Management Discussion and Analysis Report: under review:

The Management Discussion and Analysis Report for the year a. Details relating to deposits covered under Chapter V of
under review, as stipulated under SEBI (Listing Obligations the Companies Act, 2013

35
Centum Electronics Limited
Annual Report 2022-23

b. Issue of equity shares with differential rights as to 31. Acknowledgements:

dividend, voting or otherwise.
Your Directors thank the customers for their continued
c. Issue of shares (including sweat equity shares) to patronage and the investors, bankers and vendors for their
employees of the Company under any scheme save and continued support.
except ESOP referred to in this report
Your Directors acknowledge and thank the invaluable
d. There is no remuneration received by the Managing contributions of all the employees, who have demonstrated
Director/Whole Time Director from the subsidiary their skill, teamwork and commitment through their
company. competence, hard work, cooperation and support.

e. No significant or material orders were passed by the Your Directors would also like to place on record the support
regulators or courts or tribunals which impact the going received from, the Electronic Hardware Technology Park, the
concern status and the Company’s operations in future. Customs and GST Departments, the Reserve Bank of India,
the Department of Industries and Commerce, Karnataka,
f. No application made or any proceeding pending under
the Karnataka Udyog Mitra and all the other Central and
the Insolvency and Bankruptcy Code, 2016.
State Governmental agencies.
g. No frauds are reported by Auditors under sub-section
(12) of Section 143.

By order of the Board

For Centum Electronics Limited

Place: Bengaluru Apparao V Mallavarapu Nikhil Mallavarapu

Date: May 27, 2023 Chairman & Managing Director Wholetime Director
DIN: 00286308 DIN: 00288551

36
Annexure - 1
Form AOC - 1
Statement containing salient features of the financial statement of subsidiaries and associate company
[Pursuant to first proviso to sub-section (3) of section 129 of the Companies Act, 2013, read with rule 5 of the Companies (Accounts) Rules, 2014]

Part "A": Subsidiaries

(in H million)
Sl Currency Equity Other Total Total Investment Total Profit/ Total tax Profit/ Proposed % of
No. Share Equity Assets* Liabilities in associate Income (Loss) expenses (Loss) dividend Shareholding
Name of the subsidiary
capital before by the
tax company
1 Centum T&S Private Limited, India (formerly known as Centum INR 1 18 410 391 - 387 25 7 18 - 100%
Adeneo India Private Limited)
2 Centum Electonics UK Limited EUR 746 105 993 142 - 2 - - - - 100%
3 Centum Adetel Group SA (CAG) EUR 407 734 3,259 2,205 87 315 (8) - (8) - 77.77%
4 Centum T&S ( Centum Technologies ET Solutions), France EUR 47 851 3,924 3,026 - 3,492 144 - 144 - held by CAG
(formerly known as Centum Adeneo SAS) 100%
5 Centum R&D (Centum Recherche ET development), France EUR 0 (16) 184 200 - 472 7 - 7 - held by CAG
(formerly known as Centum Adeneo CRD SAS) 100%
6 Centum Adetel Transportation System SAS, France (CATS) EUR 753 (449) 931 627 - 163 (4) - (4) - held by CAG

37
100%
7 Centum T&S (Centum Technologies ET Solutions), Canada CAD 5 (31) 440 466 - 255 (155) - (155) - held by CATS
(formerly known as Centum Adetel Solution) 100%
8 Centum E&S (Centum Equipments ET Systemes), Canada CAD 3 (204) 467 668 - 610 (102) - (102) - held by CATS
(formerly known as Centum Adetel Equipment) 100%
9 Centum T&S (Technologies & Solutions) Belgium SRL (formerly EUR 1 14 68 53 - 155 8 - 8 - held by CAG
Corporate Overview

known as Centum Adeneo Belgium) 100%

Part "B": Associate

(in H million)
Sl Currency Shares of Associate held by the Company on the year end Networth attributable to Profit/(Loss) OCI for the
No. Number Amount of Investment Extent of holding % parent Shareholding as for the year year
Name of the associate
in million in associate per latest audited Balance
Management Reports

Sheet
1 Ausar Energy SAS EUR 1 - held by CAG 30.45% (60) 12 5
*
excluding investment in associate
Financial Statements
Centum Electronics Limited
Annual Report 2022-23

Annexure - 2
Form No. MR-3
SECRETARIAL AUDIT REPORT1

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2023

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the
Companies (Appointment and Remuneration Personnel) Rules, 2014]

To
CIN L85110KA1993PLC013869
The Members,
Authorised Capital J 15.50 Crores
Centum Electronics Limited
Bengaluru

I have conducted the Secretarial Audit of the compliance of (a) The Securities and Exchange Board of India (Substantial
applicable statutory provisions and the adherence to good Acquisition of Shares and Takeovers) Regulations, 2011;
corporate practices by Centum Electronics Limited (hereinafter
called the company). Secretarial Audit was conducted in a (b) The Securities and Exchange Board of India (Prohibition
manner that provided me a reasonable basis for evaluating the of Insider Trading) Regulations, 2015
corporate conducts/statutory compliances and expressing my
opinion thereon. (c) The Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations,
Based on my verification of the Centum Electronics Limited 20182;
books, papers, minute books, forms and returns filed and other
records maintained by the company and also the information (d) The Securities and Exchange Board of India (Employee
provided by the Company, its officers, agents and authorized Stock Option Scheme and Employee Stock Purchase
representatives during the conduct of Secretarial Audit, I hereby Scheme) Regulations, 2021
report that in my opinion, the company has, during the audit
(e) The Securities and Exchange Board of India (Issue and
period covering the financial year ended on 31st March, 2023
Listing of Non-Convertible Securities) Regulations,
complied with the statutory provisions listed hereunder and also
20212;
that the Company has proper Board-processes and compliance-
mechanism in place to the extent, in the manner and subject to (f) The Securities and Exchange Board of India (Registrars
the reporting made hereinafter: to an Issue and Share Transfer Agents) Regulations,
1993 regarding the Companies Act and dealing with
I have examined the books, papers, minute books, forms and
client;
returns filed and other records maintained by Centum Electronics
Limited (“the Company”) for the financial year ended on 31st (g) The Securities and Exchange Board of India (Delisting of
March, 2023 according to the provisions of: Equity Shares) Regulations, 20212; and

(i) The Companies Act, 2013 (the Act) and the rules made (h) The Securities and Exchange Board of India (Buyback of
thereunder; Securities) Regulations, 20182;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and (vi) Other Laws as applicable to Electronic System Design and
the rules made thereunder; Manufacturing (ESDM) Company viz:-

(iii) The Depositories Act, 1996 and the Regulations and Bye- 1. EXIM Policy of India relating to Export Oriented Unit
laws framed thereunder; (EOU)

(iv) Foreign Exchange Management Act, 1999 and the rules 2. Semiconductor Integrated Circuits Layout Design Act,
and regulations made thereunder to the extent of Foreign 2000
Direct Investment, Overseas Direct Investment and External
Commercial Borrowings; 3. Environment (Protection) Act, 1986, Water (Prevention
and Control of Pollution) Act,1974; Air (Prevention and
(v) The following Regulations and Guidelines prescribed under Control of Pollution) Act,1981; e-waste & hazardous
the Securities and Exchange Board of India Act, 1992 (‘SEBI waste (Management and Handling Rules).
Act’):-

38
Corporate Overview Management Reports Financial Statements

4. Micro Small and Medium Enterprises Development Act, the Board of Directors that took place during the period under
2006 review were carried out in compliance with the provisions of the
Act.
I have also examined compliance with applicable clauses of the
following: Adequate notice is given to all Directors to schedule the Board
Meetings, agenda and detailed notes on agenda were sent at
(i) Secretarial Standards issued by the Institute of Company least seven days in advance, and a system exists for seeking and
Secretaries of India; obtaining further information and clarifications on the agenda
items before the meeting and for meaningful participation at the
(ii) The Listing Agreement entered into by the Company with
meeting.
the National Stock Exchange of India Limited and BSE
Limited and the SEBI (Listing Obligations and Disclosure Majority decision is carried through while the dissenting
Requirements) Regulations, 2015; members’ views are captured and recorded as part of the
minutes.
During the period under review the Company has complied
with the provisions of the Act, Rules, Regulations, Guidelines, I Further Report That there are adequate systems and processes
Standards, etc, mentioned above subject to the following in the company commensurate with the size and operations of
disclaimer: the company to monitor and ensure compliance with applicable
laws, rules, regulations and guidelines.
My opinion is based on audit evidence, explanations and
information given to me during the audit and the Management I Further Report That during the audit period the company has:
Representation Letter in support of compliances in respect of the
Act, Rules, Regulations, Guidelines, Standards, etc, mentioned (i) Re-appointed S R Batliboi & Associates LLP, Chartered
above. Accountants as the Statutory Auditors of the Company for a
Second Term of 5 consecutive years.
I Further Report That
(ii) has granted 1,30,400 Stock Options to eligible employees
The Board of Directors of the Company is duly constituted with of the Company and its Subsidiaries under the ‘Centum
proper balance of Executive Directors, Non-Executive Directors Electronics Limited Restricted Stock Unit Plan ; 2021
and Independent Directors. The changes in the composition of

Place : Bengaluru AARTHI GOPALAKRISHNA

Date : 27th May, 2023 FCS# 5706 CP# 5645
UDIN: F005706E000394677 Peer Review Cert# 1110/2021

1
To be read with the letter annexed hereto which forms an integral part of this report
2
There were no actions necessitating compliance under these Regulations

39
Centum Electronics Limited
Annual Report 2022-23

ANNEXURE
To,
The Members,
Centum Electronics Limited
Bengaluru

My report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. My responsibility is to express an
opinion on these secretarial records based on my audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the
contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial
records. I believe that the processes and practices, I followed provide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations and
happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of
management. My examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness
with which the management has conducted the affairs of the company.

Place : Bengaluru AARTHI GOPALAKRISHNA

Date : 27th May, 2023 FCS# 5706 CP# 5645

40
Corporate Overview Management Reports Financial Statements

Annexure - 3
INFORMATION PURSUANT TO SECTION 134(3)(m) OF THE COMPANIES ACT, 2013

1. CONSERVATION OF ENERGY: • Regular checking of leakage in gas and air pipelines

and arresting leakages, if any. immediately
The Company continues to accord priority to energy
conservation. The company’s ‘Energy Saving Team’ is • 88% of our energy consumption is through renewable
committed to minimize the use of energy consumption and energy sources (Solar + Wind) to reduce carbon footage.
implement several energy-saving projects. Consistent efforts
• Thermography study is done for all electrical panels
are being made to identify potential areas for energy saving.
and corrective action is taken as part of predictive
Some of the measures the company has undertaken during maintenance program.
the period under report in the high-priority area of Energy
• All office area, AHUs are operated with automated
Conservation are:
timers on working days to control power consumption.
• Water level-based purging in inter cooler and after
• Installation of timers for Production area, Air handling
cooler drain to reduce power consumption and moisture
Units and exhausts to operate as per schedule.
entry to compressed air.

• Installation of spare VFD for MIC Air handling unit. • HVAC system is controlled through BMS automation
to run efficiently as per production and process
• Centralized chiller integrated with process chiller for requirement.
effective loading of the chiller.
• Regular descaling of condenser tubes and pipelines to
• Installation of Auto RH controller system. improve the performance of Chillers.
Implementation of alternate solution for BMS cost
effectiveness. • Installation of VFD for Cooling tower fans and Process
Chiller pumps with closed loop feedback is implemented
• Optimum utilization of resources by operating 99 TR
to reduce Power consumption.
chiller in place of 245 TR.
• Installed RO system for HVAC to reduce the scaling of
• Manage climate risk by staying committed to the UN’s
chiller condenser tubes for efficient operation
Sustainable Development Goals.
• Converted “Wrapped V belt” drives to “Raw edge belt”
• The power factor is maintained at 0.99 by automatic
drive to increase the efficiency of AHU’s.
power factor control panel.

• Regularly monitor the top power guzzlers like HVAC • Operation of Heat Pump to generate hot water for
system, Process Chillers, air compressors etc. to maintaining shopfloor humidity, it operates through
control the consumption & cost. reverse recovery principle and 2 times energy efficient
than conventional water heaters.
• Energy Management is done with SCADA software.
This software is used to monitor and control the power • With modification of Jigs, the loading capacity of walk
consumption every day on hourly basis. in ESS chamber is increased, which reduces 40% of
energy consumption per cycle.
• Consumption monitoring and control is done for
Nitrogen gas on daily basis by implementing auto 2. TECHNOLOGY AND RESEARCH & DEVELOPMENT:
control valve in reflow ovens.
I. Technology Development:
• Regular maintenance of HVAC & Air Compressor
systems are undertaken for maximum efficiency.  Indigenization of Tank Electronics

• Switching off power & gas supply to machines which are  Development of Fully hybridized multiple converter
not in production plan to reduce idle consumption. for space applications

• Air pressure optimization is monitored based on  Miniaturized Isolated wide input voltage range
production machine requirement to reduce power Eighth brick 72W DC-DC Converter
consumption by compressor.

41
Centum Electronics Limited
Annual Report 2022-23

 Bus Management Unit for space  GaN Based X-Band Plank Unit

 Hyperspectral Payload Electronics  True Time Delay Based X-Band Plank Unit

 High speed data transfer with SERDES interface for  Digitally Tuneable Filter
space
 Integrated power & pyro Relay unit
II. New Processes Developed
 High speed data transfer cables for Space
The Process & NPI Team is constantly working on
the development of various new processes. This has (ii) Benefits derived as a result of the above R&D
succeeded in the development of various new processes
 Published 16 papers.
which has helped in enhancing the product performance
and in getting new business opportunities.  Filed 1 Patent, 4 Patents have been Granted.

 New Automated SMT Line Installation and a New (iii) Future Plan of Action
Parallel Gap welder Equipment commissioning.
 Digital Receiver and ELINT controller for Satellites
 Power Amplifier MMIC assembly

Electronic Power Conditioner for Human Space

GaN (Gallium Nitride) Die assembly on gold Programs
plated KOVAR based Ceramic Packages for RF
applications.  Power supplies for Solar Array Drive Assembly for
Space
III. Research & Development (R&D) and benefits derived
thereon: o Ku Band Receiver, C Band Receiver, CXS and SXC
frequency converters for Space
(i) Specific areas in which R&D is carried out by the
Company or Under development (iv) Expenditure on R & D


Development of Hybridized Single and Dual H in Millions
output DC-DC Converter For the year ended 2022-23 2021-22
March 31
 Indigenization of Power Unit (Electro block) for
A. Capital 57.65 3.05
Tank Electronics
B. Recurring 130.31 87.20
 HV Power Supply for AESA Radar Application C. Total 187.96 90.24
 AL Gyro Stabilizer for Tank Electronics Total R&D expenditure 3.76 2.55
as a % of total turnover
 Bus Management Unit for space application
3. FOREIGN EXCHANGE EARNINGS AND OUTGO:
 Power Supply for Missile

 Miniature Super Heat Receiver Foreign Exchange Earnings was H 2,381.80 Million and Outgo
was H 2,192.23 Million for the year ended March 31, 2023.
 MEMS Gyro-Design and Engineering

42
Corporate Overview Management Reports Financial Statements

Annexure - 4
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. A brief outline of the Company’s CSR policy:

In accordance with Section 135 of the Companies Act, 2013 and Corporate Social Responsibility (CSR) Rules, 2014 together with
Schedule VII of the Companies Act, 2013 the Company has in place Corporate Social Responsibility Policy.

The Company’s CSR initiatives are presented at the annual planning and budgeting meet of the Company and forms an integral
part of the business plan annually. All projects are assessed under an agreed strategy and are monitored every quarter, measured
against targets and budgets. Whenever necessary, midcourse corrections would be carried out. To measure the impact of the work
done, a social satisfaction audit is carried out from time to time.

2. Composition of the CSR Committee:

The Composition of the CSR Committee is as follows:

No. of No. of meeting

meetings held attended
Name Designation Position
during the FY during the FY
22-23 22-23
Mr. Thiruvengadam P Independent Director Chairman 1 1
Ms. Kavitha Dutt Independent Director Member 1 1
Dr. Swarnalatha Mallavarapu Non – Executive Director Member 1 1

3. The Company has formulated a CSR Policy and the web-link where the Composition of the Committee,
CSR Policy and CSR Projects approved by the Board are disclosed and is available at Investor page on the
Company website:

https://www.centumelectronics.com/wp-content/uploads/2022/04/CSR-COMMITTEE-COMPOSITION-PROJECTS-AND-POLICY.pdf

4. The details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of rule 8 of the
Companies (Corporate Social Responsibility Policy) Rules, 2014:

Not Applicable

5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate
Social Responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any:

Sr No. Financial Year Amount available for set-off from preceding Amount required to be set-off for the financial
financial years (in J) year, if any (in J)
1 2020-21 1,14,408 -
2 2021-22 20,219 -
3 2022-23 898 -
Total 1,35,525 -

6. Average net profits of the Company as per Section 135(5): J 26,50,05,097/-

7. a. 2% of the average Net Profit of the Company as per section 135(5): H 53,00,102/-

b. Surplus arising out of the CSR projects or programmes or activities of the previous financial years: Nil

c. Amount required to be set off for the financial year: Nil

d. Total CSR obligation for the financial year (a+b-c) = H 53,00,102/-

43
Centum Electronics Limited
Annual Report 2022-23

8. a. CSR Amount spent or unspent for the financial year:

Total Amount Spent for the Financial Amount unspent (in J)

Year. (in J)
Total Amount transferred to Amount transferred to any fund specified
Unspent CSR account as per under Schedule VII as per second proviso
section 135(6) to section 135(5)
H 53,01,000 /- Nil Nil

b. Details of CSR amount spent against ongoing projects for the financial year: Nil

c. Details of CSR amount spent against other than ongoing projects for the financial year
(Amount in H)
Sr. Name of the Item from Local Location of the project Amount Mode of Details of
No. Project the list of Area spent for Implementation Implementation
activities in the project –Direct (Yes/ Agency
schedule VII (Yes /No) (in H) No)
to the Act
State District
1. Promoting Education Yes Karnataka Bangalore 801,000 No Mathru
Education - Blind Educational Trust
School - CSR00015120
2. Health Care Health care Yes Karnataka Bangalore 3,00,000 No Narayana
Programme Hrudayalaya
for the weaker Charitable Trust -
section & children CSR00004596
3. Meal Distribution Eradicating Yes Karnataka Bangalore 20,00,000 No The Akshaya
Hunger Patra Foundation
- CSR00000286
4. Healthcare – Healthcare Yes Karnataka Bangalore 2,50,000 No proVISION ASIA -
Distribution of CSR00009130
wheel chairs
5. Education Promoting No Maharasthra Mumbai 1,00,000 No Vedanta
Education Wisdom Trust -
CSR00016793
6. Meal Distribution Meal Yes Karnataka Bangalore 5,00,000 No International
Distribution Society for
Krishna
Consciousness -
CSR00005587
7. Education, Women Promoting Yes Karnataka Bangalore 1,00,000 No Shri Vishwanath
Empowerment, Education Raghunath Rao
Health Care and and Health Memorial Trust -
Social activities care CSR00010355.
8. Art & Culture Promotion Yes Karnataka Bangalore 10,00,000 No Art &
and Photography
Development Foundation -
of art and CSR00000053
culture
9. Welfare measures Empowering Yes Karnataka Bangalore 2,50,000 No Prerana
for blind and women Resource Centre
disabled - CSR00012205
Total 53,01,000

d. Amount spent in Administrative Overheads: Nil

e. Amount spent in Impact Assessment: Not Applicable

f. Total amount spent for the Financial Year: H 53,01,000 /-

44
Corporate Overview Management Reports Financial Statements

g. Excess amount for set off:

Amount
SI. No. Particulars
(in J)
(i) Two percent of average net profit of the Company as per section 135(5) 53,00,102
(ii) Total amount spent for the Financial Year 53,01,000
(iii) Excess amount spent for the financial year [(ii) -(i)] 898
(iv) Surplus arising out of CSR projects or programmes or activities of the previous financial years, if -
any
(v) Amount available for set off in succeeding financial years [(iii)-(iv)] 898

9. a. Details of Unspent CSR amount for the preceding three financial years: Nil

b. Details of CSR amount spent in the financial year for ongoing projects of the preceding financial year(s): Not Applicable

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or acquired through CSR spent
in financial year:

Not Applicable

11. Specify the reason(s) if the Company fails to spend the 2% of the average net profit as per Section 135(5):

Not Applicable.

Place: Bengaluru Apparao V Mallavarapu Thiruvengadam P

Date: May 27, 2023 Chairman and Managing Director Chairman of CSR Committee
DIN: 00286308 DIN: 00016375

45
Centum Electronics Limited
Annual Report 2022-23

Annexure - 5
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF
THE COMPANIES ACT,2013 READ WITH RULE 5(1) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year
2022-23, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year
2022-23 are as under:

% increase in Ratio of
Remuneration in remuneration of
Sl. the Financial Year each Director/
Name of the Director/KMP and Designation
No. 2022-23 to median
remuneration of
employees
1 Apparao V Mallavarapu 52 21.40
Chairman and Managing Director
2 Nikhil Mallavarapu 31 21.40
Whole-time Director
3 Manoj Nagrath 0 1.16
Non-Executive Independent Director
4 Rajiv C Mody -10 0.83
Non-Executive Independent Director
5 Pranav Kumar N Patel 0 1.16
Non-Executive Independent Director
6 Swarnalatha Mallavarapu -5 0.93
Non-Executive Director
7 Thiruvengadam P -4 1.11
Non-Executive Independent Director
8 V Kavitha Dutt 0 0.97
Non-Executive Independent Director
9 K. S. Desikan 24 Not applicable
Chief Financial Officer
10 Indu H S* - Not applicable
Company Secretary

(i) *Ms. Indu H S was appointed as the Company Secretary w.e.f 24th May, 2022.

(ii) During the financial year, there was an increase of 16.31% in the median remuneration of employees.

(iii) On standalone basis, there were 1226 permanent employees on the rolls of Company as on March 31, 2023.

(iv) Average percentage increase in the salaries of employees other than the managerial personnel in the last financial year i.e., 2022-
23 was 8.01% and increase in the managerial personnel for the same financial year was 31.36%.

(v) Affirmation that the remuneration is as per the Remuneration Policy of the Company.

It is affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other
employees, adopted by the Company.

46
Corporate Overview Management Reports Financial Statements

To The Members,

Declaration regarding Code of Conduct pursuant Part D of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015

I, Apparao V Mallavarapu, Managing Director of Centum Electronics Limited, to the best of my knowledge and belief, declare that all
the members of the Board of Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct for the
year ended 31 March, 2023.

Place : Bangalore Apparao V Mallavarapu

Date : 27th May, 2023 Chairman and Managing Director
DIN: 00286308

47
Centum Electronics Limited
Annual Report 2022-23

Annexure - 6
Corporate Governance Report
1) Company’s Philosophy on Code of Governance Independent Non-Executive Directors. The composition
of Board is in due compliance of Regulation 17 of the
Centum’s vision and continuing endeavor to create value by SEBI (Listing Obligations and Disclosure Requirements)
contributing to the success of our customers, has always Regulations, 2015.
been achieved and will continue to be achieved by adhering
to its core values of Teamwork, Openness and Trust, The Company has an active, experienced and a well-
Integrity, Customer Relationship, Excellence and Social informed Board. The Board along with its committees
Responsibility. undertakes its fiduciary duties keeping in mind the
interests of all its stakeholders and the Company’s
Centum Electronics Limited firmly believes that Corporate Governance philosophy. The Nomination
implementation of good Corporate Governance will help and Remuneration Committee of the Board ensures
the Company to achieve Corporate goals and enhance the right composition of the Board. The Board is
stakeholders value. Your Company’s philosophy on primarily responsible for the overall management of
Corporate Governance envisages attainment of the highest the Company’s business. The Directors on the Board
level of transparency, accountability and integrity in all facets are from varied fields with wide range of skills and
of its operation. The fundamental objective is enhancement expertise.
of long-term Shareholder value, while at the same time
protecting the interests of other stakeholders. All Independent Directors possess the requisite
qualifications and are very experienced in their own
Your Company is in compliance with the conditions of fields. These Independent Directors have the necessary
corporate governance as required under the SEBI (Listing experience and expertise. Necessary disclosures have
Obligations and Disclosures Requirements) Regulations, been obtained from all the Directors regarding their
2015 as amended from time to time (“SEBI Listing Directorship and have been taken on record by the
Regulations”), as applicable. Board at its meeting held on May 27, 2023. The Board,
thus, hereby confirms that in the opinion of the Board all
2) Board of Directors
the Independent Directors appointed by the Company
a) Composition: fulfills the conditions specified in these regulations and
are independent of the management.
As on March 31, 2023, the Board of Directors of the
Company comprises of 8 Directors out of which 5 are The composition of the Board of Directors as at March
31, 2023 is as follows:

Name of the Director Category Designation No. of Number of other Number of other Name of other
shares Directorships Committees Membership/ Listed entities
held and Chairmanship & category of
percentage Directorships*
to paid
up share
capital Chairmanship Membership Chairmanship Membership

Mr. Apparao V Promoter Chairman 66,04,715 - 2 - - -

Mallavarapu - Executive & Managing
and Non- Director 51.26
Independent

Mr. Nikhil Promoter - Whole Time 5,89,929 - - - - -

Mallavarapu Executive Director
and Non- 4.58
Independent

Mr. Manoj Nagrath Non-Executive Director - - - - - -

and Independent

48
Corporate Overview Management Reports Financial Statements

Name of the Director Category Designation No. of Number of other Number of other Name of other
shares Directorships Committees Membership/ Listed entities
held and Chairmanship & category of
percentage Directorships*
to paid
up share
capital Chairmanship Membership Chairmanship Membership

Mr. Rajiv C Mody Non-Executive Director - 1 1 - 1 1. Sasken

and Independent Technologies
Limited – CMD

Mr. Pranav Kumar Non-Executive Director - - - - - -

N Patel and Independent

Dr. Swarnalatha Promoter - Director 3,69,150 - 1 - - -

Mallavarapu** Non-Executive
and Non- 2.86
Independent

Mr. Thiruvengadam Non-Executive Director - - 7 - 3 1. F

ine Organic
P and Independent Industries
Limited – ID
2. W
estern India
Plywoods
Limited – NED

Ms. V Kavitha Dutt Non-Executive Director - - 8 2 3 1. The K.C.P.

and Independent Limited -
JMD
2. DCM
Shriram
Industries
Limited - ID
3. Apollo
Hospitals
Enterprise
Limited – ID

* CMD – Chairman and Managing Director; ID – Independent Director; JMD – Joint Managing Director; NED - Non-Executive Director
** Resigned with effect from closing hours of 27th May, 2023

• The Directorships, held by the Directors as mentioned None of the Independent Non-Executive Directors of the
above, do not include Directorship(s) in Foreign Companies Company have any pecuniary relationships or transactions with
and Section 8 Companies under the Companies Act, 2013. the Company.

• Membership(s) / Chairmanship(s) of only Audit Committee Dr. Swarnalatha Mallavarapu resigned from the Directorship of
and Stakeholders’ Relationship Committee in all public the Company with effect from closing hours of 27th May, 2023.
limited companies have been considered.
The Board, based on the recommendations of the Nomination
The number of Directorships, Committee Membership(s), and Remuneration Committee Meeting held on 27th May, 2023,
Chairmanship(s) of all the Directors are within the limits approved the appointment of Ms. Tanya Mallavarapu (DIN:
prescribed under the Companies Act, 2013 and SEBI (Listing 01728446) as Additional Director with immediate effect subject to
Obligations and Disclosure Requirements) Regulations, 2015. the approval of shareholders of the Company.

Dr. Swarnalatha Mallavarapu is the spouse of Mr. Apparao V Ms. Tanya Mallavarapu is the daughter of Mr. Apparao V
Mallavarapu. Mr. Nikhil Mallavarapu is the son of Mr. Apparao V Mallavarapu and Dr. Swarnalatha Mallavarapu. Ms. Tanya
Mallavarapu and Dr. Swarnalatha Mallavarapu. None of the other Mallavarapu is the sister of Mr. Nikhil Mallavarapu.
Directors are related to any other Director on the Board.
The Board has identified the following skills / expertise /
competencies fundamental for the effective functioning of the
Company which are currently available with the Board:

49
Centum Electronics Limited
Annual Report 2022-23

The mapping of the same with each of the Directors are as below:

Name of the Director Competencies

Mr. Apparao V Knowledge on key industry and technology trends, Global Business, Strategy and Planning, Risk Management,
Mallavarapu Financial Management, Governance, Statekholder Management, Performance Management and Evaluation.
Mr. Nikhil Mallavarapu Knowledge on key industry and technology trends, Global Business, Strategy and Planning, Risk Management,
Financial Management, Governance, Statekholder Management, Performance Management and Evaluation.
Dr. Swarnalatha Risk Management, Financial Management, Governance, Statekholder Management, Performance
Mallavarapu* Management and Evaluation.
Ms. Tanya Risk Management, Financial Management, Governance, Statekholder Management, Performance
Mallavarapu** Management and Evaluation.
Mr. Manoj Nagrath Risk Management, Financial Management, Governance, Statekholder Management, Performance
Management and Evaluation.
Mr. Rajiv C Mody Knowledge on key industry and technology trends, Global Business, Strategy and Planning, Risk Management,
Financial Management, Performance Management and Evaluation.
Mr. Pranav Kumar N Knowledge on key industry and technology trends, Global Business, Strategy and Planning, Risk Management,
Patel Financial Management, Performance Management and Evaluation.
Mr. Thiruvengadam P Knowledge on key industry and technology trends, Global Business, Strategy and Planning, Risk Management,
Financial Management, Governance, Performance Management and Evaluation.
Ms. V Kavitha Dutt Strategy and Planning, Risk Management, Financial Management, Governance, Statekholder Management,
Performance Management and Evaluation.

* Resigned with effect from closing hours of 27th May, 2023

** Appointed with effect from 27th May, 2023

The eligibility of a person to be appointed as a Director of the 2013. The attendance of Directors in Board Meetings and
Company is dependent on whether the person possesses the previous Annual General Meeting (AGM) are as follows:
requisite skill sets identified by the Board as above from time
to time. The Board is satisfied that the current composition Name of the Director Number of Attendance
reflects an appropriate mix of knowledge, skills, experience, meetings at the last
expertise, diversity and independence. The Board provides attended AGM
leadership, strategic guidance, an objective and independent Mr. Apparao V Mallavarapu 4 Yes
view to the Company’s management while discharging its Mr. Nikhil Mallavarapu 4 Yes
fiduciary responsibilities, thereby ensuring that the management
Mr. Manoj Nagrath 4 Yes
adheres to high standards of ethics, transparency and disclosure.
The Board periodically evaluates the need for change in its Mr. Rajiv C Mody 1 Yes
composition and size. Mr. Pranav Kumar N Patel 4 Yes
Dr. Swarnalatha Mallavarapu 3 Yes
b) Board Meetings:
Mr. Thiruvengadam P 4 Yes
The details of the Board Meetings held during the financial Ms. V Kavitha Dutt 4 Yes
year 2022-23 are as follows:
The board had accepted all recommendation of its
Sl. No. Day & Date committees of the board during the financial year.
1 Tuesday, May 24, 2022
c) Code of Conduct for Directors and Senior Management:
2 Friday, August 12, 2022
3 Wednesday, November 9, 2022 The Company has adopted the Code of Conduct for Directors
and Senior Management and the Company received the
4 Tuesday, February 7, 2023
annual affirmations with regard to the adherence to the
The necessary quorum was present in all the Board Code of Conduct for the financial year 2022-23. The Code of
Meetings. The maximum gap between any two meetings Conduct is available on the Company’s website (https://www.
was in compliance with the provisions of the Companies Act, centumelectronics.com/investor-relations/policies/).

50
Corporate Overview Management Reports Financial Statements

All the Independent Directors of the Company at the time a) Audit Committee:
of their first appointment to the Board and thereafter in
the first meeting of the Board in each financial year give a As a measure of good Corporate Governance and to
declaration that they meet the criteria of independence as provide assistance to the Board of Directors in overseeing
provided under SEBI (Listing Obligations and Disclosure the Board’s responsibilities, an Audit Committee
Requirements) Regulations, 2015 and the Companies was formed as a sub-committee of the Board. The
Act, 2013. The Independent Directors fulfill the conditions Committee is in line with the requirements of Section
specified in these regulations and are independent of the 177 of the Companies Act, 2013 and Regulation 18 of the
management. SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015. The terms of reference of the Audit
d) Familiarisation Programmes for Board members: Committee covers all matters specified in Part C of
Schedule II of Regulation 18 (3) of the SEBI (Listing
At the time of appointing a Director, a formal letter of Obligations & Disclosure Requirements)
appointment is given to the Board Members, which inter alia
explains the role, function, duties and responsibilities expected Regulations, 2015 and also those specified in Section
from them as a Director of the Company. The Director is also 177 of the Companies Act, 2013. The terms of reference
explained in detail the compliances required from him under broadly include the following:
the Companies Act, SEBI (Listing Obligation and Disclosure
Requirements) Regulations, 2015 and other relevant Financial Reporting and Related Processes
regulations. The Board members are provided with necessary
 Oversight of the Company’s financial reporting process
documents, reports and internal policies to enable them to
and financial information submitted to the Stock
familiarize with the Company’s procedures and practices.
Exchanges, regulatory authorities or the public.
Quarterly updates on important changes in the regulatory  Reviewing with the Management the quarterly unaudited
environment is presented to the Board by the functional financial statements and the Auditors’ Limited Review
heads. Apart from this, the statutory auditors present to the Report thereon/audited annual financial statements and
Audit Committee/ Board on regular intervals on important Auditors’ Report thereon before submission to the Board
regulatory changes. for approval. This would, inter alia, include reviewing
changes in the accounting policies and reasons for the
The details of Familiarisation Programmes imparted to the
same, major accounting estimates based on exercise of
Independent Directors is disclosed on its website https://
judgment by the Management, significant adjustments
www.centumelectronics.com/investor-relations/policies/
made in the financial statements and / or recommendation,
e) Separate Meeting of the Independent Directors: if any, made by the Statutory Auditors in this regard.

 Review the Management Discussion & Analysis of

Pursuant to the provisions of the Companies Act, 2013 and
financial and operational performance.
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, a separate meeting of the Independent  Discuss with the Statutory Auditors its judgment about
Directors is being held every financial year. None of the non- the quality and appropriateness of the Company’s
independent directors, Members of the management or Key accounting principles with reference to the Generally
Managerial Personnel are present for this Meeting. During Accepted Accounting Principles in India.
the financial year 2022-23 the Meeting of the Independent
Directors was held on Thursday, January 19, 2023 to  Review the investments made by the Company.
review the performance of the Non-Independent directors
Internal Controls and Governance Processes
(including the Chairman & Managing Director) and the Board
as a whole. Based on the guidance note issued by SEBI on  Review the adequacy and effectiveness of the Company’s
January 05, 2017 on the Board Evaluation, Independent system and internal controls.
Directors also reviewed the quality, content and timelines of
the flow of information between the management and the  Review and discuss with the Management the
Board and its Committees which is necessary to perform Company’s major financial risk exposures and steps
and discharge their duties effectively and reasonably. taken by the Management to monitor and control such
exposure.
3) Board Committees
 To oversee and review the functioning of a vigil
The Board of Directors has constituted the Committees, mechanism and to review the findings of investigation
which are mandatory with appropriate delegation of powers. into cases of material nature and the actions taken in
These Committees are functioning as required. respect thereof.

51
Centum Electronics Limited
Annual Report 2022-23

Audit During the year under review, Four Audit Committee

Meetings were held and gap between two meetings
 Review the scope of the Statutory Auditors, the Annual did not exceed one hundred and twenty days. Audit
Audit Plan and the Internal Audit Plan with a view to Committee Meetings were held on May 24, 2022, August
ensure adequate coverage. 11, 2022, November 8, 2022 and February 6, 2023. The
Chairman of the Audit Committee was present at the
 Review the significant audit findings from the Statutory
Annual General Meeting of the Company held on August
and Internal audits carried out, the recommendations
12, 2022, to answer the shareholder queries.
and Management response thereto.
Self-Assessment by the Audit Committee
 Review and recommend to the Board the appointment/
re-appointment of the Statutory Auditors considering The Audit Committee has set in place a process to measure
their independence and effectiveness and their and benchmark its performance each year. The assessment
replacement and removal. broadly covers composition, structure and committee
meetings, overview of the financial reporting process,
 Approve such additional services to be rendered by the
internal control systems and overview of internal and
Statutory Auditors except those enumerated in Section
external audits.
144 of the Companies Act, 2013 and payment for such
services. b) Nomination and Remuneration Committee:

 Recommend to the Board the remuneration of the In compliance with Regulation 19 of SEBI (Listing Obligations
Statutory Auditors. and Disclosure Requirements) Regulations, 2015 read with
Section 178 of the Companies Act, 2013, the Board has
 Discuss with the Statutory Auditors/ Internal Auditors
constituted the “Nomination and Remuneration Committee”.
any significant difficulties encountered during the
course of the Audit. The composition of the Nomination & Remuneration
Committee & attendance in the meetings for the financial
Other Duties
year 2022-23 was as follows:
 To approve the appointment, removal and terms of
remuneration of the Internal Auditor. Sl. Name Position Number of
No. Meetings
 To grant omnibus approval for related party transactions Held Attended
which are in the ordinary course of business and on an
1. Mr. Manoj Nagrath Chairman 2 2
arm’s length pricing basis and to review and approve
2. Ms. V Kavitha Dutt Member 2 2
such transactions subject to the approval of the Board.
3. Mr. Rajiv C Mody Member 2 -
 The composition and attendance of the members for 4. Mr. Apparao V Member 2 2
the Committee Meetings held during the year are as Mallavarapu
follows:
The Nomination & Remuneration Committee Meetings were
Sl. Name Position Number of held on May 24, 2022 and February 7, 2023. The Chairman of
No. Meetings the Nomination and Remuneration Committee was present
Held Attended at the Annual General Meeting of the Company held on
1. Mr. Manoj Nagrath Chairman 4 4 August 12, 2022 to answer the shareholder queries.

2. Mr. Apparao V Member 4 3 The quorum for a meeting of the Nomination and
Mallavarapu Remuneration committee shall be either two members
3. Mr. Pranav Kumar Member 4 4 or one third of the members of the committee, whichever
N Patel is greater, including at least one independent director in
4. Mr. Thiruvengadam P Member 4 3 attendance. This requirement was adhered to during the
year under review.
The Chairman of the Audit Committee is an Independent
Director. The Company Secretary acts as the Secretary The Company Secretary acts as the Secretary to the
to the Committee. Committee.

52
Corporate Overview Management Reports Financial Statements

The terms of reference of the Committee as stipulated • To carry out such other function as may be mandated by
under Schedule II Part (D) of the Regulation 19 (4) of the the Board from time to time;
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 which inter alia includes the following: The Nomination & Remuneration Committee has laid
down the Performance Evaluation criteria of Independent
• To formulate the criteria for determining qualifications, Directors in terms of Regulation 19 read with Part D of
positive attributes and independence of a director and the Schedule II of SEBI (Listing Obligations and Disclosure
recommend to the board of directors a policy relating Requirements) Regulations, 2015.
to, the remuneration of the directors, key managerial
personnel and other employees; The Board has, on the recommendation of the Nomination
& Remuneration Committee framed a policy for selection
• To formulate criteria for evaluation of performance of and appointment of Directors, Senior Management and their
independent directors and the Board; remuneration.

• To devise a policy on Board diversity; Policy for selection and Appointment of Directors and their
Remuneration
• To identify persons who are qualified to become directors
and who may be appointed in the senior management in The Nomination and Remuneration Committee (NRC)
accordance with the criteria laid down and recommend has formulated a policy which, inter alia, deals with the
to the board of directors their appointment and removal; manner of selection of the Board of Directors and the
Senior Management. Link for the policy is https://www.
• To recommend the Board whether to extend or continue centumelectronics.com/investor-relations/policies/
the term of appointment of the Independent Director,
on the basis of the report of performance evaluation of
Independent Directors;

The details of remuneration paid to the Directors for the year ended March 31, 2023 are as follows:
(in H)

Name of the Director Salary & Perquisites Sitting Fees Commission Total
Mr. Apparao V Mallavarapu 1,36,25,667 - - 1,36,25,667
Mr. Nikhil Mallavarapu 1,36,25,667 - - 1,36,25,667
Mr. Manoj Nagrath - 2,40,000 5,00,000 7,40,000
Mr. Rajiv C Mody - 30,000 5,00,000 5,30,000
Mr. Pranav Kumar N Patel - 2,40,000 5,00,000 7,40,000
Dr. Swarnalatha Mallavarapu* - 90,000 5,00,000 5,90,000
Mr. Thiruvengadam P - 2,10,000 5,00,000 7,10,000
Ms. V Kavitha Dutt - 1,20,000 5,00,000 6,20,000

* resigned from the closing hours of 27th May, 2023

A sitting fee of H 30,000 is paid to the Non-Executive (Listing Obligation and Disclosure Requirements)
Directors for attending each Meeting of the Board and Regulations, 2015, the Board has constituted the
the Audit Committee. The payment of Commission of “Stakeholders’ Relationship Committee”
H 5,00,000 (Rupees Five Lakhs) to the Non – Executive
Directors annually commencing from April 1, 2020 The Stakeholders’ Relationship Committee has been
was approved by the Members of the Company at the formed for the effective redressal of the investors’
Annual General Meeting held on September 18, 2020. complaints, reviewing the activities of the share transfer
The approval was based on the responsibilities and committee and reporting of the same to the Board
their contribution to the Company in their respective periodically.
capacities.
The Stakeholders’ Relationship Committee meeting
c) Stakeholders’ Relationship Committee (SRC): was held on May 24, 2022, during the year. The details of
attendance of the Committee Members in the meeting
In compliance with the provisions of Section 178 of the
are given below.
Companies Act, 2013 and Regulation 20 of the SEBI

53
Centum Electronics Limited
Annual Report 2022-23

Name Particulars Number of The Company Secretary & Compliance Officer acts as
Meetings the Secretary to the Committee.
Held Attended
The Company has received complaints/requests during
Mr. Manoj Nagrath Chairman 1 1 the year from the Shareholders. All the complaints have
Mr. Nikhil Mallavarapu Member 1 1 been redressed to the satisfaction of the Shareholders.
Dr. Swarnalatha Member 1 1 An analysis of the complaints /requests are as follows:
Mallavarapu

Status of complaints from the stakeholders from 01.04.2022 to 31.03.2023

Sl.No. Nature of Complaints OpeningBalance Received Redressed Pending

1. Non receipt of securities NIL 24 24 NIL
2. Non receipt of Dividend Warrants NIL 139 139 NIL
3 Non receipt of Annual reports NIL - - NIL
4. General Enquiries NIL 889 889 NIL
Total NIL 1052 1052 NIL

d) Corporate Social Responsibility (CSR) Committee: e) Risk Management Committee:

In compliance with the provisions of Section 135 of In compliance with Regulation 21 of the SEBI (Listing
the Companies Act, 2013, the Board has constituted Obligations and Disclosure Requirements) Regulations,
Corporate Social Responsibility (CSR) Committee. The 2015 the Board has constituted “Risk Management
terms of the Committee broadly comprise the following: Committee”. The Committee has laid down the Policy
on Risk Management and its mitigation. The Policy on
 To review the CSR Policy and to make it more Risk Management of the Company is available at https://
comprehensive so as to indicate the activities to www.centumelectronics.com/investor-relations/
be undertaken by the Company as specified in policies/
Schedule VII of the Companies Act, 2013;
The Risk Management Committee meetings were held
 To provide guidance on various CSR activities to on August 5, 2022 and December 19, 2022. The details of
be undertaken by the Company and to monitor its attendance of the Committee Members in the meetings
progress. are given below.
The Corporate Social Responsibility Committee was
Sl. Name Position Number of
held on 24th May, 2022. The details of attendance of the
No. Meetings
Committee Members in the meeting are given below.
Held Attended
Name Particulars Number of 1. Mr. Pranav Kumar Chairman 2 2
Meetings N Patel

Held Attended 2. Mr. Member 2 2

Thiruvengadam P
Mr. Thiruvengadam P Chairman 1 1
3. Mr. Nikhil Member 2 2
Dr. Swarnalatha Member 1 1 Mallavarapu
Mallavarapu
4 Mr. K S Desikan Member 2 2
Ms. V Kavitha Dutt Member 1 1

The CSR Committee meeting was held on May 24, 2022

during the year. The Chairman and all the Members
attended the CSR Committee Meeting.

54
Corporate Overview Management Reports Financial Statements

4) Disclosures d) Related Party Transactions

a)
Annual evaluation of Board, its Committees and All transactions entered into with Related Parties as
Individual Directors defined under the Companies Act, 2013 and Regulation
23 of the SEBI (Listing Obligations and Disclosure
The Board of Directors has carried out an annual Requirements) Regulations, 2015, during the financial
evaluation of its own performance, its Committees and year were in the ordinary course of business and at an
individual Directors pursuant to the requirements of the arm’s length basis. There are no material significant
Act and the Listing Regulations. related party transactions during the financial year
i.e. transactions of the Company of material nature
b) Subsidiary Companies
with its promoters, the Directors, the Management,
The Company has the following subsidiary companies: their subsidiaries or the relatives etc., that may have
potential conflict with the interests of the Company
1. Centum T&S Private Limited (Formerly known as at large. However, the Company has taken approval of
Centum Adeneo India Private Limited), a wholly owned the Audit Committee and Board of Directors for all the
Indian Subsidiary company. related party transactions during the year.

2. Centum Electronics UK Limited, UK based company. Details of the significant related party transactions
with the group companies are given in the appended
Centum Adetel Group S.A., French based company,
financial statements under Note no. 42 of the notes to
which is the subsidiary of Centum Electronics UK
the accounts of the standalone financial statements.
Limited.
Pursuant to the said regulations, the Company has
The Audited Annual Financial Statements of Subsidiary
framed a policy for dealing with the related party
Companies are tabled at the Audit Committee and
transactions, which has been uploaded on the
Board Meetings of the Company.
Company’s website. The weblink for the same is https://
Copies of the Minutes of the Audit Committee / Board www.centumelectronics.com/investor-relations/
Meetings of Subsidiary Companies are individually given policies/
to all the Directors and are tabled at the subsequent
e) There are no Loans and advances in the nature of loans
Board Meetings.
to firms/companies in which directors are interested.
The Company has a policy on material subsidiaries
f) Fees Paid to Statutory Auditors:
and the weblink for the same is https://www.
centumelectronics.com/investor-relations/policies/ During the year ended March 31, 2023 fees paid to
Statutory Auditors are as follows:
Centum Electronics UK Limited is a Material Subsidiary
of the Company. It was incorporated by Centum (Amount in H)
Electronics Limited in 2016. The Statutory Auditors of
Particulars Fees (Excluding GST)
Centum Electronics UK Limited are Blick Rothenberg.
Audit and related services 52,00,000
c) Whistle Blower Policy: (excluding out of pocket expense)
Fees paid for Subsidiary 7,00,000
The Company promotes ethical behavior in all its
business activities and has put in place a mechanism Total 59,00,000
for reporting illegal or unethical behavior. The Company
g) Compliance with Statutory/legal requirements:
has a Vigil mechanism/Whistle blower policy under
which the employees are free to report violations of During the year, there are no non-compliances by the
applicable laws, regulations and the Code of Conduct. Company. There are no other penalties, strictures
During the year under review, there are no such imposed on the Company by the Stock Exchange or
events to report. The copy of Whistle Blower Policy is SEBI or any other statutory authority, on any matter
available on the website of the Company https://www. related to capital matters, during the last three years.
centumelectronics.com/investor-relations/policies/
h) Compliance with Accounting Standards:
The Board hereby affirms that no personnel has been
denied access to the Audit Committee. Your Company confirms that it has complied with all the
applicable Accounting Standards issued by the Ministry
of Corporate Affairs.

55
Centum Electronics Limited
Annual Report 2022-23

i) Internal Controls: any convertible instruments which is likely to have an

impact on Company's equity.
The Company has a formal system of internal control
testing which examines both the design effectiveness l) Certification from Company Secretary in Practice:
and operational effectiveness to ensure reliability of
financial and operational information and all statutory None of the Directors of the Company have been
/ regulatory compliances. The Company’s business debarred or disqualified from being appointed or
processes are on LN -ERP and has a strong monitoring continuing as director of company by the Securities and
and reporting process resulting in financial discipline Exchange Board of India or the Ministry of Corporate
and accountability. Affairs or any such Statutory Authority. A Certificate to
this effect, issued by the Practicing Company Secretary
j) CMD/CFO Certification: is annexed to this Report.

The CMD and the CFO have issued certificate pursuant m) Disclosures under Sexual Harassment of Women at
to the provisions of Regulation 17(8) of the SEBI (Listing Workplace (Prevention, Prohibition and Redressal)
Obligations and Disclosure Requirements) Regulations, Act, 2013:
2015, certifying that the financial statements do not
contain any untrue statement and these statements The Company has formulated a Policy in line with the
represent a true and fair view of the Company’s affairs. provisions of the Sexual Harassment of Women at
The said certificate is annexed and forms part of the Workplace (Prevention, Prohibition and Redressal) Act,
Annual Report. 2013 and the Rules thereunder. A reference disclosure
on the same is also made in the Board’s Report forming
k) Outstanding GDRs / ADRs: part of the Annual Report.

The Company has not issued any Global Depository The Company has not received any complaint of sexual
Receipt / American Depository Receipt / Warrant or harassment during the financial year 2022-23.

n) Compliance of mandatory requirements:

The Company is pleased to inform that your Company has complied with all the mandatory requirements of the SEBI (Listing
Obligation and Disclosure Requirements) Regulations, 2015 including Regulation 17 to 27 read with Schedule V and Regulation
46 as applicable and amended from time to time.

5) General Body Meetings:

a) Date and venue of the last three AGMs are given below:

Year Date Venue Time Number of special

resolutions
2019-20 September 18, 2020 Meeting held through Video Conference from the 4.00 P.M 4
Registered Office: No.44, KHB Industrial Area
Yelahanka New Town Bengaluru – 560 106
2020-21 August 12, 2021 Meeting held through Video Conference from the 4.00 P.M 1
Registered Office: No.44, KHB Industrial Area
Yelahanka New Town Bengaluru – 560 106
2021-22 August 12, 2022 Meeting held through Video Conference from the 4.30 P.M -
Registered Office: No.44, KHB Industrial Area
Yelahanka New Town Bengaluru – 560 106

b) Means of Communication: The results are also published in Business Standard –

All editions, Economic Times – Bangalore & Mumbai
The Company has its own website viz. www. editions and Vijayavani/ Prajavani – Bangalore edition.
centumelectronics.com. The quarterly, half- yearly and
annual results are posted on the Company’s website for All the material information is promptly sent to the
the information of the Shareholders. Stock Exchanges where the Shares of the Company
are listed. The Management Discussion and Analysis
Report forms part of the Annual Report.

56
Corporate Overview Management Reports Financial Statements

Ministry of Corporate Affairs ("MCA") has vide its circular dated December 28, 2022 read with circulars dated April 08, 2020, April 13,
2020 and May 05, 2020 (collectively referred to as "MCA Circulars") permitted the holding of AGM through VC / OAVM, without the
physical presence of Members. In compliance therewith, AGM of the Company is being held through VC / OAVM. Also, in compliance
with MCA Circulars and SEBI Circular dated January 05, 2023 read with circular dated May 12, 2020, Notice of the AGM along with
the Annual Report 2022-23 is being sent only through electronic mode to those Members whose email addresses are registered
with the Company / Depositories. Members may note that the Notice and Annual Report 2022-23 will also be available on the
Company’s website viz. https://www.centumelectronics.com/investor-relations/, websites of the Stock Exchanges i.e. BSE Limited
and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com respectively.

6) General Shareholder Information

1 Registration Details Company is registered in the State of Karnataka and the Corporate Identity Number
allotted by Ministry of Corporate Affairs (MCA) is L85110KA1993PLC013869
2 Registered Office No.44, KHB Industrial Area, Yelahanka New Town, Bengaluru – 560 106
3 Compliance Officer Ms. Indu H S
4 Date, time & venue of the 30th Friday, August 11, 2023 at 04:30 p.m. IST
AGM
The Company is conducting meeting through Video Conferencing/ Other Audio Visual
Means pursuant to the MCA Circulars and as such there is no requirement to have a venue
for the AGM. For details please refer to the Notice of this AGM.
5 Financial Year 2022-2023
6 Record Date for Dividend August 2, 2023
7 Dividend The Board of Directors of the Company have recommended a dividend of H 4/- (40%) per
equity share. Dividend, if approved in the ensuing Annual General Meeting will be paid to
those Shareholders, whose name appear in the Register of Members as on August 2, 2023.
8 Listing in Stock Exchanges The Equity Shares of the Company are listed in the following Stock Exchanges:
• The National Stock Exchange of India Limited
• BSE Limited
9 Stock Code • National Stock Exchange of India Limited – CENTUM
• BSE Limited – 517544
10 Listing Fees Listing Fees as prescribed has been paid fully to the Stock Exchanges where the shares
of the Company are listed.
11 Details of Credit Ratings Total Bank Loan Facilities H 355.70 Crores (Rupees Three Hundred
Rated Fifty-Five Crore and
Seventy Lakhs Only)
Long Term Bank Facilities CARE BBB; Stable
(Triple B; Outlook: Stable )
Long Term / Short Term Bank CARE BBB; Stable / CARE A3+ (Triple B ; Outlook:
Facilities Stable/ A Three Plus )

7) Stock Performance

Month National Stock Exchange of India Limited (NSE) BSE Limited (BSE)
High Low Total Turnover High Low Total Turnover
(J in Lakhs) (J in Lakhs)
April 535.00 455.25 1,621.80 535.45 456.00 121.82
May 483.05 392.00 906.56 489.80 393.40 49.34
June 466.00 395.05 641.85 468.00 395.60 33.04
July 440.01 393.55 471.97 438.90 393.15 18.17
August 504.90 406.10 1,561.03 505.00 408.00 139.19
September 559.00 450.50 2,096.65 557.95 450.00 303.39
October 671.40 472.30 3,788.31 670.00 473.00 280.92
November 692.80 523.95 4,166.69 692.50 525.25 327.27
December 791.10 558.25 11,352.60 790.00 553.95 526.73
January 747.45 618.05 4,323.82 747.40 617.15 379.44
February 669.80 545.00 1,813.10 674.00 546.60 93.67
March 729.70 496.85 6,700.97 728.35 497.00 227.25

57
Centum Electronics Limited
Annual Report 2022-23

The performance of the stock in National Stock Exchange of India Limited and BSE Limited for the period
from April 1, 2022, to March 31, 2023, was as follows:

Exchange: NSE; Date:01-04-2022 End Date: 31-03-2023 Exchange: BSE; Date:01-04-2022 End Date: 31-03-2023

8) Dematerialisation of shares The Share Transfer Committee meets as and when required.
The Committee reports periodically to the Stakeholders’
The ISIN for the Equity Shares of the Company is Relationship Committee on receipt of the Investors’
INE320B01020. A total of 1,27,94,412 Equity Shares complaints, if any.
aggregating to 99.30% of the total shares of the Company
are in dematerialised form as on March 31, 2023. In terms of Regulation 40(1) of the Listing Regulations,
securities can be transferred only in dematerialized form
9) Registrars and Share Transfer Agents with effect from April 1, 2019.

For Share related matters, Members are requested to In case of shares held in electronic form, the transfers
correspond with the Company’s Registrar and Transfer Agent are processed by National Securities Depository Limited
– KFin Technologies Limited (formerly KFin Technologies ('NSDL') and Central Depository Services (India) Limited
Private Limited) quoting their Folio No./ DP ID & Client ID at (‘CDSL’) through respective Depository Participants.
the following Address:
The Company obtains a certificate from Practicing Company
KFin Technologies Limited Secretary as required under Regulation 40(9) of the Listing
(Formerly KFin Technologies Private Limited) Regulations and the same is filed with the Stock Exchanges.
Selenium Tower B, Plot Nos.31 & 32, Financial District
Nanakramguda, Serilingampally Mandal, Hyderabad – Suspense Escrow Demat Account:
500032
There were no instances during the financial year where
Ph No.: +91 40 6716 2222, Fax No.: +91 040 23001153
shares were liable to be transferred to the Suspense Escrow
Toll Free No. 1800 3454 001
Demat Account on account of non-receipt of demat request
Email: [email protected]
from the investor within 120 days of issuance of the Letter of
10) Share Transfer System Confirmation by RTA.

The composition of the Share Transfer Committee is as The Company has delegated the power of share transfers
follows: to KFin Technologies Limited, the Company’s Registrar
and Share Transfer Agent (‘RTA’). They process the share
Sl. Name Designation transfers and the same are approved by the Share Transfer
No. Committee periodically. The share transfers are effected
1. Mr. Apparao V Chairman & Managing within 15 days from the date of receipt. The Shareholders
Mallavarapu Director can send their share transfer/demat requests either to the
2. Mr. K S Desikan Chief Financial Officer RTA directly or to the Company.
4. Ms. Indu H S Company Secretary

58
Corporate Overview Management Reports Financial Statements

11) Distribution of Shareholding

The distribution of the Shareholding as on March 31, 2023 is as follows:

Category (Shares) No. of Shareholders % No. of Shares %

1-5000 9,597 93.64 6,50,790 5.05
5001- 10000 303 2.96 2,38,795 1.85
10001- 20000 139 1.36 2,01,589 1.56
20001- 30000 45 0.44 1,11,778 0.87
30001- 40000 25 0.24 89,001 0.69
40001- 50000 25 0.24 1,17,506 0.91
50001- 100000 53 0.52 3,78,195 2.94
100001 & Above 24 0.23 3,42,967 2.66
200001 & above 38 0.37 1,07,54,160 83.47
Total 10,249 100.00 1,28,84,781 100.00

12) Shareholding Pattern

Categories of Shareholders as on March 31, 2023 is as follows:

Category No. of Shares % to Total Shares

Promoters & Promoter Group 75,76,478 58.80
Employees 1,64,278 1.27
Mutual Funds 6,67,637 5.18
Financial Institutions / Banks 1,83,286 1.42
Non-Resident Indians 21,542 0.17
Non-Resident Indian Non Repatriable 37,412 0.29
Foreign Portfolio- CORP 10,600 0.08
Indian Public 32,68,437 25.37
Clearing Members 5,397 0.04
Bodies Corporate 7,07,077 5.49
IEPF 93,741 0.73
HUF 1,48,896 1.16
Total 1,28,84,781 100.00

Promoters / Promoter group haven’t pledged any equity The Shares Transferred to the IEPF can be claimed by the
shares of the Company held by them in the Company during concerned members from the IEPF Authority after complying
the financial year 2022-23. with the procedure prescribed under the IEPF Rules. The
details of the unclaimed dividends are available on the
13) Transfer of Unclaimed/Unpaid Dividend Company’s Website at https://www.centumelectronics.com/
unclaimed-dividends/
Pursuant to applicable provisions of the Companies Act,
2013 read with Investor Education and Protection Fund During the year under review, the Company has transferred
Authority (Accounting, Audit, Transfer and Refund) Rules, H 4,47,756/- to Investor Education and Protection Fund
2016 (Rules), all unpaid or unclaimed dividends are required Account which was pertaining to Unpaid Final Dividend
to be transferred by the Company to the IEPF established by Account - Centum Electronics Limited 2014-15 and Unpaid
the Central Government, after completion of 7 (seven) years. 1st Interim Dividend Account - Centum Electronics Limited
Further, according to the Rules, shares in respect of which 2015-16 and remained as unclaimed for a period of 7 years
dividend has not been paid or claimed by the Shareholders for from the date of transfer to Unpaid Dividend account.
7 (seven) consecutive years or more shall also be transferred
to the Demat account created by the IEPF Authority.

59
Centum Electronics Limited
Annual Report 2022-23

The Company will be transferring the unclaimed/unpaid dividends as mentioned hereunder to the Investors Education and Protection
Fund established by the Central Government, in terms of the provisions of Section 124 and 125 of the Companies Act, 2013:

Sl Dividend Year AGM/ Board Meeting Date at Dividend per Share (in J) Due date for transfer of
No. which the Dividend declared unclaimed Dividend to IEPF
1 2016-17 - Interim 14-02-2017 2.00 26-02-2024
2 2016-17 - Final 11-07-2017 3.00 19-07-2024
3 2017-18 - Interim 13-02-2018 1.00 25-02-2025
4 2018-19 - Interim 06-02-2019 1.00 10-03-2026
5 2018-19 - Final 13-08-2019 4.00 19-09-2026
6 2019-20- Final 18-09-2020 2.50 24-10-2027
7 2020-21 - Interim 10-02-2021 2.00 18-03-2028
8 2020-21- Final 12-08-2021 2.00 10-09-2028
9 2021-22 - Final 12-08-2022 2.50 25-08-2029

14)
Transfer of the ‘Shares’ to Investor Education Internet access: www.centumelectronics.com
and Protection Fund (IEPF) (in cases where
The website of the Company contains all relevant information
dividend has not been paid or claimed for seven
about the Company. The Annual Reports, Shareholding
consecutive years or more)
pattern, un-audited quarterly results and all other material
In terms of Section 124(6) of the Act read with Investor information are hosted in this site.
Education & Protection Fund (IEPF) Authority (Accounting,
Email Id for Investor Grievances:
Audit, Transfer and Refund) Rules, 2016 as amended and
Notifications issued by the Ministry of Corporate Affairs Company has a dedicated e-mail id (investors@
from time to time, the Company is required to transfer the centumelectronics.com) for redressal of grievances of
shares in respect of which dividends have remained unpaid/ investors. Investors can also write to the Company on the
unclaimed for a period of seven consecutive years or more to below address:
the IEPF Account established by the Central Government. As
required under the said Rules, the Company has transferred Company Secretary,
the required number of shares to the IEPF. The Company has Centum Electronics Limited,
accordingly transferred 9,284 shares to the Demat Account No. 44, KHB Industrial Area,
of the IEPF Authority. Yelahanka New Town,
Bengaluru – 560 106
15) Disclosureswith respect to the Demat Suspense Telephone: +91 80 41436000
Account / Unclaimed Suspense Account: Fax : +91 80 41436005

17) Registered Office & Plant Address /Phone and

There are no equity shares lying in the Demat suspense Fax Numbers
account
Location I Location II
16) Financials Release Dates for 2023-24
Centum Electronics Limited Centum Electronics Limited
Quarter Release Date (tentative & No. 44, KHB Industrial Area, Avansa Plot-58P, Survey
subject to change) Yelahanka New Town, No.8, KIADB, Bangalore
Bengaluru – 560 106. Aerospace Park, Industrial
1st Quarter ending Second week of
Telephone: +91 80 41436000 Area, Jala Hobli, Budigere
June 30, 2023 August 2023
Fax: +91 80 41436005 Post, Bengaluru – 562 129.
2nd Quarter ending Second week of
Telephone: +91 80 71214000
September 30, 2023 November 2023
Fax: +91 80 71214005
3rd Quarter ending Second week of
December 31, 2023 February 2024
4th Quarter ending Last week of May 2024
March 31, 2024

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Corporate Overview Management Reports Financial Statements

18) Compliance with discretionary requirements: on the Company’s website and also communicated to
the Stock Exchanges where the shares of the Company
All mandatory requirements of the SEBI Listing Regulations are listed i.e., BSE Ltd and National Stock Exchange of
have been complied with by the Company. The status of India Limited.
compliance with the discretionary requirements, as stated
under Part E of Schedule II to the SEBI Listing Regulations 2. The Auditors’ Opinion on the Financial Statements is
are as under: unmodified.

1. The quarterly financial results are published in the 3. M/s KPMG, Assurance & Consulting Services, LLP
leading English and Kannada newspapers and not were the Internal Auditors of the Company during the
sent to individual Shareholders. Significant events year. The Internal Auditors report directly to the Audit
are published as news items/advertisements in Committee on a quarterly basis on their findings and
newspapers. Further, the financial results are available corrective actions taken.

By order of the Board

For Centum Electronics Limited

Place: Bengaluru Apparao V Mallavarapu Nikhil Mallavarapu

Date: 27th May, 2023 Chairman & Managing Director Wholetime Director
DIN: 00286308 DIN: 00288551

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Corporate Governance Compliance Certificate

To
The Members of
Centum Electronics Limited

I have examined all the relevant records of Centum Electronics Limited (‘the Company’) for the purpose of certifying compliance
of conditions of Corporate Governance as stipulated in Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (‘Listing Regulations’) for the period from 1st April, 2022 to 31st March, 2023. I have obtained all the
information and explanations which to the best of my knowledge and belief were necessary for the purposes of certification.

The compliance of conditions of Corporate Governance is the responsibility of the Management of the Company. My examination was
limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance with conditions of Corporate
Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In my opinion and to the best of my information and according to the explanations given to me, I certify that the Company has complied
with the conditions of Corporate Governance as stipulated in ;

• Regulations 17 to 27, clauses (b) to (i) of Regulation 46(2) and paragraphs C, D and E Schedule V of the Listing Regulations.

• Paragraphs C and E of Discretionary requirements specified in Part E of Schedule II of the Listing Regulations.

I further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness
with which the management has conducted the affairs of the Company.

Place: Bengaluru RAJSHEKAR

Date : 18th May, 2023 Practicing Company Secretary
UDIN: F004078E000330448 FCS 4078, CP No 2468

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Corporate Overview Management Reports Financial Statements

Certificate of Non-Disqualification of Directors

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015)

To,
The Members of
Centum Electronics Limited

I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Centum Electronics
Limited having CIN L85110KA1993PLC013869 and having registered office at 44, KHB Industrial Area, Yelahanka Bangalore. 560064
(hereinafter referred to as ‘the Company’), produced before me by the Company for the purpose of issuing this Certificate, in accordance
with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

In my opinion and to the best of my information and according to the verifications (including Directors Identification Number (DIN)
status at the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company & its officers, I hereby
certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31st March, 2023 have
been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of
India, Ministry of Corporate Affairs, or any such other Statutory Authority.

Sl. No Name of Director Director Identification Date of original

Number (DIN) appointment in Company
Executive Directors
1 Mr. Apparao Venkata Mallavarapu 00286308 08.01.1993
2 Mr. Nikhil Mallavarapu 00288551 13.02.2020
Non-Executive Directors
3 Mr. Manoj Nagrath 01974412 05.01.2010
4 Mr. Rajiv Chandrakanth Mody 00092037 07.08.2010
5 Mr. Pranavkumar Nalinkumar Patel 06784801 28.01.2014
6 Ms. Swarnalatha Mallavarapu 00288771 26.03.2015
7 Mr. Thiruvengadam Parthasarathi 00016375 08.02.2016
8 Ms. V Kavitha Dutt 00139274 25.03.2020

Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the Management of the
Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to
the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the
Company.

Place: Bengaluru RAJSHEKAR

Date : 18th May, 2023 Practicing Company Secretary
UDIN: F004078E000330470 FCS 4078, CP No 2468

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Annexure - 7
Business Responsibility & Sustainability Reporting –
FY 2022-23
SECTION A: GENERAL DISCLOSURES

I. Details of the listed entity

1 Corporate Identity Number (CIN) of the Listed Entity L85110KA1993PLC013869

2 Name of the Listed Entity Centum Electronics Limited
3 Year of incorporation 08-01-1993
4 Registered office address No. 44, KHB Industrial Area, Yelahanka New
Town, Bengaluru – 560 106
5 Corporate address No. 44, KHB Industrial Area, Yelahanka New
Town, Bengaluru – 560 106
6 E-mail [email protected]
7 Telephone 080 4143 6000
8 Website www.centumelectronics.com
9 Financial year for which reporting is being done 2022-23
10 Name of the Stock Exchange(s) where shares are listed BSE Limited and National Stock Exchange of
India Limited
11 Paid-up Capital H 129 million
12 Name and contact details (telephone, email address) of the person who Ms. Indu H S
may be contacted in case of any queries on the BRSR report Telephone: 080 4143 6000 and email id :
[email protected]
13 Reporting boundary - Are the disclosures under this report made on a Standalone
standalone basis (i.e. only for the entity) or on a consolidated basis (i.e.
for the entity and all the entities which form a part of its consolidated
financial statements, taken together)

II. Products/services
14. Details of business activities (accounting for 90% of the turnover):

Description of Main Activity Description of Business Activity % of Turnover

of the entity
Electronic System Design and Manufacturing Design services, Manufacture of systems and 100
subsystems, Contract manufacturing

15. Products/Services sold by the entity (accounting for 90% of the entity’s Turnover):

S.No. Product/Service NIC Code % of total turnover

contributed
1 Systems and Subsystems 26109 29
2 Contract Manufacturing 26104 71

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Corporate Overview Management Reports Financial Statements

III. Operations
16. Number of locations where plants and/or operations/offices of the entity are situated:

Location Number of plants Number of offices Total

National 2 2 4
International - - -

17. Markets served by the entity:

a. Number of locations

Location Number
National (No. of States) 10
International (No. of Countries) 12

b. What is the contribution of exports as a percentage of the total turnover of the entity?
54%

c. A brief on types of customers :

The company offers a broad range of products and services across different industry segments. It has domain expertise in
Electronics Design & Manufacturing Solutions and offers entire spectrum of design services and manufacturing of systems,
subsystems for mission critical products in Defence, Space, Aerospace, Industrial & Energy, Transportation & Automotive and
Healthcare sectors. The company has been helping customers turn their ideas into products.

IV. Employees

18. Details as at the end of Financial Year:

a. Employees and workers

Sl. Particulars Total (A) Male Female

No. No. (B) % (B/A) No. (C ) % (C/A)
EMPLOYEES
1 Permanent (D) 451 350 77.61 101 22.39
2 Other than Permanent (E) - - - - -
3 Total employees (D + E) 451 350 77.61 101 22.39
WORKERS
4 Permanent (F) 775 560 72.26 215 27.74
5 Other than Permanent (G) - - - - -
6 Total workers (F + G) 775 560 72.26 215 27.74

b. Differently abled Employees and Workers: None

19. Participation/Inclusion/Representation of women

Particulars Total (A) No. and percentage of Females

No. (B) % (B/A)
Board of Directors 8 2 25
Key Management Personnel 4 1 25

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Centum Electronics Limited
Annual Report 2022-23

20. Turnover rate for permanent employees and workers

Particulars 2022-23 2021-22 2020-21

Male Female Total Male Female Total Male Female Total
Permanent Employees 34.72 25.56 32.79 31.16 40.25 32.95 21.00 25.31 21.85
Permanent Workers 45.62 20.28 32.66 36.80 29.61 34.52 47.49 36.60 44.07

V. Holding, Subsidiary and Associate Companies (including joint ventures)

21. Names of holding / subsidiary / associate companies / joint ventures

Sl. Name of the Holding / Subsidiary / Indicate whether % of shares held Does the entity indicated
No. Associate Companies / Joint Ventures holding / Subsidiary by listed entity at column A, participate in
(A) / Associate / Joint the Business Responsibility
Venture initiatives of the listed entity?
(Yes/No)
1 Centum T&S Private Limited (Formerly Subsidiary 100 No
known as Centum Adeneo India Private
Limited)
2 Centum Electronics UK Limited Subsidiary 100 No

VI. CSR Details

22. (i) Whether CSR is applicable as per section 135 of the Companies Act, 2013: (Yes/No): Yes
(ii) Turnover (in H) – FY 21-22 : H3,480 million
(iii) Net worth (in H) – FY 21-22 : H2,645 million

VII. Transparency and Disclosures Compliances

23. Complaints/Grievances on any of the principles (Principles 1 to 9) under the National Guidelines on Responsible Business
Conduct:

Stakeholder Grievance FY 2022-23 FY 2021-22

group from whom Redressal
complaint is Mechanism in Place
received (Yes/No) (If Yes,
then provide web-
link for grievance
redress policy)*
Number of Number of Remarks Number of Number of Remarks
complaints complaints complaints complaints
filed during pending filed during pending
the year resolution at the year resolution at
close of the close of the
year year
Communities Yes - - - - - -
Investors (other than Yes - - - - - -
shareholders)
Shareholders Yes 163 - - 140 - At the end
of the year
there were
no investor
complaints
pending
resolution.

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Corporate Overview Management Reports Financial Statements

Stakeholder Grievance FY 2022-23 FY 2021-22

group from whom Redressal
complaint is Mechanism in Place
received (Yes/No) (If Yes,
then provide web-
link for grievance
redress policy)*
Employees and Yes - - - - - -
workers
Customers Yes - - - - - -
Value Chain Partners Yes - - - - - -

*The Company’s grievance redressal mechanism is available at https://www.centumelectronics.com/investor-relations/policies/

24. Overview of the entity’s material responsible business conduct issues

The company’s risk management committee periodically evaluates significant risk exposures and assess the mitigation measures
covering environmental, social and governance aspects. The risk management framework of the Company has the requisite
processes and systems for identifying and reporting risks. Corrective actions are implemented to address the risks identified.

Sl No. Material Indicate Rationale for identifying In case of risk, approach to Financial implications
issue whether the risk / opportunity adapt or mitigate of the risk or
identified risk or opportunity (Indicate
opportunity positive or negative
(R/O) implications)
1 Material Lead R Long material lead times Efficient inventory management Negative
Times impact the manufacturing and plan for alternate component
operations due to lack of manufacturers
required components
2 CSR O CSR projects create a Positive
positive impact and improve
community relations
3 Employee O Ensuring an employee- Positive
Engagement friendly environment at the
workplace
4 Supply Chain R Some external events lead The materials are procured from Negative
Management to difficulty in sourcing and reputed manufacturers to ensure
transport of materials delivery timelines
5 Talent R Significant consequences of Attracting and retaining talent Negative
Management loss of top talent, inability
to meet business goals

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Annual Report 2022-23

SECTION B: MANAGEMENT AND PROCESS DISCLOSURES

This section is aimed at helping businesses demonstrate the structures, policies and processes put in place towards adopting the
NGRBC Principles and Core Elements.

Particulars P1 P2 P3 P4 P5 P6 P7 P8 P9
Ethics & Product Human Responsi Respect Environm Public Inclusive Customer
Transpar Responsibility Resources veness to for Human ent Policy Growth Engagement
ency Stakehold Rights restoration Advocacy
ers
Policy and management processes
1. a. Whether your Y Y Y Y Y Y N Y Y
entity’s policy/
policies cover each
principle and its
core elements of the
NGRBCs. (Yes/No)
b. Has the policy All policies are not required to be approved by the Board of Directors. The approval of the Board has been taken
been approved by the on mandatory policies. However, all the policies are approved by the Chairman & Managing Director of the
Board? (Yes/No) Company.
c. Web Link of the www.centumelectronics.com
Policies, if available
2. Whether the Yes, the Company has translated the policies into procedures wherever applicable. The same are assimilated in
entity has translated the procedures and practices in all areas of activity that the Company undertakes. Formal communication is sent
the policy into to internal stakeholders and the external stakeholders are communicated to the extent as may be applicable.
procedures. (Yes / The Company has a HR Information System (HRIS) Potal for the benefit of employees. It is an employee self-
No) service portal. We upload all the HR policies in HRIS system with access controls.
3. Do the enlisted Due diligence is carried on in the process of dealing with the various value chain partners.
policies extend to
your value chain
partners? (Yes/No)
4. Name of the • ISO Certificate for Quality Management System (ISO 9001:2015)
national and • ISO Certificate for Occupational Health and Safety Management System (ISO 45001:2018)
international codes/
certifications/labels/ • ISO Certificate for Environment Management System (ISO 14001:2015)
standards (e.g. • ISO Certificate for Information Security Management System (ISO/IEC 27001:2013)
Forest Stewardship
• ISO Certificate for Medical Standard (ISO 13485:2003)
Council, Fairtrade,
Rainforest Alliance, • ISO Certificate for Automotive Standard (ISO 16949:2009)
Trustea) standards • ESD association 20-20 certified
(e.g. SA 8000,
OHSAS, ISO, BIS) • IRIS Railway certification
adopted by your • IPC certified for IPC-A-610 Class III & II application specialist
entity and mapped to
• IPC certified for J-STD-001 certified trainer
each principle.

5. Specific commitments, goals and targets set by the entity with defined timelines, if any.

The Company has identified key parameters and has placed an effective mechanism to continuously monitor. Necessary
assessments are carried out periodically by third party independent service providers and certified.

6. Performance of the entity against the specific commitments, goals and targets along with reasons in case the same are not met.

P1 Ethics & Transparency • Code of Conduct for Board of Directors and Senior Management
• Policy for Determination of materiality of events for disclosure to Stock Exchanges
• Code of Practices and Procedures for Fair Disclosure of UPSI
• Whistle Blower Policy
• Company’s core values

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Corporate Overview Management Reports Financial Statements

Centum adheres to fair and transparent conduct of the affairs by adopting the best practices, standards of ethical
behavior.
P2 Product Responsibility • Quality Policy
• Information Security Policy
Proper mechanisms are in place to carry on Life cycle assessment of the products. Product labelling is done by
complying with all regulatory requirements and as per customer requirements.
P3 Human Resources • Code of Conduct
• HR Policies (including Prevention of Sexual Harassment Policy)
• HR Handbook
Employees are provided opportunities to demonstrate their skills and capabilities. The Company’s code of conduct
is applicable to all the employees to establish and uphold high ethical conduct with utmost transparency and
accountability. The Company has a policy for addressing sexual harassment in the workplace and applies to all
stakeholders of the Company.
P4 Responsiveness to • Corporate Social Responsibility Policy
Stakeholders • Code of Conduct
The Company regularly engages with the Stakeholders and discuss the matters including environmental, social and
governance issues.
P5 Respect for Human Rights • Code of conduct
• Whistle Blower Policy
• HR Policies
• Prevention of Sexual Harassment Policy
The Human resource department of the Company communicates the labor laws and other policies to all the
employees.
P6 Environment Restoration • Environment Policy
• Quality Policy
All steps are taken towards sustainable manufacturing.
P7 Public Policy Advocacy Considering the business activities of the Company and the nature of its business, the
Board has not felt the need to formulate certain policies.
P8 Inclusive Growth • Corporate Social Responsibility Policy
• HR Policies
The Company’s CSR policy is formulated keeping in view the holistic development of the community and the
environment. The CSR initiatives of the Company are manifested to uplift and support the underprivileged.
P9 Customer Engagement • Code of Conduct
• Quality policy
• Information Security Policy
There is regular interaction with key customers of the Company. Customer Satisfaction surveys are conducted annually.

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Governance, leadership and oversight

7. Statement by director responsible for the business Centum Electronics Limited is committed to instilling
responsibility report, highlighting ESG related challenges, environmental, social and governance priorities into its
targets and achievements businesses. The Company judiciously make use of energy
and energy saving assets. Centum Electronics Limited has
partnered with agencies to implement CSR activities. One
of the Company’s core value is Social Responsibility. As a
responsible corporate citizen Centum endeavors to have a
positive impact on the greater society that it serves. Social
responsibility is intertwined in company’s self-belief and work
ethics. Corporate Governance is given utmost importance and
is followed in letter and spirit.
8. Details of the highest authority responsible for Mr. Apparao V Mallavarapu, Chairman & Managing Director
implementation and oversight of the Business Responsibility
policy (ies).
9. Does the entity have a specified Committee of the Board/ No director has been specifically nominated. The Corporate
Director responsible for decision making on sustainability Social Responsibility (CSR) Committee of the Board drive the
related issues? (Yes / No). social responsibility initiatives. Further, the relevant policies
are administered by the Departmental Heads who report to the
Management of the Company.

10. Details of Review of NGRBCs by the Company:

Subject for Review Indicate whether review was undertaken by Director / Committee of the
Board / Any other Committee
P1 P2 P3 P4 P5 P6 P7 P8 P9
Performance against above policies and follow up Each of the Policies and performance against the same are being reviewed
action Indicate whether review was undertaken by the Board as required under the relevant regulations. Periodic review
by Director / Committee of the Board / Any other of the charters, policies is done internally by the Senior Management and
Committee Board Committees. External assessment is done on need basis.
Compliance with statutory requirements of Details of External assessment:
relevance to the principles, and, rectification of Policies and procedures of the organization are subject to audits/ reviews
any non-compliances Indicate whether review was during ISO 9001, ISO 14001, OHSAS 18001, ISO 27001 Audits
undertaken by Director / Committee of the Board/
Any other Committee
Subject for Review Frequency (Annually/ Half yearly/ Quarterly/ Any other - please specify)
Performance against above policies and follow up The Company views business responsibility as a part and parcel of its
action business.
Compliance with statutory requirements of Lot of time, efforts and investments are continuously being made in this
relevance to the principles, and, rectification of any area especially in and around the products that we manufacture. Quarterly/
non-compliances Annual review as and when required, is being done by the Board of Directors
of the Company.
Has the entity carried out independent The Company’s policies and procedures are subject to internal scrutiny
11.
assessment/ evaluation of the working of its by the management, However, there has not been any specific review or
policies by an external agency? (Yes/No). If yes, assessment or evaluation by an external agency.
provide name of the agency.

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Corporate Overview Management Reports Financial Statements

12. If answer to question (1) above is “No” i.e. not all Principles are covered by a policy, reasons to be stated:

Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
The entity does not consider the Principles material to its
business (Yes/No)
The entity is not at a stage where it is in a position to formulate
and implement the policies on specified principles (Yes/No) No
The entity does not have the financial or/human and technical
resources available for the task (Yes/No)
It is planned to be done in the next financial year (Yes/No)
Any other reason (please specify) Note on P7: Centum Electronics Limited participates in
various industry forums where views / opinions on relevant
topics are discussed. The Company does work for public
good on its own and along with trade bodies and industry
colleagues from time to time. It is felt that there is no need
to have a specific policy for this purpose.

SECTION C: PRINCIPLE WISE PERFORMANCE DISCLOSURE

PRINCIPLE 1 Businesses should conduct and govern themselves with integrity, and in a manner that is Ethical,
Transparent and Accountable.

Essential Indicators

1. Percentage coverage by training and awareness programmes on any of the Principles during the financial year:

Segment Total number Topics / principles covered under the % of persons

of training and training and its impact in respective
awareness category covered
programmes by the awareness
held programmes
Board of Directors 4 Board of Directors are periodically updated about the 100
matters relating to business, statute, governance etc.,
Key Managerial Personnel Strategic presentations are made to the Directors,
regularly on Company strategy, performance and growth
plans. Updates on performance review, strategy and key
regulatory developments are presented at the quarterly
Board Meetings and annual Board strategy meeting.
Employees other than BOD and 6 Interviewing skills, Email Etiquettes, POSH, Emotional 100
KMPs Intelligence, MS Excel, First Time Manager
Workers 6 Kaizen, ESD, POSH, 5S, EHS and QMS 100

2. Details of fines / penalties /punishment/ award/ compounding fees/ settlement amount paid in proceedings (by the entity or
by directors / KMPs) with regulators/ law enforcement agencies/ judicial institutions: No penalties or fines were reported.

3. Of the instances disclosed in Question 2 above, details of the Appeal/ Revision preferred in cases where monetary or non-
monetary action has been appealed : Nil.

4. Does the entity have an anti-corruption or anti-bribery policy? If yes, provide details in brief and if available, provide a web-
link to the policy.

The Centum Code of Conduct covers employees of the Company.

The Company has a well-defined Code of Conduct for its employees. Under “gifts and corporate hospitality policy”, employees
are not authorised to give or receive the gifts from any suppliers, vendors or partners. Gifts received by employees if any by not in
person, will be handed over to HR department. HR department will distribute the gifts through dip system in employee monthly
meetings.

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Annual Report 2022-23

The Code of Conduct is available at the Company’s website PRINCIPLE 2 Businesses should provide goods and
at www.centumelectronics.com services in a manner that is sustainable and safe
5.
Number of Directors/KMPs/employees/workers against
Essential Indicators
whom disciplinary action was taken by any law enforcement
agency for the charges of bribery/ corruption: Nil 1. Percentage of R&D and capital expenditure (capex)
investments in specific technologies to improve the
6. Details of complaints with regard to conflict of interest:
environmental and social impacts of product and
The Directors disclose their interest at the beginning of the processes to total R&D and capex investments made by
year. In case of change in the disclosure made, the same the entity, respectively.
is taken note by the Board. The Board of Directors and
Centum is proudly engaged in design & development of
senior management are subject to the provisions of code of
subsystems and systems and indigenization of various
conduct.
products for Defence, Space and Aerospace segments.
7.
Provide details of any corrective action taken or These subsystems and systems are being used by various
underway on issues related to fines / penalties / action defense & space agencies to serve the Nation. This is in line
taken by regulators/ law enforcement agencies/ judicial with the Make in India and Atmanirbhar Bharat policies of
institutions, on cases of corruption and conflicts of Government of India.
interest.
2.
a.
Does the entity have procedures in place for
Nil sustainable sourcing? (Yes/No)

Leadership Indicators b.
If yes, what percentage of inputs were sourced
sustainably?
1. Awareness programmes conducted for value chain
partners on any of the Principles during the financial Yes, the Company has well established procedures for
year: sustainable sourcing. About 80% of our inputs was
sourced sustainably.
Centum carries out awareness / training programmes
for its value chain partners depending on the The sourcing is carried out in a systematic manner.
business needs, stakeholder feedback and regulatory In the first stage, the compatibility of the sources with
requirements covering various topics. respect to the requirements is carefully evaluated.

2. Does the entity have processes in place to avoid/ After this stage, the source is evaluated thoroughly with
manage conflict of interests involving members of the the assistance of supplier evaluation criteria which
Board? (Yes/No) If Yes, provide details of the same. includes the policies like Conflict of Minerals Policy.

The Company has a Code of Conduct for its Board Thereafter, considering the scores obtained in the
Members and Senior Management which defines supplier evaluation rating, the decision will be made to
Conflict of Interest and entails the process for avoiding engage with the particular source. The initial samples
the same. from the new source are taken up for evaluation after
which the supplier is added to Approved Vendor List
The Code of Conduct is available on the website of the (AVL). The supplies from the newly qualified vendor is
Company. ramped up in a phased manner.

Centum is committed to maintaining a socially

responsible supply chain with a strong focus on Conflict
of Minerals.

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Corporate Overview Management Reports Financial Statements

3. Describe the processes in place to safely reclaim your dispose hazardous and non-hazardous waste generated
products for reusing, recycling and disposing at the end during the process.
of life, for (a) Plastics (including packaging) (b) E-waste (c)
(a) Plastics (including packaging) – Disposed through
Hazardous waste and (d) other waste.
approved Plastics Recycler.
Centum Electronics Limited has a Life Cycle Assessment (b) E-waste – Disposed through approved E–waste recycler.
(LCA) process in place for its products.
(c) Hazardous waste – Disposed through approved
Centum has a well-established waste management system hazardous waste incinerators.
for collection, segregation, storage & disposal of hazardous (d) Other waste – Disposed through authorized vendor
& non-hazardous waste. The waste generated are either
reused, recycled or disposed through authorized vendor/ 4.
Whether Extended Producer Responsibility (EPR) is
recyclers. Waste water is recycled through treatment plants applicable to the entity’s activities (Yes / No). If yes,
& reused for internal operations. whether the waste collection plan is in line with the
Extended Producer Responsibility (EPR) plan submitted
There are proper mechanisms and procedures followed to Pollution Control Boards? If not, provide steps taken to
as per State Government guidelines to collect, store and address the same.

No

Leadership Indicators

1. Has the entity conducted Life Cycle Perspective / Assessments (LCA) for any of its products (for manufacturing industry)
or for its services (for service industry)? If yes, provide details in the following format?

NIC Code Name of Product / Service % of Total Boundary for Whether Results
turnover which the conducted by communicated
contributed Life Cycle independent in public domain
Perspective / external agency (Yes/No) If yes,
Assessment (Yes/No) provide the web-
was conducted link
26109, 26104 Manufacture, Design, Supply of
Electronic Modules, Sub Systems,
Printed Circuit Board Assembly
(PCBA) Integration, Box build and
repairs, Screening of Electronic 100% Gate to Gate No No
Components and module for
Space, Avionics and Defence
applications, Plastic moulded
components and assemblies

2. If there are any significant social or environmental concerns and/or risks arising from production or disposal of your products
/ services, as identified in the Life Cycle Perspective / Assessments (LCA) or through any other means, briefly describe the
same along-with action taken to mitigate the same. : None of our products cause significant social or environmental concerns.

3. Percentage of recycled or reused input material to total material (by value) used in production (for manufacturing
industry) or providing services (for service industry).

Indicate Input Material Recycled or re-used input material to total material

2022-23 2021-22
Solder Dross 45 40

4. Of the products and packaging reclaimed at end of life of products, amount (in metric tonnes) reused, recycled, and safely
disposed, as per the following format: Not Applicable

5. Reclaimed products and their packaging materials (as percentage of products sold) for each product category: Not Applicable

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PRINCIPLE 3 Businesses should respect and promote the well-being of all employees, including those in their
value chains

Essential Indicators

1. a. Details of measures for the well-being of employees:

Category Total % of employees covered by

(A) Health Accident Maternity Benefits Paternity Day Care facilities
Insurance Insurance Benefits
Number (B) (B/A) Number (C) (C/A) Number (D) (D/A) Number (E) (E/A) Number (F) (F/A)
Permanent Employees
Male 350 350 100 350 100 N.A. N.A. - - - -
Female 101 101 100 101 100 101 100 N.A. N.A - -
Total 451 451 100 451 100 101 100 - - - -
Other Permanent Employees
Male
Female -
Total

b. Details of measures for the well-being of workers:

Category Total % of workers covered by

(A) Health Insurance Accident Insurance Maternity Benefits Paternity Benefits Day Care facilities
Number (B/A) Number (C/A) Number (D/A) Number (E/A) Number (F/A)
(B) (C) (D) (E) (F)
Permanent workers
Male 560 109 19.46 560 100 N.A. N.A. - - - -
Female 215 64 29.77 215 100 215 100 N.A N.A - -
Total 775 173 22.32 775 100 215 100 - - - -
Other Permanent workers
Male
Female -
Total

2. Details of retirement benefits, for Current Financial Year and Previous Financial Year.

Benefits 2022-23 2021-22

No. of No. of Deducted and No. of No. of Deducted and
employees workers deposited employees workers deposited
covered as covered as with the covered as covered as with the
a% of total a % of total authority a% of total a % of total authority
employees workers (Y/N/N.A.) employees workers (Y/N/N.A.)
PF 100 100 YES 100 100 YES
Gratuity 100 100 YES 100 100 YES
ESI 0.4 72.8 YES 5.2 89.2 YES
Others – please specify - - - - - -

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Corporate Overview Management Reports Financial Statements

3. Accessibility of workplaces

Are the premises / offices of the entity accessible to differently abled employees and workers, as per the requirements of the
Rights of Persons with Disabilities Act, 2016? If not, whether any steps are being taken by the entity in this regard.

Most of the premises / offices are well equipped for accessibility to differently abled persons. There are currently no differently
abled employees and workers.

4. Does the entity have an equal opportunity policy as per the Rights of Persons with Disabilities Act, 2016? If so, provide a web-
link to the policy.

Yes, the Company’s policy on hiring does not discriminate against persons with disabilities.

5. Return to work and Retention rates of permanent employees and workers that took parental leave.

Particulars Permanent Employees Permanent Workers

Gender Return to work rate Retention rate Return to work rate Retention rate
Male N.A. N.A N.A. N.A.
Female 86 86 100 100

6. Is there a mechanism available to receive and redress grievances for the following categories of employees and worker? If
yes, give details of the mechanism in brief.

Particulars Yes/No (If yes, give the details of mechanism in brief)

Permanent Workers Yes
Other than Permanent Workers Yes
Permanent Employees Yes
Other than Permanent Employees Yes

Human Resource Manager is a single point of contact to address all types of grievances related to employees / workers.

Pursuant to Section 177 (9) and Regulation 22 of SEBI LODR, company has a vigil mechanism for directors and employees to report
concerns, if any. This Policy is available on the Company’s website at www.centumelectronics.com.

The Company has formulated a Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal
of sexual harassment at workplace and Internal Complaints Committee has also been set up to redress any such complaints
received. The Company sensitizes employees across the organization on the Policy and the provisions of the Sexual Harassment
of Women at work place (Prevention, Prohibition and Redressal) Act, 2013.

7. Membership of employees and worker in association(s) or Unions recognised by the listed entity: None

8. Details of training given to employees and workers:

FY 2022-23 FY 2021-22
On Health and On Skill On Health and On Skill
Category
Total (A) safety measures upgradation Total (D) safety measures upgradation
No. (B) % (B / A) No. (C) % (C / A) No. (E) % (E / D) No. (F) % (F / D)
Employees
Male 350 350 100 140 40 323 323 100 129 39.94
Female 101 101 100 40 39.60 79 79 100 32 40.51
Total 451 451 100 180 39.91 402 402 100 161 40.05
Workers
Male 560 560 100 560 100 539 539 100 539 100
Female 215 215 100 215 100 230 230 100 230 100
Total 775 775 100 775 100 769 769 100 769 100

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9. Details of performance and career development reviews of employees and worker:

Category FY 2022-23 FY 2021-22

Total (A) No. (B) % (B / A) Total (C) No. (D) % (D / C)
Employees
Male 350 350 100 323 323 100
Female 101 101 100 79 79 100
Total 451 451 100 402 402 100
Workers
Male 560 560 100 539 539 100
Female 215 215 100 230 230 100
Total 775 775 100 769 769 100

10. Health and safety management system: The participation of all stakeholders helps in
understanding the process thoroughly and identifying
a. Whether an occupational health and safety the hazard at workplace. This leads to preventing the risk
management system has been implemented by the related to injury, protect asset and ensure sustainability
entity? (Yes/ No). If yes, the coverage of such system? in all the activities and organization processes.
Yes – Centum Electronics Limited is ISO 45001:2018 c. Whether you have processes for workers to report the
certified for Health and Safety Management system. work related hazards and to remove themselves from
such risks. (Y/N)
Centum Electronics Limited has implemented and
maintained the Occupational Health and Safety Yes, Centum Electronics has Shop Floor Management
Management System. All the activities, products and (SFM) tool to promote safety culture within company.
services are in line with OHSMS 45001:2018 standards. SFM online portal is designed to help employees to
It provides a mechanism for managing Occupational report health or safety hazard/risk incidents that may
Health Safety and Environmental Management System lead to unsafe conditions.
by formulating EOHS policy and objectives, complying
d. Do the employees/ worker of the entity have access
with applicable legal & other requirements, and
to non-occupational medical and healthcare services?
managing unacceptable risk.
(Yes/ No)
The scope of Occupational Health Safety and
Yes. Employees and workers have access to non-
Environmental Management System is clearly defined
occupational medical and healthcare services. The
and followed at all locations as per ISO/OHSMS
Company has tied up with well-established hospitals
45001:2018 Standard.
to deal with any kind of incident, accident or medical
b. What are the processes used to identify work-related emergency. Employees are required to undergo an annual
hazards and assess risks on a routine and non-routine health check-up and healthcare advice is provided.
basis by the entity? Medical insurance facilities are provided to employees.

Centum Electronics has an established risk 11. Details of safety related incidents, in the following format:
assessment process namely, Hazard Identification
and Risk Assessment (HIRA). Regular safety walk are Safety Incident/ Category FY 2022-23 FY 2021-22
conducted at the company’s plants. These processes Number
help identify and contain incidents that may cause Lost Time Injury Employees - 6
injury to people or property. The assessment is followed Frequency Rate Workers - -
up with documentation of risks and hazards, their (LTIFR) (per one
causes, associated consequences and containment million-person
recommendations. hours worked)
Total recordable Employees - 1
The company has developed participative and consultative
work-related Workers - -
approach for consideration of all its stakeholders
injuries
including employees, associate and contract workmen.

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Corporate Overview Management Reports Financial Statements

Safety Incident/ Category FY 2022-23 FY 2021-22 improvement of processes needed for the elimination of
Number hazards and minimization of risks.

No. of fatalities Employees - - • Safety walk through audit program in line with EOHS
Workers - - policy to ensure safe and healthy working conditions.
High consequence Employees - -
• EHS awareness through training and communication.
work-related Workers - -
injury or ill- • Trained Emergency Response Team (ERT), Fire Fighters
health (excluding & First Aid team availability during all the shifts.
fatalities)
• Conducting evacuation mock drills as per schedules to
12. Describe the measures taken by the entity to ensure a safe create awareness in case of emergency.
and healthy work place.
• Has an online portal (SFM) for incident management
Centum Electronics is committed to provide healthy and safe process in place for hazard identification at work /plant
working conditions. area. It enables employees to identify and contain incidents
that may cause an injury to the people or property.
• Health and safety committee ensures establishment,
implementation, maintenance and continual

13. Number of Complaints on the following made by employees and workers:

No complaints were received from employees and workers for FY 22-23 and FY 21-22 regarding Working Conditions and Health
& Safety. Centum Electronics has always prioritized the health, safety and well-being of employees through establishment,
implementation, maintenance and continual improvements of processes and practices that provides a healthy and safe working
environment for employees.

14. Assessments for the year:

Particulars % of your plants and offices that were assessed (by entity or statutory authorities or third
parties)
Health and safety practices 100% of plant area are assessed internally by internal EHS auditors on the health and safety
Working Conditions practices. Centum Electronics is annually assessed on ISO 45001:2018 standard for EOHS
management system by external certifying bodies.

15. Provide details of any corrective action taken or underway to address safety-related incidents (if any) and on significant risks
/ concerns arising from assessments of health & safety practices and working conditions.

Centum Electronics has processes in place for taking corrective actions by implementing Engineering controls, Automation, Safety
guards etc., if necessary, to eliminate the causes of actual and potential non conformities or incidents and enforce corrective
actions.

Centum Electronics implements and records changes in the 6. Aspect and impact identification.
documented procedure and the steps are standardized in 7. Process Safety Information.
the relevant operational procedure to ensure prevention of
8. Pre-Start up Safety Review.
incident again.
With a significant onsite workforce, safe and well-organized
Safety systems at work include:
building evacuation is a priority. The emergency management
1. Safety sensors interlock cutting / Trimming machines. system includes bi-annual mock drills for organization.
2. Online monitoring & SMS alert of Temperature for
All incidents are investigated thoroughly as per company
chemical storage room.
safety guidelines on incident reporting, investigations and
3. Automatic changeover of chemical in cleaning machine. communicated through all process departments to ensure
4. Permit to Work. non-occurrence of similar incidents. It is also encouraged
5. Hazard identification and risk assessment. to employees and workers to report maximum number of
unsafe acts and conditions to eliminate such incidents.

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Leadership Indicators 5. Details on assessment of value chain partners:

1. Does the entity extend any life insurance or any The Company engages with only those value chain
compensatory package in the event of death of (A) partners who comply with the Statutory Requirements
Employees (Y/N) (B) Workers (Y/N). under various statutes including Health and safety
practices and safe working conditions.
Not applicable as there were no such instances.
6. Provide details of any corrective actions taken or
2. Provide the measures undertaken by the entity to
underway to address significant risks / concerns arising
ensure that statutory dues have been deducted and
from assessments of health and safety practices and
deposited by the value chain partners.
working conditions of value chain partners.
The Company engages with only those suppliers and
All incidents are investigated thoroughly as per company
value chain partners who comply with the Statutory
safety guidelines on incident reporting, investigating
requirements. Periodic due diligence is undertaken to
and communicated through all process departments to
ensure that applicable statutory dues are deducted and
ensure non-occurrence of similar incidents.
deposited by value chain partners.
PRINCIPLE 4: Businesses should respect the interests
3. Provide the number of employees / workers having
of and be responsive to all its stakeholders
suffered high consequence workrelated injury / ill-
health / fatalities (as reported in Q11 of Essential Essential Indicators
Indicators above), who have been are rehabilitated
and placed in suitable employment or whose family 1. Describe the processes for identifying key stakeholder
members have been placed in suitable employment: groups of the entity.

Nil The Company has identified internal and external

stakeholder groups. The major ones being employees,
4. Does the entity provide transition assistance suppliers, contractors, customers, investors, lending
programs to facilitate continued employability and institutions, regulatory and statutory authorities.
the management of career endings resulting from
retirement or termination of employment? (Yes/ No) There are well established grievance redressal mechanisms
for the stakeholder groups.
Not applicable, as there were no instances of injury /ill
health / fatalities.
2. List stakeholder groups identified as key and the frequency of engagement with each stakeholder group.

Stakeholder Group Whether Channels of communication Frequency of Purpose and scope of engagement
identified as (Email, SMS, Newspaper, engagement including key topics and concerns
Vulnerable & Pamphlets, Advertisement, (Annually/ Half raised during such engagement
Marginalized Community Meetings, yearly/ Quarterly
Group (Yes/ Notice Board, Website), / others - please
No) Other specify)
Customers N Email, Other O • Addressing Customer feedback
• Addressing Customer grievances
• Providing information regarding
products and services
Investors/Shareholders N Email, Newspaper, Website O • Business update
and Other • Financial Performance
• Statutory Communications
Employees N Email, Notice Board and O • Employee Productivity
Other • Talent management
• Learning and development
Regulatory and Statutory N Email, Other O Regulatory compliance
Authorities
Suppliers N Email, Other O Keep track of orders placed
Communities Y Community Meetings O Community Engagement Meetings

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Corporate Overview Management Reports Financial Statements

Leadership Indicators The Company consults its stakeholders while

identifying its CSR programs. During the year,
1. Provide the processes for consultation between based on consultation with the authorities and local
stakeholders and the Board on economic, communities, the Company partnered with Akshaya
environmental, and social topics or if consultation is Patra and Narayana Hrudayalaya. The Company also
delegated, how is feedback from such consultations has a Memorandum of Understanding with the Art and
provided to the Board. Photography Foundation for promotion of art.
It is a continuous process wherein leadership team 3. Provide details of instances of engagement with, and
engages with various stakeholders on different platforms actions taken to, address the concerns of vulnerable/
and outcome of these interactions are presented to the marginalized stakeholder groups.
Board. The CSR activities, their implementation schedule
and their impact is presented to the Board. The Company through its CSR initiatives, provide
necessary support to the vulnerable / marginalized
2. Whether stakeholder consultation is used to support community.
the identification and management of environmental,
and social topics (Yes / No). If so, provide details Through its CSR initiatives it has supported specially
of instances as to how the inputs received from abled group, successfully diagnosed and treated
stakeholders on these topics were incorporated into patients from economically challenged groups.
policies and activities of the entity.

Yes

PRINCIPLE 5 Businesses should respect and promote human rights

Essential Indicators

1. Employees and workers who have been provided training on human rights issues and policy(ies) of the entity, in the following
format:

Category FY 2022-23 FY 2021-22

Total (A) No. of employees/ % (B / Total (C) No. of employees/ % (D / C)
workers covered (B) A) workers covered (D)
Employees
Permanent 451 451 100 404 404 100
Other than permanent - - - - - -
Total Employees 451 451 100 404 404 100
Workers
Permanent 775 775 100 767 767 100
Other than permanent - - - - - -
Total Workers 775 775 100 767 767 100

2. Details of minimum wages paid to employees and workers, in the following format:

Category FY 2022-23 FY 2021-22

Total Equal to Minimum More than Total Equal to Minimum More than
(A) Wage Minimum Wage (D) Wage Minimum Wage
No. (B) % (B / A) No. (C) % (C / A) No. (E) % (E / D) No. (F) % (F / D)
Permanent Employees
Male 350 - - 350 100 325 - - 325 100
Female 101 - - 101 100 79 - - 79 100
Others - - - - - - - - - -

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Category FY 2022-23 FY 2021-22

Total Equal to Minimum More than Total Equal to Minimum More than
(A) Wage Minimum Wage (D) Wage Minimum Wage
No. (B) % (B / A) No. (C) % (C / A) No. (E) % (E / D) No. (F) % (F / D)
Other than permanent
Male - - - - - - - - - -
Female - - - - - - - - - -
Others - - - - - - - - - -
Permanent Workers
Male 560 - - 560 100 537 278 51.77 259 48.23
Female 215 - - 215 100 230 96 41.74 134 58.26
Others - - - - - - - - - -
Other than permanent
Male - - - - - - - - - -
Female - - - - - - - - - -
Others - - - - - - - - - -

3. Details of remuneration/salary/wages, in the following format:

Median remuneration in H
Particulars Male Female
Number Median remuneration/ Number Median remuneration/ salary/
salary/ wages of respective wages of respective category
category
Board of Directors (BoD) 6 7,40,000 2 6,05,000
Key Managerial Personnel 3 1,36,25,667 1 10,81,721
Employees other than BoD and KMP 347 7,83,432 100 5,40,558
Workers 560 2,04,708 215 2,49,324

4. Do you have a focal point (Individual/ Committee) responsible for addressing human rights impacts or issues caused or
contributed to by the business? (Yes/No)

Yes, Complaints pertaining to human rights issues are taken care by the Human Resource Department or Head of the respective
departments and appropriate actions are taken as per the policies of the Company. The Head of Human Resource department (HR)
of the Company is the authorized personnel responsible for implementing human right functions in the Company.

5. Describe the internal mechanisms in place to redress grievances related to human rights issues.

The Company is committed to providing an enabling working environment for its employees and workers. The Company’s policy
and practices relating to protection of human rights viz. non-engagement of child labour, personal hygiene, safety and welfare
measures of workers etc., are applicable to the Company and includes contractors.

6. Number of Complaints on the following made by employees and workers:

There were no complaints made by employees and workers during FY 22-23 and FY 21-22 under human rights related issues.

7. Mechanisms to prevent adverse consequences to the complainant in discrimination and harassment cases.

Concerns on discrimination and harassment, if any, will be dealt with confidentially. The Company ensures that principles of
natural justice are followed in the entire process of investigation and decision making.

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Corporate Overview Management Reports Financial Statements

8. Do human rights requirements form part of your business agreements and contracts?

(Yes/No)

Yes, It is ensured that all agreements between Centum and the stakeholders, contain clauses on human rights viz non-engagement
of child labour, personal hygiene, safety and welfare measures of workers etc.

9. Assessments for the year:

Particulars % of your plants and offices that were assessed (by entity or statutory authorities
or third parties)
Child labour
Forced/involuntary labour
Sexual harassment 100%

Discrimination at workplace
Wages
Others - please specify

10. Provide details of any corrective actions taken or underway to address significant risks / concerns arising from the assessments
at Question 9 above. No corrective action was necessitated.
Leadership Indicators 3. Is the premise/office of the entity accessible to differently
abled visitors, as per the requirements of the Rights of
1. Details of a business process being modified / introduced Persons with Disabilities Act, 2016?
as a result of addressing human rights grievances/
Yes
complaints.
4. Details on assessment of value chain partners:
The Company has not received any grievance / complaints
with respect to human rights. The Company engages with those value chain partners who
comply with the Statutory Requirements under all applicable
2. Details of the scope and coverage of any Human rights
statutes.
due-diligence conducted.
5. Provide details of any corrective actions taken or underway
The Company has not conducted any human rights due-
to address significant risks / concerns arising from the
diligence during FY 2022-23. However, the human rights
assessments at Question 4 above.
diligence is conducted as part of other audits.
No corrective actions were required to be taken during FY
2022-23.

PRINCIPLE 6: Businesses should respect and make efforts to protect and restore the environment

Essential Indicators

1. Details of total energy consumption (in Joules or multiples) and energy intensity, in the following format:

Parameter Unit FY 2022-23 FY 2021-22

Total electricity consumption (A) KWH 8,19,774 5,37,626
Total fuel consumption (B) KWH 1,30,501 1,28,295
Energy consumption through other sources (C) KWH 70,44,718 68,40,710
Total energy consumption (A+B+C) KWH 79,94,993 75,06,631
Energy intensity per rupee of turnover (Total energy KWH/H 0.0037 0.0043
consumption/ turnover in rupees)
Energy intensity (optional) - the relevant metric may be KWH/Sq.ft/Annum 77.55 72.41
selected by the entity

Independent assessment/ evaluation/assurance has been carried out by KPMG.

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2. Does the entity have any sites / facilities identified as designated consumers (DCs) under the Performance, Achieve and Trade
(PAT) Scheme of the Government of India? (Y/N) If yes, disclose whether targets set under the PAT scheme have been achieved.
In case targets have not been achieved, provide the remedial action taken, if any:

No

3. Provide details of the following disclosures related to water, in the following format:

Parameter FY 2022-23 FY 2021-22

Water withdrawal by source (in kilolitres)
(i) Surface water - -
(ii) Groundwater 46,513 27,511
(iii) Third party water 1,592 1,419
(iv) Seawater / desalinated water - -
(v) Others - -
Total volume of water withdrawal (in kilolitres) (i + ii + iii + iv + v) 48,105 28,930
Total volume of water consumption (in kilolitres) 48,105 28,930
Water intensity per rupee of turnover (Water consumed / turnover) 0.0094 0.0087
Water intensity (optional) - the relevant metric may be selected by the entity - KL/Per 27.56 20.57
Employee

Independent assessment/ evaluation/assurance has been carried out by an external agency? No

4. Has the entity implemented a mechanism for Zero Liquid Discharge? If yes, provide details of its coverage and implementation.

Centum Electronics understands the importance of water and has a Sewage Treatment Plant (STP) and re-circulation plant where
re-treated water is used for maintenance of in-house landscape. This helps to reduce our freshwater consumption requirement
and intake.

5. Please provide details of air emissions (other than GHG emissions) by the entity, in the following format:

Parameter Please specify unit FY 2022-23 FY 2021-22

NOx Mg/nm3 637.9 503.2
SOx Mg/nm3 105.5 77.2
Particulate matter (PM) Mg/nm3 439.3 502.8
Persistent organic pollutants (POP) - - -
Volatile organic compounds (VOC) PPM VOC monitoring values are VOC monitoring values are
within defined limit within defined limit
Hazardous air pollutants (HAP) - - -

In order to conduct a monthly assessment of the source emissions, National Accreditation Board for testing and calibration
laboratories (NABL) and Ministry of Environment and Forests (MOEF) external laboratories approved by are engaged.

National Analytical Laboratories & Research Center, Bengaluru has carried on the assessment.

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Corporate Overview Management Reports Financial Statements

6. Provide details of greenhouse gas emissions (Scope 1 and Scope 2 emissions) & its intensity, in the following format:

Parameter Unit FY 2022-23 FY 2021-22

Total Scope 1 emissions ( Break-up of the GHG into CO2, Ton CO2 emission 1,262 1,255
CH4, N2O, HFCs, PFCs, SF6, NF3, if available)
Total Scope 2 emissions ( Break-up of the GHG into CO2, Ton CO2 emission 790 517
CH4, N2O, HFCs, PFCs, SF6, NF3, if available)
Total Scope 1 and Scope 2 emissions per rupee of turnover Ton CO2 emission 0.000001235 0.000000832
Total Scope 1 and Scope 2 emission intensity (optional) - the Ton CO2 emission / 0.0213 0.0174
relevant metric may be selected by the entity Sq.ft

Independent assessment/ evaluation/assurance has been carried out by an external agency? No

7. Does the entity have any project related to reducing Green House Gas emission? If yes, then provide details.

Yes, Centum has implemented various projects to reduce GHG emissions.

• Company’s green (wind + solar) energy consumption was around 90% of its overall consumption in FY 2022-23.

• Installation of Energy Savers control for all Split Air Conditioners to reduce power consumption.

• As part of reducing Scope-1 emissions sensor-based automatic on/off operation implemented for nitrogen gas consumption
in machines.

• Recovery of process solder waste and re-using it in wave machines.

• Installation of VFD, timer, and Automatic control system to reduce power consumption and Co2 emissions.

• As part of reducing Scope-1 emissions, continuously monitoring to arrest the leakage of nitrogen and Helium gas, if any.

8. Provide details related to waste management by the entity, in the following format:

Parameter 2022-23 2021-22

Total Waste generated (in metric tonnes)
Plastic waste (A) 6.157 0.603
E-waste (B) 1.889 2.911
Bio-medical waste (C) - -
Construction and demolition waste (D) - -
Battery waste (E) 1.636 -
Radioactive waste (F) NA NA
Other Hazardous waste. Please specify, if any (G)
(Spent solvents, lead bearing residues, contaminated cotton rags, oil soaked cotton 11.132 15.122
waste, empty barrels, waste residues containing oil)
Other Non-hazardous waste generated (H). Please specify, if any. (Break-up by 39.963 9.106
composition i.e. by materials relevant to the sector) Corrugated cotton box, Paper,
Metal waste, Aluminium etc.
Total (A+B + C + D + E + F + G + H) 60.777 27.742
For each category of waste generated, total waste recovered through recycling, re-
using or other recovery operations (in metric tonnes)

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Parameter 2022-23 2021-22

Category of waste
(i) Recycled 3.364 0.904
(ii) Re-used 10.619 5.904
(iii) Other recovery operations 0.269 0.450
Total 14.252 7.258
For each category of waste generated, total waste disposed by nature of disposal
method (in metric tonnes)
Category of waste
(i) Incineration 10.042 13.156
(ii) Landfilling - -
(iii) Other disposal operations - -
Total 10.042 13.156

Independent assessment/ evaluation/assurance has been carried out by an external agency? No

9. Briefly describe the waste management practices adopted in your establishments. Describe the strategy adopted by your
company to reduce usage of hazardous and toxic chemicals in your products and processes and the practices adopted to
manage such wastes.

Centum Electronics is arduously working towards generating less waste by focusing on the behavioral aspects of waste generation.
We ensure that all waste we generate from our activities adopt 3R (Reduce, Recovery, Reuse) method to reduce the generation of
hazardous waste. Final unrecovered waste is collected, segregated, and disposed to authorized recyclers & vendors.

The company has defined processes for managing waste at each departments.

The hazardous waste are segregated, stored and transported in accordance with applicable regulatory requirements and best
industry practices. The hazardous waste is disposed of in an environmentally sound manner through authorized vendor for
recycling as required by regulations.

Other non-hazardous wastes include paper waste, carton, scrap metal, e-waste. Our strategic intent is to eliminate or reduce the
generation of waste to divert waste from disposal through reuse and recycling wherever possible.

10. If the entity has operations/offices in/around ecologically sensitive areas (such as national parks, wildlife sanctuaries,
biosphere reserves, wetlands, biodiversity hotspots, forests, coastal regulation zones etc.) where environmental approvals /
clearances are required, please specify details in the following format:

None of the Company's operations/offices are in/around ecologically sensitive areas.

11. Details of environmental impact assessments of projects undertaken by the entity based on applicable laws, in the current
financial year:

There was no new construction of office building & hence no environmental assessment of projects undertaken by us.

12. Is the entity compliant with the applicable environmental law/ regulations/ guidelines in India; such as the Water (Prevention
and Control of Pollution) Act, Air (Prevention and Control of Pollution) Act, Environment protection act and rules thereunder If
not, provide details of all such non-compliances, (Y/N).

Yes – Centum Electronics is compliant with the applicable environmental law/ regulations/ guidelines in India.

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Leadership Indicators

1. Provide break-up of the total energy consumed (in Joules or multiples) from renewable and non-renewable sources, in the
following format:
(In KWH)
Parameter FY 2022-23 FY 2021-22
From renewable sources
Total electricity consumption (A) 70,44,718 68,40,710
Total fuel consumption (B) - -
Energy consumption through other sources (C) - -
Total energy consumed from renewable sources (A+B+C) 70,44,718 68,40,710
From non-renewable sources
Total electricity consumption (D) 8,19,774 5,37,626
Total fuel consumption (E) 1,30,501 1,28,295
Energy consumption through other sources (F) - -
Total energy consumed from non-renewable sources (D+E+F) 9,50,275 6,65,921

Independent assessment/ evaluation/assurance has been carried out by an external agency? No

2. Provide the following details related to water discharged:

Parameter FY 2022-23 FY 2021-22

Water discharge by destination and level of treatment (in kilolitres)
(i) To Surface water 11,354.70 7,926.30
- No treatment - -
- With treatment - please specify level of treatment 11,354.70 7,926.30
(ii) To Groundwater - -
- No treatment - -
- With treatment - please specify level of treatment - -
(iii) To Seawater - -
- No treatment - -
- With treatment - please specify level of treatment - -
(iv) Sent to third-parties 54 84
- No treatment 54 84
- With treatment - please specify level of treatment - -
(v) Others - -
- No treatment - -
- With treatment - please specify level of treatment - -
Total water discharged (in kilolitres) 11,408.70 8,010.3

Independent assessment/ evaluation/assurance has been carried out by an external agency? No

3. Water withdrawal, consumption and discharge in areas of water stress (in kilolitres): None of Company's facility / plant is
located in areas of water stress.

For each facility / plant located in areas of water stress, provide the following information: Not Applicable

(i) Name of the area

(ii) Nature of operations

(iii) Water withdrawal, consumption and discharge in the following format: Not Applicable

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4. Please provide details of total Scope 3 emissions & its intensity, in the following format:

Parameter Unit FY 2022-23 FY 2021-22

Total Scope 3 emissions ( Break-up of the GHG into Metric tonnes of CO2 1.30165 1.642665
CO 2, CH4, N2O, HFCs, PFCs, SF6, NF3, if available) equivalent
Total Scope 3 emissions per rupee of turnover Metric tons of Co2 emission 0.00000000078 0.00000000103

Independent assessment/ evaluation/assurance has been carried out by an external agency? No

5. With respect to the ecologically sensitive areas reported at Question 10 of Essential Indicators above, provide details of
significant direct & indirect impact of the entity on biodiversity in such areas along-with prevention and remediation activities.

Centum electronics does not have operations in/around the ecologically sensitive areas where environmental approvals / clearances
are required.

6. If the entity has undertaken any specific initiatives or used innovative technology or solutions to improve resource efficiency,
or reduce impact due to emissions / effluent discharge / waste generated, please provide details of the same as well as
outcome of such initiatives, as per the following format:

S. No. Initiative undertaken Details of the initiative (Web-link, if any,

Outcome of the initiative
may be provided along-with summary)
1 Purchase of renewable Purchase of open access power from 90% of Overall Energy consumption comes from
energy solar & wind energy through third party Renewable sources.
Reduction of CO2 emission from 7,979 ton in 2017-
18 to 692 ton of CO2 emission in 2022-23.
2 VFD operation of HVAC Installation of VFD for Cooling tower fans Saved 80,887 KWH units electricity consumption.
pumps/process chiller and Process Chiller pumps with closed Reduction of 78 ton of Co2 emission
pumps loop feedback is implemented to reduce
power consumption
3 Installation of RO Installed RO system for HVAC to reduce Saved 1,56,000 KWH units electricity consumption.
system for HVAC plant the scaling of chiller condenser tubes for Reduction of 150 ton of Co2 emission
efficient operation
4 Product Jig With Jig modification increased Saved 180 KWH units/Cycle electricity consumption
modification the loading capacity of walk in ESS
chamber, which reduces 40% of energy
consumption per cycle.
5 Recirculation & Sewage recycled & sewage treated water in STP Recycled & re-used 11,355 KL of wastewater
treatment plant is used for landscaping, this has helped through sewage treatment plants.
to reduce freshwater requirement
6 Recycling of waste Recycling of waste generated at process 45% of solder waste Recycled & reused as raw
& re-use as raw material materials.
10% of Recycled Plastic runners used as raw
material.
10% in reduction of chemical consumption in
cleaning machines by chemical filtration process.
7 Installation of timer Installed timer system for 11TR package Saved 39,360 KWH units electricity consumption.
for Package units and units and Exhuast system which is Reduction of 38 ton of CO2 emission
Exhaust Motor operation Manual

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Corporate Overview Management Reports Financial Statements

S. No. Initiative undertaken Details of the initiative (Web-link, if any,

Outcome of the initiative
may be provided along-with summary)
8 Conversion of all Replaced all fluorescent lamp to LED Saved 69,216 KWH units electricity consumption.
fluorescent bulbs and light with street light timer control Reduction of 67 ton of CO2 emission
halogen bulbs to LED-
Office and Shopfloor
9 Automatic Control of Installled the Automatic Control system Saved 32,880 KWH units electricity consumption.
heater banks in AHU to control the Temp & RH and reduced Reduction of 67 ton of CO2 emission
through controller and the power consumption
room sensor
10 Changed 300 CFM Changed 300 CFM compressor Cut in & Saved 32,880 KWH units electricity consumption.
compressor Cut in & Cut off pressure from 7.4 kg to 7 kg Reduction of 32 ton of CO2 emission
Cut off pressure from
7.4 kg to 7 kg
11 Installed high efficiency Installed the Automatic timer-based Saved 406 KL /Year -13 % - on over all consumption
water sprinklers and system for water sprinklers to garden
Spray aerators and spray aerators for washbasins in
canteen & restrooms

7. Does the entity have a business continuity and disaster The site Business Continuity Plan contain information
management plan? on the threats to normal service levels and the impact on
profitability and continued viability.
Centum has a business continuity plan for assessment of
potential risks to the business that can cause by disaster 8. Disclose any significant adverse impact to the environment,
situations. It is imperative to consider all the possible arising from the value chain of the entity. What mitigation
incidents and the impact it may have on the organization’s or adaptation measures have been taken by the entity in
ability to continue to deliver its normal business services. this regard.
The BCP process help to examine the possibility of serious
situations disrupting the business operations and the There are no significant adverse impact to the environment,
potential impact of such events. The Business continuity arising from the value chain.
team consists of the General Manager’s from all Business
9. Percentage of value chain partners (by value of business
Units along with the IT, Finance, IE, EHS and all Functional
done with such partners) that were assessed for
Managers. Centum BCP covers a mechanism to assess the
environmental impacts.
criticality of all the organization’s business processes and
determine the impact and consequences of loss of service Centum engages with such value chain partners who comply
or a reduction in normal service levels. with all the statutes applicable to them.

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PRINCIPLE 7 Businesses, when engaging in influencing public and regulatory policy, should do so in a manner
that is responsible and transparent

Essential Indicators

1. a. Number of affiliations with trade and industry chambers/ associations : 12

Centum is a member of several industries and trade bodies and participates in industry events and stakeholder consultation
leading to policy formulation by various regulatory bodies.

b. List the top 10 trade and industry chambers/ associations (determined based on the total members of such body) the
entity is a member of/ affiliated to:

S. No. Name of the trade and industry chambers/ associations Reach of trade and industry chambers/
associations (State/National)
1 Confederation of Indian Industry (CII) National
2 Electronic Industries Association of India (ELCINA) National
3 Indo-French Chamber of Commerce and Industry National
4 Indo-American Chamber of Commerce National
5 India Electronics and Semiconductor Association (IESA) National
6 Bangalore Chamber of Commerce State
7 Software Technology Parks of India (STPI) National
8 Federation of Karnataka Chambers of Commerce and Industry State
9 Society of Indian Defence Manufacturer National
10 Indian Space Association (ISPA) National
11 Karnataka Employer Association State
12 Electronic & Computer Software Export Promotion Council National

2. Provide details of corrective action taken or underway on any issues related to anti- competitive conduct by the entity, based
on adverse orders from regulatory authorities: None

Leadership Indicators

Details of public policy positions advocated by the entity: Centum Electronics Limited participates in various industry forums
where views / opinions on relevant topics are discussed. The Company does work for public good on its own and along with trade
bodies and industry colleagues from time to time. Details of the Company’s participation on various public platforms and industry
body discussion forums are available on https://www.linkedin.com/company/centumelectronics/posts/?feedView=all

PRINCIPLE 8 Businesses should promote inclusive growth and equitable development

Essential Indicators

1. Details of Social Impact Assessments (SIA) of projects undertaken by the entity based on applicable laws, in the current
financial year.

The Company has not undertaken any social impact assessments as it is not applicable to the Company. However, the same would
be undertaken whenever required.

2. Provide information on project(s) for which ongoing Rehabilitation and Resettlement (R&R) is being undertaken by your entity:

No projects have been undertaken which require Rehabilitation and Resettlement (R&R)

3. Describe the mechanisms to receive and redress grievances of the community.

The Company is committed to sustainable and inclusive development of the community. It engages with the community on regular
basis either directly or through implementing agencies. The grievances received informally or formally through such forums are
further discussed and a resolution is provided.

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Corporate Overview Management Reports Financial Statements

The Company’s CSR projects are aimed at addressing concerns and challenges that affect the surrounding communities including
underprivileged groups within the community.

4. Percentage of input material (inputs to total inputs by value) sourced from suppliers:

Particulars FY 2022-23 FY 2021-22

Directly sourced from MSMEs/ small producers 13 11.5
Sourced directly from within the district and neighbouring districts* 17.5 21

* districts within the state only are considered.

Leadership Indicators

1. Provide details of actions taken to mitigate any negative social impacts identified in the Social Impact Assessments
(Reference: Question 1 of Essential Indicators above):

The Company has not undertaken any social impact assessments as it is not applicable to the Company. However, the same
would be undertaken whenever required.

2. Provide the following information on CSR projects undertaken by your entity in designated aspirational districts as
identified by government bodies:

No CSR projects are undertaken in aspirational districts as identified by Government bodies.

3. (a) Do you have a preferential procurement policy where you give preference to purchase from suppliers comprising
marginalized /vulnerable groups? (Yes/No)

Centum does not have any preferential procurement policy wherein purchase from suppliers comprising marginalized /
vulnerable groups is given preference.

The Company sources products from local and small producers by evaluating them with the necessary requirements. The
Company actively engages with the different Vendors to develop and improve their capabilities and capacities from time to
time. Constant feedbacks are given to the local suppliers to upgrade their performance both in terms of quality performance
and capacity enhancement.

(b) From which marginalized /vulnerable groups do you procure?

Not Applicable

(c) What percentage of total procurement (by value) does it constitute?

Not Applicable

4. Details of the benefits derived and shared from the intellectual properties owned or acquired by your entity (in the current
financial year), based on traditional knowledge:

For the FY 2022-2023, 1 Patent is Filed, 4 Patents have been Granted. 16 technical papers have been published. No commercial
benefits for current & previous FY.

5. Details of corrective actions taken or underway, based on any adverse order in intellectual property related disputes
wherein usage of traditional knowledge is involved: None

6. Details of beneficiaries of CSR Projects:

S. CSR Project No. of persons % of beneficiaries

No. benefitted from CSR from vulnerable and
Projects marginalized groups
1 Promoting Education - Blind School - Mathru Educational Trust 187 100
2 Health Care Programme for the weaker section & children - 110 100
Narayana Hrudayalaya Charitable Trust
3 Meal Distribution – The Akshaya Patra Foundation 1333 60

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S. CSR Project No. of persons % of beneficiaries

No. benefitted from CSR from vulnerable and
Projects marginalized groups
4 proVISION ASIA 21 100
5 Vedanta Wisdom Trust Not Applicable Not Applicable
6 International Society for Krishna Consciousness Not Applicable Not Applicable
7 Shri Vishwanath Raghunath Rao Memorial Trust Not Applicable Not Applicable
8 Art & Photography Foundation Not Applicable Not Applicable
9 Prerana Resource Centre 95 100

PRINCIPLE 9 Businesses should engage with and Company has a complaint redressal mechanism, through which
provide value to their consumers in a responsible consumers can contact and lodge their respective grievances.
manner
Further, our sales teams engage with customers on a regular
Essential Indicators basis through emails, formal meetings. In case of any complaints,
customers can raise the complaint with the Company SPOC or
1. Describe the mechanisms in place to receive and respond send their complaints by mail to the company.
to consumer complaints and feedback.
2. Turnover of products and / services as a percentage of
Centum has a well-established process & procedure to turnover from all products/service that carry information
receive any kind of enquiry / grievance /customer compliant about:
/ feedback from an external stakeholder.
Particulars As a percentage to total
The customers directly contact the respective Program
turnover
Manager, Quality Leads or Sales Team.
Environmental and social
Centum addresses the customer compliant with RCCA (root parameters relevant to the
cause and corrective actions) within a stipulated timeline product 100%
depending on the type of Complaint or feedback received. Safe and responsible usage
Recycling and/or safe disposal

3. Number of consumer complaints in respect of the following:

Particulars 2022-23 2021-22

Received Pending Received Pending
Remarks Remarks
during the resolution at during the resolution at
year end of year year end of year
Data privacy
Advertising
Cyber-security
Delivery of essential services - - - -
Restrictive Trade Practices
Unfair Trade Practices
Other

4. Details of instances of product recalls on account of safety issues:

Particulars Number Reasons for recall

Voluntary recalls
None
Forced recalls

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Corporate Overview Management Reports Financial Statements

5. Does the entity have a framework / policy on cyber security Information regarding usage of product and end use
and risks related to data privacy? (Yes/No) applications will be provided in the respective Product
catalogue, Instruction Manuals, Installation Manual and
Yes. Centum has implemented Information Security user guides.
Management System in accordance with ISO/IEC 27001:2013
for the scope of Design, Manufacturing, Integration and 3. Mechanisms in place to inform consumers of any risk of
Screening of PCB Assembly and Electronic Modules. The disruption/discontinuation of essential services.
Company has layered security defined for People, Process
and Technology. The method of protect, detect and respond Centum Electronics Limited is not involved in directly
is adopted in the IT security process. providing essential services (as per essential service
definition given in The Essential Services Maintenance Act,
The Company has various controls established within the 1981). However, Centum Electronics Limited maintains
IT security. There are perimeter controls, internal controls continuous connect with its customers to ensure smooth
and access controls. Additionally, the Company carries on running of its operations.
cyber security assessments wherein Annual Vulnerability
Assessment and Penetration Test is carried out by 3rd party 4. Does the entity display product information on the product
cyber security partners. There are other internal ISMS audits over and above what is mandated as per local laws? (Yes/
conducted once in every 6 months, annual ISMS surveillance No/Not applicable)
audits conducted by certification agency, annual ITGC audit
The Company manufactures and supply the products as per
conducted by statutory financial audit team and customer
customer’s specification. Display of product information on
audit on Information Security Management System.
the products covers all relevant information mandated as
The policy is available at the company’s website www. per local laws and as per the Customer’s instructions from
centumelectronics.com time to time.

6. Provide details of any corrective actions taken or underway Company’s products which are exported display product
on issues relating to advertising, and delivery of essential information in line with requirement of respective laws of
services; cyber security and data privacy of customers; re- land.
occurrence of instances of product recalls; penalty / action
Bar code of the product carrying all information is displayed
taken by regulatory authorities on safety of products /
as well.
services.
Did your entity carry out any survey with regard to
The Company keeps strengthening and upgrading its
consumer satisfaction relating to the major products /
infrastructure and implementing various monitoring tools in
services of the entity, significant locations of operation of
line with the cyber security and data privacy requirements of
the entity or the entity as a whole? (Yes/No)
individuals and customers.
Yes.
Leadership Indicators
Centum is a customer centric organization, customer
1. Channels / platforms where information on products and
satisfaction is given utmost importance. Customer feedback
services of the entity can be accessed (provide web link, if
is taken right from the design and manufacturing stage till
available).
the customer gets delivery of our products.
The Company provides information about the product and
Customer satisfaction is ensured by having continuous
services through its Website www.centumelectronics.com.
engagement with customers by providing continuous
The Company also participates in Trade Fairs and Exhibitions
support. Customer satisfaction surveys are carried on to
related to Electronics Manufacturing.
seek feedback from customers on an annual basis. The
2. Steps taken to inform and educate consumers about safe feedback is taken on various parameters viz. Sales, Project
and responsible usage of products and/or services. Execution, Delivery, Documentation, Quality, Health and
Safety and Information Security Management Systems.
The Company manufactures and supply the products as per Customer periodically provides scorecards covering the
customer’s specification. There is continuous interaction information towards service satisfaction.
with the customers during the execution phase of a project.
The end user are educated accordingly.

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5. Provide the following information relating to data electronic products design and manufacturing by
breaches: ensuring confidentiality, integrity and availability of
information supported through measurable objectives
a. Number of instances of data breaches along-with and to comply with applicable legal, statutory, regulatory
impact and contractual requirements.
There were no instances of data breaches reported b. Percentage of data breaches involving personally
so far. Centum is committed to establish, implement, identifiable information of customers.
maintain and continually improve information security
management system involved in the activities of its There are no data breaches reported so far.

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Independent Auditor’s Report

To the Members of Centum Electronics Limited Responsibilities for the Audit of the Standalone Ind AS Financial
Statements’ section of our report. We are independent of the
Company in accordance with the ‘Code of Ethics’ issued by
Report on the Audit of the Standalone Ind AS Financial
the Institute of Chartered Accountants of India together with
Statements
the ethical requirements that are relevant to our audit of the
standalone Ind AS financial statements under the provisions of
Opinion the Act and the Rules thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements
We have audited the accompanying standalone Ind AS financial
and the Code of Ethics. We believe that the audit evidence we
statements of Centum Electronics Limited (“the Company”),
have obtained is sufficient and appropriate to provide a basis for
which comprise the Balance sheet as at March 31 2023, the
our audit opinion on the standalone Ind AS financial statements.
Statement of Profit and Loss, including the statement of Other
Comprehensive Income, the Cash Flow Statement and the
Statement of Changes in Equity for the year then ended, and Key Audit Matters
notes to the standalone Ind AS financial statements, including a
Key audit matters are those matters that, in our professional
summary of significant accounting policies and other explanatory
judgment, were of most significance in our audit of the standalone
information.
Ind AS financial statements for the financial year ended March 31,
In our opinion and to the best of our information and according 2023. These matters were addressed in the context of our audit
to the explanations given to us, the aforesaid standalone Ind of the standalone Ind AS financial statements as a whole, and in
AS financial statements give the information required by the forming our opinion thereon, and we do not provide a separate
Companies Act, 2013, as amended (“the Act”) in the manner opinion on these matters. For each matter below, our description
so required and give a true and fair view in conformity with the of how our audit addressed the matter is provided in that context.
accounting principles generally accepted in India, of the state of
We have determined the matters described below to be the key
affairs of the Company as at March 31, 2023, its profit including
audit matters to be communicated in our report. We have fulfilled
other comprehensive income, its cash flows and the changes in
the responsibilities described in the Auditor’s responsibilities for
equity for the year ended on that date.
the audit of the standalone Ind AS financial statements section
of our report, including in relation to these matters. Accordingly,
Basis for Opinion our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement
We conducted our audit of the standalone Ind AS financial
of the standalone Ind AS financial statements. The results of our
statements in accordance with the Standards on Auditing (SAs),
audit procedures, including the procedures performed to address
as specified under section 143(10) of the Act. Our responsibilities
the matters below, provide the basis for our audit opinion on the
under those Standards are further described in the ‘Auditor’s
accompanying standalone Ind AS financial statements.

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Key audit matters How our audit addressed the key audit matter
llowance for inventory obsolescence (as described
A in note 2.3(k), note 11 and note 41 of the standalone Ind AS financial
statements)
The Company held an inventory balance of H 2,315.71 Our procedures in relation to evaluate the allowance of inventories included:
million as at March 31, 2023, as disclosed in Note 11 • We obtained an understanding of how the management identifies the
and is a material balance for the Company. Inventory slow-moving and obsolete inventories and assesses the amount of
obsolescence allowance is determined using policies/ allowance for inventories;
methodologies that the Company deems appropriate
• We assessed and tested the design and operating effectiveness of the
to the business. Significant judgement is exercised
Company’s internal financial controls over the allowance for inventory
by the management in identifying the slow-moving
obsolescence;
and obsolete inventories and in assessing whether
provision for obsolescence for slow moving, excess • We observed the inventory count performed by management and
or obsolete inventory items should be recognized assessed the physical condition of the inventories;
considering the production plan, forecast inventory • We also assessed the allowance policy based on historical sales
usage, committed and expected orders, alternative performance of the products in their life cycle and comparing the actual
usage, etc. Considering that the aforesaid assessment loss to historical allowance recognized, on a sample basis;
process is complex and involves significant estimates • We further tested the ageing of the inventories and the computation of
and judgements and the balance of inventory is the obsolescence level on a sample basis;
material, we have identified this as a key audit matter.
• We have tested a sample of inventory items for significant components
to assess the cost and tested the basis of determination of net realisable
value of inventory, on a sample basis;
•We also assessed the Company’s disclosures concerning this in Note
41 on significant accounting estimates and judgements and Note 11 on
Inventories to the standalone Ind AS financial statements.
Impairment testing of investments in a subsidiary (as described in note 2.3(l), note 5 and note 41 of the standalone Ind AS financial
statements)
As at March 31, 2023, the carrying amount of Our procedures in relation to evaluate the impairment of investment
investment in Centum Electronics UK Limited, a included:
subsidiary of the Company is H 748.72 million which has • We assessed whether the Company’s accounting policy with respect to
underlying investment in Adetel Group SA (‘Adetel’). impairment is in accordance with Ind AS 36 “Impairment of assets.
Adetel has been incurring losses leading to erosion of
• We have carried out assessment of forecasts of future cash flows
net worth whereby the carrying value of the investment
prepared by the management, evaluating the assumptions and
in Adetel as at March 31, 2023, is higher than Adetel’s
comparing the estimates to externally available industry, economic and
net worth. The determination of recoverable amounts
financial data;
of the Company’s investments in Centum Electronics
UK Limited relies on management’s estimates of • We have also assessed the valuation methodology and the key
future cash flows and their judgment with respect assumptions adopted in the cash flow forecasts with the support of our
to the Adetel’s performance. Significant judgements in-house valuation experts;
are required to determine the key assumptions used • We also assessed the recoverable value headroom by performing
in the discounted cash flow models, such as revenue sensitivity testing of key assumptions used.
growth, price, terminal value and discount rates. • We discussed potential changes in key drivers as compared to previous
Due to the uncertainty of forecasting and discounting year / actual performance with management to evaluate whether
future cash flows, being inherently subjective, the the inputs and assumptions used in the cash flow forecasts were
level of management’s judgement involved and the appropriate.
significance of the Company’s investment as at March
• We discussed with senior management personnel, the justification for
31, 2023, we have considered this as a key audit matter.
the key assumptions underlying the cashflow projections and performed
The basis of impairment of investment in subsidiary is sensitivity analysis on the same to assess their reasonableness;
presented in the accounting policies in Note 2.3(l) to
• We tested the arithmetical accuracy of the financial projection model;
the standalone Ind AS financial statements.
• We assessed the Company’s disclosures concerning this in Note 41 on
significant accounting estimates and judgements and Note 5 pertaining
to the disclosures of investment in subsidiary to the standalone Ind AS
financial statements.

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Corporate Overview Management Reports Financial Statements

Information Other than the Standalone Ind AS Company or to cease operations, or has no realistic alternative
Financial Statements and Auditor’s Report Thereon but to do so.

The Company’s Board of Directors is responsible for the other Those Board of Directors are also responsible for overseeing the
information. The other information comprises the information Company’s financial reporting process.
included in the Annual report, but does not include the standalone
Ind AS financial statements and our auditor’s report thereon. The Auditor’s Responsibilities for the Audit of the
other information is expected to be made available to us after the Standalone Ind AS Financial Statements
date of this auditor’s report.
Our objectives are to obtain reasonable assurance about whether
Our opinion on the standalone Ind AS financial statements does the standalone Ind AS financial statements as a whole are free
not cover the other information and we do not express any form from material misstatement, whether due to fraud or error, and
of assurance conclusion thereon. to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
In connection with our audit of the standalone Ind AS financial
an audit conducted in accordance with SAs will always detect a
statements, our responsibility is to read the other information
material misstatement when it exists. Misstatements can arise
identified above when it becomes available and, in doing
from fraud or error and are considered material if, individually or
so, consider whether such other information is materially
in the aggregate, they could reasonably be expected to influence
inconsistent with the standalone Ind AS financial statements or
the economic decisions of users taken on the basis of these
our knowledge obtained in the audit or otherwise appears to be
standalone Ind AS financial statements.
materially misstated. If, based on the work we have performed,
we conclude that there is a material misstatement of this other As part of an audit in accordance with SAs, we exercise
information, we are required to report that fact. professional judgment and maintain professional skepticism
throughout the audit. We also:
Responsibilities of Management for the Standalone
• Identify and assess the risks of material misstatement of
Ind AS Financial Statements
the standalone Ind AS financial statements, whether due
The Company’s Board of Directors is responsible for the matters to fraud or error, design and perform audit procedures
stated in section 134(5) of the Act with respect to the preparation responsive to those risks, and obtain audit evidence that is
of these standalone Ind AS financial statements that give a true sufficient and appropriate to provide a basis for our opinion.
and fair view of the financial position, financial performance The risk of not detecting a material misstatement resulting
including other comprehensive income, cash flows and changes from fraud is higher than for one resulting from error, as
in equity of the Company in accordance with the accounting fraud may involve collusion, forgery, intentional omissions,
principles generally accepted in India, including the Indian misrepresentations, or the override of internal control.
Accounting Standards (Ind AS) specified under section 133 of
• Obtain an understanding of internal control relevant to the
the Act read with the Companies (Indian Accounting Standards)
audit in order to design audit procedures that are appropriate
Rules, 2015, as amended. This responsibility also includes
in the circumstances. Under section 143(3)(i) of the Act, we
maintenance of adequate accounting records in accordance
are also responsible for expressing our opinion on whether
with the provisions of the Act for safeguarding of the assets of
the Company has adequate internal financial controls with
the Company and for preventing and detecting frauds and other
reference to standalone Ind AS financial statements in place
irregularities; selection and application of appropriate accounting
and the operating effectiveness of such controls.
policies; making judgments and estimates that are reasonable
and prudent; and the design, implementation and maintenance • Evaluate the appropriateness of accounting policies used
of adequate internal financial controls, that were operating and the reasonableness of accounting estimates and related
effectively for ensuring the accuracy and completeness of the disclosures made by management.
accounting records, relevant to the preparation and presentation
of the standalone Ind AS financial statements that give a true and • Conclude on the appropriateness of management’s use of
fair view and are free from material misstatement, whether due the going concern basis of accounting and, based on the
to fraud or error. audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant
In preparing the standalone Ind AS financial statements, doubt on the Company’s ability to continue as a going
management is responsible for assessing the Company’s ability concern. If we conclude that a material uncertainty exists,
to continue as a going concern, disclosing, as applicable, matters we are required to draw attention in our auditor’s report to
related to going concern and using the going concern basis of the related disclosures in the standalone Ind AS financial
accounting unless management either intends to liquidate the statements or, if such disclosures are inadequate, to modify

95
Centum Electronics Limited
Annual Report 2022-23

our opinion. Our conclusions are based on the audit evidence Changes in Equity dealt with by this Report are in
obtained up to the date of our auditor’s report. However, agreement with the books of account;
future events or conditions may cause the Company to cease
to continue as a going concern. (d) In our opinion, the aforesaid standalone Ind AS financial
statements comply with the Accounting Standards
• Evaluate the overall presentation, structure and content of specified under Section 133 of the Act, read with
the standalone Ind AS financial statements, including the Companies (Indian Accounting Standards) Rules, 2015,
disclosures, and whether the standalone Ind AS financial as amended;
statements represent the underlying transactions and
events in a manner that achieves fair presentation. (e) On the basis of the written representations received
from the directors as on March 31, 2023 taken on record
We communicate with those charged with governance regarding, by the Board of Directors, none of the directors is
among other matters, the planned scope and timing of the disqualified as on March 31, 2023 from being appointed
audit and significant audit findings, including any significant as a director in terms of Section 164 (2) of the Act;
deficiencies in internal control that we identify during our audit.
(f) With respect to the adequacy of the internal financial
We also provide those charged with governance with a statement controls with reference to these standalone Ind AS
that we have complied with relevant ethical requirements financial statements and the operating effectiveness of
regarding independence, and to communicate with them all such controls, refer to our separate Report in “Annexure
relationships and other matters that may reasonably be thought 2” to this report;
to bear on our independence, and where applicable, related
safeguards. (g) In our opinion, the managerial remuneration for the
year ended March 31, 2023 has been paid / provided
From the matters communicated with those charged with by the Company to its directors in accordance with the
governance, we determine those matters that were of most provisions of section 197 read with Schedule V to the
significance in the audit of the standalone Ind AS financial Act;
statements for the financial year ended March 31, 2023 and
are therefore the key audit matters. We describe these matters (h) With respect to the other matters to be included in
in our auditor’s report unless law or regulation precludes the Auditor’s Report in accordance with Rule 11 of
public disclosure about the matter or when, in extremely rare the Companies (Audit and Auditors) Rules, 2014,
circumstances, we determine that a matter should not be as amended in our opinion and to the best of our
communicated in our report because the adverse consequences information and according to the explanations given to
of doing so would reasonably be expected to outweigh the public us:
interest benefits of such communication.
i. The Company has disclosed the impact of pending
litigations on its financial position in its standalone
Report on Other Legal and Regulatory Requirements Ind AS financial statements – Refer Note 45 (c) to
the standalone Ind AS financial /statements;
1. As required by the Companies (Auditor’s Report) Order, 2020
(“the Order”), issued by the Central Government of India in ii. The Company has made provision, as required
terms of sub-section (11) of section 143 of the Act, we give under the applicable law or accounting standards,
in the “Annexure 1” a statement on the matters specified in for material foreseeable losses, if any, on long-term
paragraphs 3 and 4 of the Order. contracts including derivative contracts – Refer
Note 27 to the standalone financial statements.;
2. As required by Section 143(3) of the Act, we report that:
iii. There has been no delay in transferring amounts,
(a) We have sought and obtained all the information and required to be transferred, to the Investor Education
explanations which to the best of our knowledge and and Protection Fund by the Company
belief were necessary for the purposes of our audit;
iv. a) The management has represented that, to the
(b) In our opinion, proper books of account as required by best of its knowledge and belief other than as
law have been kept by the Company so far as it appears disclosed in the note 56(v) to the standalone
from our examination of those books; Ind AS financial statements, no funds have
been advanced or loaned or invested (either
(c) The Balance Sheet, the Statement of Profit and Loss
from borrowed funds or share premium or any
including the Statement of Other Comprehensive
other sources or kind of funds) by the Company
Income, the Cash Flow Statement and Statement of
to or in any other person(s) or entity(ies),

96
Corporate Overview Management Reports Financial Statements

including foreign entities (“Intermediaries”), to believe that the representations under

with the understanding, whether recorded in sub-clause (a) and (b) contain any material
writing or otherwise, that the Intermediary misstatement.
shall, whether, directly or indirectly lend or
invest in other persons or entities identified in v. As stated in note 19 to the standalone Ind AS
any manner whatsoever by or on behalf of the financial statements, the final dividend paid by the
Company (“Ultimate Beneficiaries”) or provide Company during the year in respect of the same
any guarantee, security or the like on behalf of declared for the previous year and the final dividend
the Ultimate Beneficiaries; proposed by the Board of Directors for the year
which is subject to the approval of the members
b) The management has represented that, at the ensuing Annual General Meeting is in
to the best of its knowledge and belief, accordance with section 123 of the Act to the extent
and as disclosed in the note 56 (vi) to the it applies to payment / declaration of dividend.
standalone Ind AS financial statements, no
funds have been received by the Company vi. As proviso to Rule 3(1) of the Companies (Accounts)
from any person(s) or entity(ies), including Rules, 2014 is applicable for the Company only
foreign entities (“Funding Parties”), with the w.e.f. April 1, 2023, reporting under this clause is
understanding, whether recorded in writing or not applicable.
otherwise, that the Company shall, whether,
directly or indirectly, lend or invest in other For S.R. Batliboi & Associates LLP
persons or entities identified in any manner Chartered Accountants
whatsoever by or on behalf of the Funding ICAI Firm Registration Number: 101049W/E300004
Party (“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf of the
per Sandeep Karnani
Ultimate Beneficiaries; and
Partner
c) Based on such audit procedures performed Membership Number: 061207
that have been considered reasonable and UDIN: 23061207BGYKVE8344
appropriate in the circumstances, nothing
Place of Signature: Bengaluru
has come to our notice that has caused us
Date: May 27, 2023

97
Centum Electronics Limited
Annual Report 2022-23

Annexure 1
referred to in clause 1 of paragraph on the ‘Report on Other Legal and Regulatory Requirements’ of our report
of even date

Re: Centum Electronics Limited (‘the Company’) (b) As disclosed in note 22 to the standalone Ind AS financial
statements, the Company has been sanctioned working
In terms of the information and explanations sought by us and capital limits in excess of H five crores in aggregate from
given by the Company and the books of account and records banks and/or financial institutions during the year on
examined by us in the normal course of audit and to the best of the basis of security of current assets of the Company.
our knowledge and belief, we state that: Based on the records examined by us in the normal
course of audit of the standalone Ind AS financial
(i) (a) (A) The Company has maintained proper records
statements, the quarterly returns/statements filed by
showing full particulars, including quantitative
the Company with such banks and financial institutions
details and situation of property, plant and
are in agreement with the books of accounts of the
equipment.
Company.
(a) (B) The Company has maintained proper records
(iii) (a) During the year the Company has not provided loans,
showing full particulars of intangible assets.
advances in the nature of loans, stood guarantee
(b) All property, plant and equipment have not been physically or provided security to companies, firms, Limited
verified by the management of the Company during the Liability Partnerships or any other parties.. However,
year but there is a regular programme of verification the Company has an outstanding loan of H 20 million
which, in our opinion, is reasonable having regard to as at March 31, 2023 to Centum T&S Private Limited
the size of the Company and the nature of its assets. No (‘CTNSI’), a subsidiary company.
material discrepancies were noticed on such verification.
(b) During the year the Company has not made investments,
(c) The title deeds of immovable properties (other than provided guarantees, provided security and granted
properties where the Company is the lessee and the loans and advances in the nature of loans to companies,
lease agreements are duly executed in favour of the firms, Limited Liability Partnerships or any other
lessee), disclosed in note 3 to the standalone Ind AS parties. However the Company has an outstanding
financial statements included in property, plant and loan of H 20.00 million to CTNSI, a subsidiary company
equipment are held in the name of the Company. Certain and investment of H1.00 million in CTNSI, a subsidiary
immovable properties are pledged with banks and their company as at March 31, 2023.
title deeds are not available with the Company. The same
(c) In respect of loan granted to subsidiary company, the
has been independently confirmed by the bank.
schedule of repayment of principal and payment of
(d) The Company has not revalued its property, plant and interest has been stipulated and the receipts are regular.
equipment (including right of use assets) or intangible
(d) There are no amounts of loans and advances in the
asset during the year ended March 31, 2023.
nature of loans granted to companies, firms, limited
(e) There are no proceedings initiated or are pending liability partnerships or any other parties which are
against the Company for holding any benami property overdue for more than ninety days.
under the Prohibition of Benami Property Transactions
(e) There were no loans or advance in the nature of
Act, 1988 and rules made thereunder.
loan granted to companies, firms, Limited Liability
(ii) (a) The management has conducted physical verification Partnerships or any other parties which had fallen due
of inventory excluding inventory lying with third parties during the year.
and goods in transit at reasonable intervals during the
(f) The Company has not granted any loans or advances
year. In our opinion the coverage and the procedure of
in the nature of loans, either repayable on demand or
such verification by the management is appropriate.
without specifying any terms or period of repayment to
Inventories lying with third parties have been confirmed
companies, firms, Limited Liability Partnerships or any
by them as at March 31, 2023. Discrepancies of 10% or
other parties. Accordingly, the requirement to report
more in aggregate for each class of inventory were not
on clause 3(iii)(f) of the Order is not applicable to the
noticed on such physical verification and confirmation.
Company.

98
Corporate Overview Management Reports Financial Statements

(iv) Loans, investments, guarantees and security in respect of made and maintained. We have not, however, made a
which provisions of sections 185 and 186 of the Companies detailed examination of the same.
Act, 2013 (‘the Act’) are applicable have been complied with
by the Company.. (vii) (a) Undisputed statutory dues including goods and services
tax, professional tax, provident fund, employees’
(v) The Company has neither accepted any deposits from the state insurance, income-tax, custom duty, cess and
public nor accepted any amounts which are deemed to be other material statutory dues, as applicable to the
deposits within the meaning of sections 73 to 76 of the Act Company have generally been regularly deposited
and the rules made thereunder, to the extent applicable. with the appropriate authorities. According to the
Accordingly, the requirement to report on clause 3(v) of information and explanations given to us and based
the Order is not applicable to the Company and hence not on audit procedures performed by us, undisputed dues
commented upon. in respect of goods and services tax, provident fund,
employees’ state insurance, income-tax, service tax,
(vi) We have broadly reviewed the books of account maintained sales-tax, duty of custom, duty of excise, value added
by the Company pursuant to the rules made by the tax, cess and other statutory dues as applicable to the
Central Government for the maintenance of cost records Company which were outstanding, at the year end, for
under section 148(1) of the Act related to the products a period of more than six months from the date they
manufactured by the Company, and are of the opinion that became payable, are as follows:
prima facie, the specified accounts and records have been

Statement of arrears of statutory dues outstanding for more than six months

Nature of the Amount (in Period to which Date of

Name of the Statute Due Date
Dues J million) the amount relates Payment
The Employees Provident Funds and Provident fund 3.33 February 2019 – Various dates Not paid
Miscellaneous Provisions Act, 1952 April 2019
Bruhat Bengaluru Mahanagara Property Tax 8.22 April 01– 2017 to Various dates Not paid
Palike March 31, 2023

(b) The dues of goods and services tax, provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of
custom, duty of excise, value added tax, cess, and other statutory dues which have not been deposited on account of any
dispute, are as follows:

Amount Period to which the Forum where the dispute is

Name of the statute Nature of the dues
(in J million) amount relates pending
Income Tax Act, 1961 Disallowance of 46.44 Financial year Commissioner of Income
exemptions 2016-2017 Tax (Appeals) - Bangalore
Central Excise Act, 1944 Non-payment of 89.25 Financial year 2009-2010 Customs, Excise and Service
service tax (3.54)* to 2017-2018 Tax Appellate Tribunal
(‘CESTAT’), Bangalore

Central Excise Act, 1944 Disallowance of 9.99 Financial year 2004-2005 Commissioner of Central
CENVAT Credit availed to 2005-2006 Excise, Bangalore
Central Excise Act, 1944 Disallowance of 22.26 Financial year 2010-2011 CESTAT, Bangalore
CENVAT Credit availed to 2012-2013
The Karnataka Stamp Stamp duty 16.28 Financial year 2007-08 The District Registrar,
Act, 1957 Gandhinagar Registration
District
The Goods and Service Recovery of erroneous 2.72 Financial year 2017-2018 Additional Commissioner
Tax Act refund sanctioned (0.44)* Central tax (Appeals)
Bruhat Bengaluru Property tax 2.70 FY 2020-2021 Bruhat Bengaluru
Mahanagara Palike Mahanagara Palike

* Amount in parenthesis represents the payment made under protest.

99
Centum Electronics Limited
Annual Report 2022-23

(viii) The Company has not surrendered or disclosed any (c) As represented to us by the management of the
transaction, previously unrecorded in the books of account, Company, there are no whistle blower complaints
in the tax assessments under the Income Tax Act, 1961 as received by the Company during the year.
income during the year. Accordingly, the requirement to report
on clause 3(viii) of the Order is not applicable to the Company. (xii) The Company is not a Nidhi Company as per the provisions
of the Act. Therefore, the requirement to report on clause
(ix) (a) The Company has not defaulted in repayment of loans or 3(xii)(a) to (c) of the Order is not applicable to the Company.
other borrowings or in the payment of interest thereon
to any lender. (xiii) Transactions with the related parties are in compliance with
sections 177 and 188 of the Act where applicable and the
(b) The Company has not been declared wilful defaulter by details have been disclosed in the notes to the standalone
any bank or financial institution or other government or Ind AS financial statements, as required by the applicable
any government authority. accounting standards.

(c) The Company did not take any new term loans during (xiv) (a) The Company has an internal audit system
the year and hence, the requirement to report on clause commensurate with the size and nature of its business.
(ix)(c) of the Order is not applicable to the Company.
(b) The internal audit reports of the Company issued till the
(d) On an overall examination of the standalone Ind AS date of the audit report, for the period under audit have
financial statements of the Company, no funds raised been considered by us.
on short-term basis have been used for long-term
purposes by the Company. (xv) The Company has not entered into any non-cash transactions
with directors or persons connected with the directors as
(e) On an overall examination of the standalone Ind AS referred to in section 192 of the Act and hence requirement
financial statements of the Company, the Company to report on clause 3(xv) of the Order is not applicable to the
has not taken any funds from any entity or person on Company.
account of or to meet the obligations of its subsidiaries
or associates during the year. (xvi) (a) The provisions of section 45-IA of the Reserve Bank
of India Act, 1934 (2 of 1934) are not applicable to the
(f) The Company has not raised loans during the year Company. Accordingly, the requirement to report on
on the pledge of securities held in its subsidiaries or clause (xvi)(a) of the Order is not applicable to the
associate companies. The Company does not have Company.
any joint venture. Hence, the requirement to report
on clause (ix)(f) of the Order is not applicable to the (b) The Company is not engaged in any Non-Banking
Company. Financial or Housing Finance activities. Accordingly, the
requirement to report on clause (xvi)(b) of the Order is
(x) (a) The Company has not raised any money during the not applicable to the Company.
year by way of initial public offer/ further public offer
(including debt instruments) hence, the requirement to (c) The Company is not a Core Investment Company as
report on clause 3(x)(a) of the Order is not applicable to defined in the regulations made by Reserve Bank of
the Company. India. Accordingly, the requirement to report on clause
3(xvi)(c) of the Order is not applicable to the Company.
(b) The Company has not made any preferential allotment
or private placement of shares /fully or partially or (d) There is no Core Investment Company as a part of the
optionally convertible debentures during the year under Group, hence, the requirement to report on clause 3(xvi)
audit and hence, the requirement to report on clause (d) of the Order is not applicable to the Company.
3(x)(b) of the Order is not applicable to the Company.
(xvii) The Company has not incurred cash losses in the current
(xi) (a) No fraud by the Company or no fraud / material fraud on financial year or the immediately preceding financial year.
the Company has been noticed or reported during the
(xviii)There has been no resignation of the statutory auditors
year.
during the year and accordingly requirement to report on
(b) During the year, no report under sub-section (12) of clause 3(xviii) of the Order is not applicable to the Company.
section 143 of the Act has been filed by cost auditor,
(xix) On the basis of the financial ratios disclosed in Note 49 to
secretarial auditor or by us in Form ADT – 4 as
the standalone Ind AS financial statements, ageing and
prescribed under Rule 13 of Companies (Audit and
expected dates of realization of financial assets and payment
Auditors) Rules, 2014 with the Central Government.
of financial liabilities, other information accompanying the

100
Corporate Overview Management Reports Financial Statements

standalone Ind AS financial statements, our knowledge of (b) There are no unspent amounts in respect of ongoing
the Board of Directors and management plans and based on projects, that are required to be transferred to a special
our examination of the evidence supporting the assumptions, account in compliance of provision of sub section (6) of
nothing has come to our attention, which causes us to section 135 of the Act. This matter has been disclosed in
believe that any material uncertainty exists as on the date of note 53 to the standalone Ind AS financial statements.
the audit report that Company is not capable of meeting its
liabilities existing at the date of balance sheet as and when
they fall due within a period of one year from the balance
sheet date.

We, however, state that this is not an assurance as to the

future viability of the Company. We further state that our
reporting is based on the facts up to the date of the audit For S.R. Batliboi & Associates LLP
report and we neither give any guarantee nor any assurance Chartered Accountants
that all liabilities falling due within a period of one year from ICAI Firm Registration Number: 101049W/E300004
the balance sheet date, will get discharged by the Company
as and when they fall due.
per Sandeep Karnani
(xx) (a) In respect of other than ongoing projects, there are no Partner
unspent amounts that are required to be transferred to Membership Number: 061207
a fund specified in Schedule VII of the Act, in compliance UDIN: 23061207BGYKVE8344
with second proviso to sub section 5 of section 135 of
the Act. This matter has been disclosed in note 53 to the Place of Signature: Bengaluru
standalone Ind AS financial statements. Date: May 27, 2023

101
Centum Electronics Limited
Annual Report 2022-23

Annexure 2
to the Independent Auditor’s Report of even date on the Standalone Ind AS Financial Statements of Centum
Electronics Limited

Report on the Internal Financial Controls under and their operating effectiveness. Our audit of internal financial
Clause (i) of Sub-section 3 of Section 143 of the controls with reference to standalone Ind AS financial statements
Companies Act, 2013 (“the Act”) included obtaining an understanding of internal financial controls
with reference to these standalone Ind AS financial statements,
We have audited the internal financial controls with reference to assessing the risk that a material weakness exists, and testing
standalone Ind AS financial statements of Centum Electronics and evaluating the design and operating effectiveness of internal
Limited (“the Company”) as of March 31, 2023 in conjunction with control based on the assessed risk. The procedures selected
our audit of the standalone Ind AS financial statements of the depend on the auditor’s judgement, including the assessment
Company for the year ended on that date. of the risks of material misstatement of the standalone Ind AS
financial statements, whether due to fraud or error.
Management’s Responsibility for Internal Financial
We believe that the audit evidence we have obtained is sufficient
Controls
and appropriate to provide a basis for our audit opinion on the
The Company’s Management is responsible for establishing Company’s internal financial controls with reference to these
and maintaining internal financial controls based on the standalone Ind AS financial statements.
internal control over financial reporting criteria established by
the Company considering the essential components of internal Meaning of Internal Financial Controls with Reference
control stated in the Guidance Note on Audit of Internal Financial to these Standalone Ind AS Financial Statements
Controls Over Financial Reporting (“Guidance Note”) issued
by the Institute of Chartered Accountants of India (“ICAI”). A company’s internal financial controls with reference to
These responsibilities include the design, implementation standalone Ind AS financial statements is a process designed to
and maintenance of adequate internal financial controls that provide reasonable assurance regarding the reliability of financial
were operating effectively for ensuring the orderly and efficient reporting and the preparation of standalone Ind AS financial
conduct of its business, including adherence to the Company’s statements for external purposes in accordance with generally
policies, the safeguarding of its assets, the prevention and accepted accounting principles. A company’s internal financial
detection of frauds and errors, the accuracy and completeness controls with reference to standalone Ind AS financial statements
of the accounting records, and the timely preparation of reliable includes those policies and procedures that (1) pertain to the
financial information, as required under the Companies Act, maintenance of records that, in reasonable detail, accurately and
2013. fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of standalone Ind
Auditor’s Responsibility
AS financial statements in accordance with generally accepted
Our responsibility is to express an opinion on the Company’s accounting principles, and that receipts and expenditures of the
internal financial controls with reference to these standalone Ind company are being made only in accordance with authorisations
AS financial statements based on our audit. We conducted our of management and directors of the company; and (3) provide
audit in accordance with the Guidance Note and the Standards reasonable assurance regarding prevention or timely detection
on Auditing, as specified under section 143(10) of the Act, to the of unauthorised acquisition, use, or disposition of the company’s
extent applicable to an audit of internal financial controls, both assets that could have a material effect on the standalone Ind AS
issued by ICAI. Those Standards and the Guidance Note require financial statements.
that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate Inherent Limitations of Internal Financial Controls
internal financial controls with reference to these standalone Ind with Reference to these Standalone Ind AS Financial
AS financial statements was established and maintained and if Statements
such controls operated effectively in all material respects.
Because of the inherent limitations of internal financial controls
Our audit involves performing procedures to obtain audit with reference to standalone Ind AS financial statements,
evidence about the adequacy of the internal financial controls including the possibility of collusion or improper management
with reference to these standalone Ind AS financial statements override of controls, material misstatements due to error or fraud

102
Corporate Overview Management Reports Financial Statements

may occur and not be detected. Also, projections of any evaluation internal control over financial reporting criteria established by
of the internal financial controls with reference to standalone Ind the Company considering the essential components of internal
AS financial statements to future periods are subject to the risk control stated in the Guidance Note issued by the ICAI.
that the internal financial control with reference to standalone
Ind AS financial statements may become inadequate because of
For S.R. Batliboi & Associates LLP
changes in conditions, or that the degree of compliance with the
Chartered Accountants
policies or procedures may deteriorate.
ICAI Firm Registration Number: 101049W/E300004

Opinion
per Sandeep Karnani
In our opinion, the Company has, in all material respects, Partner
adequate internal financial controls with reference to standalone Membership Number: 061207
Ind AS financial statements and such internal financial controls UDIN: : 23061207BGYKVE8344
with reference to standalone Ind AS financial statements
were operating effectively as at March 31, 2023, based on the Place of Signature: Bengaluru
Date: May 27, 2023

103
Centum Electronics Limited
Annual Report 2022-23

Standalone Balance Sheet

(CIN): L85110KA1993PLC013869
as at March 31, 2023
(H in million)
Particulars Notes March 31, 2023 March 31, 2022
ASSETS
(1) Non-current assets
(a) Property, plant and equipment 3 992.56 1,033.13
(b) Capital work-in-progress 3a 54.09 0.09
(c) Goodwill 4 36.35 36.35
(d) Other intangible assets 4 29.11 42.17
(e) Right-of-use assets 45a 35.42 29.07
(f) Financial assets
(i) Investments 5 762.98 627.85
(ii) Loans 6 10.00 20.00
(iii) Other financial assets 7 205.25 248.49
(g) Deferred tax assets (net) 8 62.11 25.34
(h) Non-current tax assets (net) 9 9.59 48.89
(i) Other assets 10 21.46 9.00
Total non - current assets 2,218.92 2,120.38
(2) Current assets
(a) Inventories 11 2,315.71 1,986.57
(b) Financial assets
(i) Trade receivables 12 2,094.87 897.57
(ii) Cash and cash equivalents 13 137.59 149.19
(iii) Bank balances other than cash and cash equivalents 13 69.25 93.67
(iv) Loans 14 10.00 –
(v) Other financial assets 15 5.99 51.61
(c) Other assets 16 202.04 160.98
Total current assets 4,835.45 3,339.59
Total assets (1+2) 7,054.37 5,459.97
EQUITY AND LIABILITIES
(1) Equity
(a) Equity share capital 17 128.85 128.85
(b) Other equity 18 2,697.58 2,516.38
Total equity 2,826.43 2,645.23
Liabilities
(2) Non-current liabilities
(a) Financial liabilities
(i) Lease liabilities 45a 7.56 1.55
(b) Government grants 20 24.43 26.57
(c) Net employee defined benefit liabilities 21 59.48 56.39
(d) Other liabilities 25 167.39 77.30
Total non-current liabilities 258.86 161.81
(3) Current liabilities
(a) Financial liabilities
(i) Borrowings 22 1,059.22 979.45
(ii) Lease liabilities 45a 6.48 11.80
(iii) Trade payables 23
Total outstanding dues of micro enterprises and small enterprises 69.84 67.00
Total outstanding dues of creditors other than micro enterprises and small enterprises 1,455.01 659.23
(iv) Other financial liabilities 24 166.98 84.48
(b) Government grants 20 8.16 7.87
(c) Other liabilities 25 1,024.76 781.34
(d) Net employee defined benefit liabilities 26 7.08 6.48
(e) Provisions 27 62.10 25.26
(f) Liabilities for current tax (net) 28 109.45 30.02
Total current liabilities 3,969.08 2,652.93
Total equity and liabilities (1+2+3) 7,054.37 5,459.97

Summary of significant accounting policies 2.3

The accompanying notes are an integral part of the standalone Ind AS financial statements.

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited
For S.R. Batliboi & Associates LLP
Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

104
Corporate Overview Management Reports Financial Statements

Standalone Statement of Profit & Loss for the year ended March 31, 2023
(H in million)
Particulars Notes March 31, 2023 March 31, 2022
I Income
Revenue from operations 29 5,005.54 3,480.11
Other income 30 31.42 30.30
Finance income 31 15.34 27.76
Total income 5,052.30 3,538.17
II Expenses
Cost of materials consumed 32 3,157.25 2,063.34
(Increase) / decrease in inventories of work-in-progress and finished goods 33 (1.15) (30.59)
Employee benefits expense 34 818.08 681.67
Finance costs 35 157.46 146.09
Depreciation and amortisation expenses 36 162.34 164.88
Other expenses 37 494.54 340.66
Total expenses 4,788.52 3,366.05
III Profit / (loss) before exceptional items and tax (I - II) 263.78 172.12
IV Exceptional items (net) 38 – (18.36)
V Profit/ (loss) before tax (III + IV) 263.78 153.76
VI Tax expenses
(a) Current tax 39 118.74 55.00
(b) Adjustment of tax relating to earlier period 39 (10.32) (9.38)
(c) Deferred tax (credit) /expense 39 (38.63) (9.52)
Total tax expenses 69.79 36.10
VII Profit / (loss) for the year (V - VI) 193.99 117.66
VIII Other comprehensive income
(A) Other comprehensive income not to be reclassified to profit or loss in
subsequent periods :
(i) Re-measurement gains / (losses) on defined benefit plans 42b(ii) 7.35 9.11
(ii) Income tax effect on above 39 (1.85) (2.63)
(B) Other comprehensive income to be reclassified to profit or loss in
subsequent periods :
(i) Net movement on effective portion of cash flow hedge 0.02 –
(ii) Income tax effect on above (0.01) –
Total other comprehensive income for the year (net of tax) 5.51 6.48
IX Total comprehensive income for the year (VII + VIII) 199.50 124.14
X Earnings per equity share (EPS) (nominal value of J 10 each) 40
Basic (H) 15.06 9.13
Diluted (H) 14.91 9.12

Summary of significant accounting policies 2.3

The accompanying notes are an integral part of the standalone Ind AS financial statements.

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited
For S.R. Batliboi & Associates LLP
Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

105
Centum Electronics Limited
Annual Report 2022-23

Standalone Ind AS Statement of Cash Flows

for the year ended March 31, 2023
(H in million)
Particulars March 31, 2023 March 31, 2022
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit / (loss) before tax 263.78 153.76
Non-cash adjustments to reconcile profit / (loss) before tax to net cash flows:
Depreciation and amortization expenses 162.34 164.88
Provisions no longer required, written back (12.86) (4.02)
Fair value (gain) / loss on financial instruments (0.02) (0.15)
Net foreign exchange differences (unrealised) (3.19) 6.34
(Gain)/ loss on sale/discard of property, plant and equipment (0.58) 0.92
Provision for expected credit loss / bad debts written off 27.31 5.08
Provision for inventory obsolescence 95.11 –
Provision for onerous contract 15.41 –
Government grants (10.50) (7.87)
Employee share based compensation cost 13.91 0.16
Finance income (15.34) (27.76)
Finance costs 130.66 112.18
Operating profit before working capital changes 666.03 403.52
Working capital adjustments:
(Increase) / decrease in inventories (424.25) (241.08)
(Increase)/decrease in trade receivables (1,213.38) 101.61
(Increase)/ decrease / in non current/ current financial assets and other assets (6.50) (17.11)
Increase / (decrease) in trade payables, non current/ current provisions, financial 1,189.00 531.18
liabilities and other liabilities
Cash generated from / (used in) operations 210.90 778.12
Direct taxes paid (net of refunds) 3.03 (98.20)
Net cash flow from / (used in) operating activities 213.93 679.92
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment, including intangible assets and capital (99.28) (95.60)
advances
Proceeds from sale of property, plant and equipment 0.63 3.56
Purchase of non-current investments (135.13) –
Proceeds from sale of non-current investments – 9.32
Investment in bank deposits (having original maturity of more than three months) 68.80 6.75
and other bank balances
Interest income received 23.19 17.53
Government grant received 8.65 –
Net cash flow (used in) / from investing activities (133.16) (58.44)
C. CASH FLOW FROM FINANCING ACTIVITIES
Repayment of long term borrowings – (195.21)
Payment of principal portion of lease liabilities (13.45) (20.05)
Payment of interest portion of lease liabilities (1.78) (2.75)
Proceeds / repayment of short term borrowings (net) 74.58 (223.50)
Finance costs paid (119.63) (110.35)
Dividend paid (including amount transferred to Investor Education & Protection Fund) (32.49) (25.53)
Net cash flow (used in) / from financing activities (92.77) (577.39)
Net (decrease)/ increase in cash and cash equivalents (A+B+C) (12.00) 44.09
Cash and cash equivalents at the beginning of the year 149.19 104.53
Effect of exchange differences on cash and cash equivalents held in foreign currency 0.40 0.57
Cash and cash equivalents at the end of the year 137.59 149.19
Total cash and cash equivalents (Note 13) 137.59 149.19

106
Corporate Overview Management Reports Financial Statements

Standalone Ind AS Statement of Cash Flows

for the year ended March 31, 2023

Explanatory notes to statement of cash flows

Changes in liabilities arising from financing activities:-

(H in million)
Liabilities arising from financing activities
Long term Short term
Unpaid Lease liabilities Derivatives
borrowings borrowings
dividend (including not designated
(including (excluding
Particulars on equity current portion as hedges -
current maturities current maturities
shares of lease Interest rate
of long term of long term
(refer liabilities) swap
borrowings) borrowings)
note 24) (refer note 45a) (refer note 51)
(refer note 22) (refer note 22)
As at April 01, 2022 2.89 – 979.45 13.35 –
Cash flows (32.49) – 74.58 (15.23) –
Non-cash changes
Foreign exchange fluctuations loss /(gain) – – 2.55 – –
Interest payable – – 2.64 – –
Accretion of interest – – – 1.78 –
Recognition of lease liabilities – – – 14.14 –
Dividend declared during the year 32.21 – – – –
As at March 31, 2023 2.61 – 1,059.22 14.04 –
As at April 01, 2021 2.65 195.21 1,201.79 32.30 0.15
Cash flows (25.53) (195.21) (223.50) (22.80) –
Non-cash changes
Foreign exchange fluctuations loss /(gain) – – 4.21 – –
Changes in fair values – – – – (0.15)
Interest payable – – (3.05) – –
Accretion of interest – – – 2.75 –
Recognition of lease liabilities – – – 1.10 –
Dividend declared during the year 25.77 – – – –
As at March 31, 2022 2.89 – 979.45 13.35 –

Summary of significant accounting policies 2.3

The accompanying notes are an integral part of the standalone Ind AS financial statements.

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited

For S.R. Batliboi & Associates LLP

Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

107
Centum Electronics Limited
Annual Report 2022-23

Standalone Changes in Equity

(a) Equity share capital
for the year ended March 31, 2023

Equity shares of H 10 each issued, subscribed and fully paid

Particulars Number (H in million)

At April 01, 2021 1,28,84,841 128.85
Issue of share capital (refer note 17) – –
At March 31, 2022 1,28,84,841 128.85
Issue of share capital (refer note 17) – –
At March 31, 2023 1,28,84,841 128.85

(b) Other equity

(H in million)
Attributable to equity shareholders
Reserves and surplus
Securities General Retained Effective Share based Capital Total
Particulars
premium reserve earnings portion of cash payments reserve equity
(refer (refer (refer flow hedge reserve (refer (refer
note 18) note 18) note 18) (refer note 18) note 18) note 18)
For the year ended March 31, 2023
As at April 01, 2022 28.07 440.26 2,044.30 – 0.32 3.43 2,516.38
Profit / (loss) for the year – – 193.99 – – – 193.99
Cash dividends (refer note 19) – – (32.21) – – – (32.21)
Compensation for options granted – – – – 13.91 – 13.91
(refer note 46)
Other comprehensive income/(loss) – – 5.50 0.01 – – 5.51
for the year (net of taxes)*
As at March 31, 2023 28.07 440.26 2,211.58 0.01 14.23 3.43 2,697.58
For the year ended March 31, 2022
As at April 01, 2021 28.07 440.26 1,945.93 – 2.11 1.48 2,417.85
Profit / (loss) for the year – – 117.66 – – – 117.66
Cash dividends (refer note 19) – – (25.77) – – – (25.77)
Compensation for options granted – – – – 0.16 – 0.16
(refer note 46)
Less: Transferred to capital reserve – – – – (1.95) 1.95 –
on forfeiture of stock options
Other comprehensive income/(loss) – – 6.48 – – – 6.48
for the year (net of taxes)*
As at March 31, 2022 28.07 440.26 2,044.30 – 0.32 3.43 2,516.38
*As required under Ind AS compliant Schedule III, the Company has recognised remeasurement gains / (losses) of defined benefit plans as part of retained earnings.

Summary of significant accounting policies 2.3

The accompanying notes are an integral part of the standalone Ind AS financial statements.
As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited

For S.R. Batliboi & Associates LLP

Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

108
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
1. Corporate information 2.2. Change in accounting policies and disclosures:
Centum Electronics Limited (“Centum” or “the Company”) is New Standards and amendments :
a public limited company domiciled in India. The registered
The Company applied for the first-time certain standards
office of the Company is located at Bangalore, India. Its
and amendments, which are effective for annual periods
equity shares are listed on National Stock Exchange and
beginning on or after 1 April 2022.
Bombay Stock Exchange in India.
The Ministry of Corporate Affairs has notified Companies
Centum designs, manufactures and also exports electronic
(Indian Accounting Standard) Amendment Rules 2022 dated
products. It also provides design services to its customers.
March 23, 2022, to amend the following Ind AS which are
These include systems, subsystems and modules.
effective from April 01, 2022.
Information on related party relationships of the Company is
provided in Note 42. (i) Onerous Contracts – Costs of Fulfilling a Contract –
Amendments to Ind AS 37
The standalone Ind AS financial statements were approved by
the Board of Directors and authorised for issue in accordance An onerous contract is a contract under which the
with a resolution of the directors on May 27, 2023. unavoidable of meeting the obligations under the
contract costs (i.e., the costs that the Company cannot
In the current year, the Company has been registered under avoid because it has the contract) exceed the economic
the provisions of Micro, Small and Medium Enterprise benefits expected to be received under it.
Development Act (“MSMED”) Act, 2006 and has obtained
the Udyam registration number (“URN”) UDYAM - KR– 03- The amendments specify that when assessing whether
0005545 on August 12, 2020 a contract is onerous or loss-making, an entity needs to
include costs that relate directly to a contract to provide
goods or services including both incremental costs
2. Significant accounting policies
(e.g., the costs of direct labour and materials) and an
The significant accounting policies applied by the Company in allocation of costs directly related to contract activities
the preparation of its standalone Ind AS financial statements (e.g., depreciation of equipment used to fulfil the contract
are listed below. Such accounting policies have been applied and costs of contract management and supervision).
consistently to all the periods presented in these standalone General and administrative costs do not relate directly
Ind AS financial statements, unless otherwise indicated. to a contract and are excluded unless they are explicitly
chargeable to the counterparty under the contract.
2.1. Basis of Preparation The Company applied the amendments to the contracts
The standalone Ind AS financial statements of the Company, for which it had not fulfilled all of its obligations at the
have been prepared in accordance with Indian Accounting beginning of the reporting period.
Standards (Ind AS) notified under the Companies (Indian
Prior to the application of the amendments, the Company
Accounting Standards) Rules, 2015 (as amended from time
had not identified any contracts as being onerous as the
to time) and presentation requirements of Division II of
unavoidable costs under the contracts, which were the
Schedule III to the Companies Act, 2013, (Ind AS compliant
costs of fulfilling them, comprised only incremental
Schedule III), as applicable.
costs directly related to the contracts. As a result of the
The standalone Ind AS financial statements have been prepared amendments, the Company assessed whether certain
on a historical cost basis, except for certain financial assets other directly related costs are required to be included
and liabilities (refer accounting policy regarding financial in determining the costs of fulfilling the contracts.
instruments) which have been measured at fair value.
In accordance with the transitional provisions, the
The functional and presentation currency of the Company Company applies the amendments to contracts for
is Indian Rupee (“H”) which is the currency of the primary which it has not yet fulfilled all of its obligations, at the
economic environment in which the Company operates and beginning of the annual reporting period in which it first
all values are rounded to the nearest million (H 000,000), applies the amendments (the date of initial application)
except when otherwise indicated. and has not restated its comparative information.

109
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
These amendments had no significant impact on the (iv) Ind AS 101 First-time Adoption of Indian Accounting
standalone Ind AS financial statements of the Company. Standards – Subsidiary as a first-time adopter

(ii)
Reference to the Conceptual Framework – The amendment permits a subsidiary that elects to
Amendments to Ind AS 103 apply the exemption in paragraph D16(a) of Ind AS 101
to measure cumulative translation differences for all
The amendments replaced the reference to the ICAI’s foreign operations in its financial statements using the
“Framework for the Preparation and Presentation amounts reported by the parent, based on the parent’s
of Financial Statements under Indian Accounting date of transition to Ind AS, if no adjustments were
Standards” with the reference to the “Conceptual made for consolidation procedures and for the effects of
Framework for Financial Reporting under Indian the business combination in which the parent acquired
Accounting Standard” without significantly changing its the subsidiary. This amendment is also available to
requirements. an associate or joint venture that uses exemption in
paragraph D16(a) of Ind AS 101.
The amendments also added an exception to the
recognition principle of Ind AS 103 Business Combinations The amendments are effective for annual reporting
to avoid the issue of potential ‘day 2’ gains or losses periods beginning on or after 1 April 2022 but do not
arising for liabilities and contingent liabilities that would apply to the Company as it is not a first-time adopter.
be within the scope of Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets or Appendix C, Levies, (v) Ind AS 109 Financial Instruments – Fees in the ’10 per
of Ind AS 37, if incurred separately. The exception cent’ test for derecognition of financial liabilities
requires entities to apply the criteria in Ind AS 37 or
Appendix C, Levies, of Ind AS 37, respectively, instead The amendment clarifies the fees that an entity
of the Conceptual Framework, to determine whether a includes when assessing whether the terms of a new
present obligation exists at the acquisition date. or modified financial liability are substantially different
from the terms of the original financial liability. These
The amendments also add a new paragraph to IFRS fees include only those paid or received between the
3 to clarify that contingent assets do not qualify for borrower and the lender, including fees paid or received
recognition at the acquisition date. by either the borrower or lender on the other’s behalf.

In accordance with the transitional provisions, the In accordance with the transitional provisions, the
Company applies the amendments prospectively, i.e., to Company applies the amendment to financial liabilities
business combinations occurring after the beginning of that are modified or exchanged on or after the beginning
the annual reporting period in which it first applies the of the annual reporting period in which the entity first
amendments (the date of initial application). applies the amendment (the date of initial application).
These amendments had no impact on the standalone
These amendments had no impact on the standalone Ind AS financial statements of the Company.
Ind AS financial statements of the Company.
(vi)
Ind AS 41 Agriculture – Taxation in fair value
(iii)
Property, Plant and Equipment: Proceeds before measurements
Intended Use – Amendments to Ind AS 16
The amendment removes the requirement in paragraph
The amendments modified paragraph 17(e) of Ind AS 22 of Ind AS 41 that entities exclude cash flows for
16 to clarify that excess of net sale proceeds of items taxation when measuring the fair value of assets within
produced over the cost of testing, if any, shall not be the scope of Ind AS 41.
recognised in the profit or loss but deducted from the
directly attributable costs considered as part of cost of The amendments are effective for annual reporting
an item of property, plant, and equipment. periods beginning on or after 1 April 2022. The
amendments had no impact on the standalone Ind AS
The amendments are effective for annual reporting financial statements of the Company.
periods beginning on or after 1 April 2022. These
amendments had no impact on the standalone Ind AS
financial statements of the Company.

110
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
2.3 Summary of significant accounting policies Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
a. Current versus non-current classification transaction between market participants at the
measurement date. The fair value measurement is
The Company presents assets and liabilities in the
based on the presumption that the transaction to sell
standalone Ind AS balance sheet based on current/ non-
the asset or transfer the liability takes place either:
current classification. An asset is treated as current
when it is: a) In the principal market for the asset or liability, or
i. Expected to be realised or intended to be sold or
b) In the absence of a principal market, in the most
consumed in normal operating cycle,
advantageous market for the asset or liability
ii. Held primarily for the purpose of trading,
The principal or the most advantageous market must
iii. Expected to be realised within twelve months after be accessible by the Company.
the reporting period, or
The fair value of an asset or a liability is measured using
iv. Cash or cash equivalent unless restricted from
the assumptions that market participants would use
being exchanged or used to settle a liability for at
when pricing the asset or liability, assuming that market
least twelve months after the reporting period
participants act in their economic best interest.
All other assets are classified as non-current.
A fair value measurement of a non-financial asset takes
A liability is current when: into account a market participant’s ability to generate
economic benefits by using the asset in its highest and
i. It is expected to be settled in normal operating best use or by selling it to another market participant
cycle, that would use the asset in its highest and best use.
ii. It is held primarily for the purpose of trading,
The Company uses valuation techniques that are
iii. It is due to be settled within twelve months after the appropriate in the circumstances and for which
reporting period, or sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
iv. There is no unconditional right to defer the
minimising the use of unobservable inputs.
settlement of the liability for at least twelve months
after the reporting period All assets and liabilities for which fair value is
measured or disclosed in the standalone Ind AS
The terms of the liability that could, at the option of the
financial statements are categorised within the fair
counterparty, result in its settlement by the issue of
value hierarchy, described as follows, based on the
equity instruments do not affect its classification.
lowest level input that is significant to the fair value
All other liabilities are classified as non-current. measurement as a whole:

Deferred tax assets and liabilities are classified as non- Level 1 — Quoted (unadjusted) market prices in active
current assets and liabilities. markets for identical assets or liabilities;

Advance tax paid is classified as non-current assets. Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
The operating cycle is the time between the acquisition directly or indirectly observable;
of assets for processing and their realisation in cash
and cash equivalents. Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
b. Fair value measurement unobservable.

The Company measures financial instruments, such as, For assets and liabilities that are recognised in the
derivatives at fair value at each balance sheet date. standalone Ind AS financial statements on a recurring

111
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
basis, the Company determines whether transfers transaction price for the sale of goods, the Company
have occurred between levels in the hierarchy by re- considers the effects of variable consideration, the
assessing categorisation (based on the lowest level existence of significant financing components, noncash
input that is significant to the fair value measurement consideration, and consideration payable to the
as a whole) at the end of each reporting period. customer (if any).

For the purpose of fair value disclosures, the Company Revenue towards satisfaction of a performance
has determined classes of assets and liabilities on the obligation is measured at the amount of transaction
basis of the nature, characteristics and risks of the price (net of variable consideration) allocated to that
asset or liability and the level of the fair value hierarchy performance obligation. The transaction price of
as explained above. goods sold and services rendered is net of variable
consideration on account of various discounts and
This note summarises accounting policy for fair value. schemes offered by the Company as part of the contract.
Other fair value related disclosures are given in the This variable consideration is estimated based on the
relevant notes. expected value of outflow. Revenue (net of variable
• Disclosures for valuation methods, significant consideration) is recognized only to the extent that it
estimates and assumptions is highly probable that the amount will not be subject
to significant reversal when uncertainty relating to its
• Quantitative disclosures of fair value measurement recognition is resolved.
hierarchy
Scrip Sales
• Investment in unquoted equity shares
Export entitlements in the form of Merchandise Export
• Financial instruments (including those carried at
from India (MEIS) are recognized in the standalone Ind
amortised cost)
AS statement of profit and loss when the right to receive
c. Revenue Recognition credit as per the terms of the scheme is established
in respect of exports made and when there is no
Revenue from contracts with customers is recognised significant uncertainty regarding the ultimate collection
when control of the goods or services are transferred of the relevant export proceeds.
to the customer at an amount that reflects the
consideration to which the Company expects to be Management fees income
entitled in exchange for those goods or services. The Income from management fees is recognised as per
Company has generally concluded that it is the principal the terms of the agreement on the basis of services
in its revenue arrangements because it typically controls rendered.
the goods or services before transferring them to the
customer. Interest income

The specific recognition criteria described below must For all financial instruments measured either
also be met before revenue is recognised. at amortised cost or at fair value through other
comprehensive income, interest income is recorded
Sale of products and services using the effective interest rate (EIR). EIR is the rate that
exactly discounts the estimated future cash payments
Revenue from sale of products is recognised at the point
or receipts over the expected life of the financial
in time when control of the asset is transferred to the
instrument or a shorter period, where appropriate, to
customer, generally on delivery of the products. Revenue
the gross carrying amount of the financial asset or to the
from sale of services is recognized as the service is
amortised cost of a financial liability. When calculating
performed and there are no unfulfilled obligations.
the effective interest rate, the Company estimates the
The Company considers whether there are other expected cash flows by considering all the contractual
promises in the contract that are separate performance terms of the financial instrument but does not consider
obligations to which a portion of the transaction the expected credit losses. Interest income is included
price needs to be allocated if any. In determining the in finance income in the statement of profit and loss.

112
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
Rental income income on a systematic basis over the periods that the
related costs, for which it is intended to compensate,
Rental income from lease of premises under operating
are expensed. When the grant relates to an asset, it
lease is recognized in the income statement on a
is recognised as income in equal amounts over the
straight line basis over the term of the lease.
expected useful life of the related asset.
Commission income
e. Taxes on income
Commission income is recognised at the time when
Current income tax
services are rendered in accordance with the rates as
per the agreements entered into with the parties. Tax expense for the year comprises current and deferred
tax. The tax currently payable is based on taxable profit
Contract balances for the year. Taxable profit differs from net profit as
reported in the statement of profit and loss because it
Contract assets
excludes items of income or expense that are taxable or
A contract asset is the right to consideration in exchange deductible in other years and it further excludes items
for goods or services transferred to the customer. If the that are never taxable or deductible. Current income
Company performs by transferring goods or services to tax assets and liabilities are measured at the amount
a customer before the customer pays consideration or expected to be recovered from or paid to the taxation
before payment is due, a contract asset is recognised authorities. The Company’s liability for current tax is
for the earned consideration that is conditional. calculated using the tax rates and tax laws that have
Contract assets are transferred to receivables when the been enacted or substantively enacted by the end of the
rights become unconditional and contract liabilities are reporting period.
recognized as and when the performance obligation is
Current income tax relating to items recognised
satisfied.
outside profit or loss is recognised outside profit or loss
Contract assets are subject to impairment assessment. (either in other comprehensive income or in equity).
Refer to accounting policies on impairment of financial Current tax items are recognised in correlation to the
assets in section (o) Financial instruments below. underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken
Trade receivables in the tax returns with respect to situations in which
A receivable is recognised if an amount of consideration applicable tax regulations are subject to interpretation
that is unconditional (i.e., only the passage of time is and considers whether it is probable that a taxation
required before payment of the consideration is due). authority will accept an uncertain tax treatment. The
Refer to accounting policies of financial assets in Company shall reflect the effect of uncertainty for each
section (o) Financial instruments below. uncertain tax treatment by using either most likely
method or expected value method, depending on which
Contract liabilities method predicts better resolution of the treatment.

A contract liability is recognised if a payment is received Deferred tax

or a payment is due (whichever is earlier) from a
customer before the Company transfers the related Deferred tax is the tax expected to be payable or
goods or services. Contract liabilities are recognised recoverable on differences between the carrying values
as revenue when the Company performs under the of assets and liabilities in the financial statements and
contract (i.e., transfers control of the related goods or the corresponding tax bases used in the computation of
services to the customer). the taxable profit and is accounted for using the balance
sheet liability model. Deferred tax liabilities are generally
d. Government grants recognised for all the taxable temporary differences. In
contrast, deferred tax assets are only recognised to the
Government grants are recognised where there is
extent that is probable that future taxable profits will be
reasonable assurance that the grant will be received
available against which the temporary differences can
and all attached conditions will be complied with. When
be utilised.
the grant relates to an expense item, it is recognised as

113
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
Deferred tax assets are recognized for all deductible for immediate sale in its present condition, subject only
temporary differences, carry forward of unused tax to terms that are usual and customary for sales of such
credits and unused tax losses, to the extent that it is assets, its sale is highly probable; and it will genuinely
probable that taxable profit will be available against be sold, not abandoned. The Company treats sale of the
which the deductible temporary differences, and the asset to be highly probable when:
carry forward of unused tax credits and unused tax
losses can be utilized. a) The appropriate level of management is committed
to a plan to sell the asset,
The carrying amount of deferred tax assets is reviewed
at each balance sheet date and reduced to the extent b) An active programme to locate a buyer and
that it is no longer probable that sufficient taxable profit complete the plan has been initiated,
will be available to allow all or part of the deferred
c) The asset is being actively marketed for sale at a
tax asset to be utilized. Unrecognised deferred tax
price that is reasonable in relation to its current fair
assets are re-assessed at each reporting date and are
value,
recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax d) The sale is expected to qualify for recognition as
asset to be recovered. a completed sale within one year from the date of
classification, and
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when e) Actions required to complete the plan indicate that
the asset is realized or the liability is settled, based it is unlikely that significant changes to the plan will
on tax rates (and tax laws) that have been enacted or be made or that the plan will be withdrawn.
substantively enacted at the balance sheet date.
Non-current assets held for sale are measured at the
Deferred tax relating to items recognised outside profit lower of their carrying amount and the fair value less
or loss is recognised outside profit or loss (either in costs to sell. Assets and liabilities classified as held for
other comprehensive income or in equity). Deferred tax sale are presented separately in the standalone Ind AS
items are recognised in correlation to the underlying balance sheet.
transaction either in OCI or directly in equity.
g. Property, plant and equipment (‘PPE’)
Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax On transition to Ind AS, the Company has elected to
assets against current tax liabilities and the deferred continue with the carrying value of all of its property,
taxes relate to the same taxable entity and the same plant and equipment recognised as at March 31, 2016
taxation authority. measured as per the previous GAAP and use that
carrying value as the deemed cost of the property, plant
f. Non-current assets held for sale and equipment as on April 1, 2016.

The Company classifies non-current assets as held Capital work in progress includes cost of property, plant
for sale if their carrying amounts will be recovered and equipment under installation / under development,
principally through a sale rather than through continuing net of accumulated impairment loss, if any, as at the
use. Actions required to complete the sale should balance sheet date. Plant and equipment are stated at
indicate that it is unlikely that significant changes to cost, net of accumulated depreciation and accumulated
the sale will be made or that the decision to sell will be impairment losses, if any. Such cost includes the
withdrawn. Management must be committed to the sale cost of replacing part of the plant and equipment and
expected within one year from the date of classification. borrowing costs for long-term construction projects if
the recognition criteria are met. When significant parts
For these purposes, sale transactions include
of plant and equipment are required to be replaced at
exchanges of non-current assets for other non-current
intervals, the Company depreciates them separately
assets when the exchange has commercial substance.
based on their specific useful lives. All other repair and
The criteria for held for sale classification is regarded
maintenance costs are recognised in profit or loss as
met only when the assets or disposal group is available
incurred.

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for the year ended March 31, 2023
Subsequent costs are included in the asset’s An item of property, plant and equipment and any
carrying amount or recognised as a separate asset, significant part initially recognised is derecognised
as appropriate, only when it is probable that future upon disposal or when no future economic benefits
economic benefits associated with the item will flow to are expected from its use or disposal. Any gain or loss
the Company and the cost of the item can be measured arising on derecognition of the asset (calculated as the
reliably. The carrying amount of any component difference between the net disposal proceeds and the
accounted for as a separate assets are derecognised carrying amount of the asset) is included in the statement
when replaced. All other repairs and maintenance are of profit and loss when the asset is derecognised.
charged to profit and loss during the reporting period in
which they are incurred. Machinery spares are depreciated on a systematic basis
over the period of the remaining useful life of the fixed
The Company identifies and determines cost of assets for which they are utilised.
each component/ part of the asset separately, if the
component/ part has a cost which is significant to h. Intangible assets
the total cost of the asset having useful life that is
Intangible assets acquired separately are measured
materially different from that of the remaining asset.
on initial recognition at cost. The cost of intangible
These components are depreciated over their useful
assets acquired in a business combination is their
lives; the remaining asset is depreciated over the life of
fair value at the date of acquisition. Following initial
the principal asset.
recognition, intangible assets are carried at cost less
Depreciation is calculated on a straight-line basis over any accumulated amortisation and accumulated
the estimated useful lives of the assets as follows: impairment losses, if any. Internally generated
intangibles, excluding capitalised development costs,
Estimated are not capitalised and the related expenditure is
Category of asset*
useful life reflected in profit or loss in the period in which the
Plant and equipment (including the 8 years* expenditure is incurred.
related intellectual property)
The useful lives of intangible assets are assessed as
Office equipment 5 years
Furniture and fixtures 10 years either finite or indefinite.
Electrical installations 10 years Intangible assets with finite lives are amortised over
Computers 3 years the useful economic life and assessed for impairment
Buildings 30 years whenever there is an indication that the intangible
Vehicles 4 years asset may be impaired. The amortisation period and
* The Company, based on technical assessment made by the
the amortisation method for an intangible asset with
technical expert and management estimate, depreciates certain a finite useful life are reviewed at least at the end of
items of plant and equipment (including the related intellectual each reporting period with the affect of any change in
property) over estimated useful lives which are different from the the estimate being accounted for on a prospective basis.
useful life prescribed in Schedule II to the Companies Act, 2013.
Changes in the expected useful life or the expected
Land is carried at historical cost and is not depreciated. pattern of consumption of future economic benefits
Leasehold improvements are depreciated over the embodied in the asset are considered to modify the
period of lease or estimated useful life, whichever is amortisation period or method, as appropriate, and
lower, on straight line basis are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite
The management believes that these estimated useful lives is recognised in the statement of profit and loss
lives are realistic and reflect fair approximation of the unless such expenditure forms part of carrying value of
period over which the assets are likely to be used. another asset.

The residual values, useful lives and methods of Intangible assets with indefinite useful lives are not
depreciation of property, plant and equipment are amortised, but are tested for impairment annually,
reviewed at each financial year end and adjusted either individually or at the cash-generating unit level.
prospectively, if appropriate. The assessment of indefinite life is reviewed annually

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for the year ended March 31, 2023
to determine whether the indefinite life continues to short-term leases and leases of low-value assets. The
be supportable. If not, the change in useful life from Company recognises lease liabilities to make lease
indefinite to finite is made on a prospective basis. payments and right-of-use assets representing the
right to use the underlying assets.
An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no i) Right-of-use assets:
future economic benefits are expected from its use or
The Company recognises right-of-use assets at the
disposal. Any gain or loss arising upon derecognition of
commencement date of the lease (i.e., the date the
the asset (calculated as the difference between the net
underlying asset is available for use). Right-of-use
disposal proceeds and the carrying amount of the asset)
assets are measured at cost, less any accumulated
is included in the statement of profit and loss when the
depreciation and impairment losses, and adjusted
asset is derecognised.
for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount
A summary of the policies applied to the Company’s
of lease liabilities recognised, initial direct costs
intangible assets is, as follows:
incurred, and lease payments made at or before
Internally the commencement date less any lease incentives
Intangible Useful Amortisation
generated received. Right-of-use assets are depreciated on
assets lives method used
or acquired a straight-line basis over the shorter of the lease
Goodwill Indefinite No amortisation Acquired term and the estimated useful lives of the assets.
Computer Definite Straight-line Acquired
If ownership of the leased asset transfers to
software (5 years) basis
the Company at the end of the lease term or the
Intellectual Definite Straight-line Acquired
cost reflects the exercise of a purchase option,
property (8 years) basis
depreciation is calculated using the estimated
rights useful life of the asset.

i. Borrowing cost The right-of-use assets are also subject to

impairment. Refer to the accounting policies in
Borrowing costs directly attributable to the acquisition,
section (l) Impairment of non-financial assets.
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its ii) Lease Liabilities
intended use or sale are capitalised as part of the cost of
the asset until such time as the assets are substantially At the commencement date of the lease, the
ready for the intended use or sale. All other borrowing Company recognises lease liabilities measured at
costs are expensed in the period in which they occur. the present value of lease payments to be made over
Borrowing costs consist of interest and other costs that the lease term. The lease payments include fixed
an entity incurs in connection with the borrowing of funds. payments (including in substance fixed payments)
Borrowing cost also includes exchange differences to the less any lease incentives receivable, variable lease
extent regarded as an adjustment to the borrowing costs. payments that depend on an index or a rate, and
amounts expected to be paid under residual value
j. Leases guarantees. The lease payments also include the
The Company has lease contracts for office spaces, various exercise price of a purchase option reasonably
items of plant and machinery and other equipment. certain to be exercised by the Company and
The Company assesses at contract inception whether payments of penalties for terminating the lease, if
a contract is, or contains, a lease. That is, if the contract the lease term reflects the Company exercising the
conveys the right to control the use of an identified asset option to terminate. Variable lease payments that
for a period of time in exchange for consideration. do not depend on an index or a rate are recognised
as expenses (unless they are incurred to produce
Company as a lessee inventories) in the period in which the event or
condition that triggers the payment occurs.
The Company applies a single recognition and
measurement approach for all leases, except for

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for the year ended March 31, 2023
In calculating the present value of lease payments, Costs incurred in bringing each product to its present
the Company uses its incremental borrowing rate location and condition are accounted for as follows:
at the lease commencement date because the
interest rate implicit in the lease is not readily a) Raw materials and stores and spares: cost
determinable. After the commencement date, the includes cost of purchase and other costs incurred
amount of lease liabilities is increased to reflect in bringing the inventories to their present location
the accretion of interest and reduced for the lease and condition.
payments made. In addition, the carrying amount
b) Finished goods and work in progress: cost includes
of lease liabilities is remeasured if there is a
cost of direct materials and labour and a proportion
modification, a change in the lease term, a change
of manufacturing overheads based on the normal
in the lease payments (e.g., changes to future
operating capacity, but excluding borrowing costs.
payments resulting from a change in an index or
rate used to determine such lease payments) or a Cost of raw materials, stores and spares, work-
change in the assessment of an option to purchase in-progress and finished goods is determined on a
the underlying asset. weighted average basis.

iii) Short-term leases and leases of low-value assets Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs of
The Company applies the short-term lease
completion and the estimated costs necessary to make
recognition exemption to its short-term leases of
the sale.
machinery and equipment (i.e., those leases that
have a lease term of 12 months or less from the l. Impairment of non-financial assets and investments
commencement date and do not contain a purchase in subsidiaries and associates
option). It also applies the lease of low-value
assets recognition exemption to leases of office As at the end of each accounting year, the Company
equipment that are considered to be low value. reviews the carrying amounts of its PPE, intangible
Lease payments on short-term leases and leases assets, including goodwill and investments in
of low-value assets are recognised as expense on a subsidiary and associates to determine whether there
straight-line basis over the lease term. is any indication that those assets have suffered an
impairment loss. If such indication exists, the said
Company as a lessor assets are tested for impairment so as to determine
the impairment loss, if any. Goodwill and the intangible
Leases in which the Company does not transfer
assets with indefinite life are tested for impairment
substantially all the risks and rewards incidental
each year.
to ownership of an asset is classified as operating
leases. Rental income arising is accounted for on Impairment loss is recognised when the carrying
a straight-line basis over the lease terms. Initial amount of an asset exceeds its recoverable amount.
direct costs incurred in negotiating and arranging Recoverable amount is determined:
an operating lease are added to the carrying
amount of the leased asset and recognised over (i) in the case of an individual asset, at the higher of
the lease term on the same basis as rental income. the fair value less costs of disposal and the value in
Contingent rents are recognised as revenue in the use; and
period in which they are earned.
(ii) in the case of a cash generating unit (a group of
k. Inventories assets that generates identified, independent cash
flows), at the higher of the cash generating unit’s net
Inventories are valued at lower of cost and net realisable fair value less costs of disposal and the value in use.
value. However, materials and other items held for use
in the production of inventories are not written down (The amount of value in use is determined as the
below cost if the finished products in which they will be present value of estimated future cash flows from the
incorporated are expected to be sold at or above cost. continuing use of an asset and from its disposal at the
end of its useful life. For this purpose, the discount rate

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Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
(pre-tax) is determined based on the weighted average for the asset (or cash generating unit) in prior years.
cost of capital of the company suitably adjusted for risks A reversal of an impairment loss is recognised
specified to the estimated cash flows of the asset). immediately in the statement of profit and loss

For this purpose, a cash generating unit is ascertained m. Provisions and contingent liabilities
as the smallest identifiable group of assets that
generates cash inflows that are largely independent of General
the cash inflows from other assets or groups of assets.
Provisions are recognised when the Company has
If recoverable amount of an asset (or cash generating a present obligation (legal or constructive) as a
unit) is estimated to be less than its carrying amount, result of a past event, it is probable that an outflow
such deficit is recognised immediately in the Statement of resources embodying economic benefits will be
of Profit and Loss as impairment loss and the carrying required to settle the obligation and a reliable estimate
amount of the asset (or cash generating unit) is reduced can be made of the amount of the obligation. When
to its recoverable amount. the Company expects some or all of a provision to be
reimbursed, for example, under an insurance contract,
In assessing value in use, the estimated future cash the reimbursement is recognised as a separate asset,
flows are discounted to their present value using a but only when the reimbursement is virtually certain.
pre-tax discount rate that reflects current market The expense relating to a provision is presented in the
assessments of the time value of money and the risks statement of profit and loss net of any reimbursement.
specific to the asset. In determining fair value less costs
of disposal, recent market transactions are taken into If the effect of the time value of money is material,
account. If no such transactions can be identified, an provisions are discounted using a current pre-tax rate
appropriate valuation model is used. These calculations that reflects, when appropriate, the risks specific to the
are corroborated by valuation multiples, quoted share liability. When discounting is used, the increase in the
prices for publicly traded companies or other available provision due to the passage of time is recognised as a
fair value indicators. finance cost.

The Company bases its impairment calculation on If the Company has a contract that is onerous, the
detailed budgets and forecast calculations, which present obligation under the contract is recognised and
are prepared separately for each of the Company’s measured as a provision. However, before a separate
CGUs to which the individual assets are allocated. To provision for an onerous contract is established, the
estimate cash flow projections beyond periods covered Company recognises any impairment loss that has
by the most recent budgets/forecasts, the Company occurred on assets dedicated to that contract.
extrapolates cash flow projections in the budget using
An onerous contract is a contract under which the
a steady or declining growth rate for subsequent years,
unavoidable costs (i.e., the costs that the Company
unless an increasing rate can be justified. In any case,
cannot avoid because it has the contract) of meeting
this growth rate does not exceed the long-term average
the obligations under the contract exceed the
growth rate for the products, industries, or country in
economic benefits expected to be received under it. The
which the Company operates, or for the market in which
unavoidable costs under a contract reflect the least net
the asset is used.
cost of exiting from the contract, which is the lower of
Impairment losses of continuing operations, including the cost of fulfilling it and any compensation or penalties
impairment on inventories, are recognised in the arising from failure to fulfil it. The cost of fulfilling a
statement of profit and loss. contract comprises the costs that relate directly to the
contract (i.e., both incremental costs and an allocation
When an impairment loss subsequently reverses, the of costs directly related to contract activities).
carrying amount of the asset (or cash generating unit)
is increased to the revised estimate of its recoverable A contingent liability is a possible obligation that arises
amount, but so that the increased carrying amount from past events whose existence will be confirmed
does not exceed the carrying amount that would have by the occurrence or non-occurrence of one or more
been determined had no impairment loss is recognised uncertain future events beyond the control of the

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for the year ended March 31, 2023
Company or a present obligation that is not recognized recognizes expected cost of short-term employee
because it is not probable that an outflow of resources benefit as an expense, when an employee renders the
will be required to settle the obligation. A contingent related service.
liability also arises in extremely rare cases where there
is a liability that cannot be recognized because it cannot The Company treats accumulated leave expected to be
be measured reliably. The Company does not recognize carried forward beyond twelve months, as long-term
a contingent liability but discloses its existence in the employee benefit for measurement purposes. Such
standalone Ind AS financial statements. long-term compensated absences are provided for
based on the actuarial valuation using the projected
Provisions and contingent liability are reviewed at each unit credit method at the reporting date. Actuarial
balance sheet. gains/losses are immediately taken to the statement of
profit and loss and are not deferred. The obligations are
Decommissioning liability presented as current liabilities in the balance sheet if
the entity does not have an unconditional right to defer
Decommissioning costs are provided at the present
the settlement for at least twelve months after the
value of expected costs to settle the obligation using
reporting date.
estimated cash flows and are recognised as part of
the cost of the particular asset. The cash flows are The Company presents the leave as a current liability
discounted at a current pre-tax rate that reflects the in the standalone Ind AS balance sheet, to the extent
risks specific to the decommissioning liability. The it does not have an unconditional right to defer its
unwinding of the discount is expensed as incurred settlement for twelve months after the reporting date.
and recognised in the statement of profit and loss
as a finance cost. The estimated future costs of The cost of providing benefits under the defined benefit
decommissioning are reviewed annually and adjusted plan is determined using the projected unit credit
as appropriate. Changes in the estimated future costs method using actuarial valuation to be carried out at
or in the discount rate applied are added to or deducted each balance sheet date.
from the cost of the asset.
Re-measurements, comprising of actuarial gains
n. Retirement and other employee benefits and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
Retirement benefit in the form of provident fund and benefit liability and the return on plan assets (excluding
pension fund are defined contribution scheme. The amounts included in net interest on the net defined
Company has no obligation, other than the contribution benefit liability), are recognised immediately in the
payable. The Company recognizes contribution payable to standalone Ind AS balance sheet with a corresponding
provident fund and pension fund as expenditure, when an debit or credit to retained earnings through OCI in the
employee renders the related service. If the contribution period in which they occur. Re-measurements are not
payable to the scheme for service received before the reclassified to profit or loss in subsequent periods.
balance sheet date exceeds the contribution already
paid, the deficit payable to the scheme is recognized as Past service costs are recognised in profit or loss on the
a liability after deducting the contribution already paid. earlier of:
If the contribution already paid exceeds the contribution
a) The date of the plan amendment or curtailment,
due for services received before the balance sheet date,
and
then excess is recognized as an asset to the extent that
the pre-payment will lead to, for example, a reduction in b) The date that the Company recognises related
future payment or a cash refund. restructuring costs

Accumulated leave, which is expected to be utilized Net interest is calculated by applying the discount rate
within the next twelve months, is treated as short-term to the net defined benefit liability or asset. The Company
employee benefit. The Company measures the expected recognises the following changes in the net defined
cost of such absences as the additional amount that it benefit obligation as an expense in the statement of
expects to pay as a result of the unused entitlement that profit and loss:
has accumulated at the reporting date. The Company

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for the year ended March 31, 2023
a) Service costs comprising current service Effective interest method
costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and The effective interest method is a method of calculating
the amortised cost of a financial instrument and of
b) Net interest expense or income.
allocating interest income or expense over the relevant
o. Financial instruments period. The effective interest rate is the rate that exactly
discounts future cash receipts or payments through
Financial assets and financial liabilities are recognised the expected life of the financial instrument, or where
when the Company becomes a party to the contract appropriate, a shorter period.
embodying the related financial instruments. All
financial assets, financial liabilities and financial (i) Financial assets
guarantee contracts are initially measured at transaction
Financial assets at amortised cost
cost and where such values are different from the fair
value, at fair value. Transaction costs that are directly Financial assets are subsequently measured at
attributable to the acquisition or issue of financial assets amortised cost if these financial assets are held
and financial liabilities (other than financial assets and within a business model whose objective is to hold
financial liabilities at fair value through profit and loss) these assets in order to collect contractual cash
are added to or deducted from the fair value measured on flows and the contractual terms of the financial
initial recognition of financial asset or financial liability. asset give rise on specified dates to cash flows that
Transaction costs directly attributable to the acquisition are solely payments of principal and interest on the
of financial assets and financial liabilities at fair value principal amount outstanding.
through profit and loss are immediately recognised in the
statement of profit and loss. Financial assets measured at fair value

Financial assets are classified, at initial recognition, Financial assets are measured at fair value through
as subsequently measured at amortised cost and other comprehensive income if these financial
fair value through profit or loss. The classification of assets are held within a business model whose
financial assets at initial recognition depends on the objective is to hold these assets in order to collect
financial asset’s contractual cash flow characteristics contractual cash flows and to sell these financial
and the Company’s business model for managing them. assets and the contractual terms of the financial
With the exception of trade receivables that do not asset give rise on specified dates to cash flows that
contain a significant financing component or for which are solely payments of principal and interest on the
the Company has applied the practical expedient, the
principal amount outstanding.
Company initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair Financial asset not measured at amortised cost or
value through profit or loss, transaction costs. Trade at fair value through other comprehensive income
receivables that do not contain a significant financing is carried at fair value through the statement of
component or for which the Company has applied the profit and loss.
practical expedient are measured at the transaction
price as disclosed in section 2.3.(c) Revenue recognition. For financial assets maturing within one year from
the balance sheet date, the carrying amounts
In order for a financial asset to be classified and measured
approximate fair value due to the short maturity of
at amortised cost, it needs to give rise to cash flows that
these instruments.
are ‘solely payments of principal and interest (SPPI)’
on the principal amount outstanding. This assessment Impairment of financial assets excluding
is referred to as the SPPI test and is performed at an investments in subsidiaries and associates
instrument level. Financial assets with cash flows that
are not SPPI are classified and measured at fair value Loss allowance for expected credit losses is
through profit or loss, irrespective of the business model. recognised for financial assets measured at
amortised cost and fair value through the statement
Investment in equity instruments issued by subsidiaries, of profit and loss.
associates are measured at cost less impairment.

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for the year ended March 31, 2023
The Company recognises impairment loss on trade substance of the contractual arrangements entered
receivables using expected credit loss model, into and the definitions of a financial liability and an
which involves use of provision matrix constructed equity instrument.
on the basis of historical credit loss experience
Equity Instruments
as permitted under Ind AS 109 – Financial
Instruments. An equity instrument is any contract that
evidences a residual interest in the assets of the
For financial assets whose credit risk has not
Company after deducting all of its liabilities. Equity
significantly increased since initial recognition,
instruments are recorded at the proceeds received,
loss allowance equal to twelve months expected
net of direct issue costs.
credit losses is recognised. Loss allowance equal
to the lifetime expected credit losses is recognised Financial Liabilities
if the credit risk on the financial instruments has
significantly increased since initial recognition. Financial liabilities are initially measured at fair
value, net of transaction costs, and are subsequently
For financial assets maturing within one year from measured at amortised cost, using the effective
the balance sheet date, the carrying amounts interest rate method where the time value of
approximates fair value due to the short maturity of money is significant. Interest bearing bank loans,
these instruments. overdrafts and issued debt are initially measured
at fair value and are subsequently measured at
De-recognition of financial assets amortised cost using the effective interest rate
method. Any difference between the proceeds (net of
The Company de-recognises a financial asset transaction costs) and the settlement or redemption
only when the contractual rights to the cash flows of borrowings is recognised over the term of the
from the financial asset expire, or it transfers the borrowings in the statement of profit and loss.
financial asset and the transfer qualifies for de-
recognition under Ind AS 109. For trade and other payables maturing within one
year from the balance sheet date, the carrying
If the Company neither transfers nor retains amounts approximate fair value due to the short
substantially all the risks and rewards of ownership maturity of these instruments.
and continues to control the transferred asset, the
a) Financial guarantee contracts
Company recognises its retained interest in the
assets and an associated liability for amounts it Financial guarantee contracts issued by the
may have to pay. Company are those contracts that require a
payment to be made to reimburse the holder
If the Company retains substantially all the risks for a loss it incurs because the specified
and rewards of ownership of a transferred financial debtor fails to make a payment when due
asset, the Company continues to recognise the in accordance with the terms of a debt
financial asset and also recognises a collateralised instrument. Financial guarantee contracts are
borrowing for the proceeds received. recognised initially as a liability at fair value,
adjusted for transaction costs that are directly
On de-recognition of a financial asset in its entirety, attributable to the issuance of the guarantee.
the difference between the carrying amount Subsequently, the liability is measured at
measured at the date of de-recognition and the the higher of the amount of loss allowance
consideration received is recognised in statement determined as per impairment requirements
of profit or loss. of Ind AS 109 and the amount recognised less
cumulative amortisation.
(ii) Financial liabilities and equity instruments
b) De-recognition
Classification as debt or equity
A financial liability is derecognised when the
Financial liabilities and equity instruments issued obligation under the liability is discharged
by the Company are classified according to the or cancelled or expires. When an existing

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for the year ended March 31, 2023
financial liability is replaced by another from r. Share-based payments
the same lender on substantially different
Certain employees of the Company and its subsidiaries
terms, or the terms of an existing liability are
are entitled to share-based payments, whereby
substantially modified, such an exchange or
employees render services as consideration for equity
modification is treated as the de-recognition
instruments (equity-settled transactions).
of the original liability and the recognition of
a new liability. The difference in the respective Equity-settled transactions
carrying amounts is recognised in the
The cost of equity-settled transactions is determined by
statement of profit and loss.
the fair value at the date when the grant is made using
Off-setting of financial instruments an appropriate valuation model.

Financial assets and financial liabilities are offset and That cost is recognised, together with a corresponding
the net amount is reported in the standalone Ind AS increase in share-based payment (SBP) reserves in
balance sheet if there is a currently enforceable legal equity, over the period in which the performance and/
right to offset the recognised amounts and there is an or service conditions are fulfilled in employee benefits
intention to settle on a net basis, to realise the assets expense. The cumulative expense recognised for
and settle the liabilities simultaneously. equity-settled transactions at each reporting date until
the vesting date reflects the extent to which the vesting
p. Derivative financial instruments
period has expired and the Company’s best estimate of
The Company uses derivative financial instruments, the number of equity instruments that will ultimately
such as interest rate swaps to hedge its interest vest. The expense or credit in statement of profit and
fluctuation risks, etc. Such derivative financial loss for a period represents the movement in cumulative
instruments are initially recognised at fair value on the expense recognised as at the beginning and end of that
date on which a derivative contract is entered into and period and is recognised in employee benefits expense.
are subsequently re-measured at fair value through
Service and non-market performance conditions are
statement of profit and loss. Derivatives are carried as
not taken into account when determining the grant date
financial assets when the fair value is positive and as
fair value of awards, but the likelihood of the conditions
financial liabilities when the fair value is negative. Refer
being met is assessed as part of the Company’s best
to note 51 for more details.
estimate of the number of equity instruments that will
Any gains or losses arising from changes in the fair ultimately vest. Market performance conditions are
value of derivatives are taken directly to profit or loss, reflected within the grant date fair value. No expense
except for the effective portion of cash flow hedges, is recognised for awards that do not ultimately vest
which is recognised in OCI and later reclassified to because non-market performance and/or service
profit or loss when the hedge item affects profit or loss conditions have not been met.
or treated as basis adjustment if a hedged forecast
The dilutive effect of outstanding options is reflected as
transaction subsequently results in the recognition of a
additional share dilution in the computation of diluted
non-financial asset or non-financial liability. earnings per share.
q. Cash and cash equivalents
s. Cash dividend
Cash and cash equivalent in the standalone Ind AS
balance sheet comprise cash at banks and on hand and The Company recognises a liability to pay dividend to
short-term deposits with an original maturity of three equity holders of the parent when the distribution
months or less that are readily convertible to a known is authorised, and the distribution is no longer at the
amount of cash and which are subject to an insignificant discretion of the Company. As per the corporate laws
risk of changes in value. in India, a distribution is authorised when it is approved
by the shareholders. A corresponding amount is
For the purpose of the statement of cash flows, cash recognised directly in equity.
and cash equivalents consist of cash and short-term
deposits, as defined above, as they are considered an
integral part of the Company’s cash management.

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Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
t. Foreign currencies vi. The ability to measure reliably the expenditure
attributable to the intangible asset during
The standalone Ind AS financial statements are development.
presented in INR, which is also the Company’s functional
currency. Following the initial recognition of the development
expenditure as an asset. The cost model is applied
Transactions in foreign currencies are initially recorded at requiring the asset to be carried at cost less any
functional currency spot rates at the date the transaction accumulated amortization and accumulated
first qualifies for recognition. However, for practical impairment losses. Amortization of the asset begins
reasons, the Company uses average rate if the average when development is complete and the asset is available
approximates the actual rate at the date of the transaction. for use. It is amortized on a straight line basis over the
period of expected future benefit from the related project.
Monetary assets and liabilities denominated in foreign
Amortization is recognized in the standalone statement
currencies are translated at the functional currency
of profit and loss. During the period of development, the
spot rates of exchange at the reporting date.
asset is tested for impairment annually.
Exchange differences arising on settlement or
v. Corporate social responsibility (‘CSR’) expenditure
translation of monetary items are recognised in profit
or loss. The Company charges its CSR expenditure during the
year to the statement of profit and loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using w. Earnings per share
the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign Basic earnings per share is calculated by dividing the net
currency are translated using the exchange rates at the profit or loss attributable to equity holder of the Company
date when the fair value is determined. The gain or loss by the weighted average number of equity shares
arising on translation of non-monetary items measured outstanding during the period. Partly paid equity shares
at fair value is treated in line with the recognition of the are treated as a fraction of an equity share to the extent
gain or loss on the change in fair value of the item (i.e., that they are entitled to participate in dividends relative to
translation differences on items whose fair value gain a fully paid equity share during the reporting period.
or loss is recognised in OCI or profit or loss are also
For the purpose of calculating diluted earnings per
recognised in OCI or profit or loss, respectively).
share, the net profit or loss for the period attributable
Exchange differences arising on the retranslation or to equity shareholders of the parent company and the
settlement of other monetary items are included in the weighted average number of shares outstanding during
statement of profit and loss for the period. the period are adjusted for the effects of all dilutive
potential equity shares.
u. Research and development expenditure

Research costs are expensed as incurred. Development 2.4 Standard notified but not yet effective
expenditure incurred on an individual project is
The Ministry of Corporate Affairs has notified Companies
recognized as an intangible asset when the Company
(Indian Accounting Standards) Amendment Rules 2023
can demonstrate all the following:
dated March 31, 2023 to amend the following Ind AS which
i. The technical feasibility of completing the intangible are effective from April 01, 2023.
asset so that it will be available for use or sale
i) Definition of Accounting Estimates - Amendments to
ii. Its intention to complete the asset Ind AS 8
iii. Its ability to use or sell the asset
The amendments clarify the distinction between
iv. How the asset will generate future economic
changes in accounting estimates and changes in
benefits
accounting policies and the correction of errors. It
v. The availability of adequate resources to complete has also been clarified how entities use measurement
the development and to use or sell the asset techniques and inputs to develop accounting estimates.

123
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
The amendments are effective for annual reporting iii) Deferred Tax related to Assets and Liabilities arising
periods beginning on or after 1 April 2023 and apply from a Single Transaction - Amendments to Ind AS 12
to changes in accounting policies and changes in
accounting estimates that occur on or after the start of The amendments narrow the scope of the initial
that period. recognition exception under Ind AS 12, so that it no
longer applies to transactions that give rise to equal
The amendments are not expected to have a material taxable and deductible temporary differences.
impact on the Company’s standalone Ind AS financial
statements. The amendments should be applied to transactions
that occur on or after the beginning of the earliest
ii) Disclosure of Accounting Policies - Amendments to comparative period presented. In addition, at the
Ind AS 1 beginning of the earliest comparative period presented,
a deferred tax asset (provided that sufficient taxable
The amendments aim to help entities provide accounting profit is available) and a deferred tax liability should also
policy disclosures that are more useful by replacing the be recognised for all deductible and taxable temporary
requirement for entities to disclose their ‘significant’ differences associated with leases and decommissioning
accounting policies with a requirement to disclose their obligations. Consequential amendments have been
‘material’ accounting policies and adding guidance on made in Ind AS 101. The amendments to Ind AS 12 are
how entities apply the concept of materiality in making applicable for annual periods beginning on or after 1
decisions about accounting policy disclosures. April 2023.
The amendments to Ind AS 1 are applicable for annual The amendments are not expected to have a material
periods beginning on or after 1 April 2023. Consequential impact on the Company’s standalone Ind AS financial
amendments have been made in Ind AS 107. statements.
The Company is currently revisiting their accounting
policy information disclosures to ensure consistency
with the amended requirements.

124
Notes to the Standalone Financial Statements for the year ended March 31, 2023

3. Property, plant and equipment

(H in million)
Freehold Plant and Electrical Office Furniture Leasehold
Particulars Building Computers Vehicles Total
land equipments installations equipments and fixtures land
Gross block (at cost/deemed cost)
As at April 1, 2021 4.41 500.58 755.10 93.85 25.88 38.83 54.52 15.85 114.61 1,603.63
Additions – 3.81 74.24 – 1.86 0.18 0.95 22.38 – 103.42
Disposal/discard during the year – – (4.96) – – – – – – (4.96)
As at March 31, 2022 4.41 504.39 824.38 93.85 27.74 39.01 55.47 38.23 114.61 1,702.09
Additions – 1.13 83.26 0.60 8.21 0.84 5.91 – – 99.95
Disposal/discard during the year – – (3.01) – – – – – – (3.01)
As at March 31, 2023 4.41 505.52 904.63 94.45 35.95 39.85 61.38 38.23 114.61 1799.03
Accumulated depreciation
As at April 1, 2021 – 68.44 341.49 38.58 22.00 31.79 18.70 7.40 – 528.40
Charge for the year – 18.01 95.76 8.98 2.47 5.91 5.24 4.66 – 141.03
Disposal/discard during the year – – (0.47) – – – – – – (0.47)
As at March 31, 2022 – 86.45 436.78 47.56 24.47 37.70 23.94 12.06 – 668.96
Charge for the year – 17.68 96.13 8.97 3.58 0.73 5.36 8.07 – 140.52

125
Disposal/discard during the year – – (3.01) – – – – – – (3.01)
As at March 31, 2023 – 104.13 529.90 56.53 28.05 38.43 29.30 20.13 – 806.47
Net block
As at March 31, 2023 4.41 401.39 374.73 37.92 7.90 1.42 32.08 18.10 114.61 992.56
Corporate Overview

As at March 31, 2022 4.41 417.94 387.60 46.29 3.27 1.31 31.53 26.17 114.61 1,033.13

Notes:

(a) Karnataka Industrial Area Development (KIADB) has allotted land to the Company on a lease cum sale basis i.e. 24,280.60 sq. mts at Plot No. 58-P Bengaluru Aerospace
Park, Industrial Area for a period of 10 years w.e.f., December 18, 2013. The aggregate capitalized cost of the land at the end of the year is H114.61 million (March 31,
2022: H114.61 million). The agreement gives a right to the Company to acquire land at the end of the lease term at an additional consideration, if any fixed by KIADB, after
reducing the amount already paid.
Management Reports

(b) Property, plant and equipments and other intangible assets of the Company have been pledged / mortgaged as securities against borrowings. Refer note 22 for details
of borrowings.
Financial Statements
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
3a. Capital work-in-progress
(H in million)
Particulars Capital work-in-progress
As at April 1, 2021 22.77
Additions 80.74
Capitalised during the year (103.42)
As at March 31, 2022 0.09
Additions 153.95
Capitalised during the year (99.95)
As at March 31, 2023 54.09

Capital work-in-progress ageing schedule

(H in million)
Amount in capital work-in-progress for a period of
As at March 31, 2023 Less than 1 More than
1 - 2 years 2 - 3 years Total
year 3 years
Projects in progress 54.09 – – – 54.09
Projects temporarily suspended – – – – –
Total 54.09 – – – 54.09

(H in million)
Amount in capital work-in-progress for a period of
As at March 31, 2022 Less than More than
1 - 2 years 2 - 3 years Total
1 year 3 years
Projects in progress 0.09 – – – 0.09
Projects temporarily suspended – – – – –
Total 0.09 – – – 0.09

The Company does not have any projects temporarily suspended or any CWIP which is overdue or has exceeded its cost compared
to its original plan/ revised approved plan.

4. Other intangible assets and goodwill

(H in million)
Other intangible assets
Particulars Intellectual
Goodwill (A) Computer Subtotal
property Total (A+D)
(refer note b) software (B) (D=B+C)
rights (C)
Gross block
At cost / deemed cost
As at April 1, 2021 36.35 100.08 9.51 109.59 145.94
Additions – 2.52 – 2.52 2.52
Disposals – – – – –
As at March 31, 2022 36.35 102.60 9.51 112.11 148.46
Additions – 0.97 – 0.97 0.97
Disposals – – – – –
As at March 31, 2023 36.35 103.57 9.51 113.08 149.43

126
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
4. Other intangible assets and goodwill (Contd..)
(H in million)
Other intangible assets
Particulars Intellectual
Goodwill (A) Computer Subtotal
property Total (A+D)
(refer note b) software (B) (D=B+C)
rights (C)
Accumulated amortization
As at April 1, 2021 – 47.65 7.40 55.05 55.05
Charge for the year – 13.66 1.23 14.89 14.89
Disposals – – – – –
As at March 31, 2022 – 61.31 8.63 69.94 69.94
Charge for the year – 13.36 0.67 14.03 14.03
Disposals – – – – –
As at March 31, 2023 – 74.67 9.30 83.97 83.97
Net block
As at March 31, 2023 36.35 28.90 0.21 29.11 65.46
As at March 31, 2022 36.35 41.29 0.88 42.17 78.52

(a) Also, refer note 3(b).

(b) The Company had entered into a business transfer agreement with Centum Industries Private Limited, an enterprises where
key managerial personnel or their relatives exercise significant influence during the year ended March 31, 2016 for the
purchase of business on slump sale. As per the terms of agreement, the Company had purchased the net assets pertaining to
plastic and defence and space of Centum Industries Private Limited for an aggregate consideration H 57.00 million, which was
arrived at based on the business valuation done by an independent professional firm. The valuation ascribed to assets taken
over by an independent professional valuer resulted in the aforesaid goodwill.

The aforementioned goodwill is tested for impairment annually. As at March 31, 2023 and March 31, 2022, the goodwill is not
impaired.

5 Non - current financial assets: Investments

(H in million)
Particulars March 31, 2023 March 31, 2022
Investment carried at cost
– Unquoted equity shares
i. Subsidiary Company 748.72 613.59
Centum Electronics UK Limited1 (refer note 42)
8,018,900 equity shares (March 31, 2022: 6,630,900) equity shares of GBP 1
each, fully paid up.
Centum T&S Private Limited (formerly known as Centum Adeneo India 1.00 1.00
Private Limited)
100,000 (March 31, 2022: 100,000) equity shares of H10 each, fully paid up.
Investment carried at fair value through statement of profit and loss account
ii. Others
Unquoted equity shares
Qulsar Inc.2 13.26 13.26
74,184 equity share (March 31, 2022: 74,184) equity shares of USD 0.01 each,
fully paid up.
Total investments (i+ii) 762.98 627.85
Aggregate value of unquoted investments 762.98 627.85

127
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
5 Non - current financial assets: Investments (Contd..)

1. a) The Company has investments in Centum Electronics UK Limited, which in turn has made investment in Centum Adetel
Group SA. Centum Adetel Group SA and its underlying subsidiaries have incurred losses.

During the year ended March 31, 2023, the Board of Directors of Company further acquired 13.11% stake of Centum
Adetel Group SA through Centum Electronics UK Limited from other shareholders of Centum Adetel Group SA. The
carrying value of the aforesaid investment continues to be higher than the net worth of Centum Adetel Group SA.

However, based on internal assessment performed as at March 31, 2023 with regard to future operations and external
valuation by an expert during the year ended March 31, 2022, the management of the Company is of the view that the
carrying value of the Company’s investment in Centum Electronics UK Limited is appropriate.

2. The Company has investments in Qulsar Inc. Based on internal assessment performed with regard to future operations,
the management of the Company is of the view that the carrying value of the Company’s investment in Qulsar Inc.
approximates the fair value as on the reporting dates.

6 Non-current loans

(H in million)
Particulars March 31, 2023 March 31, 2022
Loans (secured considered good unless otherwise stated)1
Loan to related party (refer note 42) 10.00 20.00
Total loan 10.00 20.00

1. Loan are non-derivative financial instruments which generate a fixed interest income for the Company. The carrying value may
be affected by the changes in the credit risk of the counter parties.

7 Other non-current financial assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Unsecured, considered good unless otherwise stated
Carried at amortised cost
Security deposits - others (refer note 42) 21.98 20.84
Non-current bank balance (refer note 13) 183.27 227.65
Total other non-current financial assets 205.25 248.49

8 Deferred tax assets (net)

(H in million)
Particulars March 31, 2023 March 31, 2022
Deferred tax liability
Property, plant and equipments: Impact of difference between tax depreciation and (28.20) (35.17)
depreciation / amortization charged for the financial reporting
Leases (5.38) (3.96)
(A) (33.58) (39.13)
Deferred tax assets
Impact of expenditure charged to the statement of profit and loss but allowed for tax 26.72 30.96
purposes on payment basis
Impact of deferred revenue 24.61 16.83
Impact of provision for expected credit losses 12.79 10.06

128
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
8 Deferred tax assets (net) (Contd..)
(H in million)
Particulars March 31, 2023 March 31, 2022
Impact of provision for inventory obsolescence 23.94 –
Others 7.63 6.62
(B) 95.69 64.47
Deferred tax assets (net) (A+B) 62.11 25.34
Movement for the year (36.77) (6.89)
Reconciliation to the statement of profit and loss
(Credit)/ expense during the year as above (36.77) (6.89)
Tax expense / (income) during the year recognized in OCI 1.86 2.63
(Credit)/ expense during the year (38.63) (9.52)

9 Non-current tax assets (net)

(H in million)
Particulars March 31, 2023 March 31, 2022
Advance income tax (net of provision for current tax and including tax paid under protest) 9.59 48.89
9.59 48.89

10 Other non-current assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Capital advances
Unsecured, considered good 10.39 –
(A) 10.39 –
Prepaid expenses 6.70 5.07
(B) 6.70 5.07
Balance with statutory / government authorities
Unsecured, considered good 4.37 3.93
(C) 4.37 3.93
Total other non-current assets (A+B+C) 21.46 9.00

11 Inventories (valued at lower of cost and net realisable value)

(H in million)
Particulars March 31, 2023 March 31, 2022
Raw materials 1,804.10 1,477.02
[Includes raw material in transit H 178.75 million (March 31, 2022: H109.56 million)]
Work-in-progress 474.75 462.18
Finished goods 35.17 46.59
Stores and spares 1.69 0.78
Total inventories (valued at lower of cost and net realisable value) 2,315.71 1,986.57

During the year ended March 31, 2023, H 95.11 million (March 31, 2022: NIL) was recognised as an expense in regard to provision
for inventory obsolescence.

129
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
12 Trade receivables
(H in million)
Particulars March 31, 2023 March 31, 2022
Carried at amortised cost
Receivables from related parties (refer note 42) 126.21 113.27
Other trade receivables 1,968.66 784.30
Total trade receivables 2,094.87 897.57

Break-up for security details:

(H in million)
Particulars March 31, 2023 March 31, 2022
Trade receivables:
Unsecured, considered good 2,089.05 891.12
Trade receivables which have significant increase in credit risk 56.62 46.43
Trade receivables - credit impaired – –
2,145.67 937.55
Impairment allowance (allowance for bad and doubtful debts)
Unsecured, considered good – –
Trade receivables which have significant increase in credit risk (50.80) (39.98)
Trade receivables - credit impaired – –
Total trade receivables 2,094.87 897.57

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

– Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days.

– Refer note 48(c)(c) for details pertaining to expected credit loss.

12.1 Trade receivables ageing schedule

As at March 31, 2023

(H in million)
Outstanding for following periods from due date of
Current
payment
Particulars Unbilled but not Total
Less than 6 months 1-2 2 - 3 More than
due
6 months - 1 year years years 3 years
Undisputed trade receivables - 1.92 1,508.40 513.42 65.20 0.11 – – 2,089.05
considered good
Undisputed trade receivables - which – – – 3.23 20.22 11.85 21.32 56.62
have significant increase in credit
risk
Undisputed trade receivables - credit – – – – – – – –
impaired
Disputed trade receivables - – – – – – – – –
considered good
Disputed trade receivables - which – – – – – – – –
have significant increase in credit
risk
Disputed trade receivables - credit – – – – – – – –
impaired
Total 1.92 1,508.40 513.42 68.43 20.33 11.85 21.32 2,145.67

130
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
12 Trade receivables Ageing Schedule (Contd..)
As at March 31, 2022
(H in million)
Outstanding for following periods from due date of
Current
payment
Particulars Unbilled but not Total
Less than 6 months 1-2 2 - 3 More than
due
6 months - 1 year years years 3 years
Undisputed trade receivables - 6.90 597.34 248.82 38.06 – – – 891.12
considered good
Undisputed trade receivables - which – – – 1.53 14.72 9.25 20.93 46.43
have significant increase in credit
risk
Undisputed trade receivables - credit – – – – – – – –
impaired
Disputed trade receivables - – – – – – – – –
considered good
Disputed trade receivables - which – – – – – – – –
have significant increase in credit
risk
Disputed trade receivables - credit – – – – – – – –
impaired
Total 6.90 597.34 248.82 39.59 14.72 9.25 20.93 937.55

13 Cash and cash equivalents and other bank balances

(H in million)
Particulars March 31, 2023 March 31, 2022
Balances with banks:
– On current accounts3 19.71 82.17
– Deposit with original maturity of less than three months – 62.00
– On exchange earners foreign currency (EEFC) accounts 116.85 4.56
Cash on hand 1.03 0.46
Total cash and cash equivalents (A) 137.59 149.19
Other bank balances
Balance with banks
– On current account1,3 2.61 2.89
– On margin money accounts2 249.91 318.43
252.52 321.32
Amount disclosed under other non-current financial assets (refer note 7) (183.27) (227.65)
(183.27) (227.65)
Total bank balance other than cash and cash equivalent (B) 69.25 93.67
(A+B) 206.84 242.86
1. Includes balance in unclaimed dividend account H2.61 million (March 31, 2022: H 2.89 million).
2. A charge has been created over the deposits towards various guarantees in favour of customer, statutory authorities and letter
of credit facility. Refer note 45 (c) for further details.
3. Balances with banks on current accounts does not earn interest.

131
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
14 Current loans
(H in million)
Particulars March 31, 2023 March 31, 2022
Loans (secured considered good unless otherwise stated)1
Loan to related party (refer note 42) 10.00 –
10.00 –
1. Loan are non-derivative financial instruments which generate a fixed interest income for the Company. The carrying value may
be affected by the changes in the credit risk of the counter parties.

15 Other current financial assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Unsecured, considered good unless otherwise stated
Carried at amortised cost
Security deposits - others (refer note 42) 0.32 0.61
(A) 0.32 0.61
Staff advances 2.27 0.98
Interest accrued on fixed deposits and others 3.38 11.23
Scrips receivables – 38.79
(B) 5.65 51.00
Derivative instruments at fair value through OCI
Cash flow hedges
Derivative assets (refer note 51) 0.02 –
(C) 0.02 –
(A+B+C) 5.99 51.61

16 Other current assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Unsecured considered good
Prepaid expenses 44.88 42.03
Balance with statutory / government authorities 7.63 2.23
Advance to suppliers and other advances (refer note 42) 147.80 116.72
Other receivables (refer note 42) 1.73 –
202.04 160.98

132
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
17 Equity share capital

Equity shares of H 10 each

Particulars
In Numbers (H in million)
Authorised share capital:
At April 01, 2021 1,55,00,000 155.00
Increase / (decrease) during the year – –
At March 31, 2022 1,55,00,000 155.00
Increase / (decrease) during the year – –
At March 31, 2023 1,55,00,000 155.00

(a) Issued equity share capital:

Equity shares of H 10 each issued, subscribed and fully paid

Particulars In Numbers (H in million)

At April 01, 2021 1,28,84,841 128.85
Changes during the period – –
At March 31, 2022 1,28,84,841 128.85
Changes during the period – –
At March 31, 2023 1,28,84,841 128.85

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of H 10 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 equity shareholders.

(c) Details of shareholders holding more than 5% shares in the Company

Name of Shareholder March 31, 2023 March 31, 2022

Particulars No. of shares held % holding in class No. of shares held % holding in class
Equity shares of J 10 each fully paid
Apparao V Mallavarapu* 66,04,715 51.26% 66,04,715 51.26%
Nikhil Mallavarapu* 5,89,929 4.58% 5,89,929 4.58%
Swarnalatha Mallavarapu* 3,69,150 2.86% 3,69,150 2.86%
M S Swarnakumari* 12,684 0.10% 12,684 0.10%
HDFC Trustee Company Limited 6,67,637 5.18% 7,77,740 6.04%
*Represents shareholders in promoter's group. There is no change in the share holding of the promoter's group in the last two years

(d) Shares reserved for issue under options

For details of shares reserved for issue under the Share based payment plan of the Company, refer note 46.

133
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
18. Other equity

Particulars (H in million)
Securities premium
Balance as at April 01, 2021 28.07
Balance as at March 31, 2022 28.07
Balance as at March 31, 2023 (A) 28.07
General reserve
Balance as at April 01, 2021 440.26
Balance as at March 31, 2022 440.26
Balance as at March 31, 2023 (B) 440.26
Retained earnings
Balance as at April 01, 2021 1,945.93
Profit for the year 117.66
Less: Dividends (25.77)
Add: Remeasurement of defined benefit plans (net of tax) 6.48
Balance as at March 31, 2022 2,044.30
Profit for the year 193.99
Less: Dividends (32.21)
Add: Remeasurement of defined benefit plans (net of tax) 5.50
Balance as at March 31, 2023 (C) 2,211.58
Effective portion of cash flow hedge (net of tax)
Balance as at April 01, 2021 –
Balance as at March 31, 2022 –
Gain/(loss) on cash flow hedge 0.01
Balance as at March 31, 2023 (D) 0.01
Share based payments reserve
Balance as at April 01, 2021 2.11
Add: Compensation for options granted 0.16
Less: Transferred to capital reserve on forfeiture of stock options (1.95)
Balance as at March 31, 2022 0.32
Add: Compensation for options granted 13.91
Balance as at March 31, 2023 (E) 14.23
Capital reserve
Balance as at April 01, 2021 1.48
Add: Amount transferred on forfeiture of share options 1.95
Balance as at March 31, 2022 3.43
Balance as at March 31, 2023 (F) 3.43
Total other equity (A+B+C+D+E+F)
Balance as at March 31, 2022 2,516.38
Balance as at March 31, 2023 2,697.58

Nature and purpose of reserves

Securities premium

Securities premium reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of
the Companies Act, 2013.

General reserve
The Company created a general reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where in certain
percentage of profits was required to be transferred to General reserve before declaring dividends. As per Companies Act 2013, the
requirements to transfer profits to general reserve is not mandatory. General reserve is a free reserve available to the Company.

134
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
18. Other equity (Contd..)
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.

Effective portion of cash flow hedge

The Company uses hedging instruments as part of its management of foreign currency risk. For hedging foreign currency, the
Company uses foreign currency forward contracts. To the extent these hedges are effective, the change in fair value of the hedging
instrument is recognised in the effective portion of cash flow hedges.

Share based payments reserve

The share-based payment reserve is used to recognise the value of equity-settled share-based options provided to employees,
including key management personnel, as part of their remuneration. Refer to Note 46 for further details of these plans.

Capital reserve

The Company recognizes the exercise or cancellation of vested options of the Company’s equity-settled share-based payments to
capital reserve.

19. Distribution made and proposed

(H in million)
Particulars March 31, 2023 March 31, 2022
Dividends on equity shares declared and paid :
Final dividend for the year ended on March 31, 2022: H 2.50 per share (March 31, 32.21 25.77
2021: H 2 per share)
32.21 25.77
Proposed dividend on equity shares 1,2
Final dividend for the year ended on March 31, 2023: H 4 per share (March 31, 2022: H 51.54 32.21
2.50 per share)
51.54 32.21
1. Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as a liability
as at March 31st.

2. The Board of Directors of the Company at its meeting held on May 27, 2023 had recommended a final dividend of 40 %
(i.e. H 4 per equity share) for the year ended March 31, 2023 which is in compliance with Section 123 of the Companies Act,
2013.

20 Government grants
(H in million)
Particulars March 31, 2023 March 31, 2022
At April 1 34.44 42.31
Received during the year 8.65 –
Released to the statement of profit and loss (10.50) (7.87)
At March 31 32.59 34.44
Current 8.16 7.87
Non - current 24.43 26.57
32.59 34.44

135
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
20 Government grants (Contd..)
Government grants have been received towards the purchase and construction of certain items of property, plant and equipment
under Modified Special Incentive Package Scheme (M-SIPS) as notified by Ministry of Communications and Information Technology,
Department of Information Technology. As per the scheme, the Company is required to abide by all terms and conditions of M-SIPS
policy, guidelines and amendments issued from time to time. The Company vide its letter of undertaking dated May 02, 2018 has
agreed to comply with all terms and conditions of M-SIPS policy, guidelines and amendments issued from time to time.

21 Net non-current employee defined benefit liabilities

(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for employee benefits
Provision for gratuity (refer note 43) 59.48 56.39
59.48 56.39

22 Current financial liabilities: Borrowings

(H in million)
Particulars March 31, 2023 March 31, 2022
From banks
Indian rupee short term loan (secured)1 – 70.00
Cash credit and overdraft (secured)2 180.98 78.42
Packing credit loan (secured)2 600.75 545.14
Foreign currency non-repatriable (FCNR) loan (secured)2 172.66 283.70
Working Capital Demand (WCD) loan (secured)2 100.00 –
Interest payable 4.83 2.19
1,059.22 979.45
The above amount includes
Secured borrowings 1,059.22 979.45
Unsecured borrowings – –
1,059.22 979.45
1. Secured Indian rupee short term loan from a bank carried interest at 8.70% p.a. (March 31, 2022: 8.70%). The loan was
secured by way of:

(a) Charge on current assets including stock and receivables of the Company;

(b) Charge on plant and machinery and furniture and fixture of the Company; and

(c) Charge by way of equitable mortgage on Land and building situated at i) No. 44, KHB Industrial Area, Yelahanka, Bangalore
- 560 106 and ii) Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No.
8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District.

(d) Cash collateral to the tune of H 50.00 million

The loan has been repaid during the year ended March 31, 2023.

2. Cash credit and overdraft from banks, packing credit, FCNR loan and WCD loan from banks are payable on demand and are
secured by way of :

(a) Hypothecation of entire current assets viz. stock of raw materials/stores and spares/work-in-progress/finished goods,
receivables / book debts and other current assets / moveable fixed assets on pari passu first charge with other banks;

(b) Hypothecation of present and future fixed assets pari passu first charge with other banks;

(c) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 belonging
to the Company, on pari passu first charge with other banks; and

136
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
22 Current financial liabilities: Borrowings (Contd..)
(d) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No. 58-P, Bengaluru
Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli,
Bengaluru North, Yelahanka Taluk, Bengaluru Urban District, belonging to the Company on pari passu first charge with
other banks.

The rate of interest of Cash credit and overdraft from banks ranges from 9.7% to 12.84% p.a. (March 31, 2022: 9.70% to 9.85% p.a.).

The rate of interest of Packing credit loan from banks ranges from 2.26% to 8.22% p.a. (March 31, 2022: 2.15% to 3.35% p.a.).

The rate of interest of WCD loan is 11.65% (March 31, 2022: Nil).

The rate of interest of FCNR loan ranges from 3.97% to 9.12% p.a. (March 31, 2022: 3.82% to 4.31% p.a.).

The interest is payable on monthly basis.”

3. The quarterly returns or statements filed by the Company with banks or financial institutions towards sanction of working
capital limits are in agreement with the books of account of the Company.

4. The Company has not been declared as a wilful defaulter by any banks or financial institutions.

5. The Company has not defaulted in repayment of borrowings or in the payment of interest thereon to banks or financial
institutions.

23 Financial liabilities: Trade payables

(H in million)
Particulars March 31, 2023 March 31, 2022
Carried at amortised cost
Trade payables 1,490.44 696.33
Trade payables to related parties (refer note 42) 34.41 29.90
1,524.85 726.23
The above amount includes
Total outstanding dues of micro enterprises and small enterprises 69.84 67.00
Total outstanding dues of creditors other than micro enterprises and small 1,455.01 659.23
enterprises
1,524.85 726.23
a) Trade payables include due to suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act,
2016). Amount due to suppliers under the MSMED Act, 2006 has been determined to the extent such parties have been identified
on the basis of information available with the Company. Further in view of the management, the impact of interest, if any, that
may be payable in accordance with the provisions of the MSMED Act 2006 is not expected to be material. The Company has not
received any claim for interest from any supplier as at balance sheet date.The disclosure pursuant to the said Act is as under:
(H in million)
Particulars March 31, 2023 March 31, 2022
Principal amount remaining unpaid to any supplier as at the end of the 69.84 67.00
accounting year.
Interest due thereon remaining unpaid to any supplier as at the end of the - -
accounting year
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.
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 the MSMED Act, 2006.

137
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
23 Financial liabilities: Trade payables (Contd..)
(H in million)
Particulars March 31, 2023 March 31, 2022
The amount of interest accrued and remaining unpaid at the end of the - -
accounting year.
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.

b) Terms and conditions of the above financial liabilities:

– Trade payables are non-interest bearing

– For explanations on the Company’s currency and liquidity risk, refer to note 48(d).
– The dues to related parties are unsecured

23.1 Trade payable ageing schedule

As at March 31, 2023

(H in million)
Outstanding for following periods from
Unbilled due date of payment
Particulars Total
dues Less than 1-2 2-3 More than
1 year years years 3 years
Undisputed dues of micro enterprises and small enterprises 9.68 60.16 – - – 69.84
Undisputed dues of creditors other than micro enterprises 295.71 1,152.54 1.54 – 0.15 1,449.94
and small enterprises
Disputed dues of micro enterprises and small enterprises – – – – – –
Disputed outstanding dues of creditors other than micro – – – – 5.07 5.07
enterprises and small enterprises
Total 305.39 1,212.70 1.54 - 5.22 1,524.85

As at March 31, 2022

(H in million)
Outstanding for following periods from
Unbilled due date of payment
Particulars Total
dues Less than 1-2 2 - 3 More than
1 year years years 3 years
Undisputed dues of micro enterprises and small enterprises 15.10 50.36 0.46 0.32 0.76 67.00
Undisputed dues of creditors other than micro enterprises 226.41 425.33 1.07 0.08 1.68 654.57
and small enterprises
Disputed dues of micro enterprises and small enterprises – – – – – –
Disputed outstanding dues of creditors other than micro – – – – 4.66 4.66
enterprises and small enterprises
Total 241.50 475.69 1.53 0.40 7.10 726.23

* There are certain vendors who have been registered as micro enterprises and small enterprises and the ageing disclosed above is based on the amount
outstanding to them and not on the basis of their registration as micro enterprises and small enterprises.

138
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
24 Other current financial liabilities
(H in million)
Particulars March 31, 2023 March 31, 2022
At amortised cost
Unpaid dividends (refer note 13) 2.61 2.89
Accrued salaries and benefits (refer note 42) 98.03 80.91
Payable for capital goods 66.34 –
Interest others – 0.68
166.98 84.48

25 Other liabilities
(H in million)
Non- Current Current
Particulars
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Advance from customers (refer note 42) 167.39 77.30 744.94 656.20
Deferred revenue – – 97.77 95.64
Withholding and other taxes / duties payable – – 180.53 29.10
Payable towards security deposit (refer note 42) – – 1.12 –
Other liabilities – – 0.40 0.40
167.39 77.30 1,024.76 781.34

26 Net current employee defined benefit liabilities

(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for employee benefits
Provision for gratuity (refer note 43) 7.08 6.48
7.08 6.48

27 Provisions
(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for employee benefits
Provision for compensated absences 46.69 25.26
Provision for loss making contracts 15.41 –
62.10 25.26

The following table summarises the changes in the provision for loss making contracts:
(H in million)
Particulars March 31, 2023 March 31, 2022
Opening balance - -
Amount provided/ (reversed) during the year 15.41 -
Amount utilised during the year - -
Closing balance 15.41 -

28 Liabilities for current tax (net)

(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for taxation, net of advance tax 109.45 30.02
109.45 30.02

139
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
29 Revenue from operations
(H in million)
Particulars March 31, 2023 March 31, 2022
Sale of products (refer note 42) 4,938.86 3,438.68
Sale of services (refer note 42) 54.67 28.20
Other operating revenues
Sales commission 11.24 12.21
Others 0.77 1.02
Total revenue 5,005.54 3,480.11

Notes to revenue from contracts with customers:

a) Timing of revenue recognition - March 31, 2023

(H in million)
Performance Performance
Particulars obligation satisfied obligation satisfied Total
at point in time over time
Sale of products 4,938.86 – 4,938.86
Sale of services – 54.67 54.67
Management fees – 0.77 0.77
Sales commission 11.24 – 11.24
4,950.10 55.44 5,005.54

Timing of revenue recognition - March 31, 2022

(H in million)
Performance Performance
Particulars obligation satisfied obligation satisfied Total
at point in time over time
Sale of products 3,438.68 – 3,438.68
Sale of services – 28.20 28.20
Management fees – 1.02 1.02
Sales commission 12.21 – 12.21
3,450.89 29.22 3,480.11

b) Contract Balances:
(H in million)
Particulars March 31, 2023 March 31, 2022
Trade receivables (including unbilled revenue) (refer note 12)
– Current (gross) 2,145.67 937.55
– Provision for impairment loss (current) (50.80) (39.98)
Contract liabilities (refer note 25)
Advance received from customers
– Non current 167.39 77.30
– Current 744.94 656.20
Deferred revenue (refer note 25)
– Current 97.77 95.64
c) Revenue recognised during the year
(H in million)
Particulars March 31, 2023 March 31, 2022
Arising out of contract liabilities as at the beginning of the year 400.85 119.05

140
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
29 Revenue from operations (Contd..)
d) Revenue recognised during the year from the performance obligation satisfied upto previous year (arising out of contract
modifications) amounts to H Nil (March 31, 2022 : H Nil).

30 Other income
(H in million)
Particulars March 31, 2023 March 31, 2022
Government grants (refer note 20) 10.50 7.87
Rental income (refer note 42 and 45a) 4.46 3.03
Provisions / liabilities no longer required, written back 12.86 17.29
Fair value gain on financial instruments – 0.15
Net gain on disposal of property, plant and equipment 0.58 –
Other non-operating income 3.02 1.96
31.42 30.30

31 Finance income
(H in million)
Particulars March 31, 2023 March 31, 2022
Interest income on bank deposits 13.48 14.67
Interest income on loan to related party (refer note 42) 1.60 1.60
Interest income - income tax refund – 11.20
Interest income - others 0.26 0.29
15.34 27.76

32 Cost of materials consumed

(H in million)
Particulars March 31, 2023 March 31, 2022
Inventory at the beginning of the year 1,477.02 1,267.31
Add: Purchases (refer note 42) 3,484.33 2,273.05
4,961.35 3,540.36
Less: Inventory at the end of the year (1,804.10) (1,477.02)
Cost of materials consumed 3,157.25 2,063.34

33 (Increase) / decrease in inventories of work-in-progress and finished goods

(H in million)
Particulars March 31, 2023 March 31, 2022
Inventories at the end of the year
– Work-in-progress / finished goods 509.92 508.77
Inventories at the beginning of the year
– Work-in-progress / finished goods 508.77 478.18
(Increase) / decrease in inventories of work-in-progress and finished goods (1.15) (30.59)

141
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
34 Employee benefits expense

(H in million)
Particulars March 31, 2023 March 31, 2022
Salaries, wages and bonus (refer note 42) 697.15 577.67
Contribution to provident and other funds (refer note 43a) 35.14 33.45
Employee share based compensation cost (refer note 46) 13.91 0.16
Gratuity expenses (refer note 43b) 15.77 17.36
Staff welfare expenses 56.11 53.03
818.08 681.67

35 Finance costs

(H in million)
Particulars March 31, 2023 March 31, 2022
Interest on debt and borrowings 77.85 57.23
Bank charges 43.73 49.65
Exchange differences regarded as an adjustment to borrowing cost 26.79 33.91
Interest on lease liabilities (refer note 45a) 1.78 2.75
Interest on income tax 7.31 2.55
157.46 146.09

36 Depreciation and amortisation expenses

(H in million)
Particulars March 31, 2023 March 31, 2022
Depreciation of tangible assets (refer note 3) 140.52 141.03
Amortisation of other intangible assets (refer note 4) 14.03 14.89
Depreciation of right-of-use assets (refer note 45a) 7.79 8.96
162.34 164.88

37 Other expenses
(H in million)
Particulars March 31, 2023 March 31, 2022
Rent and lease hire charges (refer note 42 and 45a) 7.81 7.18
Rates and taxes 7.50 5.79
Power and fuel 60.06 54.32
Repairs and maintenance 80.56 57.13
Insurance 17.58 15.28
Legal and professional fees (includes payment to auditor (refer details below)) (refer 63.11 74.23
note 42)
Travelling and conveyance 46.93 19.05
Purchase of services (refer note 42) 32.85 39.40
Corporate social responsibility expenditure (refer note 53) 5.30 6.81
Freight outwards 31.58 15.65
Foreign exchange differences (net) 61.62 6.24
Loss on sale of property, plant and equipment – 0.92
Provision for expected credit loss / bad debts written off (refer note 48(c)) 27.31 –
Directors’ sitting fees (refer note 42) 3.93 4.33
Miscellaneous expenses 48.40 34.33
494.54 340.66

142
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
37 Other expenses (Contd..)
Payment to auditor (exclusive of taxes)
(H in million)
Particulars March 31, 2023 March 31, 2022
As auditor:
Audit fee (including fees for internal controls over financial reporting, consolidated 5.20 5.20
financial statements of the Group and quarterly limited reviews)
In other capacity
Reimbursement of expenses 0.52 0.30
5.72 5.50

38 Exceptional items (net)

(H in million)
Particulars March 31, 2023 March 31, 2022
Impairment of receivables from associate (refer note 42) – (18.36)
– (18.36)

During the year ended March 31, 2020, Centum Adetel Group SA, a step down subsidiary entered into agreement for sale of 65%
stake in HOLIWATT ( formerly known as Centum Adetel Transportation SAS ("HOLIWATT")). Centum Adetel Group SA had a put
option to sale its remaining 35% stake at a fixed price amounting to EUR 3.96 million plus interest at the rate of 6% p.a as per
the aforesaid sale agreement and had other receivables of EUR 0.5 million. Subsequent to the year ended March 31, 2021 the
HOLIWATT has been placed in specific insolvency statutes, allowing it to commence negotiation with other parties including its
shareholders. During the year ended March 31, 2022, the Commercial Court of Lyon announced the opening of judicial recovery
procedures and accordingly, based on its internal assessment, the management of the Company had provided for its receivables
amounting to H 18.36 million and the same had been disclosed as exceptional items in the standalone Ind AS financial statements
for the year ended March 31, 2022.

39 Income tax
The Company is subject to income tax in India on the basis of standalone Ind AS financial statements. Business loss can be carried
forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains.
Unabsorbed depreciation can be carried forward for an indefinite period.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 (‘Ordinance’) issued by Ministry of Law and Justice (Legislative
Department) on September 20, 2019 which is effective from April 1, 2019, domestic companies have the option to pay income tax
at 22% plus applicable surcharge and cess (‘new tax regime’) subject to certain conditions. The Company based on the current
projections has chosen to adopt the reduced rates of tax as per the Income Tax Act, 1961 from the financial year 2020-21 and
accordingly the Company has accounted deferred tax asset based on the reduced applicable tax rates.

Income tax expenses in the standalone Ind AS statement of profit and loss consist of the following:
(H in million)
Particulars March 31, 2023 March 31, 2022
(a) Current tax 118.74 55.00
(b) Adjustment of tax relating to earlier period (10.32) (9.38)
(c) Deferred tax (credit)/ expense (38.63) (9.52)
(d) Deferred tax expense / (credit) related to items recognized in OCI during the 1.86 2.63
period
Total taxes 71.65 38.73

143
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
39 Income tax (Contd...)
Reconciliation of taxes to the amount computed by applying the statutory income tax rate to the income before taxes is
summarised below:
(H in million)
Particulars March 31, 2023 March 31, 2022
Profit before taxes 263.78 153.76
Other Comprehensive income 7.37 9.11
Applicable tax rates in India 25.17% 25.17%
Computed tax charge 68.24 40.99
Tax effect on permanent non-deductible expenses 3.17 2.36
Adjustment of tax relating to earlier years (10.32) (9.38)
Others 10.56 4.76
Total tax expenses 71.65 38.73
Income tax expenses reported in the statement of profit and loss 71.65 38.73
– –

40 Earnings per share (‘EPS’)

Basic EPS amounts are calculated by dividing the profit / loss for the year attributable to equity shareholders of the Company by
the weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an
equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting
period.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion
of all the dilutive potential equity shares into equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:

Particulars March 31, 2023 March 31, 2022

Face value of equity shares (H per share) 10 10
Profit attributable to equity shareholders (A) (H in million) 193.99 117.66
Weighted average number of equity shares used for computing EPS (basic) (B) 1,28,84,841 1,28,84,841
EPS - basic (A/B) (H) 15.06 9.13
Weighted average number of equity shares used for computing EPS (basic) (B) 1,28,84,841 1,28,84,841
Add: Effect of dilutive issues of stock options 1,23,625 10,279
Weighted average number of equity shares used for computing EPS (diluted) (C) 1,30,08,466 1,28,95,120
EPS - diluted (A/C) (H) 14.91 9.12

41 Significant accounting judgements, estimates and assumptions

The preparation of the Company’s standalone Ind AS financial statements requires management to make judgements, estimates
and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures,
and the disclosure of contingent liabilities. Actual results could differ from those estimates.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.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and future periods affected.

144
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
41 Significant accounting judgements, estimates and assumptions (Contd...)
Significant judgements and estimates relating to the carrying values of assets and liabilities include impairment of non current
asset including goodwill and investments, taxes, fair value measurement of financial instruments, contingencies, defined benefit
plans (gratuity benefits), provision for inventory obsolescence and leases - estimating the incremental borrowing rate.

(i) Estimates and assumptions:

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Company based its assumptions and estimates on parameters available when the standalone
Ind AS 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.

Impairment of non current asset including goodwill and investments

Determining whether investment and goodwill are impaired requires an estimation of the value in use of the respective asset or the
relevant cash generating units. The value in use calculation is based on DCF model. Further, the cash flow projections are based
on estimates and assumptions which are considered as reasonable by the management.

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available
against which the same can be utilised. Significant management judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning
strategies. Refer note 8 and 39 for further disclosures.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted
prices in active markets, their fair value is measured using valuation techniques including the 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. Refer note 48 for further disclosures.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal
and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail
to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant
judgement and the use of estimates regarding the outcome of future events. Refer note 45 (c) for further disclosures.

Defined benefit plans (gratuity benefits)

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

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in
India, the management considers the interest rates of government bonds where remaining maturity of such bond correspond to
expected term of defined benefit obligation.

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

145
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Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
41 Significant accounting judgements, estimates and assumptions (Contd..)
Further details about gratuity obligations are given in note 43.

Provision for inventory obsolescence

Inventory obsolescence provision are determined using policies framed by the Company and in accordance with the methodologies
that the Company deems appropriate to the business. There is a significant level of judgment involved in assessing whether
provision for obsolescence for slow moving, excess or obsolete inventory items should be recognized considering orders in hand,
expected orders, alternative usage, etc.

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Company ‘would have to pay’, which requires estimation when no observable
rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Company estimates
the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific
estimates.

42 Related party transactions

a) Names of related parties and description of relationship

Description of relationship Name of related parties
Parties where control exists Apparao V Mallavarapu (directly and indirectly exercises over 50% voting power in the
Company)
Subsidiary Companies Centum Electronics UK Limited
Centum Adetel Group SA, France
Centum T&S ( Centum Technologies ET Solutions), France (formerly known as Centum
Adeneo SAS)
Centum R&D (Centum Recherche ET development), France (formerly known as Centum
Adeneo CRD SAS)
Centum Adetel Transportation System SAS, France
Centum Adetel Synergies SARL**
Centum T&S (Centum Technologies ET Solutions), Canada (formerly known as Centum
Adetel Solution)
Centum E&S (Centum Equipments ET Systemes), Canada (formerly known as Centum
Adetel Equipment)
Centum T&S Private Limited, India (formerly known as Centum Adeneo India Private
Limited)
Centum T&S (Technologies & Solutions) Belgium SRL (formerly known as Centum
Adeneo Belgium)
Associate Companies HOLIWATT (formerly known as Centum Adetel Transportation SAS*)
Ausar Energy SAS
Enterprises where key Centum Industries Private Limited
managerial personnel or their
relatives exercise significant
influence (where transactions
have taken place)

146
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
42 Related party transactions (Contd..)

Description of relationship Name of related parties

Key managerial personnel Mr. Apparao V Mallavarapu - Chairman and Managing Director
and their relatives Mrs. Swarnalatha Mallavarapu - Director (resigned w.e.f May 27, 2023)
Mr. Nikhil Mallavarapu - Whole Time Director
Mrs. Tanya Mallavarapu - Director (appointed w.e.f May 27, 2023)
Mr. S Krishnan - Independent Director (retired w.e.f August 14, 2021)
Mr. Pranav Kumar Patel - Independent Director
Mr. Rajiv C Mody - Independent Director
Mr. Manoj Nagrath - Independent Director
Mr. Thiruvengadam P - Independent Director
Mrs. Kavitha Dutt - Independent Women Director
Mr. K S Desikan - Chief Financial Officer
Mr. Nagaraj K.V - Company Secretary (resigned w.e.f March 10, 2022)
Mrs. Indu H S - Company Secretary (appointed w.e.f May 24, 2022)
* The Group has divested its stake during the year ended March 31, 2020 and accordingly it has ceased to be a subsidiary and has become an associate
w.e.f March 31, 2020. Further, during the year ended March 31, 2022, the Commercial Court of Lyon has announced opening of judicial recovery based on
which the entire shareholding has been transferred to Forsee Power and accordingly it has ceased to become an associate.
** Centum Adetel Synergies SARL has been merged with Centum T&S ( Technologies and Solutions) SAS (formerly known as Centum Adeneo SAS) w.e.f;
April 01, 2021

b) Summary of transactions and outstanding balances with above related parties are as follows:
(H in million)
Particulars March 31, 2023 March 31, 2022
i) Sale of products
Subsidiary companies
– Centum T&S (Centum Technologies ET Solutions), France 9.05 27.52
– Centum E&S (Centum Equipments ET Systems), Canada 150.32 187.98
– Centum T&S Private Limited, India 1.47 2.17
ii) Sale of services
Subsidiary company
– Centum T&S Private Limited, India – 0.17
iii) Finance income
Subsidiary company
– Centum T&S Private Limited, India 1.60 1.60
iv) Other income
Subsidiary company
– Centum T&S Private Limited, India 2.19 –
v) Purchase of goods and services
Subsidiary companies
– Centum T&S ( Centum Technologies ET Solutions), France 4.17 19.36
– Centum E&S (Centum Equipments ET Systemes), Canada 9.32 5.43
– Centum T&S Private Limited, India 9.20 0.92
vi) Lease rental paid
Enterprises where key managerial personnel or their relatives exercise
significant influence (where transactions have taken place)
– Centum Industries Private Limited – 0.57

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Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
42 Related party transactions (Contd..)
(H in million)
Particulars March 31, 2023 March 31, 2022
vii) Expense incurred on behalf of the Group Company:
Subsidiary companies
– Centum Electronics UK Limited 2.04 1.94
– Centum Adetel Group SA, France 1.49 3.75
– Centum T&S (Centum Technologies ET Solutions), Canada – 3.08
– Centum T&S Private Limited, India 1.91 0.28
viii)Expense incurred on behalf of the Company by:
Subsidiary companies
– Centum T&S Private Limited, India 0.05 –
ix) Exceptional items - Impairment of receivables
Associate Company
– HOLIWATT – 18.36
x) Remuneration to key managerial personnel and their relatives
a) Employee benefit expenses (excluding employee share based
payments)(refer (i) below)
– Mr. Apparao V Mallavarapu 13.63 8.97
– Mr. Nikhil Mallavarapu 13.63 10.42
– Mr. K S Desikan 10.42 8.43
– Mrs. Indu H S 1.08 –
– Mr. Nagaraj K.V – 1.67
b) Directors’ sitting fees (including commission paid to non-executive
directors)
– Mr. S Krishnan – 0.28
– Mr. Rajiv C Mody 0.53 0.59
– Mr. Pranav Kumar Patel 0.74 0.74
– Mr. Manoj Nagrath 0.74 0.74
– Mr. Thiruvengadam P 0.71 0.74
– Mrs.V Kavitha Dutt 0.62 0.62
– Mrs. Swarnalatha Mallavarapu 0.59 0.62
xi) Investment made in equity shares
Subsidiary company
– Centum Electronics UK Limited 135.13 –
xii) Outstanding balances as at the year ended:
a) Trade receivables
Subsidiary companies
– Centum T&S ( Centum Technologies ET Solutions), France 3.59 25.20
– Centum T&S Private Limited, India 0.10 2.25
– Centum E&S (Centum Equipments ET Systemes), Canada 122.52 85.82
b) Trade payables
Subsidiary companies
– Centum T&S ( Centum Technologies ET Solutions), France 10.14 16.09
– Centum E&S (Centum Equipments ET Systemes), Canada 9.81 3.79
– Centum Adetel Group SA, France 1.03 3.75
– Centum Electronics UK Limited 2.04 –
– Centum T&S (Centum Technologies ET Solutions), Canada 3.03 3.08
– Centum T&S Private Limited, India 5.36 –
c) Payable to Key managerial personnel
– Mr. S Krishnan – 0.19
– Mr. Rajiv C Mody 0.50 0.50
– Mr. Pranav Kumar Patel 0.50 0.50
– Mr. Manoj Nagrath 0.50 0.50
– Mr. Thiruvengadam P 0.50 0.50

148
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
42 Related party transactions (Contd..)
(H in million)
Particulars March 31, 2023 March 31, 2022
– Mrs.V Kavitha Dutt 0.50 0.50
– Mrs. Swarnalatha Mallavarapu 0.50 0.50
d) Loan to related party (including current and non- current)
Subsidiary company
– Centum T&S Private Limited, India 20.00 20.00
e) Other current assets- Other receivables
Subsidiary company
- Centum T&S Private Limited, India 1.73 -
f) Other current financial asset- Interest accrued but not due on others
Subsidiary company
- Centum T&S Private Limited, India 0.12 -
g) Other non - current financial asset - Security deposit
Enterprises where key managerial personnel or their relatives
exercise significant influence
- Centum Industries Private Limited 0.45 0.45
h) Other current assets - Advance to suppliers and other advances
Subsidiary company
- Centum T&S ( Centum Technologies ET Solutions), France 32.26 -
i) Other current financial liabilities - Accrued salaries and benefits-payable
- Mr. Apparao V Mallavarapu 5.13 0.48
- Mr. Nikhil Mallavarapu 3.74 0.54
- Mr. K S Desikan 2.15 1.71
- Mrs. Indu H S 0.12 -
- Mr. Nagaraj K.V - 0.15
j) Other current liabilities - Advance from customers
Subsidiary company
- Centum T&S Private Limited, India 0.53 -
k) Other current liabilities - Payable towards security deposit
Subsidiary company
- Centum T&S Private Limited, India 1.12 -

c) Key Managerial Personnel’s interests in the share based payments plan:

Share options held by key managerial personnel under the share based payments plan to purchase equity shares are as follows:

March 31, 2023 March 31, 2022

Share based payments plan Exercise price Number Number
outstanding outstanding
Centum ESOP - 2013 plan H 71.25 3,653 3,653
Centum RSU - 2021 plan H 10.00 14,500 –

No share options have been granted to the non-executive members of the Board of Directors under the share based payments
plans of the Company. Refer to Note 46 for further details on the scheme.

Notes:
(i) As the liability for gratuity and leave encashment is provided on actuarial basis for the Company, as a whole the amount
pertaining to the key managerial personnel’s’ are not disclosed above.
(ii) For investments in related parties, refer note 5.

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Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
43 Gratuity and other post-employment benefits plans

a) Defined contribution plan

The Company’s contribution to provident fund, Employees’ State Insurance and other funds are considered as defined
contribution plans. The contributions are charged to the standalone Ind AS statement of profit and loss as they accrue.
Contributions to provident and other funds included in employee benefits expense (refer note 34) are as under:
(H in million)
Particulars March 31, 2023 March 31, 2022
Contribution to provident fund 31.34 29.15
Contribution to employees’ state insurance 3.80 4.30
35.14 33.45

b) Defined benefit plans

The Company has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the
act, every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn
salary) for each completed year of service. The level of benefits provided depends on the member’s length of service and salary
at retirement age. The Gratuity plan is unfunded.

The following tables summarise the components of net benefit expense recognised in the standalone Ind AS statement of
profit or loss and amounts recognised in the standalone balance sheet for gratuity benefit:

i. Net benefit expenses (recognized in the standalone Ind AS statement of profit and loss)

(H in million)
Particulars March 31, 2023 March 31, 2022
Current service cost 11.13 13.09
Interest cost on defined benefit obligation 4.64 4.27
Net benefit expenses 15.77 17.36

ii. Remeasurement (gains)/ loss recognised in other comprehensive income:

(H in million)
Particulars March 31, 2023 March 31, 2022
Actuarial (gain)/ loss on obligations arising from changes in experience (6.20) (3.47)
adjustments
Actuarial (gain)/ loss on obligations arising from changes in financial (1.15) (5.64)
assumptions
Actuarial (gain)/ loss recognised in OCI (7.35) (9.11)

iii. Net defined benefit asset/ (liability)

(H in million)
Particulars March 31, 2023 March 31, 2022
Defined benefit obligation (66.56) (62.87)
Fair value of plan assets – –
(Liability) /asset recognised in the balance sheet (66.56) (62.87)

150
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
43 Gratuity and other post-employment benefits plans (Contd..)
iv. Changes in the present value of the defined benefit obligation are as follows:
(H in million)
Particulars March 31, 2023 March 31, 2022
Opening defined benefit obligation 62.87 61.64
Current service cost 11.13 13.09
Benefits paid (4.73) (7.02)
Interest cost on the defined benefit obligation 4.64 4.27
Actuarial (gain)/ loss on obligations arising from changes in experience (6.20) (3.47)
adjustments
Actuarial (gain)/ loss on obligations arising from changes in financial (1.15) (5.64)
assumptions
Closing defined benefit obligation 66.56 62.87

v. The following pay-outs are expected in future years:

(H in million)
Particulars March 31, 2023 March 31, 2022
Within the next 12 months 7.08 6.48
Between 1 and 2 years 2.98 2.78
Between 2 and 3 years 4.36 2.85
Between 3 and 4 years 3.52 3.96
Between 4 and 5 years 6.35 3.27
Between 5 and 10 years 29.10 26.70

The average duration of the defined benefit plan obligation at the end of the reporting period is 9.94 years (March 31, 2022: 10 years)

vi. The principal assumptions used in determining gratuity obligations for the Company’s plan are shown below:

Particulars March 31, 2023 March 31, 2022

Discount rate (in %) 7.30% 7.12%
Salary escalation rate (in %) 10.00% 10.00%
Employee Turnover/ Withdrawal Rate “Age 21 - 30 Yrs : 15% “Age 21 - 30 Yrs : 15%
Age 30 - 34 Yrs : 10% Age 30 - 34 Yrs : 10%
Age 35 - 44 Yrs : 5% Age 35 - 44 Yrs : 5%
Age 45 - 50 Yrs : 3% Age 45 - 50 Yrs : 3%
Age 51 - 54 Yrs : 2% Age 51 - 54 Yrs : 2%
Age 55 - 59 Yrs : 1%” Age 55 - 59 Yrs : 1%”
Retirement age 60 years 60 years
Mortality Rate Indian Assured Lives Indian Assured Lives
Mortality (2012-14) Mortality (2012-14)
Ultimate Table Ultimate Table

Notes:

i) The estimate of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion
and other relevant factors such as supply and demand factors in the employment market.

ii) Plan Characteristics and Associated Risks:

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

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Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
43 Gratuity and other post-employment benefits plans (Contd..)
a. Discount rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If
bond yields fall, the defined benefit obligation will tend to increase

b. Salary inflation risk : Higher than expected increases in salary will increase the defined benefit obligation

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

vii. A quantitative sensitivity analysis for significant assumption is as shown below:

(H in million)
Particulars March 31, 2023 March 31, 2022
Discount rate
Impact on defined benefit obligation due to 1% increase in discount rate (5.78) (5.54)
Impact on defined benefit obligation due to 1% decrease in discount rate 6.81 6.56
Salary escalation rate
Impact on defined benefit obligation due to 1% increase in salary escalation rate 3.28 3.22
Impact on defined benefit obligation due to 1% decrease in salary escalation (3.29) (3.20)
rate
Attrition rate
Impact on defined benefit obligation due to 1% increase in attrition rate (0.47) (0.24)
Impact on defined benefit obligation due to 1% decrease in attrition rate 0.69 0.41

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

44 Segment information - Disclosure pursuant to Ind AS 108 ‘Operating Segments’

(a) Information about reportable segments

Basis of identifying operating segments / reportable segments:

(i) Basis of identifying operating segments:

Operating segments are identified as those components of the Company (a) that engage in business activities to earn
revenues and incur expenses (including transactions with any of the Company’s other components); (b) whose operating
results are regularly reviewed by the Company’s Chief Operating Decision Maker (CODM) to make decisions about resource
allocation and performance assessment and (c) for which discrete financial information is available. The accounting
policies consistently used in the preparation of financial statements are also applied to record revenue and expenditure
in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based
on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the
segment on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying
services are used interchangeably. The Company therefore believes that it is not practical to provide segment disclosures
relating to such items and accordingly such items are separately disclosed as ‘unallocated’

152
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
44 Segment information - Disclosure pursuant to Ind AS 108 ‘Operating Segments’ (Contd..)
(ii) Reportable segments:

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or
absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments.

CODM evaluates the performance of the Company based on the single operative segment as Electronics System Design
and Manufacturing (“ESDM”). Therefore, there is only one reportable segment called ESDM in accordance with the
requirement of Ind AS 108 “Operating Segments”.

(b) Geographical information

(H in million)
Segment revenue* Non-current assets**
Particulars
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
India 2,259.41 2,030.73 1,168.99 1,149.81
Europe and UK 1,595.45 1,025.43 – –
North America 1,032.60 321.56 – –
Rest of the world 118.08 102.39 – –
Total 5,005.54 3,480.11 1,168.99 1,149.81

*Revenue by geographical area are based on the geographical location of the customer.
**Non-current assets excludes financial instruments and tax assets.

(c) Combined revenue from two external customer group having more than 10% each of the Company's total revenue amounting
to H2,027.87 million (March 31, 2022: Combined revenue from four external customer group having more than 10% each of
the Company's total revenue amounting to H 2,378.41 million). Further, the top 5 customer group of the Company contribute
to more than 68% of the revenue for the year ended March 31, 2023 and more than 77% of the revenue during the year ended
March 31, 2022.

45 Leases, commitments and contingencies

(a) Leases

I. Company as a lessee

The Company has lease contracts for office facilities and equipment. The lease term of the office facilities is generally
3 - 5 years .The Company’s obligations under its leases are secured by the lessor’s title to the leased assets. The lease
term for equipments is 3 years and the assets are transferred to the Company at the end of lease term.

The Company also has certain leases of computer and computer equipments with low value. The Company applies the
‘lease of low-value assets’ recognition exemptions for these leases.

The Company has 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 significant 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 significant leasehold improvements or significant customisation to the leased asset).

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Notes to the Standalone Financial Statements

for the year ended March 31, 2023
45 Leases, commitments and contingencies (Contd..)
The carrying amounts of right-of-use assets recognised and the movements during the year is as follows
(H in million)
Office Plant Leased
Particulars Total
Buildings Machinery Computer
Gross block
As at April 1, 2021 7.40 37.10 6.95 51.45
Additions 1.10 – – 1.10
As at March 31, 2022 8.50 37.10 6.95 52.55
Additions 14.14 – – 14.14
Modification of right-of-use assets/other adjustments (7.40) – – (7.40)
As at March 31, 2023 15.24 37.10 6.95 59.29
Accumulated depreciation
As at April 1, 2021 5.05 3.87 5.60 14.52
Charge for the year 2.87 4.74 1.35 8.96
As at March 31, 2022 7.92 8.61 6.95 23.48
Charge for the year 3.17 4.62 – 7.79
Modification of right-of-use assets/other adjustments (7.40) – – (7.40)
As at March 31, 2023 3.69 13.23 6.95 23.87
Net Block as at March 31, 2023 11.55 23.87 – 35.42
Net Block as at March 31, 2022 0.58 28.49 – 29.07

The carrying amounts of lease liabilities recognised and the movements during the year is as follows:
Particulars (H in million)
As at April 1, 2021 32.30
Additions 1.10
Accretion of interest 2.75
Payments (22.80)
As at March 31, 2022 13.35
Additions 14.14
Accretion of interest 1.78
Payments (15.23)
As at March 31, 2023 14.04

(H in million)
Particulars March 31, 2023 March 31, 2022
Current 6.48 11.80
Non current 7.56 1.55

The maturity analysis of lease liabilities are disclosed in note 48(c)(d).

The effective interest rate for lease liabilities is 12 %.

The following are the amounts recognised in statement of profit or loss:

(H in million)
Particulars March 31, 2023 March 31, 2022
Depreciation expense of right-of-use assets 7.79 8.96
Interest expense on lease liabilities 1.78 2.75
Expense relating to leases of low-value assets / short term leases 7.81 7.18
(included in other expenses) (refer note 37)
Total amount recognised in statement of profit or loss 17.38 18.89
The Company had total cash outflows for leases of H 23.04 million in March 31, 2023 (March 31, 2022 : H29.98 million)

154
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
45 Leases, commitments and contingencies (Contd..)
II. Company as a lessor

The Company has entered into cancellable lease agreements for sub-lease of office space. The lease term is for 3 years
with a cancellation clause of 3 months.

The following amounts recognised in the standalone Ind AS statement of profit and loss
(H in million)
Particulars March 31, 2023 March 31, 2022
Rental income (refer note 30 and 42) 4.46 3.03
4.46 3.03

(b) Commitments

(i) Capital commitments

(H in million)
Particulars March 31, 2023 March 31, 2022
Estimated amount of contracts remaining to be executed on capital account 100.54 3.55
and not provided for (net of advances)

(ii) Power purchase agreement

The Company has commitment in nature of variable lease payment towards purchase of solar and wind power with
various parties whereby the Company has committed to purchase and supplier has committed to sell contracted quantity
of solar and wind power for period as defined in the power purchase agreements.

(c) Contingent liabilities

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

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company
believes that none of the contingencies described below would have a material adverse effect on the Company’s financial
condition, results of operations or cash flows.
(H in million)
(i) Particulars of guarantees March 31, 2023 March 31, 2022
Bank guarantees (refer note 13)* 28.65 28.65

* Excludes performance bank guarantees given to various customers as the management is of the view that the same is not required to be
disclosed here.

(ii) The Hon’ble Supreme Court of India in the month of February 2019 had passed a judgement relating to definition of
wages under the Provident Fund Act, 1952. The Management is of the view that there are interpretative challenges on
the application of the judgement retrospectively. Based on the legal advice and in the absence of reliable measurement
of the provision for earlier periods, the Company has made a provision for provident fund contribution pursuant to the
judgement only from the date of Supreme Court Order. The Company will evaluate its position and update its provision, if
required, on receiving further clarity on the subject. The Company does not expect any material impact of the same.

155
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Notes to the Standalone Financial Statements

for the year ended March 31, 2023
45 Leases, commitments and contingencies (Contd..)

(iii) The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However,
the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code
when it comes into effect and will record any related impact in the period the Code becomes effective.

(iv) The Company is involved in legal proceedings, both as plaintiff and as defendant. The Company believes the following
claims to be material.
(H in million)
Disputes * March 31, 2023 March 31, 2022
Matters relating to income taxes under dispute 46.44 46.44
Matters relating to indirect taxes under dispute 143.34 143.34
Others
Stamp duty levy 16.28 16.28
Property tax 10.86 5.89
Claims against the Company not acknowledged as debts 5.78 5.78

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

The Company is subject to legal proceeding and claims, which have arisen in the ordinary course of business. The
Company has reviewed all its pending litigations and proceedings and is not carrying provisions for all the above mentioned
amounts in its books of account, as the Company’s Management is confident of successfully litigating the matters and
these are disclosed as contingent liability, where applicable in its standalone Ind AS financial statements. The Company’s
Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have
a material and adverse effect of the Company’s results of operations or financial condition.

46 Share-based payments

A Description of the share based payment arrangements

The Company has following share based payment arrangements:

(i) Share option plans (equity settled)

The Company sponsers share option plan -

The Centum Employee Stock Option Plan (‘ESOP’) - 2013 plan. The details of the aforementioned plan are as follows:

(a) The Centum ESOP - 2013 plan was approved by the directors of the Company in May 2013 and by the shareholders in
August 2013. Centum ESOP - 2013 plan provides for the issue of 250,000 shares to the employees of the Company and its
subsidiaries (whether in India or outside India), who are in whole time employment with the Company and/or it’s subsidiaries.

The plan is administered by a Compensation committee. Options will be issued to employees of the Company and/or
it’s subsidiaries at an exercise price, which shall not be less than the market price immediately preceding the date
of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight months
from the date of grant. The exercise period is ten years from the date of vesting.

The Centum Electronics Limited Restricted Stock Unit Plan 2021. The details of the aforementioned plan are as follows:

(a) The Centum Electronics Limited Restricted Stock Unit Plan 2021 was approved by the shareholders of the Company
in October 2021. Centum RSU - 2021 plan provides for the issue of 1,75,000 shares to the employees of the Company
and its subsidiaries (whether in India or outside India), who are in whole time employment with the Company and/or
it’s subsidiaries.

156
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
45 Leases, commitments and contingencies (Contd..)

The plan is administered by a Nomination and Remuneration committee. Options will be issued to employees of the
Company and/or it’s subsidiaries at an exercise price, which shall be equal to the face value of the shares. RSUs
granted under this Plan would vest not earlier than minimum vesting period of 1 (one) year or such other period as
may be prescribed under applicable laws and not later than maximum vesting period of 8 (eight) years from the date
of grant of such RSUs. The exercise period is 5 years from the date of last vesting of RSU.

B Measurement of fair values

The fair value of employee share options has been measured using Black Scholes model. The fair value of the options and the
input used in the measurement of the grant- date fair values of both the plans are as follows:

Year ended March 31, 2023 Year ended March 31, 2022
Particulars
Centum ESOP - 2013 Centum ESOP - 2013
Fair value at grant date H 11.65 - H 277.30 H 11.65 - H 277.30
Share price at grant date H 71.25 & H 637.05 H 71.25 & H 637.05
Weighted average exercise price (WAEP) H 71.25 H 71.25
Dividend yield (%) 10% 10%
Expected life of share options (years) 1- 4 years 1- 4 years
Risk free interest rate (%) 5.70 - 8.60% 5.70 - 8.60%
Expected volatility (%) 48.31% 48.31%

Year ended March 31, 2023 Year ended March 31, 2022
Particulars
Centum RSU - 2021 Centum RSU - 2021
Fair value at grant date H 420.08 –
Share price at grant date H 455.65 –
Weighted average exercise price (WAEP) H 10 –
Dividend yield (%) 2.08% –
Expected life of share options (years) 1- 8 years –
Risk free interest rate (%) 7.12% –
Expected volatility (%) 56.15% –

C Movements during the year

The following table illustrates the number and WAEP of, and movements in, Centum ESOP - 2013 plan during the period

For the year ended March 31, 2023 For the year ended March 31, 2022
Particulars
Number of options WAEP Number of options WAEP
Options outstanding at April 01, 2022 12,026 71.25 19,026 279.42
Granted during the period – – – –
Forfeited / lapsed during the period – – 7,000 –
Exercised during the period – – – –
Expired during the period – – – –
Options outstanding at March 31, 2023 12,026 71.25 12,026 71.25
Exercisable at year end 12,026 71.25 12,026 71.25

The options outstanding as at March 31, 2023 had an exercise price of H 71.25 (March 31, 2022: H 71.25) and the weighted
average remaining contractual life of 3.77 years (March 31, 2022: 4.77 years).

157
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
46 Share-based payments (Contd..)
The following table illustrates the number and WAEP of, and movements in, Centum RSU - 2021 plan during the period

For the year ended March 31, 2023 For the year ended March 31, 2022
Particulars
Number of options WAEP Number of options WAEP
Options outstanding at April 01, 2022 – – – –
Granted during the period 1,30,400 10 – –
Forfeited / lapsed during the period 15,000 10 – –
Exercised during the period – – – –
Expired during the period – – – –
Options outstanding at March 31, 2023 1,15,400 10 – –
Exercisable at year end - 10 – –
The options outstanding as at March 31, 2023 had an exercise price of H10 (March 31, 2022: Nil) and the weighted average
remaining contractual life of 7.15 years (March 31, 2022: Nil).

D Expense recognised in statement of profit and loss

The expense recognised for employee services received during the year is shown in the following table :
(H in million)
Particulars 31-Mar-23 31-Mar-22
Expense arising from equity settled share based payment transaction (refer 13.91 0.16
note 34)

47 Capital Management
The Company’s capital management is intended to create value for the shareholders by facilitating the meeting of long term and
short term goals of the Company.

The Company determines the amount of capital required on the basis of annual business plan coupled with long term and short
term strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and
short term bank borrowings.

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity shareholders of the Company.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment
to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is
net debt divided by total capital plus net debt. The Company’s policy is to keep the gearing ratio at an optimum level to ensure that
the debt related covenants are complied with.
(H in million)
Particulars March 31, 2023 March 31, 2022
Borrowings (refer note 22) 1,059.22 979.45
Less: Cash and cash equivalents (refer note 13) 137.59 149.19
Net debt (i) 921.63 830.26
Capital components
Equity share capital (refer note 17) 128.85 128.85
Other equity (refer note 18) 2,697.58 2,516.38
Total Capital (ii) 2,826.43 2,645.23
Capital and net debt (iii = i + ii) 3,748.06 3,475.49
Gearing ratio (i / iii) 25% 24%

158
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
47 Capital Management (Contd..)
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2023 and
March 31, 2022.

48 Disclosures on Financial instruments

This section gives an overview of the significance of financial instruments of the Company and provides additional information on
balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on
which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are
disclosed in Note 2.3(b) and 2.3(o), to the standalone Ind AS financial statements.

(a) Financial assets and liabilities

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March
31, 2023 and March 31, 2022.

As at March 31, 2023

(H in million)
Fair value Fair value through
Total
through statement of other Amortised Total fair
Particulars carrying
statement of comprehensive cost value
value
profit or loss income
Financial assets
(i) Investments (other than investments in 13.26 – – 13.26 13.26
subsidiaries)
(ii) Trade receivables – – 2,094.87 2,094.87 2,094.87
(iii) Cash and cash equivalents – – 137.59 137.59 137.59
(iv) Bank balances other than cash and cash – – 252.52 252.52 252.52
equivalents
(v) Loans and other financial assets – 0.02 47.95 47.97 47.97
Total 13.26 0.02 2,532.93 2,546.21 2,546.21
Financial liabilities
(i) Borrowings – – 1,059.22 1,059.22 1,059.22
(ii) Lease Liabilities – – 14.04 14.04 14.04
(iii) Trade payables – – 1,524.85 1,524.85 1,524.85
(iv) Other financial liabilities – – 166.98 166.98 166.98
Total – – 2,765.09 2,765.09 2,765.09

As at March 31, 2022

(H in million)
Fair value Fair value through
Total
through statement of other Amortised Total fair
Particulars carrying
statement of comprehensive cost value
value
profit or loss income
Financial assets
(i) Investments (other than investments in 13.26 – – 13.26 13.26
subsidiaries)
(ii) Trade receivables – – 897.57 897.57 897.57

159
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
48 Disclosures on Financial instruments (Contd...)
(H in million)
Fair value Fair value through
Total
through statement of other Amortised Total fair
Particulars carrying
statement of comprehensive cost value
value
profit or loss income
(iii) Cash and cash equivalents – – 149.19 149.19 149.19
(iv) Bank balances other than cash and cash – – 321.32 321.32 321.32
equivalents
(v) Loans and other financial assets – – 92.45 92.45 92.45
Total 13.26 – 1,460.53 1,473.79 1,473.79
Financial liabilities
(i) Borrowings – – 979.45 979.45 979.45
(ii) Lease Liabilities – – 13.35 13.35 13.35
(iii) Trade payables – – 726.23 726.23 726.23
(iv) Other financial liabilities – – 84.48 84.48 84.48
Total – – 1,803.51 1,803.51 1,803.51

(b) Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair
value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference
to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted
equity shares and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities,
measured using inputs 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).

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets
and liabilities measured using inputs that 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.
(H in million)
Fair value measurements at reporting date using
Particulars
Total Level 1 Level 2 Level 3
March 31, 2023
Financial assets
Investments (other than investments in subsidiaries) (refer note 5) 13.26 – – 13.26
Derivative assets (refer note 15) 0.02 - 0.02 -
Financial liabilities
Borrowings (refer note 22) 1,059.22 – 1,059.22 –
March 31, 2022
Financial assets
Investments (other than investments in subsidiaries) (refer note 5) 13.26 – – 13.26
Financial liabilities
Borrowings (refer note 22) 979.45 – 979.45 –

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

160
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
48 Disclosures on Financial instruments (Contd..)
(ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent
limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates
presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale
transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be
different from the amounts reported at each reporting date.

(iii) There have been no transfers between Level 1, Level 2 and Level 3 for the year ended March 31, 2022 and March 31, 2023.

(c) 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 trade receivables, other financial assets and cash and bank balances derived from its operations.

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest
rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The
Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with
the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the
Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the
Company’s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a
change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest
rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market
movements cannot be normally predicted with reasonable accuracy.

(a) Market risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
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 debt obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans
and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the
impact on floating rate borrowings, as follows:
(H in million)
Increase / decrease Effect on profit
Particulars
in basis points before tax
March 31, 2023
+50 (5.27)
-50 5.27
March 31, 2022
+50 (4.89)
-50 4.89

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment.

161
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
48 Disclosures on Financial instruments (Contd..)
(b) Market risk- Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates.

Foreign currency sensitivity (refer note 54)

The following tables demonstrate the sensitivity to a reasonably possible change in USD and EURO 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 excluding derivative assets. The Company’s exposure to other currency is not material.

(H in million)
Change in Effect on profit or loss before tax
Particulars
currency Strengthening Weakening
March 31, 2023
USD 5% (29.99) 29.99
EURO 5% (5.76) 5.76
March 31, 2022
USD 5% (40.46) 40.46
EURO 5% (1.01) 1.01

The sensitivity analysis has been based on the composition of the Company’s financial assets and liabilities at March 31,
2023 and March 31, 2022 .The period end balances are not necessarily representative of the average debt outstanding
during the period.

(c) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally
consist of trade receivables, investments, cash and cash equivalents.

The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk was H
2,546.21 million and H 1,473.79 million as at March 31, 2023 and March 31, 2022 respectively, being the total carrying value
of trade receivables, balances with bank, bank deposits, investments (other than investments in subsidiaries) and other
financial assets.

Customer credit risk is managed by each business unit based on the Company’s established policy, procedures and
control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an
individual basis for major aged receivables. The Company does not hold collateral as security. Further, the top 5 customer
group of the Company contribute to more than 57% of the trade receivables for the year ended March 31, 2023 and more
than 49% of the trade receivables during the year ended March 31, 2022.

With respect to trade receivables, the Company has constituted the terms to review the receivables on periodic basis and
to take necessary mitigations, wherever required. The Company creates allowance for all unsecured receivables based
on lifetime expected credit loss based on a provision matrix. The provision matrix takes into account historical credit loss
experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of
the receivables that are due and rates used in the provision matrix.

The following table summarises the changes in the loss allowance measured using ECL:
(H in million)
Particulars March 31, 2023 March 31, 2022
Opening balance 39.98 62.15
Amount provided/ (reversed) during the year 27.31 (13.28)
Amount utilised during the year (16.49) (8.89)
Closing balance 50.80 39.98

162
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
48 Disclosures on Financial instruments (Contd..)
Credit risk from balances with bank and financial institutions and in respect to loans and security deposits is managed
by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made
only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise
the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

(d) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The
Company has obtained fund and non-fund based working capital limits from various banks. The Company invests its
surplus funds in bank fixed deposit, which carry no or low market risk.

The Company monitors its risk of shortage of funds on a regular basis. The Company’s objective is to maintain a balance
between continuity of funding and flexibility through the use of bank overdrafts, bank loans, etc. The Company assessed
the concentration of risk with respect to refinancing its debt and concluded it to be medium.

The following table shows a maturity analysis of the anticipated cash flows excluding interest obligations for the
Company’s financial liabilities on an undiscounted basis, which may differ from both carrying value and fair value.
(H in million)
Particulars 0 - 1 years 1 to 5 years > 5 years Total
March 31, 2023
(i) Borrowings 1,059.22 – – 1,059.22
(ii) Lease liabilities 6.48 9.89 – 16.37
(iii) Trade payables 1,524.85 – – 1,524.85
(iv) Other financial liabilities 166.98 – – 166.98
2,757.53 9.89 – 2,767.42
March 31, 2022
(i) Borrowings 979.45 – – 979.45
(ii) Lease liabilities 11.80 1.55 – 13.35
(iii) Trade payables 726.23 – – 726.23
(iv) Other financial liabilities 84.48 – – 84.48
1,801.96 1.55 – 1,803.51

163
Notes to the Standalone Financial Statements
for the year ended March 31, 2023
49 Ratio analysis and its elements
(H in million)
March 31, March 31,
Annual Report 2022-23

Ratio Numerator Denominator % change Reason for variance

2023 2022
Centum Electronics Limited

Current ratio Current Assets Current Liabilities 1.22 1.26 –3% –

Debt- Equity Ratio Total Debt Shareholder’s Equity 0.37 0.37 1% –
Debt Service Coverage Earnings for debt service = Debt service = Interest & 4.93 0.80 517% Increase is on account of increase
ratio Net profit after taxes + Non- Lease Payments + Principal in earnings and reduction in loan
cash operating expenses Repayments repayments
Return on Equity ratio Net Profits after taxes Average Shareholder’s 0.07 0.05 56% Increase is on account of increase in
Equity profits during the year.
Inventory Turnover ratio Cost of materials consumed Average Inventory 1.47 1.09 35% Increase is on account of increase in
+ Decrease / (increase) cost of material consumed on account
in inventories of work-in- of increase in operations/sales during
progress and finished goods the year.
Trade Receivable Revenue from operations Average Trade Receivable 3.35 3.68 –9% –
Turnover Ratio

164
Trade Payable Turnover Purchases made during the Average Trade Payables 3.51 4.03 –13% –
Ratio year
Net Capital Turnover Revenue from operations Working capital = Current 5.78 5.07 14% –
Ratio assets – Current liabilities
Net Profit ratio Net Profits after taxes Net sales = Total sales - 0.04 0.03 15% –
sales return
Return on Capital Earnings before interest Capital Employed = Total 0.11 0.09 32% Increase is on account of increase in
Employed and taxes tangible Net Worth + Total profits.
debt
Return on Investment NA NA NA NA NA
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
50 Interest in significant investment in subsidiaries and associates as per Ind AS - 27

Percentage of
effective ownership
Percentage of voting Country
Name of the entity Relationship as at Date of of incor-
interest held (directly
rights held as at
and indirectly) as at incor- poration/
poration place of
March 31, March 31, March 31, March 31, March 31, March 31, business
Particulars
2023 2022 2023 2022 2023 2022
Centum T&S Private Limited Subsidiary Subsidiary 100.00% 100.00% 100.00% 100.00% Dec 06, 2016 India
(formerly known as Centum Adeneo
India Private Limited)
Centum Electronics UK Limited Subsidiary Subsidiary 100.00% 100.00% 100.00% 100.00% May 18, 2016 United
Kingdom

Note:

1. Disclosure of financial data as per Ind AS – 112 ‘Disclosure of Interests in Other Entities’ has been done based on the financial
statements for the respective periods provided to us by the management.

2. The above disclosure made do not include step down subsidiaries and associates and are with respect to subsidiaries and
associates existing as at March 31, 2023.

51 Hedging activities and derivatives

The Company uses foreign exchange forward contracts to manage some of its transaction exposures. These derivative instruments
are not designated as cash flow / fair value hedges and are entered into for periods consistent with foreign currency exposure
of underlying transactions. All transactions in derivative financial instruments are undertaken to manage risks arising from
underlying business activities.
(H in million)
Particulars March 31, 2023 March 31, 2022
Derivative assets (refer note 15) 0.02 –

52
The Company is in the process of conducting a transfer pricing study as required by the transfer pricing regulations under the
IT Act (‘regulations’) to determine whether the transactions entered during the year ended March 31, 2023, with the associated
enterprises were undertaken at “arm’s length price”. The management confirms that all the transactions with associate enterprises
are undertaken at negotiated prices on usual commercial terms and is confident that the aforesaid regulations will not have any
impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

53 Corporate social responsibility expenses

(H in million)
Particulars 31-Mar-23 31-Mar-22
a) Gross amount required to be spent by the Company during the year 5.30 6.81
b) Amount approved by the Board to be spent during the year 5.53 6.81

(H in million)
c) Amount spent during the year ending March 31, 2023 : In Cash Yet to be in cash Total
i) Construction/acquisition of any assets – – –
ii) On purposes other than (i) above 5.30 – 5.30

165
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
53 Corporate social responsibility expenses (Contd..)
(H in million)
d) Amount spent during the year ending March 31, 2022 : In Cash Yet to be in cash Total
i) Construction/acquisition of any assets – – –
ii) On purposes other than (i) above 6.81 – 6.81

(H in million)
e) Details related to spent / unspent obiligations : March 31, 2023 March 31, 2022
i) Contribution to Public Trust 4.00 3.11
ii) Contribution to Charitable Trust 1.30 3.70
iii) Unspent amount in relation to :
– Ongoing project – –
– Other than Ongoing project – –

Details of other than ongoing project

For the year ended March 31, 2023

(H in million)
In case of S. 135(6) (Ongoing Project)
Amount deposited in Specified Amount required to be Amount spent
Opening balance Closing balance
Fund of Sch VII within 6 months spent during the year during the year
- – 5.30 (5.30) -

For the year ended March 31, 2022

(H in million)
In case of S. 135(6) (Ongoing Project)
Amount deposited in Specified Amount required to be Amount spent
Opening balance Closing balance
Fund of Sch VII within 6 months spent during the year during the year
- – 6.81 6.81 -

54 Unhedged foreign currency exposure:

Particulars of unhedged foreign currency exposure as at balance sheet date:

March 31, 2023 March 31, 2022

Particulars Currency Amount in foreign Amount in Amount in foreign Amount in
currency in million H million currency H million
Short- term borrowings USD 5.14 422.87 10.96 828.86
Trade payables EUR 1.44 128.63 0.53 44.60
GBP* 0.01 0.60 0.00 0.15
CHF 0.01 0.51 – –
USD 13.06 1,074.02 5.85 442.59
Payable for capital goods USD 0.10 8.61 – –
Trade receivables EUR 0.14 12.94 0.28 23.82
GBP 0.02 1.65 – –
USD 9.59 788.68 6.05 457.29
Cash and cash equivalents EUR 0.01 0.50 0.01 0.50
USD 1.42 116.99 0.07 4.99

* March 31, 2022: GBP 1,206

166
Corporate Overview Management Reports Financial Statements

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
55
As at March 31, 2023, trade payables amounting to H 82.54 million, advance from customers amounting to H 113.64 million and
trade receivables amounting to H 52.17 million towards purchase and sale of goods and services respectively, which are outstanding
beyond permissible time period stipulated under the Master Circular on Import of Goods and Services and Master Circular on
Export of Goods and Services issued by Reserve Bank of India (‘the RBI’). Considering that the balances are outstanding for more
than the stipulated time, the Company is in the process of intimating the appropriate regulatory authorities and seeking requisite
approvals for extensions. The management is confident that required approvals would be received and penalties, if any that may
be imposed on the Company would not be material. Accordingly, no adjustments have been made by the management to these
standalone Ind AS financial statements in this regard.

56 Other Statutory Information

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

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

(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) Following are the details of the funds advanced by the Company to Intermediaries for further advancing to the Ultimate
beneficiaries:
(Euro. in million)
Name of the Date on which funds Amount of funds
Amount
intermediary to Date of funds are invested by further advanced Ultimate
of funds
which the funds advanced intermediaries to to ultimate Beneficary
advanced
are advanced Ultimate Benefeciaries beneficaries
Centum May 04, 2022 1.60 June 16, 2022 1.60 Shareholders of
Electronics UK November 04, 2022 0.08 November 07, 2022 0.08 Centum Adetel
Limited Group SA

The Company has complied with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and The
Companies Act, 2013 for the above transactions and the transactions are not violative of the Prevention of Money laundering
Act, 2022 (15 of 2003).

Complete details of the Intermediary and Ultimate Beneficiary:

Government Relationship with the

Name of the entity Registerd Address
Identification Number Company
Centum Electronics UK Limited 16 Great Queen Street, Covenat 10186046 Subsidiary
Garden, London, WC2B 5AH

As detailed above, the Ultimate Beneficiaries are shareholders of Centum Adetel Group SA from whom the Company through
its step down subsidiary Centum Electronics UK Limited have further acquired additional stake of Centum Adetel Group SA
during the year.

(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

167
Centum Electronics Limited
Annual Report 2022-23

Notes to the Standalone Financial Statements

for the year ended March 31, 2023
56 Other Statutory Information (Contd..)
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries”

(vii) The Company has no 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.

57 Events after reporting period

The Board of Directors have proposed dividend after the balance sheet date which are subject to approval by the shareholders at
the annual general meeting. Refer note 19 for details.

58 Previous year numbers have been reclassified/regrouped wherever necessary to confirm to current year classifications.

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

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited
For S.R. Batliboi & Associates LLP
Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

168
Corporate Overview Management Reports Financial Statements

Independent Auditor’s Report

To the Members of Centum Electronics Limited under those Standards are further described in the ‘Auditor’s
Responsibilities for the Audit of the Consolidated Ind AS Financial
Statements’ section of our report. We are independent of the
Report on the Audit of the Consolidated Ind AS
Group and its associate in accordance with the ‘Code of Ethics’
Financial Statements
issued by the Institute of Chartered Accountants of India together
with the ethical requirements that are relevant to our audit of the
Opinion consolidated Ind AS financial statements under the provisions of
the Act and the Rules thereunder, and we have fulfilled our other
We have audited the accompanying consolidated Ind AS financial
ethical responsibilities in accordance with these requirements
statements of Centum Electronics Limited (hereinafter referred to
and the Code of Ethics. We believe that the audit evidence we
as “the Holding Company”), its subsidiaries (the Holding Company
have obtained is sufficient and appropriate to provide a basis for
and its subsidiaries together referred to as “the Group”) and its
our audit opinion on the consolidated Ind AS financial statements.
associate comprising of the consolidated Balance sheet as at
March 31 2023, the consolidated Statement of Profit and Loss,
including other comprehensive income, the consolidated Cash Key Audit Matters
Flow Statement and the consolidated Statement of Changes
Key audit matters are those matters that, in our professional
in Equity for the year then ended, and notes to the consolidated
judgment, were of most significance in our audit of the
Ind AS financial statements, including a summary of significant
consolidated Ind AS financial statements for the financial
accounting policies and other explanatory information (hereinafter
year ended March 31, 2023. These matters were addressed
referred to as “the consolidated Ind AS financial statements”).
in the context of our audit of the consolidated Ind AS financial
In our opinion and to the best of our information and according to the statements as a whole, and in forming our opinion thereon, and
explanations given to us and based on the consideration of reports we do not provide a separate opinion on these matters. For each
of other auditors on separate financial statements and on the other matter below, our description of how our audit addressed the
financial information of the subsidiaries and its associate, the aforesaid matter is provided in that context.
consolidated Ind AS financial statements give the information
We have determined the matters described below to be the key
required by the Companies Act, 2013, as amended (“the Act”) in the
audit matters to be communicated in our report. We have fulfilled
manner so required and give a true and fair view in conformity with the
the responsibilities described in the Auditor’s responsibilities for
accounting principles generally accepted in India, of the consolidated
the audit of the consolidated Ind AS financial statements section
state of affairs of the Group and its associate as at March 31, 2023,
of our report, including in relation to these matters. Accordingly,
their consolidated profit including other comprehensive income, their
our audit included the performance of procedures designed to
consolidated cash flows and the consolidated statement of changes
respond to our assessment of the risks of material misstatement
in equity for the year ended on that date.
of the consolidated Ind AS financial statements. The results
of audit procedures performed by us and by other auditors of
Basis for Opinion components not audited by us, as reported by them in their audit
reports furnished to us by the management, including those
We conducted our audit of the consolidated Ind AS financial
procedures performed to address the matters below, provide the
statements in accordance with the Standards on Auditing (SAs),
basis for our audit opinion on the accompanying consolidated Ind
as specified under section 143(10) of the Act. Our responsibilities
AS financial statements.

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Centum Electronics Limited
Annual Report 2022-23

Key audit matters How our audit addressed the key audit matter
Allowance for inventory obsolescence (as described in Note 2.3(m), 11 and 41 of the consolidated Ind AS financial statements)
The Group held an inventory balance of H 2,610.62 Our procedures in relation to evaluate the allowance of inventories included:
million as at March 31, 2023, as disclosed in Note • We obtained an understanding of how the management identifies the
11 and is a material balance for the Group. Inventory slow-moving and obsolete inventories and assesses the amount of
obsolescence allowance is determined using policies/ allowance for inventories;
methodologies that the Group deems appropriate
• We assessed and tested the design and operating effectiveness of the
to the business. Significant judgement is exercised
Company’s internal financial controls over the allowance for inventory
by the management in identifying the slow-moving
obsolescence.
and obsolete inventories and in assessing whether
provision for obsolescence for slow moving, excess • We observed the inventory count performed by management and
or obsolete inventory items should be recognized assessed the physical condition of the inventories;
considering the production plan, forecast inventory • We also assessed allowance policy based on historical sales
usage, committed and expected orders, alternative performance of the products in their life cycle and comparing the actual
usage, etc. Considering that the aforesaid assessment loss to historical allowance recognized, on a sample basis;
process is complex and involves significant estimates • We further tested the ageing of the inventories and the computation of
and judgements and the balance of inventory is the obsolescence level on a sample basis;
material, we have identified this as a key audit matter.
• We have tested a sample of inventory items for significant components
to assess the cost and tested the basis of determination of net realisable
value of inventory, on a sample basis.
•
We also assessed the Group’s disclosures concerning this in Note 41
on significant accounting estimates and judgements and Note 11 on
Inventories to the consolidated Ind AS financial statements.
Impairment of Goodwill and Intangible assets (as described in Note 2.3(j), 2.3(n), 4a, 4b, 4c and 41 of the consolidated Ind AS
financial statements)
The Group’s balance sheet includes H 376.23 million Our procedures in relation to evaluate the impairment of goodwill and
of goodwill, H 286.20 million of intangible assets and intangible assets included:
H 227.56 million of intangible assets under development • We assessed whether the Company’s accounting policy with respect to
representing 8.30% of total Group assets. In accordance impairment is in accordance with Ind AS 36 “Impairment of assets”.
with Ind AS, these balances are allocated to Cash
• We assessed the Group’s methodology applied in determining the CGUs
Generating Units (CGUs) which are tested annually for
to which goodwill is allocated.
impairment using discounted cash-flow models of each
CGU’s recoverable value compared to the carrying value • We have carried out assessment of forecasts of future cash flows prepared
of the assets. A deficit between the recoverable value by the management, evaluating the assumptions and comparing the
and the CGU’s net assets would result in impairment. estimates to externally available industry, economic and financial data.

The determination of recoverable amounts, being the • We have also assessed the valuation methodology and the key
higher of fair value less cost to sale and value in use assumptions adopted in the cash flow forecasts with the support of our
involves reliance on management’s estimates of future in-house valuation experts.
cash flows and their judgment with respect to the CGU’s • We also assessed the recoverable value headroom by performing
performance. Significant judgements are required to sensitivity testing of key assumptions used.
determine the key assumptions used in the discounted • We discussed potential changes in key drivers as compared to previous
cash flow models, such as revenue growth, price, year / actual performance with management to evaluate whether the
terminal value and discount rates. Due to the uncertainty inputs and assumptions used in the cash flow forecasts were appropriate.
of forecasting and discounting future cash flows,
• We discussed with senior management personnel, the justification for
being inherently subjective, the level of management’s
the key assumptions underlying the cashflow projections and performed
judgement involved and the materiality of the goodwill
sensitivity analysis on the same to assess their reasonableness.
and intangible assets to the Group’s consolidated Ind AS
financial statements as a whole as at March 31, 2023, we • We tested the arithmetical accuracy of the financial projection model.
have considered this as a key audit matter. • We assessed the Group's disclosures concerning this in Note 41 on
The basis of impairment of goodwill and intangible assets significant accounting estimates and judgements and Note 4a, 4b
is presented in the accounting policies in Note 2.3(j) and and 4c pertaining to the disclosures of goodwill, intangible assets and
2.3(n) to the consolidated Ind AS financial statements. intangible assets under development respectively to the consolidated
Ind AS financial statements.

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Corporate Overview Management Reports Financial Statements

Information Other than the Consolidated Ind AS In preparing the consolidated Ind AS financial statements, the
Financial Statements and Auditor’s Report Thereon respective Board of Directors of the companies included in the
Group and of its associate are responsible for assessing the ability
The Holding Company’s Board of Directors is responsible for of their respective companies to continue as a going concern,
the other information. The other information comprises the disclosing, as applicable, matters related to going concern and
information included in the Annual report, but does not include using the going concern basis of accounting unless management
the consolidated Ind AS financial statements and our auditor’s either intends to liquidate the Group or to cease operations, or
report thereon. The other information is expected to be made has no realistic alternative but to do so.
available to us after the date of this auditor’s report.
Those respective Board of Directors of the companies included in
Our opinion on the consolidated Ind AS financial statements does the Group and of its associate are also responsible for overseeing
not cover the other information and we do not express any form the financial reporting process of their respective companies.
of assurance conclusion thereon.

In connection with our audit of the consolidated Ind AS financial Auditor’s Responsibilities for the Audit of the
statements, our responsibility is to read the other information Consolidated Ind AS Financial Statements
identified above when it becomes available and, in doing
Our objectives are to obtain reasonable assurance about whether
so, consider whether such other information is materially
the consolidated Ind AS financial statements as a whole are free
inconsistent with the consolidated Ind AS financial statements or
from material misstatement, whether due to fraud or error, and
our knowledge obtained in the audit or otherwise appears to be
to issue an auditor’s report that includes our opinion. Reasonable
materially misstated. If, based on the work we have performed,
assurance is a high level of assurance, but is not a guarantee that
we conclude that there is a material misstatement of this other
an audit conducted in accordance with SAs will always detect a
information, we are required to report that fact.
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
Responsibilities of Management for the Consolidated in the aggregate, they could reasonably be expected to influence
Ind AS Financial Statements the economic decisions of users taken on the basis of these
consolidated Ind AS financial statements.
The Holding Company’s Board of Directors is responsible for
the preparation and presentation of these consolidated Ind As part of an audit in accordance with SAs, we exercise
AS financial statements in terms of the requirements of the professional judgment and maintain professional skepticism
Act that give a true and fair view of the consolidated financial throughout the audit. We also:
position, consolidated financial performance including other
comprehensive income, consolidated cash flows and consolidated • Identify and assess the risks of material misstatement of
statement of changes in equity of the Group including its associate the consolidated Ind AS financial statements, whether due
in accordance with the accounting principles generally accepted to fraud or error, design and perform audit procedures
in India, including the Indian Accounting Standards (Ind AS) responsive to those risks, and obtain audit evidence that is
specified under section 133 of the Act read with the Companies sufficient and appropriate to provide a basis for our opinion.
(Indian Accounting Standards) Rules, 2015, as amended. The The risk of not detecting a material misstatement resulting
respective Board of Directors of the companies included in the from fraud is higher than for one resulting from error, as
Group and of its associate are responsible for maintenance of fraud may involve collusion, forgery, intentional omissions,
adequate accounting records in accordance with the provisions misrepresentations, or the override of internal control.
of the Act for safeguarding of the assets of their respective
• Obtain an understanding of internal control relevant to the
companies and for preventing and detecting frauds and other
audit in order to design audit procedures that are appropriate
irregularities; selection and application of appropriate accounting
in the circumstances. Under section 143(3)(i) of the Act, we
policies; making judgments and estimates that are reasonable
are also responsible for expressing our opinion on whether
and prudent; and the design, implementation and maintenance
the Holding Company has adequate internal financial
of adequate internal financial controls, that were operating
controls with reference to consolidated Ind AS financial
effectively for ensuring the accuracy and completeness of the
statements in place and the operating effectiveness of such
accounting records, relevant to the preparation and presentation
controls.
of the consolidated Ind AS financial statements that give a true
and fair view and are free from material misstatement, whether • Evaluate the appropriateness of accounting policies used
due to fraud or error, which have been used for the purpose of and the reasonableness of accounting estimates and related
preparation of the consolidated Ind AS financial statements by disclosures made by management.
the Directors of the Holding Company, as aforesaid.

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Centum Electronics Limited
Annual Report 2022-23

• Conclude on the appropriateness of management’s use of communicated in our report because the adverse consequences
the going concern basis of accounting and, based on the of doing so would reasonably be expected to outweigh the public
audit evidence obtained, whether a material uncertainty interest benefits of such communication.
exists related to events or conditions that may cast significant
doubt on the ability of the Group and its associate to continue
Other Matter
as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s (a) We did not audit the consolidated financial statements and
report to the related disclosures in the consolidated Ind AS other financial information, in respect of two subsidiaries
financial statements or, if such disclosures are inadequate, located outside India (one of the said subsidiary has 6
to modify our opinion. Our conclusions are based on the underlying subsidiaries and 1 associate) whose consolidated
audit evidence obtained up to the date of our auditor’s report. financial statements (before adjustments for consolidation)
However, future events or conditions may cause the Group include total assets of H 4,906.65 million as at March 31, 2023,
and its associate to cease to continue as a going concern. and total revenue from operations of H 4,204.14 million and
net cash outflows of H 113.93 million for the year ended on
• Evaluate the overall presentation, structure and content of
that date. These consolidated financial statement and other
the consolidated Ind AS financial statements, including the
financial information have been audited by other auditors, which
disclosures, and whether the consolidated Ind AS financial
financial statements, other financial information and auditor’s
statements represent the underlying transactions and
reports have been furnished to us by the management. Our
events in a manner that achieves fair presentation.
opinion on the consolidated Ind AS financial statements, in
• Obtain sufficient appropriate audit evidence regarding the so far as it relates to the amounts and disclosures included in
financial information of the entities or business activities within respect of these subsidiaries and associate, and our report in
the Group and its associate of which we are the independent terms of sub-sections (3) of Section 143 of the Act, in so far as
auditors to express an opinion on the consolidated Ind AS it relates to the aforesaid subsidiaries and associate, is based
financial statements. We are responsible for the direction, solely on t.he reports of such other auditors.
supervision and performance of the audit of the financial
These subsidiaries and associate are located outside India whose
statements of such entities included in the consolidated Ind
financial statements and other financial information have been
AS financial statements of which we are the independent
prepared in accordance with accounting principles generally
auditors. For the other entities included in the consolidated
accepted in their respective countries and which have been
Ind AS financial statements, which have been audited by
audited by other auditors under generally accepted auditing
other auditors, such other auditors remain responsible for the
standards applicable in their respective countries. The Holding
direction, supervision and performance of the audits carried
Company’s management has converted the financial statements
out by them. We remain solely responsible for our audit opinion.
of such subsidiaries and associate located outside India from
We communicate with those charged with governance of the accounting principles generally accepted in their respective
Holding Company and such other entities included in the countries to accounting principles generally accepted in India. We
consolidated Ind AS financial statements of which we are the have audited these conversion adjustments made by the Holding
independent auditors regarding, among other matters, the Company’s management. Our opinion in so far as it relates to the
planned scope and timing of the audit and significant audit balances and affairs of such subsidiaries and associate located
findings, including any significant deficiencies in internal control outside India is based on the report of other auditors and the
that we identify during our audit. conversion adjustments prepared by the management of the
Holding Company and audited by us.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding Our opinion above on the consolidated Ind AS financial
independence, and to communicate with them all relationships statements, and our report on Other Legal and Regulatory
and other matters that may reasonably be thought to bear on our Requirements below, is not modified in respect of the above
independence, and where applicable, related safeguards. matters with respect to our reliance on the work done and the
reports of the other auditors.
From the matters communicated with those charged with
governance, we determine those matters that were of most
Report on Other Legal and Regulatory Requirements
significance in the audit of the consolidated Ind AS financial
statements for the financial year ended March 31, 2023 and 1. As required by the Companies (Auditor’s Report) Order, 2020
are therefore the key audit matters. We describe these matters (“the Order”), issued by the Central Government of India in
in our auditor’s report unless law or regulation precludes terms of sub-section (11) of section 143 of the Act, based
public disclosure about the matter or when, in extremely rare on our audit and on the consideration of report of the other
circumstances, we determine that a matter should not be auditors on separate financial statements and the other

172
Corporate Overview Management Reports Financial Statements

financial information of the subsidiary company, incorporated in India, the managerial remuneration for the year
in India, as noted in the ‘Other Matter’ paragraph we give ended March 31, 2023 has been paid / provided by the
in the “Annexure 1” a statement on the matters specified in Holding Company and its subsidiary incorporated in
paragraph 3(xxi) of the Order. India to their directors in accordance with the provisions
of section 197 read with Schedule V to the Act;
2. As required by Section 143(3) of the Act, based on our audit and
on the consideration of report of the other auditors on separate (h) With respect to the other matters to be included in
financial statements and the other financial information of the Auditor’s Report in accordance with Rule 11 of
subsidiaries and associate as noted in the ‘other matter’ the Companies (Audit and Auditors) Rules, 2014,
paragraph we report, to the extent applicable, that: as amended, in our opinion and to the best of our
information and according to the explanations given to
(a) We/the other auditors whose report we have relied us and based on the consideration of the report of the
upon have sought and obtained all the information and other auditors on separate financial statements as also
explanations which to the best of our knowledge and the other financial information of the subsidiaries and
belief were necessary for the purposes of our audit of its associate, as noted in the ‘Other matter’ paragraph:
the aforesaid consolidated Ind AS financial statements;
i. The consolidated Ind AS financial statements
(b) In our opinion, proper books of account as required by disclose the impact of pending litigations on its
law relating to preparation of the aforesaid consolidation consolidated financial position of the Group and
of the financial statements have been kept so far as its associate in its consolidated Ind AS financial
it appears from our examination of those books and statements – Refer note 45(c)(iv) to the consolidated
reports of the other auditors; Ind AS financial statements;
(c) The consolidated Balance Sheet, the consolidated ii. Provision has been made in the consolidated
Statement of Profit and Loss including the Statement Ind AS financial statements, as required under
of Other Comprehensive Income, the consolidated the applicable law or accounting standards, for
Cash Flow Statement and consolidated Statement material foreseeable losses, if any, on long-term
of Changes in Equity dealt with by this Report are in contracts including derivative contracts – Refer
agreement with the books of account maintained for note 21, 25, 28 and 53 to the consolidated Ind AS
the purpose of preparation of the consolidated Ind AS financial statements in respect of such items as it
financial statements; relates to the Group and its associate.
(d) In our opinion, the aforesaid consolidated Ind AS iii. There has been no delay in transferring amounts,
financial statements comply with the Accounting required to be transferred, to the Investor Education
Standards specified under Section 133 of the Act, read and Protection Fund by the Holding Company and
with Companies (Indian Accounting Standards) Rules, its subsidiary, incorporated in India during the year
2015, as amended; ended March 31, 2023.
(e) On the basis of the written representations received iv. a) The respective managements of the Holding
from the directors of the Holding Company as on March Company and its subsidiary which are
31, 2023 taken on record by the Board of Directors of companies incorporated in India whose
the Holding Company and the reports of the statutory financial statements have been audited under
auditors who are appointed under Section 139 of the the Act have represented to us and the other
Act, of its subsidiary company, none of the directors auditors of such subsidiary respectively that,
of the Group’s companies, incorporated in India, is to the best of its knowledge and belief, other
disqualified as on March 31, 2023 from being appointed than as disclosed in the note 55(v) to the
as a director in terms of Section 164 (2) of the Act; consolidated Ind AS financial statements,
no funds have been advanced or loaned or
(f) With respect to the adequacy of the internal financial
invested (either from borrowed funds or share
controls with reference to consolidated Ind AS financial
premium or any other sources or kind of
statements of the Holding Company and its subsidiary
funds) by the Holding Company or any of such
company, incorporated in India, and the operating
subsidiary to or in any other persons or entities,
effectiveness of such controls, refer to our separate
including foreign entities (“Intermediaries”),
Report in “Annexure 2” to this report;
with the understanding, whether recorded in
(g) In our opinion and based on the consideration of reports writing or otherwise, that the Intermediary
of other statutory auditors of the subsidiary incorporated shall, whether, directly or indirectly lend or

173
Centum Electronics Limited
Annual Report 2022-23

invest in other persons or entities identified auditor’s notice that has caused us or the other
in any manner whatsoever by or on behalf auditors to believe that the representations
of the respective Holding Company or any of under sub-clause (a) and (b) contain any
such subsidiaries (“Ultimate Beneficiaries”) or material mis-statement.
provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; v) As stated in the note 18 to the consolidated Ind AS
financial statements, the final dividend paid during
b) The respective managements of the Holding the year by the Holding company and the final
Company and its subsidiary which are dividend proposed by the Board of Directors for the
companies incorporated in India whose year which is subject to approval of members at the
financial statements have been audited under ensuing Annual General Meeting, is in compliance
the Act have represented to us and the other with section 123 of the Act to the extent it applies
auditors of such subsidiary respectively that, to payment / declaration of dividend. No dividend
to the best of its knowledge and belief and has been declared or paid during the year by the
disclosed in the note 55(vi) to the consolidated subsidiary company incorporated in India.
Ind AS financial statements, no funds have
been received by the respective Holding vi) As proviso to Rule 3(1) of the Companies (Accounts)
Company or any of such subsidiary from any Rules, 2014 is applicable only w.e.f. April 1, 2023 for
persons or entities, including foreign entities the Holding Company and its subsidiary companies
(“Funding Parties”), with the understanding, incorporated in India, hence reporting under this
whether recorded in writing or otherwise, that clause is not applicable.
the Holding Company or any of such subsidiary
shall, whether, directly or indirectly, lend or
invest in other persons or entities identified
in any manner whatsoever by or on behalf of For S.R. Batliboi & Associates LLP
the Funding Party (“Ultimate Beneficiaries”) or Chartered Accountants
provide any guarantee, security or the like on ICAI Firm Registration Number: 101049W/E300004
behalf of the Ultimate Beneficiaries; and

c) Based on the audit procedures that have been per Sandeep Karnani
considered reasonable and appropriate in Partner
the circumstances performed by us and that Membership Number: 061207
performed by the auditors of the subsidiary UDIN: 23061207BGYKVF3193
company which is incorporated in India whose
financial statements have been audited under Place of Signature: Bengaluru
the Act, nothing has come to our or other Date: May 27, 2023

174
Corporate Overview Management Reports Financial Statements

Annexure I referred to in clause 1 of paragraph on the ‘Report on Other Legal and Regulatory
Requirements’ of our report of even date

Re: Centum Electronics Limited (“the Holding Company”)

In terms of the information and explanations sought by us and given by the Holding Company and the books of account and records
examined by us in the normal course of audit and to the best of our knowledge and belief, and based on the consideration of reports
of auditors in respect of subsidiaries, we state that the qualifications or adverse remarks by the respective auditors in their reports on
Companies (Auditor’s Report) Order, 2020 of the companies included in the Consolidated Ind AS Financial Statements are:

Holding company/ Clause number of the CARO report

Sl.No Name CIN
subsidiary which is qualified or is adverse
1 Centum Electronics Limited L85110KA1993PLC013869 Holding company Clause 3(vii)(a)

For S.R. Batliboi & Associates LLP

Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004

per Sandeep Karnani

Partner
Membership Number: 061207
UDIN: 23061207BGYKVF3193

Place of Signature: Bengaluru

Date: May 27, 2023

175
Centum Electronics Limited
Annual Report 2022-23

Annexure II to the Independent Auditor’s Report of even date on the consolidated Ind AS
Financial Statements of Centum Electronics Limited

Report on the Internal Financial Controls under to consolidated Ind AS financial statements was established
Clause (i) of Sub-section 3 of Section 143 of the and maintained and if such controls operated effectively in all
Companies Act, 2013 (“the Act”) material respects.

In conjunction with our audit of the consolidated Ind AS financial Our audit involves performing procedures to obtain audit evidence
statements of Centum Electronics Limited (hereinafter referred about the adequacy of the internal financial controls with
to as the “Holding Company”) as of and for the year ended reference to consolidated Ind AS financial statements and their
March 31, 2023, we have audited the internal financial controls operating effectiveness. Our audit of internal financial controls
with reference to consolidated Ind AS financial statements of with reference to consolidated Ind AS financial statements
the Holding Company and its subsidiary company, (the Holding included obtaining an understanding of internal financial controls
Company and its subsidiary together referred to as “the Group”), with reference to consolidated Ind AS financial statements,
which are companies incorporated in India, as of that date. assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected
Management’s Responsibility for Internal Financial
depend on the auditor’s judgement, including the assessment of
Controls
the risks of material misstatement of the consolidated Ind AS
The respective Board of Directors of the companies included in the financial statements, whether due to fraud or error.
Group, which are companies incorporated in India, are responsible
We believe that the audit evidence we have obtained, is sufficient
for establishing and maintaining internal financial controls based
and appropriate to provide a basis for our audit opinion on the
on the internal control over financial reporting criteria established
internal financial controls with reference to consolidated Ind AS
by the Holding Company considering the essential components of
financial statements.
internal control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting (the “Guidance Note”)
issued by the Institute of Chartered Accountants of India (ICAI). Meaning of Internal Financial Controls With Reference
These responsibilities include the design, implementation and to Consolidated Ind AS Financial Statements
maintenance of adequate internal financial controls that were
A company's internal financial control with reference to
operating effectively for ensuring the orderly and efficient conduct
consolidated Ind AS financial statements is a process designed to
of its business, including adherence to the respective company’s
provide reasonable assurance regarding the reliability of financial
policies, the safeguarding of its assets, the prevention and
reporting and the preparation of consolidated Ind AS financial
detection of frauds and errors, the accuracy and completeness
statements for external purposes in accordance with generally
of the accounting records, and the timely preparation of reliable
accepted accounting principles. A company's internal financial
financial information, as required under the Companies Act, 2013.
control with reference to consolidated Ind AS financial statements
includes those policies and procedures that (1) pertain to the
Auditor’s Responsibility maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
Our responsibility is to express an opinion on the Holding
company; (2) provide reasonable assurance that transactions are
Company's internal financial controls with reference to
recorded as necessary to permit preparation of consolidated Ind
consolidated Ind AS financial statements based on our audit.
AS financial statements in accordance with generally accepted
We conducted our audit in accordance with the Guidance Note
accounting principles, and that receipts and expenditures of the
and the Standards on Auditing, specified under section 143(10) of
company are being made only in accordance with authorisations
the Act, to the extent applicable to an audit of internal financial
of management and directors of the company; and (3) provide
controls, both, issued by ICAI. Those Standards and the Guidance
reasonable assurance regarding prevention or timely detection
Note require that we comply with ethical requirements and plan
of unauthorised acquisition, use, or disposition of the company's
and perform the audit to obtain reasonable assurance about
assets that could have a material effect on the consolidated Ind
whether adequate internal financial controls with reference
AS financial statements.

176
Corporate Overview Management Reports Financial Statements

Inherent Limitations of Internal Financial Controls statements and such internal financial controls with reference
With Reference to Consolidated Ind AS Financial to consolidated Ind AS financial statements were operating
Statements effectively as at March 31,2023, based on the internal control over
financial reporting criteria established by the Holding Company
Because of the inherent limitations of internal financial controls considering the essential components of internal control stated
with reference to consolidated Ind AS financial statements, in the Guidance Note issued by the ICAI.
including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud
may occur and not be detected. Also, projections of any evaluation
of the internal financial controls with reference to consolidated Ind For S.R. Batliboi & Associates LLP
AS financial statements to future periods are subject to the risk Chartered Accountants
that the internal financial controls with reference to consolidated ICAI Firm Registration Number: 101049W/E300004
Ind AS financial statements may become inadequate because of
changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
per Sandeep Karnani
Partner
Opinion Membership Number: 061207
UDIN: 23061207BGYKVF3193
In our opinion, the Group, which have companies incorporated in
India, have, maintained in all material respects, adequate internal Place of Signature: Bengaluru
financial controls with reference to consolidated Ind AS financial Date: May 27, 2023

177
Centum Electronics Limited
Annual Report 2022-23

Consolidated Ind AS Balance Sheet

as at March 31, 2023
Corporate Identity Number (CIN): L85110KA1993PLC013869
(H in million)
Notes March 31, 2023 March 31, 2022

ASSETS
(1) Non-current assets
(a) Property, plant and equipment 3 1,071.27 1,119.54
(b) Capital work-in-progress 3a 54.09 0.09
(c) Goodwill on consolidation 4a 376.23 376.23
(d) Other intangible assets 4b 286.20 416.42
(e) Intangible assets under development 4c 227.56 120.14
(f) Right-of-use assets 44 464.74 481.07
(g) Financial assets
(i) Investment in associates 5 82.47 59.15
(ii) Other investments 6 13.81 13.78
(iii) Trade receivables 12 286.83 269.12
(iv) Other financial assets 7 321.56 378.36
(h) Deferred tax assets (net) 8 69.68 31.58
(i) Non-current tax assets (net) 9 9.59 48.89
(j) Other assets 10 54.88 41.84
Total non-current assets 3,318.91 3,356.21
(2) Current assets
(a) Inventories 11 2,610.62 2,248.25
(b) Financial assets
(i) Trade receivables 12 3,828.44 2,499.02
(ii) Cash and cash equivalents 13 352.71 480.44
(iii) Bank balances other than cash and cash equivalents 13 69.25 93.66
(iv) Other financial assets 14 162.26 226.21
(c) Other assets 15 384.79 325.82
Total current assets 7,408.07 5,873.40
Total assets (1+2) 10,726.98 9,229.61
EQUITY AND LIABILITIES
(1) Equity
(a) Equity share capital 16 128.85 128.85
(b) Other equity 17 1,978.32 1,910.83
Equity attributable to equity holders of the parent 2,107.17 2,039.68
Non-controlling interests (66.60) (54.48)
Total equity 2,040.57 1,985.20
Liabilities
(2) Non-current liabilities
(a) Financial liabilities
(i) Borrowings 19 579.62 815.74
(ii) Lease liabilities 44 361.58 355.54
(b) Deferred tax liabilities (net) 8 27.12 48.82
(c) Other liabilities 26 167.39 77.30
(d) Net employee defined benefit liabilities 20 61.81 58.28
(e) Provisions 21 23.67 70.35
(f) Government grants 22 24.43 26.57
Total non-current liabilities 1,245.62 1,452.60
(3) Current liabilities
(a) Financial liabilities
(i) Borrowings 23 2,047.99 1,910.25
(ii) Lease liabilities 44 91.79 120.03
(iii) Trade payables 24 2,109.71 1,140.83
(iv) Other financial liabilities 25 517.04 598.56
(b) Other liabilities 26 2,254.99 1,701.28
(c) Government grants 22 8.16 7.87
(d) Net employee defined benefit liabilities 27 7.39 6.51
(e) Provisions 28 287.08 274.59
(f) Liabilities for current tax (net) 29 116.64 31.89
Total current liabilities 7,440.79 5,791.81
Total equity and liabilities (1+2+3) 10,726.98 9,229.61
Summary of significant accounting policies 2.3
The accompanying notes are an integral part of the consolidated Ind AS financial statements.
As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited
For S.R. Batliboi & Associates LLP
Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

178
Corporate Overview Management Reports Financial Statements

Consolidated Ind AS Statement of Profit and loss

for the year ended March 31, 2023

(H in million)
Notes March 31, 2023 March 31, 2022

I Income
Revenue from operations 30 9,229.69 7,799.40
Other income 31 37.25 47.05
Finance income 32 21.28 33.19
Total income 9,288.22 7,879.64
II Expenses
Cost of materials consumed 33a 4,146.60 3,065.02
Decrease / (increase) in inventories of work-in-progress and finished goods 33b 5.29 (45.44)
Employee benefit expenses 34 3,327.22 3,199.02
Finance costs 35 273.44 263.48
Depreciation and amortisation expenses 36 438.26 431.93
Other expenses 37 988.49 838.37
Total expenses 9,179.30 7,752.38
III Profit / (loss) before share of profit/(loss) of associates, exceptional items and tax (I - II) 108.92 127.26
IV Share of profit / (loss) of associates (net) 5(ii) 12.44 (45.74)
V Profit / (loss) before exceptional items and tax (III - IV) 121.36 81.52
VI Exceptional items (net) 38 - (603.54)
VII Profit / (loss) before tax (V - VI) 121.36 (522.02)
VIII Tax expenses
(a) Current tax 39 126.51 57.49
(b) Adjustment of tax relating to earlier period 39 (10.32) (11.05)
(c) Deferred tax (credit) / expense 39 (61.77) (33.81)
Total tax expenses 54.42 12.63
IX Profit / (loss) for the year (VII - VIII) 66.94 (534.65)
X Other comprehensive income
(A) Other comprehensive income to be reclassified to profit or loss in subsequent periods:
(i) (a) Exchange differences on translating the financial statements of foreign operations 1.24 16.85
(b) Income tax effect on above - -
(ii) (a) Net movement on effective portion of cash flow hedge 0.02 -
(b) Income tax effect on above (0.01) -
(B) Other comprehensive income not to be reclassified to profit or loss in subsequent periods:
(i) (a) Remeasurement gains / (losses) on defined benefit plans 43b(ii) 7.77 10.00
(b) Income tax effect on above 39 (1.96) (2.63)
Other comprehensive income for the year, net of tax 7.06 24.22
Profit / (loss) for the year 66.94 (534.65)
Attributable to
a) Equity holders of the parent 98.16 (305.43)
b) Non-controlling interests (31.22) (229.22)
Other comprehensive income for the year 7.06 24.22
Attributable to
a) Equity holders of the parent 8.44 19.89
b) Non-controlling interests (1.38) 4.33
Total comprehensive income for the year (IX + X) 74.00 (510.43)
Attributable to
a) Equity holders of the parent 106.60 (285.54)
b) Non-controlling interests (32.60) (224.89)
XI Earnings per equity share (nominal value of J 10 each)
Earnings per share (H) : Basic and diluted, computed on the basis of profit / (loss) attributable to 40
equity holders of the parent (per equity share of H.10 each)
- Basic 7.62 (23.70)
- Diluted 7.55 (23.70)
Summary of significant accounting policies 2.3
The accompanying notes are an integral part of the consolidated Ind AS financial statements.
As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited
For S.R. Batliboi & Associates LLP
Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

179
Centum Electronics Limited
Annual Report 2022-23

Consolidated Ind AS Statement of Cash Flows

for the year ended March 31, 2023

(H in million)
March 31, 2023 March 31, 2022
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit / (loss) before tax expenses 121.36 (522.02)
Non-cash adjustments to reconcile profit/(loss) before tax to net cash flows:
Depreciation and amortisation expenses 438.26 431.93
Provisions / liabilities no longer required, written back (20.87) (28.90)
Fair value (gain)/ loss on financial instruments (0.02) (0.15)
Net foreign exchange differences (unrealised) 23.89 5.24
Provision for expected credit losses / bad debts written off 44.33 83.81
Employee share based compensation cost 13.91 0.16
Provision for inventory obsolescence 95.11 -
Provision for onerous contract 15.41 -
Government grants (10.50) (7.87)
Provision for dimunition in the value of investment / receivables - 372.77
(Gain)/ loss on disposal of property, plant and equipment (0.58) 0.92
Provision for dimunition in the value of loans - 6.06
Provision for settlement of claims - 132.22
Provision for impairment of unbilled revenue - 34.48
Finance income (21.28) (33.19)
Finance costs 246.65 229.57
Share of (profit) / loss of associates (12.44) 45.74
Operating profit / (loss) before working capital changes 933.23 750.77
Working capital adjustments:
(Increase) / decrease in inventories (443.21) (310.80)
(Increase) / decrease in trade receivables /non-current /current financial and other assets (1,216.31) 184.48
Increase / (decrease) in trade payables, non-current /current provisions, financial liabilities 1,435.05 514.39
and other liabilities
Cash generated from / (used in) operations 708.76 1,138.84
Direct taxes paid (net of refunds) 0.56 (103.97)
Net cash flow from / (used in) operating activities 709.32 1,034.87
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment, including other intangible assets and capital (217.56) (187.53)
advances
Proceeds from sale of property, plant and equipment 0.63 3.56
Proceeds from sale of non-current investments - 9.31
Investment in bank deposits (having original maturity of more than three months) and 72.18 6.28
other bank balances
Interest income received 23.61 19.06
Government grant received 8.65 -
Net cash flow (used in) / from investing activities (112.49) (149.32)
C. CASH FLOW FROM FINANCING ACTIVITIES
Acquisition of non-controlling interests (135.13) -
Repayment of long term borrowings (298.77) (219.53)
Proceeds / (repayment) of short term borrowings (net) 95.07 (204.97)
Payment of principal portion of lease liabilities (135.14) (130.75)
Payment of interest portion of lease liabilities (9.86) (13.14)
Finance costs paid (223.29) (217.87)
Dividend paid (including amount transferred to Investor Education & Protection Fund) (32.49) (25.53)
Net cash flow (used in) / from financing activities (739.61) (811.79)
Net (decrease)/increase in cash and cash equivalents (A+B+C) (142.78) 73.76
Cash and cash equivalents at the beginning of the year 480.44 411.48
Effect of exchange differences on cash and cash equivalents held in foreign currency 15.05 (4.79)
Cash and cash equivalents at the end of the year 352.71 480.44
Total cash and cash equivalents (note 13) 352.71 480.44

180
Corporate Overview Management Reports Financial Statements

Consolidated Ind AS Statement of Cash Flows

for the year ended March 31, 2023

Explanatory notes to consolidated Ind AS statement of cash flows

1. Changes in liabilities arising from financing activities:-

(H in million)
Liabilities arising from financing activities
Short term
Long term borrowings Lease liabilities
borrowings Derivatives not
(including current Unpaid dividend (including current
Particulars excluding current designated as
maturities of long term on equity shares portion of lease
maturities of long hedges - (refer
borrowings) (refer note 25) liabilities)
term borrowings note 53)
(refer note 19 and 23) (refer note 44)
(refer note 23)
As at April 1, 2022 1,141.19 2.89 1,584.80 475.57 -
Cash flows (298.77) (32.49) 95.07 (145.00) -
Non-cash changes
Foreign exchange differences 55.28 - 42.99 29.13 -
(gain) / loss
Interest accrued but not due - - 7.05 - -
Changes in fair values - - - 9.86 -
Reversal of lease liabilities - - - (57.63) -
Recognition of lease liabilities - - - 141.44 -
Dividend declared during the - 32.21 - - -
year
As at March 31, 2023 897.70 2.61 1,729.91 453.37 -
As at April 1, 2021 1,382.30 2.65 1,801.49 558.88 0.15
Cash flows (219.53) (25.53) (204.97) (143.89) -
Non-cash changes
Foreign exchange differences (21.58) - (7.06) (9.29) -
(gain) / loss
Interest accrued but not due - - (4.66) - -
Changes in fair values - - - 13.14 (0.15)
Reversal of lease liabilities - - - (73.55) -
Recognition of lease liabilities - - - 130.28 -
Dividend declared during the - 25.77 - - -
year
As at March 31, 2022 1,141.19 2.89 1,584.80 475.57 -

Summary of significant accounting policies 2.3

The accompanying notes are an integral part of the consolidated Ind AS financial statements.

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited
For S.R. Batliboi & Associates LLP
Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

181
Consolidated Ind AS Statement of Changes in Equity
for the year ended March 31, 2023

(a) Equity share capital

Annual Report 2022-23

Equity shares of J 10 each issued, subscribed and fully paid

Centum Electronics Limited

Particulars Number (J in million)

At April 01, 2021 1,28,84,841 128.85
Issue of share capital (refer note 16) - -
At March 31, 2022 1,28,84,841 128.85
Issue of share capital (refer note 16) - -
At March 31, 2023 1,28,84,841 128.85

(b) Other equity

(H in million)
Attributable to equity shareholders
Equity Reserves and surplus

182
portion of Effective Share Non-
Foreign Total Total
put option Securities General Retained portion of based Capital controlling
Particulars currency Other equity
liability premium reserve earnings cash flow payments reserve interests
translation equity (A) (A+B)
(refer note (refer note (refer (refer note hedge reserve (refer (B)
17) reserve (refer
17) note 17) 17) (refer note (refer note note 17)
note 17)
17) 17)
For the year ended March 31, 2023
As at April 01, 2022 (162.11) 28.07 440.26 1,541.28 - 0.32 48.30 14.71 1,910.83 (54.48) 1,856.35
Profit / (loss) for the year - - - 98.16 - - - - 98.16 (31.22) 66.94
Other comprehensive income/(loss) for - - - 5.81 0.01 - - 2.62 8.44 (1.38) 7.06
the year (net of taxes)*
Exercise of put options by non- (20.48) - - - - - - - (20.48) 20.48 -
controlling interest shareholders
Dividends (refer note 18) - - - (32.21) - - - - (32.21) - (32.21)
Compensation for options granted - - - - - 13.91 - - 13.91 - 13.91
(refer note 47)
Others - - - (0.33) - - - - (0.33) - (0.33)
As at March 31, 2023 (182.59) 28.07 440.26 1,612.71 0.01 14.23 48.30 17.33 1,978.32 (66.60) 1,911.72
Consolidated Ind AS Statement of Changes in Equity
for the year ended March 31, 2023

(H in million)
Attributable to equity shareholders
Equity Reserves and surplus
portion of Effective Share Non-
Foreign Total Total
put option Securities General Retained portion of based Capital controlling
Particulars currency Other equity
liability premium reserve earnings cash flow payments reserve interests
translation equity (A) (A+B)
(refer note (refer note (refer (refer note hedge reserve (refer (B)
17) reserve (refer
17) note 17) 17) (refer note (refer note note 17)
note 17)
17) 17)
For the year ended March 31, 2022
As at April 01, 2021 (281.34) 28.07 440.26 1,864.35 - 2.11 46.35 2.19 2,101.99 170.41 2,272.40
(Loss)/ profit for the year - - - (305.43) - - - - (305.43) (229.22) (534.65)
Other comprehensive income/(loss) for - - - 7.37 - - - 12.52 19.89 4.33 24.22
the year (net of taxes)*
Restatement of put options to fair 119.23 - - - - - - - 119.23 - 119.23
value (refer note 25 (1))
Dividends (refer note 18) - - - (25.77) - - - - (25.77) - (25.77)

183
Compensation for options granted - - - - - 0.16 - - 0.16 - 0.16
(refer note 47)
Transferred to capital reserve on - - - - - (1.95) 1.95 - - - -
forfeiture of stock options
Others - - - 0.76 - - - - 0.76 - 0.76
Corporate Overview

As at March 31, 2022 (162.11) 28.07 440.26 1,541.28 - 0.32 48.30 14.71 1,910.83 (54.48) 1,856.35
*As required under Ind AS compliant Schedule III, the Company has recognised remeasurement gains/(losses) of defined benefit plans as part of retained earnings.

Summary of significant accounting policies 2.3

The accompanying notes are an integral part of the consolidated Ind AS financial statements.

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited
For S.R. Batliboi & Associates LLP
Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
Management Reports

ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Financial Statements

Date : May 27, 2023 Date : May 27, 2023

Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
1. Corporate information The functional and presentation currency of the Group
is Indian Rupee (“H”) which is the currency of the primary
Centum Electronics Limited (“Centum” or “the Company” or economic environment in which the Group operates and all
“the Holding Company) is a public limited company domiciled values are rounded to the nearest million (H 000,000), except
in India. The registered office of the Company is located at when otherwise indicated.
Bangalore, India. Its equity shares are listed on National
Stock Exchange and Bombay Stock Exchange in India. The consolidated Ind AS financial statements comprise the
financial statements of the Company and its subsidiaries
The Company along with its subsidiaries ("the Group") and an as at March 31, 2023. Control is achieved when the
associate (hereinafter collectively referred to as "the Group"), Group is exposed, or has rights, to variable returns from
are primarily involved in the design and manufacture of its involvement with the investee and has the ability to
advanced microelectronics modules, systems, subsystems affect those returns through its power over the investee.
and printed circuit board assembly catering to the Defence, Specifically, the Group controls an investee if and only if the
Aerospace, Transportation and Industrial electronics Group has:
markets. Centum is headquartered in Bangalore, India.
• Power over the investee (i.e. existing rights that give it
The consolidated Ind AS financial statements were approved the current ability to direct the relevant activities of the
by the Board of Directors and authorised for issue in investee);
accordance with a resolution of the directors on May 27, 2023.
• Exposure, or rights, to variable returns from its
The Holding Company has been registered under the involvement with the investee, and
provisions of Micro, Small and Medium Enterprise
Development Act (“MSMED”) Act, 2006 and has obtained • The ability to use its power over the investee to affect its
the Udyam registration number (“URN”) UDYAM - KR– 03- returns.
0005545 on August 12, 2020
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and
2. Significant accounting policies when the Group has less than a majority of the voting or
similar rights of an investee, the Group considers all relevant
The significant accounting policies applied by the Group
facts and circumstances in assessing whether it has power
in the preparation of its consolidated Ind AS financial
over an investee, including:
statements are listed below. Such accounting policies have
been applied consistently to all the periods presented in • The contractual arrangement with the other vote
these consolidated Ind AS financial statements, unless holders of the investee.
otherwise indicated.
• Rights arising from other contractual arrangements.

2.1. Basis of Consolidation • The Group’s voting rights and potential voting rights.
The consolidated Ind AS financial statements of the Group
• The size of the Group’s holding of voting rights relative
have been prepared in accordance with Indian Accounting
to the size and dispersion of the holdings of the other
Standards (Ind AS) notified under the Companies (Indian
voting rights holders.
Accounting Standards) Rules, 2015 (as amended from time
to time) and presentation requirements of Division II of The Group re-assesses whether or not it controls an investee
Schedule III to the Companies Act, 2013, (Ind AS compliant if facts and circumstances indicate that there are changes to
Schedule III), as applicable to the consolidated Ind AS one or more of the three elements of control. Consolidation
Financial Statement (CFS). of a subsidiary begins when the Group obtains control over
the subsidiary and ceases when the Group loses control of
The consolidated Ind AS financial statements have been
the subsidiary. Assets, liabilities, income and expenses of
prepared on a historical cost basis, except for certain
a subsidiary acquired or disposed of during the year are
financial assets and liabilities (refer accounting policy
included in the consolidated Ind AS financial statements
regarding financial instruments) which have been measured
from the date the Group gains control until the date the
at fair value.
Group ceases to control the subsidiary.

184
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
Consolidated Ind AS financial statements are prepared Profit or loss and each component of other comprehensive
using uniform accounting policies for like transactions income (OCI) are attributed to the equity holders of the
and other events in similar circumstances. If a member parent of the Group and to the non-controlling interests,
of the Group uses accounting policies other than those even if this results in the non-controlling interests having
adopted in the consolidated Ind AS financial statements a deficit balance. When necessary, adjustments are made
for like transactions and events in similar circumstances, to the financial statements of subsidiaries to bring their
appropriate adjustments are made to that Group member’s accounting policies into line with the Group’s accounting
financial statements in preparing the consolidated Ind AS policies. All intra-group assets and liabilities, equity, income,
financial statements to ensure conformity with the Group’s expenses and cash flows relating to transactions between
accounting policies. members of the Group are eliminated in full on consolidation.

The financial statements of all entities used for the purpose A change in the ownership interest of a subsidiary, without a
of consolidation are drawn up to same reporting date as that loss of control, is accounted for as an equity transaction. If
of the parent company, i.e., year ended on 31 March. When the Group loses control over a subsidiary, it:
the end of the reporting period of the parent is different
from that of a subsidiary, the subsidiary prepares, for • Derecognises the assets (including goodwill) and
consolidation purposes, additional financial information as liabilities of the subsidiary at their carrying amounts at
of the same date as the financial statements of the parent to the date when
enable the parent to consolidate the financial information of • control is lost
the subsidiary, unless it is impracticable to do so.
• Derecognises the carrying amount of any non-
Consolidation procedure: controlling interests

a) Combine like items of assets, liabilities, equity, income, • Derecognises the cumulative translation differences
expenses and cash flows of the parent with those of its recorded in equity
subsidiaries. For this purpose, income and expenses of
the subsidiary are based on the amounts of the assets • Recognises the fair value of the consideration received
and liabilities recognised in the consolidated Ind AS
• Recognises the fair value of any investment retained
financial statements at the acquisition date.
• Recognises any surplus or deficit in profit or loss
b) Offset (eliminate) the carrying amount of the parent’s
investment in each subsidiary and the parent’s portion • Recognise that distribution of shares of subsidiary to
of equity of each subsidiary. Business combinations Group in Group’s capacity as owners
policy explains how to account for any related goodwill.
• Reclassifies the parent’s share of components previously
c) Eliminate in full intragroup assets and liabilities, recognised in OCI to profit or loss or retained earnings,
equity, income, expenses and cash flows relating to as appropriate, as would be required if the Group had
transactions between entities of the Group (profits or directly disposed of the related assets or liabilities.
losses resulting from intragroup transactions that
are recognised in assets, such as inventory and fixed
2.2. Change in accounting policies and disclosures:
assets, are eliminated in full). Intragroup losses may
indicate an impairment that requires recognition in New standards and amendments:
the consolidated Ind AS financial statements. Ind AS
12 Income Taxes applies to temporary differences that The Group applied for the first-time certain standards
arise from the elimination of profits and losses resulting and amendments, which are effective for annual periods
from intragroup transactions. beginning on or after 1 April 2022.

d) Non-controlling interest represents that part of the total The Ministry of Corporate Affairs has notified Companies
comprehensive income and net assets of subsidiaries (Indian Accounting Standard) Amendment Rules 2022 dated
attributable to interests which are not owned, directly or March 23, 2022, to amend the following Ind AS which are
indirectly, by the Parent Company. effective from April 01, 2022.

185
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
(i) Onerous Contracts – Costs of Fulfilling a Contract – Accounting Standard” without significantly changing its
Amendments to Ind AS 37 requirements.

An onerous contract is a contract under which the The amendments also added an exception to
unavoidable of meeting the obligations under the the recognition principle of Ind AS 103 Business
contract costs (i.e., the costs that the Group cannot Combinations to avoid the issue of potential ‘day 2’
avoid because it has the contract) exceed the economic gains or losses arising for liabilities and contingent
benefits expected to be received under it. liabilities that would be within the scope of Ind AS
37 Provisions, Contingent Liabilities and Contingent
The amendments specify that when assessing whether Assets or Appendix C, Levies, of Ind AS 37, if incurred
a contract is onerous or loss-making, an entity needs separately. The exception requires entities to apply the
to include costs that relate directly to a contract to criteria in Ind AS 37 or Appendix C, Levies, of Ind AS
provide goods or services including both incremental 37, respectively, instead of the Conceptual Framework,
costs (e.g., the costs of direct labour and materials) to determine whether a present obligation exists at the
and an allocation of costs directly related to contract acquisition date.
activities (e.g., depreciation of equipment used to fulfil
the contract and costs of contract management and The amendments also add a new paragraph to IFRS
supervision). General and administrative costs do not 3 to clarify that contingent assets do not qualify for
relate directly to a contract and are excluded unless recognition at the acquisition date.
they are explicitly chargeable to the counterparty under
the contract. In accordance with the transitional provisions, the
Group applies the amendments prospectively, i.e., to
The Group applied the amendments to the contracts business combinations occurring after the beginning of
for which it had not fulfilled all of its obligations at the the annual reporting period in which it first applies the
beginning of the reporting period. amendments (the date of initial application).

Prior to the application of the amendments, the Group These amendments had no impact on the consolidated
had not identified any contracts as being onerous as Ind AS financial statements of the Group.
the unavoidable costs under the contracts, which were
the costs of fulfilling them, comprised only incremental (iii) Property, Plant and Equipment: Proceeds before
costs directly related to the contracts. As a result of Intended Use – Amendments to Ind AS 16
the amendments, the Group assessed whether certain
The amendments modified paragraph 17(e) of Ind AS
other directly related costs are required to be included
16 to clarify that excess of net sale proceeds of items
in determining the costs of fulfilling the contracts.
produced over the cost of testing, if any, shall not be
In accordance with the transitional provisions, the Group recognised in the profit or loss but deducted from the
applies the amendments to contracts for which it has directly attributable costs considered as part of cost of
not yet fulfilled all of its obligations, at the beginning of an item of property, plant, and equipment.
the annual reporting period in which it first applies the
The amendments are effective for annual reporting
amendments (the date of initial application) and has not
periods beginning on or after 1 April 2022. These
restated its comparative information.
amendments had no impact on the consolidated Ind AS
These amendments had no significant impact on the financial statements of the Group.
consolidated Ind AS financial statements of the Group.
(iv) Ind AS 101 First-time Adoption of Indian Accounting
(ii) Reference to the Conceptual Framework – Standards – Subsidiary as a first-time adopter
Amendments to Ind AS 103
The amendment permits a subsidiary that elects to
The amendments replaced the reference to the ICAI’s apply the exemption in paragraph D16(a) of Ind AS 101
“Framework for the Preparation and Presentation to measure cumulative translation differences for all
of Financial Statements under Indian Accounting foreign operations in its financial statements using the
Standards” with the reference to the “Conceptual amounts reported by the parent, based on the parent’s
Framework for Financial Reporting under Indian date of transition to Ind AS, if no adjustments were

186
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
made for consolidation procedures and for the effects of in the acquiree at fair value or at the proportionate share
the business combination in which the parent acquired of the acquiree’s identifiable net assets. Acquisition-
the subsidiary. This amendment is also available to related costs are expensed as incurred.
an associate or joint venture that uses exemption in
paragraph D16(a) of Ind AS 101. The Group determines that it has acquired a business
when the acquired set of activities and assets include
The amendments are effective for annual reporting an input and a substantive process that together
periods beginning on or after 1 April 2022 but do not significantly contribute to the ability to create outputs.
apply to the Group as it is not a first-time adopter. The acquired process is considered substantive if it is
critical to the ability to continue producing outputs, and
(v) Ind AS 109 Financial Instruments – Fees in the ’10 per the inputs acquired include an organised workforce
cent’ test for derecognition of financial liabilities with the necessary skills, knowledge, or experience
to perform that process or it significantly contributes
The amendment clarifies the fees that an entity
to the ability to continue producing outputs and is
includes when assessing whether the terms of a new
considered unique or scarce or cannot be replaced
or modified financial liability are substantially different
without significant cost, effort, or delay in the ability to
from the terms of the original financial liability. These
continue producing outputs.
fees include only those paid or received between the
borrower and the lender, including fees paid or received At the acquisition date, the identifiable assets
by either the borrower or lender on the other’s behalf. acquired and the liabilities assumed are recognised
at their acquisition date fair values. For this purpose,
In accordance with the transitional provisions, the Group
the liabilities assumed include contingent liabilities
applies the amendment to financial liabilities that are
representing present obligation and they are measured
modified or exchanged on or after the beginning of the
at their acquisition fair values irrespective of the
annual reporting period in which the entity first applies
fact that outflow of resources embodying economic
the amendment (the date of initial application). These
benefits is not probable. However, the following assets
amendments had no impact on the consolidated Ind AS
and liabilities acquired in a business combination are
financial statements of the Group.
measured at the basis indicated below:
(vi) Ind AS 41 Agriculture – Taxation in fair value
• Deferred tax assets or liabilities, and the assets or
measurements
liabilities related to employee benefit arrangements
The amendment removes the requirement in paragraph are recognised and measured in accordance with
22 of Ind AS 41 that entities exclude cash flows for Ind AS 12 Income Tax and Ind AS 19 Employee
taxation when measuring the fair value of assets within Benefits respectively.
the scope of Ind AS 41.
• Potential tax effects of temporary differences and
The amendments are effective for annual reporting carry forwards of an acquiree that exist at the
periods beginning on or after 1 April 2022. The acquisition date or arise as a result of the acquisition
amendments had no impact on the consolidated Ind AS are accounted in accordance with Ind AS 12.
financial statements of the Group.
• Liabilities or equity instruments related to share
based payment arrangements of the acquiree
2.3 Summary of significant accounting policies or share – based payments arrangements of the
a. Business combination and goodwill Group entered into to replace share-based payment
arrangements of the acquiree are measured in
Business combinations are accounted for using accordance with Ind AS 102 Share-based Payments
the acquisition method. The cost of an acquisition at the acquisition date.
is measured as the aggregate of the consideration
transferred measured at acquisition date fair value • Assets (or disposal groups) that are classified as held
and the amount of any non-controlling interests in the for sale in accordance with Ind AS 105 Non-current
acquiree. For each business combination, the Group Assets Held for Sale and Discontinued Operations are
elects whether to measure the non-controlling interests measured in accordance with that Standard.

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• Reacquired rights are measured at a value After initial recognition, goodwill is measured at cost
determined on the basis of the remaining less any accumulated impairment losses. For the
contractual term of the related contract. Such purpose of impairment testing, goodwill acquired in
valuation does not consider potential renewal of a business combination is, from the acquisition date,
the reacquired right. allocated to each of the Group’s cash-generating units
that are expected to benefit from the combination,
When the Group acquires a business, it assesses the irrespective of whether other assets or liabilities of the
financial assets and liabilities assumed for appropriate acquiree are assigned to those units.
classification and designation in accordance with
the contractual terms, economic circumstances and A cash generating unit to which goodwill has been
pertinent conditions as at the acquisition date. This allocated is tested for impairment annually, or more
includes the separation of embedded derivatives in host frequently when there is an indication that the unit
contracts by the acquiree. may be impaired. If the recoverable amount of the
cash generating unit is less than its carrying amount,
If the business combination is achieved in stages, any the impairment loss is allocated first to reduce the
previously held equity interest is re-measured at its carrying amount of any goodwill allocated to the unit
acquisition date fair value and any resulting gain or loss and then to the other assets of the unit pro rata based
is recognised in profit or loss or OCI, as appropriate. on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognised in profit or
Any contingent consideration to be transferred by the
loss. An impairment loss recognised for goodwill is not
acquirer is recognised at fair value at the acquisition
reversed in subsequent periods.
date. Contingent consideration classified as an asset
or liability that is a financial instrument and within the Where goodwill has been allocated to a cash-generating
scope of Ind AS 109 Financial Instruments, is measured unit and part of the operation within that unit is disposed
at fair value with changes in fair value recognised of, the goodwill associated with the disposed operation
in profit or loss in accordance with Ind AS 109. If the is included in the carrying amount of the operation
contingent consideration is not within the scope of when determining the gain or loss on disposal. Goodwill
Ind AS 109, it is measured in accordance with the disposed in these circumstances is measured based on
appropriate Ind AS and shall be recognised in profit the relative values of the disposed operation and the
or loss. Contingent consideration that is classified as portion of the cash-generating unit retained.
equity is not re-measured at subsequent reporting
dates and subsequent its settlement is accounted for b. Investment in associates and joint ventures
within equity.
An associate is an entity over which the Group has
Goodwill is initially measured at cost, being the excess significant influence. Significant influence is the power
of the aggregate of the consideration transferred and to participate in the financial and operating policy
the amount recognised for non-controlling interests, decisions of the investee, but is not control or joint
and any previous interest held, over the net identifiable control over those policies.
assets acquired and liabilities assumed. If the fair value
of the net assets acquired is in excess of the aggregate A joint venture is a type of joint arrangement whereby
consideration transferred, the Group re-assesses the parties that have joint control of the arrangement
whether it has correctly identified all of the assets have rights to the net assets of the joint venture. Joint
acquired and all of the liabilities assumed and reviews control is the contractually agreed sharing of control
the procedures used to measure the amounts to be of an arrangement, which exists only when decisions
recognised at the acquisition date. If the reassessment about the relevant activities require unanimous consent
still results in an excess of the fair value of net assets of the parties sharing control.
acquired over the aggregate consideration transferred,
The considerations made in determining whether
then the gain is recognised in OCI and accumulated in
significant influence or joint control are similar to those
equity as capital reserve. However, if there is no clear
necessary to determine control over the subsidiaries.
evidence of bargain purchase, the Group recognises the
gain directly in equity as capital reserve, without routing The Group’s investments in its associate and joint
the same through OCI. venture are accounted for using the equity method after

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for the year ended March 31, 2023
making necessary adjustments to achieve uniformity the associate or joint venture is impaired. If there is such
in application of accounting policies. Under the equity evidence, the Group calculates the amount of impairment
method, the investment in an associate or a joint venture as the difference between the recoverable amount of the
is initially recognised at cost. The carrying amount of associate or joint venture and its carrying value, and then
the investment is adjusted to recognise changes in the recognises the loss as ‘Share of profit of an associate and
Group’s share of net assets of the associate or joint a joint venture’ in the statement of profit or loss.
venture since the acquisition date. Goodwill relating
to the associate or joint venture is included in the Upon loss of significant influence over the associate or
carrying amount of the investment and is not tested for joint control over the joint venture, the Group measures
impairment individually. and recognises any retained investment at its fair
value. Any difference between the carrying amount of
The statement of profit and loss reflects the Group’s the associate or joint venture upon loss of significant
share of the results of operations of the associate or influence or joint control and the fair value of the
joint venture. Any change in OCI of those investees is retained investment and proceeds from disposal is
presented as part of the Group’s OCI. In addition, when recognised in profit or loss.
there has been a change recognised directly in the equity
of the associate or joint venture, the Group recognises its c. Current versus non-current classification
share of any changes, when applicable, in the statement
The Group presents assets and liabilities in the
of changes in equity. Unrealised gains and losses
consolidated Ind AS balance sheet based on current/
resulting from transactions between the Group and the
non-current classification. An asset is treated as
associate or joint venture are eliminated to the extent of
current when it is:
the interest in the associate or joint venture.
i. Expected to be realised or intended to be sold or
When the Group’s share of losses of an associate or
consumed in normal operating cycle,
a joint venture equals or exceeds its interest in the
associate or joint venture (which includes any long term ii. Held primarily for the purpose of trading,
interest that, in substance, form part of the Group’s net
investment in the associate or joint venture), the Group iii. Expected to be realised within twelve months after
discontinues recognising its share of further losses. the reporting period, or
Additional losses are recognised only to the extent that
iv. Cash or cash equivalent unless restricted from
the Group has incurred legal or constructive obligations
being exchanged or used to settle a liability for at
or made payments on behalf of the associate or joint
least twelve months after the reporting period
venture. If the associate or joint venture subsequently
reports profits, the Group resumes recognising its All other assets are classified as non-current.
share of those profits only after its share of the profits
equals the share of losses not recognised. A liability is current when:

The aggregate of the Group’s share of profit or loss of an i. It is expected to be settled in normal operating
associate and a joint venture is shown on the face of the cycle,
statement of profit and loss.
ii. It is held primarily for the purpose of trading,
The financial statements of the associate or joint venture
are prepared for the same reporting period as the Group. iii. It is due to be settled within twelve months after the
When necessary, adjustments are made to bring the reporting period, or
accounting policies in line with those of the Group.
iv. There is no unconditional right to defer the
After application of the equity method, the Group settlement of the liability for at least twelve months
determines whether it is necessary to recognise an after the reporting period
impairment loss on its investment in its associate or joint
The terms of the liability that could, at the option of the
venture. At each reporting date, the Group determines
counterparty, result in its settlement by the issue of
whether there is objective evidence that the investment in
equity instruments do not affect its classification.

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for the year ended March 31, 2023
All other liabilities are classified as non-current. Level 1- Quoted (unadjusted) market prices in active
markets for identical assets or liabilities;
Deferred tax assets and liabilities are classified as non-
current assets and liabilities. Level 2- Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
Advance tax paid is classified as non-current assets. directly or indirectly observable; and
The operating cycle is the time between the acquisition Level 3- Valuation techniques for which the lowest level
of assets for processing and their realisation in cash input that is significant to the fair value measurement is
and cash equivalents. unobservable.
d. Fair value measurement For assets and liabilities that are recognised in the
The Group measures financial instruments, such as, consolidated Ind AS financial statements on a recurring
derivatives at fair value at each balance sheet date. basis, the Group determines whether transfers
have occurred between levels in the hierarchy by re-
Fair value is the price that would be received to sell assessing categorisation (based on the lowest level
an asset or paid to transfer a liability in an orderly input that is significant to the fair value measurement
transaction between market participants at the as a whole) at the end of each reporting period.
measurement date. The fair value measurement is
based on the presumption that the transaction to sell For the purpose of fair value disclosures, the Group has
the asset or transfer the liability takes place either: determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset
a) In the principal market for the asset or liability, or or liability and the level of the fair value hierarchy as
explained above.
b) In the absence of a principal market, in the most
advantageous market for the asset or liability This note summarises accounting policy for fair value.
Other fair value related disclosures are given in the
The principal or the most advantageous market must
relevant notes.
be accessible by the Group.
• Disclosures for valuation methods, significant
The fair value of an asset or a liability is measured using
estimates and assumptions
the assumptions that market participants would use
when pricing the asset or liability, assuming that market • Quantitative disclosures of fair value measurement
participants act in their economic best interest. hierarchy

A fair value measurement of a non-financial asset takes • Investment in unquoted equity shares
into account a market participant’s ability to generate
economic benefits by using the asset in its highest and • Financial instruments (including those carried at
best use or by selling it to another market participant amortised cost)
that would use the asset in its highest and best use.
e. Revenue Recognition
The Group uses valuation techniques that are appropriate
Revenue from contracts with customers is recognised
in the circumstances and for which sufficient data are
when control of the goods or services are transferred
available to measure fair value, maximising the use of
to the customer at an amount that reflects the
relevant observable inputs and minimising the use of
consideration to which the Group expects to be entitled
unobservable inputs.
in exchange for those goods or services. The Group has
All assets and liabilities for which fair value is generally concluded that it is the principal in its revenue
measured or disclosed in the consolidated Ind AS arrangements because it typically controls the goods or
financial statements are categorised within the fair services before transferring them to the customer.
value hierarchy, described as follows, based on the
The specific recognition criteria described below must
lowest level input that is significant to the fair value
also be met before revenue is recognised.
measurement as a whole:

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for the year ended March 31, 2023
Sale of products and services for these projects. Revenues generated by time and
material contracts is recognised as the services are
Revenue from sale of products is recognised at the point performed.
in time when control of the asset is transferred to the
customer, generally on delivery of the products. Revenue Scrip Sales
from sale of services is recognized as the service is
performed and there are no unfulfilled obligations. Export entitlements in the form of Merchandise Export
from India (MEIS) are recognized in the consolidated Ind
The Group considers whether there are other promises in AS statement of profit and loss when the right to receive
the contract that are separate performance obligations credit as per the terms of the scheme is established
to which a portion of the transaction price needs to be in respect of exports made and when there is no
allocated if any. In determining the transaction price significant uncertainty regarding the ultimate collection
for the sale of goods, the Group considers the effects of the relevant export proceeds.
of variable consideration, the existence of significant
financing components, noncash consideration, and Management fees income
consideration payable to the customer (if any).
Income from management fees is recognised as per
Revenue towards satisfaction of a performance the terms of the agreement on the basis of services
obligation is measured at the amount of transaction rendered.
price (net of variable consideration) allocated to that
Interest income
performance obligation. The transaction price of
goods sold and services rendered is net of variable For all financial instruments measured either
consideration on account of various discounts and at amortised cost or at fair value through other
schemes offered by the Group as part of the contract. comprehensive income, interest income is recorded
This variable consideration is estimated based on the using the effective interest rate (EIR). EIR is the rate that
expected value of outflow. Revenue (net of variable exactly discounts the estimated future cash payments
consideration) is recognized only to the extent that it or receipts over the expected life of the financial
is highly probable that the amount will not be subject instrument or a shorter period, where appropriate, to
to significant reversal when uncertainty relating to its the gross carrying amount of the financial asset or to the
recognition is resolved. amortised cost of a financial liability. When calculating
the effective interest rate, the Group estimates the
Fixed price contracts
expected cash flows by considering all the contractual
These contracts which have a performance obligation terms of the financial instrument but does not consider
either provide for the fixed price for the entire project the expected credit losses. Interest income is included
or a price defined in a framework agreement for each in finance income in the statement of profit and loss.
type of service ordered by the customer as the project
Rental income
is performed. Revenues from fixed price contracts
is recognised based on the stage of completion and Rental income from lease of premises under operating
the expected profit on completion. Depending on the lease is recognized in the income statement on a
contracts, the degrees of progress is determined straight line basis over the term of the lease.
according to the input method (notably according to the
costs borne by the project and hours spent) or the output Commission income
method (notably according to the deliverables made).
Commission income is recognised at the time when
In the event of an unexpected excess of total contract
services are rendered in accordance with the rates as
costs over total contract revenues, the expected losses
per the agreements entered into with the parties.
on completion are provisioned.
Contract balances
Time and material contracts
Contract assets
These contracts, which are subject to best efforts
clause, have a variable price determined according to A contract asset is the right to consideration in exchange
the time spent and the seniority of the staff employed for goods or services transferred to the customer (which

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for the year ended March 31, 2023
consist of unbilled revenue). If the Company performs Current income tax assets and liabilities are measured
by transferring goods or services to a customer before at the amount expected to be recovered from or paid to
the customer pays consideration or before payment the taxation authorities. The Group’s liability for current
is due, a contract asset is recognised for the earned tax is calculated using the tax rates and tax laws that
consideration that is conditional. Contract assets are have been enacted or substantively enacted by the end
transferred to receivables when the rights become of the reporting period.
unconditional and contract liabilities are recognized as
and when the performance obligation is satisfied. Current income tax relating to items recognised
outside profit or loss is recognised outside profit or loss
Contract assets are subject to impairment assessment. (either in other comprehensive income or in equity).
Refer to accounting policies on impairment of financial Current tax items are recognised in correlation to the
assets in section (q) Financial instruments. underlying transaction either in OCI or directly in equity.
Management periodically evaluates positions taken
Trade receivables in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
A receivable is recognised if an amount of consideration
and considers whether it is probable that a taxation
that is unconditional (i.e., only the passage of time is
authority will accept an uncertain tax treatment. The
required before payment of the consideration is due).
Company shall reflect the effect of uncertainty for each
Refer to accounting policies of financial assets in
uncertain tax treatment by using either most likely
section (q) Financial instruments.
method or expected value method, depending on which
Contract liabilities method predicts better resolution of the treatment.

A contract liability is recognised if a payment is received Deferred tax

or a payment is due (whichever is earlier) from a
Deferred tax is the tax expected to be payable or
customer before the Group transfers the related goods
recoverable on differences between the carrying values
or services. Contract liabilities are recognised as
of assets and liabilities in the consolidated Ind AS
revenue when the Group performs under the contract
financial statements and the corresponding tax bases
(i.e., transfers control of the related goods or services
used in the computation of the taxable profit and is
to the customer).
accounted for using the balance sheet liability model.
f. Government grants Deferred tax liabilities are generally recognised for all
the taxable temporary differences. In contrast, deferred
Government grants are recognised where there is tax assets are only recognised to the extent that is
reasonable assurance that the grant will be received probable that future taxable profits will be available
and all attached conditions will be complied with. When against which the temporary differences can be utilised.
the grant relates to an expense item, it is recognised as
income on a systematic basis over the periods that the Deferred tax assets are recognized for all deductible
related costs, for which it is intended to compensate, temporary differences, carry forward of unused tax
are expensed. When the grant relates to an asset, it credits and unused tax losses, to the extent that it is
is recognised as income in equal amounts over the probable that taxable profit will be available against
expected useful life of the related asset. which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax
g. Taxes on income losses can be utilized.

Current income tax The carrying amount of deferred tax assets is reviewed at
each balance sheet date and reduced to the extent that
Tax expense for the year comprises current and
it is no longer probable that sufficient taxable profit will
deferred tax. The tax currently payable is based on
be available to allow all or part of the deferred tax asset
taxable profit for the year. Taxable profit differs from
to be utilized. Unrecognised deferred tax assets are re-
net profit as reported in the statement of profit and loss
assessed at each reporting date and are recognised to
because it excludes items of income or expense that
the extent that it has become probable that future taxable
are taxable or deductible in other years and it further
profits will allow the deferred tax asset to be recovered.
excludes items that are never taxable or deductible.

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Deferred tax assets and liabilities are measured at the e) Actions required to complete the plan indicate that
tax rates that are expected to apply in the year when it is unlikely that significant changes to the plan will
the asset is realized or the liability is settled, based be made or that the plan will be withdrawn.
on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date. Non-current assets held for sale are measured at the
lower of their carrying amount and the fair value less
Deferred tax relating to items recognised outside profit costs to sell. Assets and liabilities classified as held for
or loss is recognised outside profit or loss (either in sale are presented separately in the consolidated Ind AS
other comprehensive income or in equity). Deferred tax balance sheet.
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. i. Property, plant and equipment (‘PPE’)

Deferred tax assets and deferred tax liabilities are offset On transition to Ind AS, the Group has elected to continue
if a legally enforceable right exists to set off current tax with the carrying value of all of its property, plant and
assets against current tax liabilities and the deferred equipment recognised as at March 31, 2016 measured
taxes relate to the same taxable entity and the same as per the previous GAAP and use that carrying value as
taxation authority. the deemed cost of the property, plant and equipment
as on April 1, 2016.
h. Non-current assets held for sale / disposal
Capital work in progress includes cost of property, plant
The Group classifies non-current assets as held for sale and equipment under installation / under development net
/ disposal if their carrying amounts will be recovered of accumulated impairment loss, if any, as at the balance
principally through a sale rather than through continuing sheet date. Plant and equipment are stated at cost, net of
use. Actions required to complete the sale should accumulated depreciation and accumulated impairment
indicate that it is unlikely that significant changes to losses, if any. Such cost includes the cost of replacing part
the sale will be made or that the decision to sell will be of the plant and equipment and borrowing costs for long-
withdrawn. Management must be committed to the sale term construction projects if the recognition criteria are
expected within one year from the date of classification. met. When significant parts of plant and equipment are
required to be replaced at intervals, the Group depreciates
For these purposes, sale transactions include them separately based on their specific useful lives. All
exchanges of non-current assets for other non-current other repair and maintenance costs are recognised in
assets when the exchange has commercial substance. profit or loss as incurred.
The criteria for held for sale classification is regarded
met only when the assets or disposal group is available Subsequent costs are included in the asset’s
for immediate sale in its present condition, subject only carrying amount or recognised as a separate asset,
to terms that are usual and customary for sales of such as appropriate, only when it is probable that future
assets, its sale is highly probable; and it will genuinely economic benefits associated with the item will flow to
be sold, not abandoned. The Group treats sale of the the Group and the cost of the item can be measured
asset to be highly probable when: reliably. The carrying amount of any component
accounted for as a separate assets are derecognised
a) The appropriate level of management is committed when replaced. All other repairs and maintenance are
to a plan to sell the asset, charged to profit and loss during the reporting period in
which they are incurred.
b) An active programme to locate a buyer and
complete the plan has been initiated, The Group identifies and determines cost of each
component/ part of the asset separately, if the
c) The asset is being actively marketed for sale at a
component/ part has a cost which is significant to
price that is reasonable in relation to its current fair
the total cost of the asset having useful life that is
value,
materially different from that of the remaining asset.
d) The sale is expected to qualify for recognition as These components are depreciated over their useful
a completed sale within one year from the date of lives; the remaining asset is depreciated over the life of
classification , and the principal asset.

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for the year ended March 31, 2023
For domestic entities, the depreciation on the Property, The estimated useful lives of the assets considered by
plant and equipment is calculated on a straight-line aforementioned entities is as follows:
basis using the rates arrived at, based on useful lives Years
estimated by the management, which coincides with Asset category
Minimum Maximum
the lives prescribed under Schedule II of the Companies
Plant & equipments 3 5
Act, 2013 except in case of certain Plant and equipment
Electrical installation 5 10
(including the related intellectual property), which
Furniture & fixtures 5 10
the Group, based on technical assessment made
Office equipments 3 8
by the technical expert and management estimate,
Computer 3 5
depreciates over estimated useful lives of 8 years which
Buildings 30 30
are different from the useful life prescribed in Schedule
II to the Companies Act, 2013.
j. Intangible assets
Land is carried at historical cost and is not depreciated.
Intangible assets acquired separately are measured
Leasehold improvements are depreciated over the
on initial recognition at cost. The cost of intangible
period of lease or estimated useful life, whichever is
assets acquired in a business combination is their
lower, on straight line basis.
fair value at the date of acquisition. Following initial
The management believes that these estimated useful recognition, intangible assets are carried at cost less
lives are realistic and reflect fair approximation of the any accumulated amortisation and accumulated
period over which the assets are likely to be used. impairment losses, if any. Internally generated
intangibles, excluding capitalised development costs,
The residual values, useful lives and methods of are not capitalised and the related expenditure is
depreciation of property, plant and equipment are reflected in profit or loss in the period in which the
reviewed at each financial year end and adjusted expenditure is incurred.
prospectively, if appropriate.
The useful lives of intangible assets are assessed as
An item of property, plant and equipment and any either finite or indefinite.
significant part initially recognised is derecognised
upon disposal or when no future economic benefits Intangible assets with finite lives are amortised over
are expected from its use or disposal. Any gain or the useful economic life and assessed for impairment
loss arising on derecognition of the asset (calculated whenever there is an indication that the intangible
as the difference between the net disposal proceeds asset may be impaired. The amortisation period and
and the carrying amount of the asset) is included in the amortisation method for an intangible asset with
the statement of profit and loss when the asset is a finite useful life are reviewed at least at the end of
derecognised. each reporting period with the affect of any change in
the estimate being accounted for on a prospective basis.
Machinery spares are depreciated on a systematic basis Changes in the expected useful life or the expected
over the period of the remaining useful life of the fixed pattern of consumption of future economic benefits
assets for which they are utilised. embodied in the asset are considered to modify the
amortisation period or method, as appropriate, and
For overseas subsidiaries and associate, the Group are treated as changes in accounting estimates. The
provides depreciation based on estimated useful lives amortisation expense on intangible assets with finite
of the property, plant and equipment as determined by lives is recognised in the statement of profit and loss
the management of such subsidiaries and associate. unless such expenditure forms part of carrying value of
In view of different sets of environment in which such another asset.
foreign subsidiaries and associate operate in their
respective countries, depreciation is provided based on Intangible assets with indefinite useful lives are not
local laws and management estimates. These entities amortised, but are tested for impairment annually,
follow straight line method of depreciation spread over either individually or at the cash-generating unit level.
the useful life of each individual asset. The assessment of indefinite life is reviewed annually

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for the year ended March 31, 2023
to determine whether the indefinite life continues to whether a contract is, or contains, a lease. That is, if
be supportable. If not, the change in useful life from the contract conveys the right to control the use of an
indefinite to finite is made on a prospective basis. identified asset for a period of time in exchange for
consideration.
An intangible asset is derecognised upon disposal (i.e.,
at the date the recipient obtains control) or when no Group as a lessee
future economic benefits are expected from its use or
disposal. Any gain or loss arising upon derecognition of The Group applies a single recognition and measurement
the asset (calculated as the difference between the net approach for all leases, except for short-term leases
disposal proceeds and the carrying amount of the asset) and leases of low-value assets. The Group recognises
is included in the statement of profit and loss when the lease liabilities to make lease payments and right-of-
asset is derecognised. use assets representing the right to use the underlying
assets.
A summary of the policies applied to the Group’s
intangible assets is, as follows: i) Right-of-use assets:

Internally The Group recognises right-of-use assets at the

Intangible Useful Amortisation commencement date of the lease (i.e., the date the
generated
assets lives method used underlying asset is available for use). Right-of-use
or acquired
assets are measured at cost, less any accumulated
Goodwill Indefinite No Acquired
depreciation and impairment losses, and adjusted
(including amortisation
for any remeasurement of lease liabilities. The
goodwill
cost of right-of-use assets includes the amount
arising on
of lease liabilities recognised, initial direct costs
consolidation)
incurred, and lease payments made at or before
Customer Definite Straight-line Acquired
the commencement date less any lease incentives
relationship (8 years) basis
received. Right-of-use assets are depreciated on
Computer Definite Straight-line Acquired
a straight-line basis over the shorter of the lease
software (5 years) basis
term and the estimated useful lives of the assets.
Intellectual Definite Straight-line Acquired
property (8 years) basis If ownership of the leased asset transfers to
rights the Group at the end of the lease term or the
cost reflects the exercise of a purchase option,
k. Borrowing cost
depreciation is calculated using the estimated
Borrowing costs directly attributable to the acquisition, useful life of the asset.
construction or production of an asset that necessarily
The right-of-use assets are also subject to
takes a substantial period of time to get ready for its
impairment. Refer to the accounting policies in
intended use or sale are capitalised as part of the cost of
section (n) Impairment of non-financial assets.
the asset until such time as the assets are substantially
ready for the intended use or sale. All other borrowing ii) Lease Liabilities
costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs At the commencement date of the lease, the
that an entity incurs in connection with the borrowing Group recognises lease liabilities measured at the
of funds. Borrowing cost also includes exchange present value of lease payments to be made over
differences to the extent regarded as an adjustment to the lease term. The lease payments include fixed
the borrowing costs. payments (including in substance fixed payments)
less any lease incentives receivable, variable lease
l. Leases payments that depend on an index or a rate, and
amounts expected to be paid under residual value
The Group has lease contracts for office spaces various
guarantees. The lease payments also include the
items of plant and machinery, computers and other
exercise price of a purchase option reasonably
equipments. The Group assesses at contract inception
certain to be exercised by the Group and payments

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for the year ended March 31, 2023
of penalties for terminating the lease, if the lease m. Inventories
term reflects the Group exercising the option to
terminate. Variable lease payments that do not Inventories are valued at lower of cost and net realisable
depend on an index or a rate are recognised as value. However, materials and other items held for use
expenses (unless they are incurred to produce in the production of inventories are not written down
inventories) in the period in which the event or below cost if the finished products in which they will be
condition that triggers the payment occurs. incorporated are expected to be sold at or above cost.

In calculating the present value of lease payments, Costs incurred in bringing each product to its present
the Group uses its incremental borrowing rate location and condition are accounted for as follows:
at the lease commencement date because the
a) Raw materials and stores and spares: cost
interest rate implicit in the lease is not readily
includes cost of purchase and other costs incurred
determinable. After the commencement date, the
in bringing the inventories to their present location
amount of lease liabilities is increased to reflect
and condition.
the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount b) Finished goods and work in progress: cost includes
of lease liabilities is remeasured if there is a cost of direct materials and labour and a proportion
modification, a change in the lease term, a change of manufacturing overheads based on the normal
in the lease payments (e.g., changes to future operating capacity, but excluding borrowing costs.
payments resulting from a change in an index or
rate used to determine such lease payments) or a Cost of raw materials, stores and spares work-in-
change in the assessment of an option to purchase progress and finished goods is determined on a
the underlying asset. weighted average basis.

iii) Short-term leases and leases of low-value assets Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs of
The Group applies the short-term lease recognition completion and the estimated costs necessary to make
exemption to its short-term leases of machinery the sale.
and equipment (i.e., those leases that have a lease
term of 12 months or less from the commencement n. Impairment of non-financial assets
date and do not contain a purchase option). It also
As at the end of each accounting year, the Group
applies the lease of low-value assets recognition
reviews the carrying amounts of its PPE, intangible
exemption to leases of office equipment that are
assets, including goodwill and investments in associate
considered to be low value. Lease payments on
to determine whether there is any indication that
short-term leases and leases of low-value assets
those assets have suffered an impairment loss. If
are recognised as expense on a straight-line basis
such indication exists, the said assets are tested for
over the lease term.
impairment so as to determine the impairment loss, if
Group as a lessor any. Goodwill and the intangible assets with indefinite
life are tested for impairment each year.
Leases in which the Group does not transfer
substantially all the risks and rewards incidental to Impairment loss is recognised when the carrying
ownership of an asset is classified as operating leases. amount of an asset exceeds its recoverable amount.
Rental income arising is accounted for on a straight-line Recoverable amount is determined:
basis over the lease terms. Initial direct costs incurred
i) in the case of an individual asset, at the higher of
in negotiating and arranging an operating lease are
the fair value less costs of disposal and the value in
added to the carrying amount of the leased asset and
use; and
recognised over the lease term on the same basis as
rental income. Contingent rents are recognised as ii) in the case of a cash generating unit (a group of
revenue in the period in which they are earned. assets that generates identified, independent cash

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for the year ended March 31, 2023
flows), at the higher of the cash generating unit’s net Impairment losses of continuing operations, including
fair value less costs of disposal and the value in use. impairment on inventories, are recognised in the
statement of profit and loss.
(The amount of value in use is determined as the
present value of estimated future cash flows from the When an impairment loss subsequently reverses, the
continuing use of an asset and from its disposal at the carrying amount of the asset (or cash generating unit)
end of its useful life. For this purpose, the discount rate is increased to the revised estimate of its recoverable
(pre-tax) is determined based on the weighted average amount, but so that the increased carrying amount
cost of capital of the company suitably adjusted for risks does not exceed the carrying amount that would have
specified to the estimated cash flows of the asset). been determined had no impairment loss is recognised
for the asset (or cash generating unit) in prior years.
For this purpose, a cash generating unit is ascertained A reversal of an impairment loss is recognised
as the smallest identifiable group of assets that immediately in the consolidated Ind AS statement of
generates cash inflows that are largely independent of profit and loss.
the cash inflows from other assets or groups of assets.
o. Provisions and contingent liabilities
If recoverable amount of an asset (or cash generating
unit) is estimated to be less than its carrying amount, General
such deficit is recognised immediately in the Statement
of Profit and Loss as impairment loss and the carrying Provisions are recognised when the Group has a
amount of the asset (or cash generating unit) is reduced to present obligation (legal or constructive) as a result of
its recoverable amount. For this purpose, the impairment a past event, it is probable that an outflow of resources
loss recognised in respect of a cash generating unit is embodying economic benefits will be required to settle
allocated first to reduce the carrying amount of any the obligation and a reliable estimate can be made of
goodwill allocated to such cash generating unit and then the amount of the obligation. When the Group expects
to reduce the carrying amount of the other assets of the some or all of a provision to be reimbursed, for example,
cash generating unit on a pro-rata basis. under an insurance contract, the reimbursement is
recognised as a separate asset, but only when the
In assessing value in use, the estimated future cash reimbursement is virtually certain. The expense relating
flows are discounted to their present value using a to a provision is presented in the consolidated Ind AS
pre-tax discount rate that reflects current market statement of profit and loss net of any reimbursement.
assessments of the time value of money and the risks
specific to the asset. In determining fair value less costs If the effect of the time value of money is material,
of disposal, recent market transactions are taken into provisions are discounted using a current pre-tax rate
account. If no such transactions can be identified, an that reflects, when appropriate, the risks specific to the
appropriate valuation model is used. These calculations liability. When discounting is used, the increase in the
are corroborated by valuation multiples, quoted share provision due to the passage of time is recognised as a
prices for publicly traded companies or other available finance cost.
fair value indicators.
If the Group has a contract that is onerous, the present
The Group bases its impairment calculation on detailed obligation under the contract is recognised and
budgets and forecast calculations, which are prepared measured as a provision. However, before a separate
separately for each of the Group’s CGUs to which the provision for an onerous contract is established,
individual assets are allocated. To estimate cash flow the Group recognises any impairment loss that has
projections beyond periods covered by the most recent occurred on assets dedicated to that contract.
budgets/forecasts, the Group extrapolates cash flow
An onerous contract is a contract under which the
projections in the budget using a steady or declining
unavoidable costs (i.e., the costs that the Group cannot
growth rate for subsequent years, unless an increasing
avoid because it has the contract) of meeting the
rate can be justified. In any case, this growth rate does
obligations under the contract exceed the economic
not exceed the long-term average growth rate for the
benefits expected to be received under it. The
products, industries, or country in which the Group
unavoidable costs under a contract reflect the least net
operates, or for the market in which the asset is used.
cost of exiting from the contract, which is the lower of

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for the year ended March 31, 2023
the cost of fulfilling it and any compensation or penalties If the contribution already paid exceeds the contribution
arising from failure to fulfil it. The cost of fulfilling a due for services received before the balance sheet date,
contract comprises the costs that relate directly to the then excess is recognized as an asset to the extent that
contract (i.e., both incremental costs and an allocation the pre-payment will lead to, for example, a reduction in
of costs directly related to contract activities). future payment or a cash refund.

A contingent liability is a possible obligation that arises Accumulated leave, which is expected to be utilized
from past events whose existence will be confirmed within the next twelve months, is treated as short-term
by the occurrence or non-occurrence of one or more employee benefit. The Group measures the expected
uncertain future events beyond the control of the Group cost of such absences as the additional amount that
or a present obligation that is not recognized because it expects to pay as a result of the unused entitlement
it is not probable that an outflow of resources will be that has accumulated at the reporting date. The Group
required to settle the obligation. A contingent liability recognizes expected cost of short-term employee
also arises in extremely rare cases where there is a benefit as an expense, when an employee renders the
liability that cannot be recognized because it cannot related service.
be measured reliably. The Group does not recognize
a contingent liability but discloses its existence in the The Group treats accumulated leave expected to be
consolidated Ind AS financial statements. carried forward beyond twelve months, as long-term
employee benefit for measurement purposes. Such
Provisions and contingent liability are reviewed at each long-term compensated absences are provided for
balance sheet. based on the actuarial valuation using the projected
unit credit method at the reporting date. Actuarial
Decommissioning liability gains/losses are immediately taken to the statement of
profit and loss and are not deferred. The obligations are
Decommissioning costs are provided at the present
presented as current liabilities in the balance sheet if
value of expected costs to settle the obligation using
the entity does not have an unconditional right to defer
estimated cash flows and are recognised as part of
the settlement for at least twelve months after the
the cost of the particular asset. The cash flows are
reporting date.
discounted at a current pre-tax rate that reflects the
risks specific to the decommissioning liability. The The Group presents the leave as a current liability in the
unwinding of the discount is expensed as incurred and consolidated Ind AS balance sheet, to the extent it does
recognised in the consolidated Ind AS statement of profit not have an unconditional right to defer its settlement
and loss as a finance cost. The estimated future costs for twelve months after the reporting date.
of decommissioning are reviewed annually and adjusted
as appropriate. Changes in the estimated future costs The cost of providing benefits under the defined benefit
or in the discount rate applied are added to or deducted plan is determined using the projected unit credit
from the cost of the asset. method using actuarial valuation to be carried out at
each balance sheet date
p. Retirement and other employee benefits
Re-measurements, comprising of actuarial gains
Retirement benefit in the form of provident fund and and losses, the effect of the asset ceiling, excluding
pension fund are defined contribution scheme. The amounts included in net interest on the net defined
Group has no obligation, other than the contribution benefit liability and the return on plan assets (excluding
payable. The Group recognizes contribution payable to amounts included in net interest on the net defined
provident fund and pension fund as expenditure, when an benefit liability), are recognised immediately in the
employee renders the related service. If the contribution consolidated Ind AS balance sheet with a corresponding
payable to the scheme for service received before the debit or credit to retained earnings through OCI in the
balance sheet date exceeds the contribution already period in which they occur. Re-measurements are not
paid, the deficit payable to the scheme is recognized as reclassified to profit or loss in subsequent periods.
a liability after deducting the contribution already paid.

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for the year ended March 31, 2023
Past service costs are recognised in profit or loss on the not contain a significant financing component or for
earlier of: which the Group has applied the practical expedient
are measured at the transaction price as disclosed in
a) The date of the plan amendment or curtailment, and section 2.3.(e) Revenue recognition.
b) The date that the Company recognises related In order for a financial asset to be classified and
restructuring costs measured at amortised cost, it needs to give rise to
cash flows that are ‘solely payments of principal and
Net interest is calculated by applying the discount rate
interest (SPPI)’ on the principal amount outstanding.
to the net defined benefit liability or asset. The Group
This assessment is referred to as the SPPI test and is
recognises the following changes in the net defined
performed at an instrument level. Financial assets with
benefit obligation as an expense in the consolidated Ind
cash flows that are not SPPI are classified and measured
AS statement of profit and loss:
at fair value through profit or loss, irrespective of the
a) Service costs comprising current service business model.
costs, past-service costs, gains and losses on
Investment in equity instruments issued by associate is
curtailments and non-routine settlements; and
measured at cost less impairment.
b) Net interest expense or income.
Effective interest method
q. Financial instruments
The effective interest method is a method of calculating
Financial assets and financial liabilities are recognised the amortised cost of a financial instrument and of
when the Group becomes a party to the contract allocating interest income or expense over the relevant
embodying the related financial instruments. All period. The effective interest rate is the rate that exactly
financial assets, financial liabilities and financial discounts future cash receipts or payments through
guarantee contracts are initially measured at the expected life of the financial instrument, or where
transaction cost and where such values are different appropriate, a shorter period.
from the fair value, at fair value. Transaction costs
(i) Financial assets
that are directly attributable to the acquisition or issue
of financial assets and financial liabilities (other than Financial assets at amortised cost
financial assets and financial liabilities at fair value
through profit and loss) are added to or deducted Financial assets are subsequently measured at
from the fair value measured on initial recognition of amortised cost if these financial assets are held
financial asset or financial liability. Transaction costs within a business model whose objective is to hold
directly attributable to the acquisition of financial assets these assets in order to collect contractual cash
and financial liabilities at fair value through profit and flows and the contractual terms of the financial
loss are immediately recognised in the consolidated Ind asset give rise on specified dates to cash flows that
AS statement of profit and loss. are solely payments of principal and interest on the
principal amount outstanding.
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost and fair value Financial assets measured at fair value
through profit or loss. The classification of financial
assets at initial recognition depends on the financial Financial assets are measured at fair value through
asset’s contractual cash flow characteristics and the other comprehensive income if these financial
Group’s business model for managing them. With the assets are held within a business model whose
exception of trade receivables that do not contain a objective is to hold these assets in order to collect
significant financing component or for which the Group contractual cash flows and to sell these financial
has applied the practical expedient, the Group initially assets and the contractual terms of the financial
measures a financial asset at its fair value plus, in the asset give rise on specified dates to cash flows that
case of a financial asset not at fair value through profit are solely payments of principal and interest on the
or loss, transaction costs. Trade receivables that do principal amount outstanding.

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for the year ended March 31, 2023
Financial asset not measured at amortised cost or at fair at the date of de-recognition and the consideration
value through other comprehensive income is carried at received is recognised in consolidated Ind AS statement
fair value through the statement of profit and loss. of profit or loss.

For financial assets maturing within one year from the (ii) Financial liabilities and equity instruments
balance sheet date, the carrying amounts approximate
fair value due to the short maturity of these instruments. Classification as debt or equity

Impairment of financial assets excluding investment Financial liabilities and equity instruments issued by
in associates the Group are classified according to the substance
of the contractual arrangements entered into and the
Loss allowance for expected credit losses is recognised definitions of a financial liability and an equity instrument.
for financial assets measured at amortised cost and fair
value through the statement of profit and loss. Equity Instruments

The Group recognises impairment loss on trade An equity instrument is any contract that evidences a
receivables using expected credit loss model, which residual interest in the assets of the Group after deducting
involves use of provision matrix constructed on the all of its liabilities. Equity instruments are recorded at the
basis of historical credit loss experience as permitted proceeds received, net of direct issue costs.
under Ind AS 109 – Financial Instruments.
Financial Liabilities
For financial assets whose credit risk has not significantly
Financial liabilities are initially measured at fair value,
increased since initial recognition, loss allowance equal
net of transaction costs, and are subsequently measured
to twelve months expected credit losses is recognised.
at amortised cost, using the effective interest rate
Loss allowance equal to the lifetime expected credit
method where the time value of money is significant.
losses is recognised if the credit risk on the financial
Interest bearing bank loans, overdrafts and issued debt
instruments has significantly increased since initial
are initially measured at fair value and are subsequently
recognition.
measured at amortised cost using the effective interest
For financial assets maturing within one year from the rate method. Any difference between the proceeds (net
balance sheet date, the carrying amounts approximates of transaction costs) and the settlement or redemption of
fair value due to the short maturity of these instruments. borrowings is recognised over the term of the borrowings
in the consolidated Ind AS statement of profit and loss.
De-recognition of financial assets
For trade and other payables maturing within one year
The Group de-recognises a financial asset only when the from the balance sheet date, the carrying amounts
contractual rights to the cash flows from the financial approximate fair value due to the short maturity of
asset expire, or it transfers the financial asset and the these instruments.
transfer qualifies for de-recognition under Ind AS 109.
a) Financial guarantee contracts
If the Group neither transfers nor retains substantially
all the risks and rewards of ownership and continues to Financial guarantee contracts issued by the Group
control the transferred asset, the Group recognises its are those contracts that require a payment to be
retained interest in the assets and an associated liability made to reimburse the holder for a loss it incurs
for amounts it may have to pay. because the specified debtor fails to make a
payment when due in accordance with the terms of
If the Group retains substantially all the risks and a debt instrument. Financial guarantee contracts
rewards of ownership of a transferred financial asset, are recognised initially as a liability at fair value,
the Group continues to recognise the financial asset adjusted for transaction costs that are directly
and also recognises a collateralised borrowing for the attributable to the issuance of the guarantee.
proceeds received. Subsequently, the liability is measured at the higher
of the amount of loss allowance determined as per
On de-recognition of a financial asset in its entirety, impairment requirements of Ind AS 109 and the
the difference between the carrying amount measured amount recognised less cumulative amortisation.

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for the year ended March 31, 2023
b) De-recognition r. Derivative financial instruments

A financial liability is derecognised when the The Group uses derivative financial instruments, such
obligation under the liability is discharged or as interest rate swaps to hedge its interest fluctuation
cancelled or expires. When an existing financial risks, etc. Such derivative financial instruments are
liability is replaced by another from the same lender initially recognised at fair value on the date on which a
on substantially different terms, or the terms of derivative contract is entered into and are subsequently
an existing liability are substantially modified, re-measured at fair value through consolidated Ind AS
such an exchange or modification is treated as statement of profit and loss. Derivatives are carried as
the de-recognition of the original liability and the financial assets when the fair value is positive and as
recognition of a new liability. The difference in the financial liabilities when the fair value is negative. Refer
respective carrying amounts is recognised in the to Note 53 for more details.
consolidated Ind AS statement of profit and loss.
Any gains or losses arising from changes in the fair
Put Option Liability value of derivatives are taken directly to profit or loss,
except for the effective portion of cash flow hedges,
The potential cash payments related to put options which is recognised in OCI and later reclassified to
issued by the Group over the equity of subsidiary profit or loss when the hedge item affects profit or loss
companies to non-controlling interests are accounted or treated as basis adjustment if a hedged forecast
for as financial liabilities when such options may only transaction subsequently results in the recognition of a
be settled other than by exchange of a fixed amount of non-financial asset or non-financial liability.
cash or another financial asset for a fixed number of
shares in the subsidiary. The financial liability for such s. Cash and cash equivalents
put option is accounted for under IND AS 109.
Cash and cash equivalent in the consolidated Ind AS
The amount that may become payable under the option balance sheet comprise cash at banks and on hand and
on exercise is initially recognised at fair value under other short-term deposits with an original maturity of three
financial liabilities with a corresponding charge directly months or less, that are readily convertible to a known
to equity. All subsequent changes in the carrying amount amount of cash and which are subject to an insignificant
of the financial liability are recognised in other equity risk of changes in value.
attributable to the parent. The entity recognises both the
non-controlling interest and the financial liability under For the purpose of the statement of cash flows, cash
the NCI put. It continues to measure non-controlling and cash equivalents consist of cash and short-term
interests at proportionate share of net assets. deposits, as defined above, as they are considered an
integral part of the Group’s cash management.
If the put option is exercised, the entity accounts for an
increase in its ownership interest. At the same time, the t. Share-based payments
entity derecognises the financial liability and recognises
Certain employees of the Group are entitled to share-
an offsetting credit in the same component of equity
based payments, whereby employees render services
reduced on initial recognition. In the event that the
as consideration for equity instruments (equity-settled
option expires unexercised, the liability is derecognised
transactions).
with a corresponding adjustment to equity.
Equity-settled transactions
Off-setting of financial instruments
The cost of equity-settled transactions is determined by
Financial assets and financial liabilities are offset and
the fair value at the date when the grant is made using
the net amount is reported in the consolidated Ind AS
an appropriate valuation model.
balance sheet if there is a currently enforceable legal
right to offset the recognised amounts and there is an That cost is recognised, together with a corresponding
intention to settle on a net basis, to realise the assets increase in share-based payment (SBP) reserves in
and settle the liabilities simultaneously. equity, over the period in which the performance and/

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for the year ended March 31, 2023
or service conditions are fulfilled in employee benefits currency spot rates at the date the transaction first
expense. The cumulative expense recognised for qualifies for recognition. However, for practical
equity-settled transactions at each reporting date until reasons, the Group uses an average rate if the average
the vesting date reflects the extent to which the vesting approximates the actual rate at the date of the
period has expired and the Group’s best estimate of the transaction.
number of equity instruments that will ultimately vest.
The expense or credit in statement of profit and loss Monetary assets and liabilities denominated in foreign
for a period represents the movement in cumulative currencies are translated at the functional currency
expense recognised as at the beginning and end of that spot rates of exchange at the reporting date.
period and is recognised in employee benefits expense.
Exchange differences arising on settlement or
Service and non-market performance conditions are translation of monetary items are recognised in profit
not taken into account when determining the grant or loss with the exception of the following:
date fair value of awards, but the likelihood of the
• Exchange differences arising on monetary
conditions being met is assessed as part of the Group’s
items that forms part of a reporting entity’s net
best estimate of the number of equity instruments that
investment in a foreign operation are recognised in
will ultimately vest. Market performance conditions are
profit or loss in the separate financial statements
reflected within the grant date fair value. No expense
of the reporting entity or the individual financial
is recognised for awards that do not ultimately vest
statements of the foreign operation, as appropriate.
because non-market performance and/or service
In the financial statements that include the
conditions have not been met.
foreign operation and the reporting entity (e.g.,
The dilutive effect of outstanding options is reflected as consolidated Ind AS financial statements when the
additional share dilution in the computation of diluted foreign operation is a subsidiary), such exchange
earnings per share. differences are recognised initially in OCI. These
exchange differences are reclassified from equity
u. Cash dividend
to profit or loss on disposal of the net investment.
The Company recognises a liability to pay dividend to
• Exchange differences arising on monetary items
equity holders of the parent when the distribution
that are designated as part of the hedge of the
is authorised, and the distribution is no longer at the
Group’s net investment of a foreign operation. These
discretion of the Company. As per the corporate laws
are recognised in OCI until the net investment is
in India, a distribution is authorised when it is approved
disposed of, at which time, the cumulative amount
by the shareholders. A corresponding amount is
is reclassified to profit or loss.
recognised directly in equity.
• Tax charges and credits attributable to exchange
v. Foreign currencies
differences on those monetary items are also
The Group’s consolidated Ind AS financial statements recorded in OCI.
are presented in INR, which is also the holding
company’s functional currency. For each entity the Non-monetary items that are measured in terms of
Group determines the functional currency and items historical cost in a foreign currency are translated using
included in the financial statements of each entity are the exchange rates at the dates of the initial transactions.
measured using that functional currency. The Group Non-monetary items measured at fair value in a foreign
uses the direct method of consolidation and on disposal currency are translated using the exchange rates at the
of a foreign operation the gain or loss that is reclassified date when the fair value is determined. The gain or loss
to profit or loss reflects the amount that arises from arising on translation of non-monetary items measured
using this method. at fair value is treated in line with the recognition of the
gain or loss on the change in fair value of the item (i.e.,
Transactions and balances: translation differences on items whose fair value gain
or loss is recognised in OCI or profit or loss are also
Transactions in foreign currencies are initially recorded
recognised in OCI or profit or loss, respectively).
by the Group’s entities at their respective functional

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for the year ended March 31, 2023
Group companies: Following the initial recognition of the development
expenditure as an asset. The cost model is applied
On consolidation, the assets and liabilities of foreign requiring the asset to be carried at cost less any
operations are translated into INR at the rate of accumulated amortization and accumulated impairment
exchange prevailing at the reporting date and their losses. Amortization of the asset begins when
statements of profit or loss are translated at exchange development is complete and the asset is available
rates prevailing at the dates of the transactions. For for use. It is amortized on a straight line basis over
practical reasons, the Group uses an average rate to the period of expected future benefit from the related
translate income and expense items, if the average project. Amortization is recognized in the consolidated
rate approximates the exchange rates at the dates of Ind AS statement of profit and loss. During the period of
the transactions. The exchange differences arising on development, the asset is tested for impairment annually.
translation for consolidation are recognised in OCI.
On disposal of a foreign operation, the component x. Corporate social responsibility (‘CSR’) expenditure
of OCI relating to that particular foreign operation is
recognised in the consolidated Ind AS statement of The Group charges its CSR expenditure during the year
profit or loss. to the consolidated Ind AS statement of profit and loss.

Any goodwill arising in the acquisition/ business y. Earnings per share

combination of a foreign operation and any fair value
Basic earnings per share is calculated by dividing the
adjustments to the carrying amounts of assets and
net profit or loss attributable to equity holder of the
liabilities arising on the acquisition are treated as assets
parent by the weighted average number of equity shares
and liabilities of the foreign operation and translated at
outstanding during the period. Partly paid equity shares
the spot rate of exchange at the reporting date.
are treated as a fraction of an equity share to the extent
Gain or loss on a subsequent disposal of any foreign that they are entitled to participate in dividends relative
operation excludes translation differences that arose to a fully paid equity share during the reporting period.
before the date of transition but includes only translation
For the purpose of calculating diluted earnings per
differences arising after the transition date.
share, the net profit or loss for the period attributable
w. Research and development expenditure to equity shareholders of the parent company and the
weighted average number of shares outstanding during
Research costs are expensed as incurred. Development the period are adjusted for the effects of all dilutive
expenditure incurred on an individual project is potential equity shares.
recognized as an intangible asset when the Group can
demonstrate all the following:
2.4 Standard notified but not yet effective
i. The technical feasibility of completing the intangible
The Ministry of Corporate Affairs has notified Companies
asset so that it will be available for use or sale
(Indian Accounting Standards) Amendment Rules, 2023
ii. Its intention to complete the asset dated March 31, 2023 to amend the following Ind AS which
are effective from April 01, 2023.
iii. Its ability to use or sell the asset
i) Definition of Accounting Estimates - Amendments to
iv. How the asset will generate future economic Ind AS 8
benefits
The amendments clarify the distinction between
v. The availability of adequate resources to complete changes in accounting estimates and changes in
the development and to use or sell the asset accounting policies and the correction of errors. It
has also been clarified how entities use measurement
vi. The ability to measure reliably the expenditure techniques and inputs to develop accounting estimates.
attributable to the intangible asset during
development. The amendments are effective for annual reporting
periods beginning on or after 1 April 2023 and apply to

203
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
changes in accounting policies and changes in accounting iii) Deferred Tax related to Assets and Liabilities arising
estimates that occur on or after the start of that period. from a Single Transaction - Amendments to Ind AS 12

The amendments are not expected to have a material The amendments narrow the scope of the initial
impact on the Group’s consolidated Ind AS financial recognition exception under Ind AS 12, so that it no
statements. longer applies to transactions that give rise to equal
taxable and deductible temporary differences.
ii) Disclosure of Accounting Policies - Amendments to
Ind AS 1 The amendments should be applied to transactions that
The amendments aim to help entities provide accounting occur on or after the beginning of the earliest comparative
policy disclosures that are more useful by replacing the period presented. In addition, at the beginning of the
requirement for entities to disclose their ‘significant’ earliest comparative period presented, a deferred tax
accounting policies with a requirement to disclose their asset (provided that sufficient taxable profit is available)
‘material’ accounting policies and adding guidance on and a deferred tax liability should also be recognised
how entities apply the concept of materiality in making for all deductible and taxable temporary differences
decisions about accounting policy disclosures. associated with leases and decommissioning obligations.
Consequential amendments have been made in Ind AS
The amendments to Ind AS 1 are applicable for annual 101. The amendments to Ind AS 12 are applicable for
periods beginning on or after 1 April 2023. Consequential annual periods beginning on or after 1 April 2023.
amendments have been made in Ind AS 107.
The amendments are not expected to have a material
The Group is currently revisiting their accounting policy impact on the Group’s consolidated Ind AS financial
information disclosures to ensure consistency with the statements.
amended requirements.

204
Notes to the consolidated Ind AS financial statements
for the year ended March 31, 2023

2.5 The entities consolidated in the consolidated Ind AS financial statements are listed below:
Percentage of Net Assets, i.e, total assets minus
Share in total comprehensive income*
effective ownership total liabilities*
Percentage of voting
interest held
rights held as at
Relationship (directly and March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Sl Country of
Name of the entity as at March indirectly) as at
No. Incorporation
31, 2023 As % As %
As a % of As a % of
March March March 31, March 31, J in J in of total J in of total J in
consolidated consolidated
31, 2023 31, 2022 2023 2022 million million comprehensive million comprehensive million
net assets net assets
income income

Parent
1 Centum Electronics India Holding 83.56% 2,826.43 85.51% 2,645.23 115.74% 199.50 -25.91% 124.14
Limited Company
Indian Subsidiaries
2 Centum T&S Private India Subsidiary 100.00% 100.00% 100.00% 100.00% 0.56% 18.94 0.01% 0.19 10.88% 18.75 -0.93% 4.46
Limited (formerly
known as Centum
Adeneo India Private
Limited) ('CTNSI')
Foreign Subsidiaries
3 Centum Electronics United Subsidiary 100.00% 100.00% 100.00% 100.00% 25.14% 850.28 21.25% 657.24 33.60% 57.91 2.61% (12.52)

205
UK Limited Kingdom
4 Centum Adetel Group France Subsidiary 77.77% 64.66% 77.77% 64.66%
SA1
5 Centum T&S (Centum France Subsidiary 77.77% 64.66% 100.00% 100.00%
Technologies ET
Solutions) (formerly
Corporate Overview

known as Centum
Adeneo SAS)1
6 Centum R&D France Subsidiary 77.77% 64.66% 100.00% 100.00%
(Centum Recherche
ET developement)
(formerly known as -9.26% (313.23) -6.77% (209.09) -60.21% (103.79) 124.22% (595.19)
Centum Adeneo CRD
SAS)1
7 Centum Adetel France Subsidiary 77.77% 64.66% 100.00% 100.00%
Transportation System
Management Reports

SAS1
8 Centum T&S (Centum Canada Subsidiary 77.77% 64.66% 100.00% 100.00%
Technologies ET
Solutions) (formerly
known as Centum
Adetel Solution)1
9 Centum E&S (Centum Canada Subsidiary 77.77% 64.66% 100.00% 100.00%
Equipments ET
Systemes) (formerly
known as Centum
Financial Statements

Adetel Equipment)1
Notes to the consolidated Ind AS financial statements
for the year ended March 31, 2023
2.5 The entities consolidated in the consolidated Ind AS financial statements are listed below: (Contd..)
Percentage of Net Assets, i.e, total assets minus
Share in total comprehensive income*
effective ownership total liabilities*
Annual Report 2022-23

Percentage of voting
interest held
rights held as at
Relationship (directly and March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Centum Electronics Limited

Sl Country of
Name of the entity as at March indirectly) as at
No. Incorporation
31, 2023 As % As %
As a % of As a % of
March March March 31, March 31, J in J in of total J in of total J in
consolidated consolidated
31, 2023 31, 2022 2023 2022 million million comprehensive million comprehensive million
net assets net assets
income income

10 Centum T&S Belgium Subsidiary 77.77% 64.66% 100.00% 100.00%

(Technologies &
Solutions) Belgium
SRL (formerly known
as Centum Adetel
Belgium)1
Foreign Associates
11 Ausar Energy SAS1 France Associate 23.68% 19.69% 30.45% 30.45%
12 HOLIWATT (formerly France - - - - -
known as Centum
Adetel Transportation

206
SAS)2
Subtotal 100.00% 3,382.42 100.00% 3,093.57 100.00% 172.37 100.00% (479.11)
Add / Less: Non (66.60) (54.48) 32.60 224.89
controlling interests in
all subsidiaries
Consolidation (1,275.25) (1,053.89) (98.37) (31.32)
adjustments/
eliminations**
Total 2,040.57 1,985.20 106.60 (285.54)

* The figures have been considered from the respective financial statements.
** Consolidation adjustments/eliminations include intercompany eliminations and consolidation adjustments.

The financial statements of subsidiaries have been drawn up to the same reporting date as of the Company, i.e. March 31, 2023. There is a quarter lag in the reporting dates
of the associates with that of the Parent Company whose management certified financial statements for the year / period ended on and as at December 31 were considered
for the purpose of consolidated Ind AS financial statements of the Group.
Notes:
1 The amounts for net assets / (liabilities) and net profit / (loss) of Centum Adetel Group SA and its subsidiaries, joint ventures and associates (refer Sl. No. 4 to 12 above)
have been presented on a consolidated basis.

2 During the year ended March 31, 2022, the Commercial Court of Lyon has announced opening of judicial recovery based on which the entire shareholding has been
transferred to Forsee Power and accordingly it has ceased to become an associate. Also refer note 5 and 38 for further details.
Notes to the consolidated Ind AS financial statements for the year ended March 31, 2023

3. Property, plant and equipment

(H in million)
Freehold Leasehold Plant and Electrical Office Furniture Leasehold
Particulars Building Computers Vehicles Total
land improvements equipments installations equipments and fixtures land
Gross block (at cost/deemed
cost)
As at April 01, 2021 5.73 15.01 537.72 943.93 207.07 55.56 67.61 57.67 16.79 114.61 2,021.70
Additions - - 3.81 71.76 18.22 4.43 1.33 0.95 22.38 - 122.88
Exchange differences - (0.02) - (0.69) 1.19 (0.67) (0.36) (0.12) - 0.02 - (0.65)
translation adjustment
Disposals - - - (4.96) - - - - - - (4.96)
As at March 31, 2022 5.71 15.01 540.84 1,011.92 224.62 59.63 68.82 58.62 39.19 114.61 2,138.97
Additions - 13.55 1.13 84.38 2.58 12.89 1.24 6.09 - - 121.86
Exchange differences - 0.09 - 2.39 7.98 7.08 1.42 1.52 - 0.02 - 20.50
translation adjustment
Disposals - - - (3.01) - - - - - - (3.01)
As at March 31, 2023 5.80 28.56 544.36 1,101.27 234.28 73.94 71.58 64.71 39.21 114.61 2,278.32
Accumulated depreciation
As at April 01, 2021 - 10.86 90.34 466.03 136.78 47.76 58.13 19.41 8.20 - 837.51

207
Charge for the year - 3.92 19.26 122.76 15.54 4.86 6.67 5.55 4.69 - 183.25
Exchange differences - - - (0.44) 0.40 (0.59) (0.05) (0.20) - 0.02 - (0.86)
translation adjustment
Disposals - - - (0.47) - - - - - - (0.47)
As at March 31, 2022 - 14.78 109.16 588.72 151.73 52.57 64.60 24.96 12.91 - 1,019.43
Corporate Overview

Charge for the year - 0.77 18.89 116.90 15.39 5.51 1.56 5.84 8.09 - 172.95
Exchange differences - - - 1.57 7.48 5.82 1.34 1.45 - 0.02 - 17.68
translation adjustment
Disposals - - - (3.01) - - - - - - (3.01)
As at March 31, 2023 - 15.55 129.62 710.09 172.94 59.42 67.61 30.80 21.02 - 1,207.05
Net block
As at March 31, 2023 5.80 13.01 414.74 391.18 61.34 14.52 3.97 33.91 18.19 114.61 1,071.27
As at March 31, 2022 5.71 0.23 431.68 423.20 72.89 7.06 4.22 33.66 26.28 114.61 1,119.54
Management Reports

Notes:

(a) Karnataka Industrial Area Development (KIADB) has allotted land to the Group on a lease cum sale basis i.e. 24,280.60 sq. mts at Plot No. 58-P Bengaluru Aerospace
Park, Industrial Area for a period of 10 years w.e.f December 18, 2013. The aggregate capitalized cost of the land at the end of the year is H 114.61 million (March 31,
2022: H 114.61 million). The agreement gives a right to the Group to acquire land at the end of the lease term at an additional consideration, if any fixed by KIADB, after
reducing the amount already paid.

(b) Property, plant and equipments and other intangible assets of the Group have been pledged / mortgaged as securities against borrowings. Refer note 19 and 23 for
Financial Statements

details of borrowings.
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
3a. Capital work-in-progress
(H in million)
Particulars Capital work-in-progress
As at April 01, 2021 20.86
Additions 102.13
Exchange differences - translation adjustment (0.02)
Capitalised during the year (122.88)
As at March 31, 2022 0.09
Additions 175.86
Exchange differences - translation adjustment -
Capitalised during the year (121.86)
As at March 31, 2023 54.09

Capital work-in-progress ageing schedule as at March 31, 2023:

(H in million)
Amount of capital work-in-progress for a period of
Particulars Less than 1 More than Total
1-2 years 2-3 years
year 3 years
Projects in progress 54.09 - - - 54.09
Projects temporarily suspended - - - - -
54.09 - - - 54.09

Capital work-in-progress ageing schedule as at March 31, 2022:

(H in million)
Amount of capital work-in-progress for a period of
Particulars Less than More than Total
1 - 2 years 2 - 3 years
1 year 3 years
Projects in progress 0.09 - - - 0.09
Projects temporarily suspended - - - - -
0.09 - - - 0.09

The Group does not have any projects temporarily suspended or any CWIP which is overdue or has exceeded its cost compared to
its original plan/ revised approved plan.

4a. Goodwill on consolidation

(H in million)
Particulars Goodwill on consolidation
At cost
As at April 01, 2021 376.23
Additions / disposals -
As at March 31, 2022 376.23
Additions / disposals -
As at March 31, 2023 376.23
Net block
As at March 31, 2023 376.23
As at March 31, 2022 376.23

Notes:

The Company has investments in Centum Electronics UK Limited, which in turn has made investment in Centum Adetel Group SA.
The Group has accounted a goodwill of H 376.23 million and has a carrying value of intangible assets (including intangible assets
under development) of H 447.66 million, as at March 31, 2023 (March 31, 2022: H 458.04 million) arising pursuant to the acquisition
of Centum Adetel Group SA.

208
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
4a. Goodwill on consolidation (Contd..)
During the year ended March 31, 2023, the Board of Directors of the Company further acquired 13.11% stake of Centum Adetel
Group SA through Centum Electronics UK Limited from other shareholders of Centum Adetel Group SA and has a stake of 77.77%
as at March 31, 2023.

Centum Adetel Group SA and its underlying subsidiaries have incurred losses. However, based on internal assessment performed
as at March 31, 2023 with regard to future operations and external valuation by an expert during the year ended March 31, 2022,
the management of the Group is of the view that the carrying value of the aforesaid Goodwill on consolidation / intangible assets
(including intangible assets under development) are appropriate. Also refer note 41.

4b. Other intangible assets

(H in million)
Acquired Computer Intellectual property rights Customer
Particulars Total
goodwill software (including R&D credits) relationships
Gross block (at cost/deemed cost)
As at April 01, 2021 36.35 249.79 1,158.23 481.92 1,926.29
Additions - 3.99 125.77 - 129.76
Exchange differences - translation - (2.50) (19.59) - (22.09)
adjustment
Disposals - - - - -
As at March 31, 2022 36.35 251.28 1,264.41 481.92 2,033.96
Additions - 6.01 - - 6.01
Exchange differences - translation - 10.01 78.09 - 88.10
adjustment
Disposals - - - - -
As at March 31, 2023 36.35 267.30 1,342.50 481.92 2,128.07
Accumulated amortisation
As at April 01, 2021 - 190.77 1,040.17 286.14 1,517.08
Charge for the year - 19.18 42.47 60.24 121.89
Exchange differences - translation - (2.61) (18.82) - (21.43)
adjustment
Disposals - - - - -
As at March 31, 2022 - 207.34 1,063.82 346.38 1,617.54
Charge for the year - 15.28 68.87 60.24 144.39
Exchange differences - translation - 10.01 69.93 - 79.94
adjustment
Disposals - - - - -
As at March 31, 2023 - 232.63 1,202.62 406.62 1,841.87
Net block
As at March 31, 2023 36.35 34.67 139.88 75.30 286.20
As at March 31, 2022 36.35 43.94 200.59 135.54 416.42

Notes:

(a) The Group had entered into a business transfer agreement with Centum Industries Private Limited, an enterprise where key
managerial personnel or their relatives exercise significant influence during the year ended March 31, 2016 for the purchase
of business on slump sale. As per the terms of agreement, the Group had purchased the net assets pertaining to plastic and
defence and space of Centum Industries Private Limited for an aggregate consideration H 57.00 million, which was arrived at
based on the business valuation done by an independent professional firm. The valuation ascribed to assets taken over by an
independent professional valuer resulted in the aforesaid goodwill.

The aforementioned goodwill is tested for impairment annually. As at March 31, 2023 and March 31, 2022 the goodwill is not
impaired.

209
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
4c. Intangible assets under development
(H in million)
Intangible assets
Particulars
under development
As at April 01, 2021 171.27
Exchange differences - translation adjustment (3.17)
Additions 81.80
Capitalised during the year (129.76)
As at March 31, 2022 120.14
Exchange differences - translation adjustment 10.42
Additions 103.01
Capitalised during the year (6.01)
As at March 31, 2023 227.56

Intangible assets under development ageing schedule as at March 31, 2023:

(H in million)
Amount of Intangible asset under development
for a period of
Particulars Total
Less than 1 More than
1-2 years 2-3 years
year 3 years
Projects in progress 101.32 48.61 44.39 33.24 227.56
Projects temporarily suspended - - - - -
101.32 48.61 44.39 33.24 227.56

Intangible assets under development ageing schedule as at March 31, 2022:

(H in million)
Amount of Intangible asset under development
for a period of
Particulars Total
Less than More than
1-2 years 2-3 years
1 year 3 years
Projects in progress 45.62 41.66 27.88 3.30 118.47
Projects temporarily suspended - - - 1.68 1.68
45.62 41.66 27.88 4.98 120.14

The Group has Intangible assets under development amounting to H 137.30 million which is overdue or has exceeded its cost
compared to its original plan/ revised approved plan.

210
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
5 Investment in Associates

(i) Details of Associates

Percentage of
Percentage of
effective ownership
voting right held
Place of interest held (directly Accounting
Name of the Entity as at Nature of Activities
Business 2 and indirectly) as at Method
March March March March
31, 2023 31, 2022 31, 2023 31, 2022
(a) Material associates:
Engaged in engineering and
HOLIWATT (formerly
manufacturing of energy Equity
known as Centum France - - - -
conversion and storage systems Method
Adetel Transportation
for rolling stock railway markets.
SAS)4,5
(b) Other associates: Engaged in the consulting,
Equity
Ausar Energy SAS1,3 France 23.68% 19.69% 30.45% 30.45% engineering, research and
Method
development in Energy sector.

Notes:

1. Aggregate amount of unquoted investment in associates H 82.47 million (March 31, 2022: H 59.15 million).

2. The country of incorporation of the above entity is same as its principal place of business.

3. There is a quarter lag in the reporting dates of the associates with that of the parent company whose management
certified financial statements for the year / period ended on and as at December 31, were considered for the purpose of
consolidated Ind AS financial statements of the Group.

4. Refer note 38

5. During the year ended March 31, 2020, the management of the Group, had entered into an agreement for sale of 65%
stake in HOLIWATT ( formerly known as Centum Adetel Transportation SAS), subsidiary of Centum Adetel Group SA.

The management of the Group had a put option to sell its remaining 35% stake at a fixed price amounting to EUR 3.96
million plus interest at the rate of 6% p.a and other receivables of EUR 0.5 million . Further the management had assessed
that they exercised significant influence / control over HOLIWATT and had accordingly treated the same as investment in
associates in the consolidated Ind AS financial statements of the Group during the year ended March 31, 2021.

During the quarter ended June 30, 2021, HOLIWATT had been placed in specific insolvency statutes, allowing HOLIWATT
to commence negotiation with other parties including its shareholders. During the year ended March 31, 2022, the
Commercial Court of Lyon announced the opening of judicial recovery process and accordingly based on the internal
assessment, the management of the Group had provided the carrying value of its investment and receivables in HOLIWATT
amounting to H 436.84 million and the same had been disclosed as exceptional item in the consolidated Ind AS financial
statements during the year ended March 31, 2022.

During the year ended March 31, 2022, the Group had accounted H 25.97 million in regard to the commission to the recruited
bankers for the sale of HOLIWATT shares and the same had been disclosed as exceptional item in the consolidated Ind AS
financial statements during the year ended March 31, 2022.

211
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
5 Investment in Associates (Contd..)
(ii) Financial information in respect of other associates
(H in million)
Particulars March 31, 2023 March 31, 2022
Aggregate carrying amount of investments in equity shares of individually - -
immaterial associates
Investment at amortised cost
Investment in 800,000 (March 31, 2022: 800,000) unquoted bonds of Euro 1 in Ausar 82.47 59.15
Energy SAS*
Total investment in other associates 82.47 59.15
Aggregate amount of group’s share of :
- Profit / (loss) for the year 12.44 (45.74)
- Other comprehensive income for the year 5.08 (0.23)
- Total comprehensive income for the year 17.52 (45.97)
*During the year ended March 31, 2023, the Group has accrued interest on bonds amounting to H 14.94 million (March 31, 2022: H 9.14 million) which has been
included in the carrying value of investment

(iii) Contingent liabilities of associates

The associate had no contingent liabilities as at March 31, 2023 and March 31, 2022. The Group has no contingent liabilities relating
to its interests in its associates.

(iv) Commitments of / towards associates

The associate had no commitments as at March 31, 2023. The Group has no commitments relating to its interests in its associates.

(v) Carrying amount of investments in associates and others

(H in million)
Particulars March 31, 2023 March 31, 2022
Material associates - -
Other associates 82.47 59.15
Total 82.47 59.15

(vi) Share in profits / (loss) of associates (net)

(H in million)
Particulars March 31, 2023 March 31, 2022
Material associates - -
Other associates 12.44 (45.74)
Total 12.44 (45.74)

212
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
6 Financial assets: Other investments
(H in million)
Particulars March 31, 2023 March 31, 2022
Unquoted equity shares
Investment carried at fair value through consolidated statement of profit or loss
Investments in equity shares of Qulsar Inc. 1 13.26 13.26
74,184 (March 31, 2022: 74,184) equity shares of USD 0.01 each, fully paid up.
Investments in other companies 0.55 0.52
Total other investments 13.81 13.78
Aggregate value of unquoted investments 13.81 13.78

1. The Group has investments in Qulsar Inc. Based on internal assessment performed with regard to future operations, the
management of the Group is of the view that the carrying value of the Group’s investment in Qulsar Inc. approximates the fair
value as on the reporting dates.

7 Other non - current financial assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Unsecured, considered good unless otherwise stated
Carried at amortised cost
Security deposits - others (refer note 42) 48.69 39.49
Subsidy receivable 79.92 98.72
Non-current bank balance (refer note 13) 192.95 240.15
321.56 378.36

8 Deferred tax
(H in million)
March 31, 2023 March 31, 2022
Particulars Deferred tax Deferred tax Deferred tax Deferred tax
asset liability asset liability
Deferred tax liability
Property, plant and equipments and Intangible assets: Impact - (27.12) - (48.82)
of difference between tax depreciation and depreciation /
amortization charged for the financial reporting
Sub - total (A) - (27.12) - (48.82)
Deferred tax liability (net) (27.12) (48.82)
Deferred tax asset
Property, plant and equipments and Intangible assets: Impact - (25.66) - (32.43)
of difference between tax depreciation and depreciation /
amortization charged for the financial reporting
Right-of-use assets - (4.33) - (3.02)
Impact of expenditure charged to the statement of profit and 30.12 - 33.52 -
loss but allowed for tax purposes on payment basis
Impact on account of provision for expected credit losses 12.79 - 10.06 -
Impact of deferred revenue 24.61 - 16.83 -
Impact on account of provision for inventory obsolescence 23.94 - - -
Others 8.21 - 6.62 -
Sub - total (B) 99.67 (29.99) 67.03 (35.45)
Deferred tax assets (net) 69.68 31.58
Total (A+B) 99.67 (57.11) 67.03 (84.27)

213
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
8 Deferred tax (Contd..)
(H in million)
March 31, 2023 March 31, 2022
Particulars Deferred tax Deferred tax Deferred tax Deferred tax
asset liability asset liability
Deferred tax assets / (Deferred tax liability) (net) 42.56 - (17.24) -
Movement for the year 59.80 - 31.18 -
Reconciliation to the consolidated Ind AS statement of profit - -
and loss
(Credit)/ expense during the year as above (59.80) - (31.18) -
Tax expense / (income) during the year recognized in OCI 1.97 - 2.63 -
(Credit) / expense during the year (61.77) - (33.81) -

9 Non-current tax assets (net)

(H in million)
Particulars March 31, 2023 March 31, 2022
Advance income tax (net of provision for current tax and including 9.59 48.89
tax paid under protest)
9.59 48.89

10 Other non-current assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Capital advances
Unsecured, considered good 10.39 -
(A) 10.39 -
Prepaid expenses 40.06 37.84
(B) 40.06 37.84
Balances with statutory / government authorities
Unsecured, considered good 4.43 4.00
(C) 4.43 4.00
Total other non-current assets (A+B+C) 54.88 41.84

11 Inventories (valued at lower of cost and net realisable value)

(H in million)
Particulars March 31, 2023 March 31, 2022
Raw materials 2,054.37 1,687.62
[Includes raw material in transit H 174.41 million (March 31, 2022: H.109.56 million)]
Work-in-progress 511.12 495.27
Finished goods 43.44 64.58
Stores and spares 1.69 0.78
Total inventories (valued at lower of cost and net realisable value) 2,610.62 2,248.25

During the year ended March 31, 2023, H 98.32 million (March 31, 2022: H 7.82 million) was recognised as an expense in regard to
provision for inventory obsolescence.

214
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
12 Trade receivables
(H in million)
Non- current Current
Particulars
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Carried at amortised cost
Receivables from related parties (refer note 42) - - 74.74 101.95
Other trade receivables 286.83 269.12 3,753.70 2,397.07
Total trade receivables 286.83 269.12 3,828.44 2,499.02

Break-up for security details:

(H in million)
Non- current Current
Particulars
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Trade receivables:
Unsecured, considered good 286.83 269.12 3,805.36 2,492.58
Trade receivables which have significant - - 121.71 100.46
increase in credit risk
Trade receivables - credit impaired - - - -
286.83 269.12 3,927.07 2,593.04
Impairment allowance
(allowance for bad and doubtful debts)
Unsecured, considered good - - - -
Trade receivables which have significant - - (98.63) (94.02)
increase in credit risk
Trade receivables - credit impaired - - - -
Total trade receivables 286.83 269.12 3,828.44 2,499.02

- The carrying amount of trade receivables include receivables amounting to H 904.32 million (March 31, 2022: H 856.98 million)
which are subject to factoring arrangement entered into with the factoring agency / bank. Under this arrangement, the Group
has transferred the relevant receivables to the bank in exchange of cash and transferred all rights and actions attached to the
aforementioned receivables. As the risk for non recovery lies with the Group, it continues to recognise the transferred assets in its
entirety in balance sheet. The amount repayable under the factoring arrangement is presented as unsecured borrowing in note 23.

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

- Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days.

- The following table summarises the changes in the loss allowance measured using ECL:

(H in million)
Particulars March 31, 2023 March 31, 2022
Opening balance 94.02 78.89
Amount provided/ (reversed) during the year 44.33 12.52
Amount utilised during the year (44.46) 3.66
Exchange differences - translation adjustment 4.74 (1.06)
Closing balance 98.63 94.02

215
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
12.1 Trade receivables ageing schedule

As at March 31, 2023

(H in million)
Outstanding for following periods
Current
from due date of payment
Particulars Unbilled* but not Total
Less than 6 months 1-2 2 - 3 More than
due
6 months - 1 year years years 3 years
Undisputed trade receivables - considered good 805.59 2,310.60 822.57 85.82 2.71 35.10 29.80 4,092.19
Undisputed trade receivables - which have - - - 13.98 50.87 24.74 32.12 121.71
significant increase in credit risk
Undisputed trade receivables - credit impaired - - - - - - - -
Disputed trade receivables - considered good - - - - - - - -
Disputed trade receivables - which have - - - - - - - -
significant increase in credit risk
Disputed trade receivables - credit impaired - - - - - - - -
Total 805.59 2,310.60 822.57 99.80 53.58 59.84 61.92 4,213.90

As at March 31, 2022

(H in million)
Outstanding for following periods
Current
from due date of payment
Particulars Unbilled* but not Total
Less than 6 months 1-2 2 - 3 More than
due
6 months - 1 year years years 3 years
Undisputed trade receivables - considered good 775.35 1,449.81 320.20 121.43 67.29 0.85 26.76 2,761.70
Undisputed trade receivables - which have - - - 25.35 26.54 9.25 39.32 100.46
significant increase in credit risk
Undisputed trade receivables - credit impaired - - - - - - - -
Disputed trade receivables - considered good - - - - - - - -
Disputed trade receivables - which have - - - - - - - -
significant increase in credit risk
Disputed trade receivables - credit impaired - - - - - - - -
Total 775.35 1,449.81 320.20 146.78 93.83 10.10 66.09 2,862.16
*Unbilled revenue consists of contract assets, that primarily relate to the Group's rights to consideration for work completed but not billed at the reporting
date. The contract assets are transferred to the receivables when the rights become unconditional and is current but not due.

13 Cash and cash equivalents and other bank balances

(H in million)
Particulars March 31, 2023 March 31, 2022
Balances with banks
- On current accounts3 213.33 413.41
- On exchange earners foreign currency (EEFC) accounts 138.33 4.56
Deposits with original maturity of less than three months - 62.00
Cash on hand 1.05 0.47
Total cash and cash equivalents (A) 352.71 480.44
Bank balances other than cash and cash equivalents
Balance with banks
- On current account1 2.61 2.89
- On margin money accounts2 259.59 330.92
262.20 333.81
Less: Amount disclosed under other non current financial assets (refer note 7) (192.95) (240.15)
Total bank balance other than cash and cash equivalent (B) 69.25 93.66
(A+B) 421.96 574.10

216
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
13 Cash and cash equivalents and other bank balances (Contd..)
1. Includes balance in unclaimed dividend account H.2.61 million (March 31, 2022: H 2.89 million).

2. A charge has been created over the deposits towards various guarantees in favour of customer, statutory authorities and letter
of credit facility. Refer note 45 (c) for further details.

3. Balances with banks on current accounts does not earn interest.

14 Other current financial assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Unsecured considered good unless otherwise stated
Security deposits (A) 0.32 0.66
Staff advances 2.39 1.08
Interest accrued on fixed deposits 3.26 11.23
Subsidy receivables 156.27 170.17
Scrips receivables - 43.07
(B) 161.92 225.55
Derivative instruments at fair value through OCI
Cash flow hedges
Derivative assets (refer note 53) 0.02 -
(C) 0.02 -
Total other current financial assets (A+B+C) 162.26 226.21

15 Other current assets

(H in million)
Particulars March 31, 2023 March 31, 2022
Unsecured considered good
Prepaid expenses 119.51 111.22
Balances with statutory / government authorities 108.84 57.51
Advance to suppliers and other advances 156.44 157.09
Total other current assets 384.79 325.82

16. Equity share capital

Equity shares of J 10 each

Particulars
In Numbers (K in million)
Authorised share capital:
At April 01, 2021 1,55,00,000 155.00
Increase / (decrease) during the year - -
At March 31, 2022 1,55,00,000 155.00
Increase / (decrease) during the year - -
At March 31, 2023 1,55,00,000 155.00

217
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
16. Equity share capital (Contd..)
(a) Issued equity share capital:

Equity shares of H 10 each issued, subscribed and fully paid

Particulars In Numbers (J in million)

At April 01, 2021 1,28,84,841 128.85
Changes during the period - -
At March 31, 2022 1,28,84,841 128.85
Changes during the period - -
At March 31, 2023 1,28,84,841 128.85

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of H 10 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 equity shareholders.

(c) Details of shareholders holding more than 5% shares in the Company

March 31, 2023 March 31, 2022

Name of Shareholder
No. of shares held % holding in class No. of shares held % holding in class
Equity shares of J 10 each fully paid
Apparao V Mallavarapu* 66,04,715 51.26% 66,04,715 51.26%
Nikhil Mallavarapu* 5,89,929 4.58% 5,89,929 4.58%
Swarnalatha Mallavarapu* 3,69,150 2.86% 3,69,150 2.86%
M S Swarnakumari* 12,684 0.10% 12,684 0.10%
HDFC Trustee Company Limited 6,67,637 5.18% 7,77,740 6.04%
*Represents shareholders in promoter's group. There is no change in the share holding of the promoter's group in the last two years.

(d) Shares reserved for issue under options

For details of shares reserved for issue under the share based payment plan of the Holding Company, refer note 47.

17. Other equity

Particulars (J in million)
Securities premium
Balance as at April 01, 2021 28.07
Balance as at March 31, 2022 28.07
Balance as at March 31, 2023 (A) 28.07
General reserve
Balance as at April 01, 2021 440.26
Balance as at March 31, 2022 440.26
Balance as at March 31, 2023 (B) 440.26
Retained earnings
Balance as at April 01, 2021 1,864.35

218
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
17. Other equity (Contd..)

Particulars (J in million)
Loss/ (profit) for the year (305.43)
Less: Dividends (25.77)
Add: Other comprehensive income for the year 7.37
Others 0.76
Balance as at March 31, 2022 1,541.28
Profit / (loss) for the year 98.16
Less: Dividends (32.21)
Add: Other comprehensive income for the year 5.81
Others (0.33)
Balance as at March 31, 2023 (C) 1,612.71
Effective portion of cash flow hedge (net of tax)
Balance as at April 01, 2021 -
Balance as at March 31, 2022 -
Gain/(loss) on cash flow hedge 0.01
Balance as at March 31, 2023 (D) 0.01
Share based payments reserve
Balance as at April 01, 2021 2.11
Add: Compensation for options granted 0.16
Less: Transferred to capital reserve on forfeiture of stock options (1.95)
Balance as at March 31, 2022 0.32
Add: Compensation for options granted 13.91
Balance as at March 31, 2023 (E) 14.23
Capital reserve
Balance as at April 01, 2021 46.35
Add: Amount transferred on forfeiture of stock options 1.95
Balance as at March 31, 2022 48.30
Balance as at March 31, 2023 (F) 48.30
Equity portion of put option liability reserve (refer note 25)
Balance as at April 01, 2021 (281.34)
Add: Fair value changes during the year 119.23
Balance as at March 31, 2022 (162.11)
Add: Exercise of put options by non-controlling interest shareholders (20.48)
Balance as at March 31, 2023 (G) (182.59)
Foreign currency translation difference account (FCTR)
Balance as at April 01, 2021 2.19
Movement during the year 12.52
Balance as at March 31, 2022 14.71
Movement during the year 2.62
Balance as at March 31, 2023 (H) 17.33
Total other equity (A+B+C+D+E+F+G+H)
Balance as at March 31, 2022 1,910.83
Balance as at March 31, 2023 1,978.32

219
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
17. Other equity (Contd..)
Nature and purpose of reserves

Securities premium

Securities premium reserve is used to record the premium on issue of shares and is utilised in accordance with the provisions of
the Companies Act, 2013.

General reserve

The Company created a general reserve in earlier years pursuant to the provisions of the Companies Act, 1956 where in certain
percentage of profits was required to be transferred to General reserve before declaring dividends. As per Companies Act 2013, the
requirements to transfer profits to general reserve is not mandatory. General reserve is a free reserve available to the Company.

Retained earnings

Retained earnings are the profits/(loss) that the Group 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 consolidated Ind AS statement of profit and loss.

Effective portion of cash flow hedge

The Group uses hedging instruments as part of its management of foreign currency risk. For hedging foreign currency, the Group
uses foreign currency forward contracts. To the extent these hedges are effective, the change in fair value of the hedging instrument
is recognised in the effective portion of cash flow hedges.

Share based payments reserve

The share-based payment reserve is used to recognise the value of equity-settled share-based options provided to employees,
including key management personnel, as part of their remuneration. Refer to Note 47 for further details of these plans.

Capital reserve

The Group recognizes the exercise or cancellation / lapse of vested options of the Group’s equity-settled share-based payments to
capital reserve.

Foreign currency translation difference account (FCTR)

Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations from their functional
currencies to the Group’s presentation currency (i.e. INR) are recognised directly in other comprehensive income and accumulated
in the foreign currency translation reserve.

18. Distribution made and proposed

(H in million)
Particulars March 31, 2023 March 31, 2022
Dividends on equity shares declared and paid:
Final dividend for the year ended on March 31, 2022: H 2.50 per share (March 31, 32.21 25.77
2021: H 2 per share)
32.21 25.77
Proposed dividend on equity shares1,2
Final dividend for the year ended on March 31, 2023: H 4.00 per share (March 31, 51.54 32.21
2022: H 2.50 per share)
51.54 32.21

1. Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as a liability
as at March 31st.

2. The Board of Directors of the Holding Company at its meeting held on May 27, 2023 had recommended a final dividend of 40% (i.e.
H 4.00 per equity share) for the year ended March 31, 2023 which is in compliance with Section 123 of the Companies Act, 2013.

220
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
19 Non-current financial liabilities: Borrowings
(H in million)
Particulars March 31, 2023 March 31, 2022
Term loan
From banks
Foreign currency term loan (secured) (refer note 23 for details of current 25.84 43.87
maturities of long term borrowings)1
Foreign currency term loan (unsecured) (refer note 23 for details of current 440.40 549.77
maturities of long term borrowings)2a, 2b
Bonds (secured) (refer note 23 for details of current maturities of long term - 84.09
borrowings)3
Interest free loan from Government (unsecured) (refer note 23 for details of 113.38 138.01
current maturities of long term borrowings)4
579.62 815.74
The above amount includes
Secured borrowings 25.84 127.96
Unsecured borrowings 553.78 687.78
579.62 815.74
1. Foreign currency term loans availed by Centum Adetel Group SA and its subsidiaries amounting to H 62.32 million (March 31,
2022: H 118.39 million) (including current maturities of long term borrowings amounting to H 36.48 million (March 31, 2022: H
74.52 million)) carries interest rate ranging from 0% to 8.35% p.a. (March 31, 2022: 0% to 8.35% p.a.) and is secured by way of
pledge of respective receivables and all other assets present and future of the borrowers along with the bank guarantee.

2a. Foreign currency term loan availed by Centum Adetel Group SA and its subsidiaries, amounting to H 452.29 million (March 31,
2022: H 546.59 million) (including current maturities of long term borrowings amounting to H 144.99 million (March 31, 2022:
H 122.95 million)) carries interest at 0% p.a for the first year and thereafter carries interest rate between 0.7% to 0.8% upto
end of the tenure and both the loans are guaranteed to the extent of 90% by the French government within framework of the
COVID -19 health crisis. The term loan is repayable in forty eight equal installments commencing from 2022 till 2026.

2b. Foreign currency term loan availed by Centum Adetel Group SA and its subsidiaries, amounting to H 134.41 million (March
31, 2022: H 126.13 million) (including current maturities of long term borrowings amounting to H 1.31 million (March 31, 2022:
H Nil)) which carries interest at 0% p.a. for the first year and thereafter shall carry interest rate between 0.7% and 2.35% upto
the end of the tenure and will be repaid over the term of 4 years starting from 2023 till 2027.

3. Bonds amounting to H 89.61 million (March 31, 2022: H 168.18 million) (including current maturities amounting to H 89.61
million (March 31, 2022: H 84.09 million)) have a coupon rate of 4% p.a. and is secured by way of mortage of immovable
properties, plant and machinery and other moveable assets of Centum Adetel Group SA The bond amounting to H 89.61 million
is payable in December 2023.

4. Interest free loan from government amounting to H 159.07 million (March 31, 2022: H 181.90 million) (including current
maturities of long term borrowings amounting to H 45.69 million (March 31, 2022: H 43.89 million)) has been provided to carry
out research and development activities and is payable on the successful outcome of the research and development.

20 Net non-current employee defined benefit liabilities

(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for employee benefits
Provision for gratuity (refer note 43) 61.81 58.28
61.81 58.28

221
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
21 Non-current provisions
(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for employee benefits
Provision for pension (refer note 43) 15.55 10.84
Other provisions
Provisions for litigations and contingencies - 50.45
Provisions for loss making contracts* 8.12 9.06
23.67 70.35

(H in million)
Provisions for Provisions for
Particulars litigations and loss making
contingencies contracts*
As at April 1, 2021 - 15.40
Provision made / (reversed) during the year and amount utilised during the year (net) 128.40 (6.34)
(refer note 38)
As at March 31, 2022 128.40 9.06
Provision made / (reversed) during the year and amount utilised during the year (net) (126.43) 14.47
As at March 31, 2023 1.97 23.53
Current 1.97 15.41
Non-current - 8.12
*The provision for losses includes provision for estimated losses on onerous contracts

22 Government grants
(H in million)
Particulars March 31, 2023 March 31, 2022
Government grants
At April 1 34.44 42.31
Government grant received during the year 8.65 -
Released to consolidated Ind AS statement of profit and loss (10.50) (7.87)
As at March 31 32.59 34.44
Current 8.16 7.87
Non - current 24.43 26.57

Government grants have been received towards the purchase and construction of certain items of property, plant and equipment
under Modified Special Incentive Package Scheme (M-SIPS) as notified by Ministry of Communications and Information Technology,
Department of Information Technology. As per the scheme, the Company is required to abide by all terms and conditions of M-SIPS
policy, guidelines and amendments issued from time to time. The Company vide its letter of undertaking dated May 02, 2018 has
agreed to comply with all terms and conditions of M-SIPS policy, guidelines and amendments issued from time to time.

222
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
23 Current financial liabilities: Borrowings
(H in million)
Particulars March 31, 2023 March 31, 2022
From banks
Indian rupee short term loan from banks (secured)1 - 70.00
Cash credit and overdraft from banks (secured) 2,3 182.92 78.51
Packing credit loan from banks (secured) 2 600.75 545.14
Foreign currency non-repatriable (FCNR) loan (secured) 2 172.66 283.70
Working Capital Demand (WCD) loan (secured)2 100.00 -
Current maturities of long term borrowings5 (refer note 19) 318.08 325.45
Interest payable 18.73 11.68
Customers bill discounted / factored (secured) 4 654.85 595.77
2,047.99 1,910.25
The above amount includes
Secured borrowings 1,856.00 1,743.41
Unsecured borrowings 191.99 166.84
2,047.99 1,910.25

1. Secured Indian rupee short term loan from a bank carried interest at 8.70% p.a. as on March 31, 2022. The loan was secured
by way of:

(a) Charge on current assets including stock and receivables of the Company;

(b) Charge on plant and machinery and furniture and fixture of the Company; and

(c) Charge by way of equitable mortgage on Land and building situated at i) No. 44, KHB Industrial Area, Yelahanka, Bangalore
- 560 106 and ii) Plot No. 58-P, Bengaluru Aerospace Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No.
8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North, Yelahanka Taluk, Bengaluru Urban District.

(d) Cash collateral to the tune of H 50.00 million

The loan has been repaid during the year ended March 31, 2023.

2. Cash credit and overdraft from banks, packing credit, FCNR loan and WCD loan from banks are payable on demand and are
secured by way of :

(a) Hypothecation of entire current assets viz. stock of raw materials/stores and spares/work-in-progress/finished goods,
receivables / book debts and other current assets / moveable fixed assets on pari passu first charge with other banks;

(b) Hypothecation of present and future fixed assets pari passu first charge with other banks;

(c) Equitable mortgage of factory land and building at No. 44, KHB Industrial Area, Yelahanka, Bangalore - 560 106 belonging
to the Company, on pari passu first charge with other banks; and

(d) Equitable mortgage on leasehold rights of factory land and equitable mortgage of building at Plot No. 58-P, Bengaluru Aerospace
Park Industrial Area, Sy. No. 8 - Part of Unachur Village & Sy.No. 8 - Part of Dummanahalli Village, Jala Hobli, Bengaluru North,
Yelahanka Taluk, Bengaluru Urban District, belonging to the Company on pari passu first charge with other banks.

The rate of interest of Cash credit and overdraft from banks ranges from 9.7% to 12.84% p.a. (March 31, 2022: 9.70% to 9.85% p.a.).

The rate of interest of Packing credit loan from banks ranges from 2.26% to 8.22% p.a. (March 31, 2022: 2.15% to 3.35% p.a.).

The rate of interest of WCD loan is 11.65% (March 31, 2022: Nil).

The rate of interest of FCNR loan ranges from 3.97% to 9.12% p.a. (March 31, 2022: 3.82% to 4.31% p.a.).

The interest is payable on monthly basis.

3. Cash credit / overdraft from banks amounting to H 1.94 million (March 31, 2022: H 0.09 million) was availed by Centum Adetel
Group SA.

223
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
23 Current financial liabilities: Borrowings (Contd..)
4. Customer's bill discounted / factored receivables carries interest rate of 0.09% (March 31, 2022: 0.09%) of the factored invoices
including VAT and have recourse to Centum Adetel Group SA and its subsidiaries.
5. The details of current maturities of long term borrowings are as follows:
(H in million)
Term loan March 31, 2023 March 31, 2022
From banks
Foreign currency term loan (secured) 36.48 74.52
Foreign currency term loan (unsecured) 146.30 122.95
Bonds (secured) 89.61 84.09
Interest free loan from Government (unsecured) 45.69 43.89
Total 318.08 325.45

6. The quarterly returns or statements filed by the Holding Company with banks or financial institutions towards sanction of
working capital limits are in agreement with the books of account of the Holding Company.
7. The Holding Company has not been declared as a wilful defaulter by any banks or financial institutions.
8. The Group has not defaulted in repayment of borrowings or in the payment of interest thereon to banks or financial institutions.

24 Financial liabilities: Trade payables

(H in million)
Particulars March 31, 2023 March 31, 2022
Trade payables 2,106.71 1,137.64
Trade payables to related parties (refer note 42) 3.00 3.19
2,109.71 1,140.83

a) Terms and conditions of the above financial liabilities:

- Trade payables are non-interest bearing

- For explanations on the Group’s currency and liquidity risk management processes, refer to note 49(c).
- The dues to related parties are unsecured

24.1 Trade payable ageing schedule

As at March 31, 2023

(H in million)
Outstanding for following periods from due date of payment

Particulars Unbilled Less than 1 2-3 More than Total

1 - 2 years
dues year years 3 years

Undisputed outstanding dues of creditors 377.73 1,691.70 27.58 5.61 2.02 2,104.64
Disputed outstanding dues of creditors - - - - 5.07 5.07
Total 377.73 1,691.70 27.58 5.61 7.09 2,109.71

As at March 31, 2022

(H in million)
Outstanding for following periods from due date of payment
Particulars Unbilled Less than 1 2-3 More than Total
1 - 2 years
dues year years 3 years
Undisputed outstanding dues of creditors 287.73 828.32 6.53 2.19 11.40 1,136.17
Disputed outstanding dues of creditors - - - 4.66 4.66
Total 287.73 828.32 6.53 2.19 16.06 1,140.83

224
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
25 Other current financial liabilities
(H in million)
Particulars March 31, 2023 March 31, 2022
At amortised cost
Unpaid dividends 2.61 2.89
Accrued salaries and benefits (refer note 42) 306.54 322.05
Payable for capital goods 66.77 -
Interest others - 0.68
Put option liability1 141.12 272.94
517.04 598.56

Note:

1. Put option liability pertains to liabilities arising from options given to non controlling interest shareholders by one of the subsidiary
of the Group as at the date of acquisition. Inititally, the management of the Group recognised these liabilities at fair values in
accordance with the binomial lattice model. The projections were based on estimates and assumptions which are considered
reasonable by the management including volatility, up move and down move probabilities, risk free rate of return, etc.

During the year ended March 31, 2022, the put option liability has been revalued from EUR 27.00 to EUR 18.90 per option based
on the fair value assessment carried out by an independent external valuer.

During the year ended March 31, 2023, the management has settled a portion of put option liability, on exercise of options by
non controlling interest shareholders.

26 Other liabilities
(H in million)
Non- current Current
Particulars
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Advance from customers 167.39 77.30 1,082.66 755.38
Withholding and other taxes / duties payable - - 675.95 549.75
Deferred revenue
Related parties (refer note 42) - - 4.57 9.14
Others - - 481.34 376.06
Other liabilities - - 10.47 10.95
167.39 77.30 2,254.99 1,701.28

27 Net current employee defined benefit liabilities

(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for employee benefits
Provision for gratuity (refer note 43) 7.39 6.51
7.39 6.51

28 Current provisions
(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for compensated absences 269.70 196.64
Provision for loss making contracts (refer note 21) 15.41 -
Provision for litigations (refer note 21) 1.97 77.95
287.08 274.59

225
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
29 Liabilities for current tax (net)
(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for taxation, net of advance tax 116.64 31.89
116.64 31.89

30 Revenue from operations

(H in million)
Particulars March 31, 2023 March 31, 2022
Sale of products (refer note 42) 6,008.73 4,571.95
Sale of services 2,833.23 2,761.81
Other operating revenues
Income from foreign subsidies 296.54 344.04
Management fees 79.95 105.10
Sale of scrips - 4.29
Sales commission 11.24 12.21
Total revenue 9,229.69 7,799.40

Refer note 50 for disclosures under Ind AS 115

31 Other income
(H in million)
Particulars March 31, 2023 March 31, 2022
Rental income (refer note 44) 2.27 3.03
Provisions / liabilities no longer required, written back 20.87 28.90
Gain on account of foreign exchange fluctuations (net) - 3.49
Government grants (refer note 22) 10.50 7.87
Net gain on disposal of property, plant and equipment 0.58 -
Fair value gain on financial instruments - 0.15
Other non-operating income 3.03 3.61
37.25 47.05

32 Finance income
(H in million)
Particulars March 31, 2023 March 31, 2022
Interest income on bank deposits 14.04 14.42
Interest income on income tax refund - 11.20
Interest income - others (refer note 42) 7.24 7.57
21.28 33.19

33a Cost of materials consumed

(H in million)
Particulars March 31, 2023 March 31, 2022
Inventory at the beginning of the year 1,688.40 1,427.47
Add: Purchases (refer note 42) 4,514.26 3,325.95
6,202.66 4,753.42
Inventory at the end of the year (2,056.06) (1,688.40)
Cost of materials consumed 4,146.60 3,065.02

226
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
33b Decrease / (increase) in inventories of work-in-progress and finished goods
(H in million)
Particulars March 31, 2023 March 31, 2022
Inventories at the beginning of the year 559.85 514.41
- Work-in-progress / finished goods
Less: Inventories at the end of the year 554.56 559.85
- Work-in-progress / finished goods
Decrease / (increase) in inventories of work-in-progress and finished goods 5.29 (45.44)

34 Employee benefits expenses

(H in million)
Particulars March 31, 2023 March 31, 2022
Salaries, wages and bonus (refer note 42) 2,540.90 2,458.74
Contribution to provident and other funds (refer note 43) 692.30 665.12
Employee share based compensation cost (refer note 47) 13.91 0.16
Gratuity expenses (refer note 43) 16.93 18.48
Staff welfare expenses 63.18 56.52
3,327.22 3,199.02

35 Finance costs
(H in million)
Particulars March 31, 2023 March 31, 2022
Interest on debt and borrowings 164.25 142.25
Interest on lease liabilities (refer note 44) 9.86 13.14
Other borrowing costs 64.71 71.15
Exchange differences regarded as an adjustment to borrowing cost 26.79 33.91
Interest on income tax 7.83 3.03
273.44 263.48

36 Depreciation and amortisation expenses

(H in million)
Particulars March 31, 2023 March 31, 2022
Depreciation of property, plant and equipment (refer note 3) 172.95 183.25
Amortisation of other intangible assets (refer note 4b) 144.39 121.89
Depreciation of right-of-use assets (refer note 44) 120.92 126.79
438.26 431.93

37 Other expenses
(H in million)
Particulars March 31, 2023 March 31, 2022
Rent and lease hire charges (refer note 42 and 44) 46.16 50.21
Rates and taxes 77.56 95.13
Power and fuel 89.34 55.51
Repairs and maintenance 150.98 118.50
Insurance 48.90 44.93
Legal and professional fees 120.91 133.90
Travelling and conveyance 139.57 154.35

227
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
37 Other expenses (Contd..)
(H in million)
Particulars March 31, 2023 March 31, 2022
Purchase of services 33.60 39.80
Corporate social responsibility expenditure 5.30 6.81
Freight outwards 33.21 16.48
Foreign exchange differences (net) 106.61 -
Loss on sale/ discard of property, plant and equipment - 0.92
Provision for expected credit losses / bad debts written off 44.33 25.80
Directors' sitting fees (refer note 42) 3.93 4.33
Miscellaneous expenses 88.09 91.70
988.49 838.37

38 Exceptional items (net)

(H in million)
Particulars March 31, 2023 March 31, 2022
Provision for dimunition in value of investment and receivables (refer note 42)1 - 436.84
Provision for settlement of claims1,2 - 132.22
Provision for impairment of unbilled revenue2 - 34.48
- 603.54

1. During the year ended March 31, 2020, the management of the Group had entered into an agreement for sale of 65% stake in
HOLIWATT ( formerly known as Centum Adetel Transportation SAS), subsidiary of Centum Adetel Group SA.

The management of the Group had a put option to sell its remaining 35% stake at a fixed price amounting to EUR 3.96 million
plus interest at the rate of 6% p.a and other receivables of EUR 0.5 million . Further the management had assessed that they
exercised significant influence / control over Centum Adetel Transportation System SAS and had accordingly treated the same
as investment in associates in the consolidated Ind AS financial statements of the Group during the year ended March 31,
2021.

During the year ended March 31, 2022, HOLIWATT had been placed in specific insolvency statutes, allowing HOLIWATT to
commence negotiation with other parties including its shareholders and the Commercial Court of Lyon announced the
opening of judicial recovery process and accordingly based on the internal assessment, the management of the Group had
provided the carrying value of its investment and receivables in HOLIWATT amounting to H 436.84 million and the same had
been disclosed as exceptional item in the consolidated Ind AS financial statements during the year ended March 31, 2022.

During the year ended March 31, 2022, the Group had accounted H 25.97 million in regard to the commission to the recruited
bankers for the sale of HOLIWATT shares and the same had been disclosed as exceptional item in the consolidated Ind AS
financial statements during the year ended March 31, 2022.

2. During the year ended March 31, 2022, the Group had been levied a claim by one of its customers on account of certain
damages in the equipment supplied to the customer. Accordingly, the Group had accounted cost of H 106.25 million towards
such claim which had been disclosed as exceptional item in the consolidated Ind AS financial statements during the year
ended March 31, 2022.

Further the Group had made provision for aged unbilled revenue in relation to certain projects amounting to H 34.48 million
which had been disclosed as exceptional item in the consolidated Ind AS financial statements during the year ended March
31, 2022.

228
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
39 Income tax

The domestic subsidiaries of the Group are subject to income tax in India on the basis of standalone financial statements. Business
loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to
which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.

Pursuant to the Taxation Law (Amendment) Ordinance, 2019 ('Ordinance') issued by Ministry of Law and Justice (Legislative Department)
on September 20, 2019 which is effective from April 1, 2019, domestic companies have the option to pay income tax at 22% plus applicable
surcharge and cess ('new tax regime') subject to certain conditions. The Holding Company and its domestic subsidiary based on the
current projections has chosen to adopt the reduced rates of tax as per the Income Tax Act, 1961 from the financial year 2020-21 and
accordingly has accounted deferred tax asset based on the reduced applicable tax rates for domestic entities.

Income tax expenses in the consolidated Ind AS statement of profit and loss consist of the following:
(H in million)
Particulars March 31, 2023 March 31, 2022
Tax expenses
(a) Current tax 126.51 57.49
(b) Adjustment of tax relating to earlier period (10.32) (11.05)
(c) Deferred tax (credit)/ expense (61.77) (33.81)
(d) Deferred tax expense / (credit) related to items recognized in OCI during the year 1.97 2.63
Total taxes 56.39 15.26

Reconciliation of estimated income tax to income tax expense is as below:

(H in million)
Particulars March 31, 2023 March 31, 2022
Profit/ (loss) before tax 121.36 (522.02)
Income tax expense at applicable tax rates applicable to individual entities 56.43 (83.12)
Tax effect on permanent non-deductible expenses 3.30 2.36
Adjustments in respect of current income tax of previous years (10.32) (11.05)
Others * 6.98 107.07
Total tax expenses 56.39 15.26
Income tax expenses reported in the consolidated Ind AS statement of profit and loss 56.39 15.26
- -

Note: Certain entities of the Group have incurred losses during the relevant period, which has resulted in reduction of profit /
increase of losses in the consolidated Ind AS financial statements. However, the tax liability has been discharged by the respective
entities on a standalone basis. Further, in view of absence of reasonable certainty, the Group has not recognised deferred tax asset
in such companies.

* Others primarily include non-recognition of deferred tax assets on loss making overseas subsidiaries.

40 Earnings per share ('EPS')

Basic EPS amounts are calculated by dividing the profit/ loss for the year attributable to equity shareholders of the parent by the
weighted average number of equity shares outstanding during the year. Partly paid equity shares are treated as a fraction of an equity
share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

Diluted EPS amounts are calculated by dividing the profit attributable to equity shareholders by the weighted average number of
equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion
of all the dilutive potential equity shares into equity shares.

229
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
40 Earnings per share ('EPS') (Contd..)
The following reflects the income and share data used in the basic and diluted EPS computations:

Particulars March 31, 2023 March 31, 2022

Profit/ (loss) attributable to equity holders of the parent for basic / diluted earnings 98.16 (305.43)
per share (H in million)
Weighted average number of equity shares used for computing EPS (basic) 1,28,84,841 1,28,84,841
Add: Effect of dilutive issues of stock options 1,23,625 10,279
Weighted average number of equity shares used for computing EPS (diluted) 1,30,08,466 1,28,95,120

Earnings per share - Basic (H) 7.62 (23.70)

Earnings per share - Diluted (H) * 7.55 (23.70)
* Considering that the Group had incurred losses during the year ended March 31, 2022, the allotment of stock options would decrease the loss per share for
the year ended March 31, 2022 and accordingly had not been considered for the purpose of calculation of diluted earnings per share.

41 Significant accounting judgements, estimates and assumptions

The preparation of the Group's consolidated Ind AS 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. Actual results could differ from those estimates. 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.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised and future periods affected.

Significant judgements and estimates relating to the carrying values of assets and liabilities include determining control over
entities and accounting thereof, discontinued operations, impairment of investments and goodwill, taxes, fair value measurement
of financial instruments, contingencies, defined benefit plan (gratuity benefits), provision for inventory obsolescence, revenue
recognition, leases - determining the lease term of contracts with renewal and termination options – Group as lessee and
estimating the incremental borrowing rate and intangible assets under development.

(i) Judgments:

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the
most significant effect on the amounts recognised in the consolidated Ind AS financial statements:

(a) Determination of control and accounting thereof:

As detailed in the accounting policy, consolidation principles under Ind AS necessitates assessment of control of the
subsidiaries independent of the majority shareholding. Consolidation principles under Ind AS are different from the
previous GAAP, especially with respect to assessment of control of the subsidiaries. Based on the assessment made,
the management of the Group believes that it has control over Centum Adetel Group SA and its underlying subsidiaries.
Further, the management of the Group assessed that it exercises significant influence in Ausar Energy SAS, based on
their assessment of the share purchase agreement.

(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 Group 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 Group. Such changes are reflected in the assumptions when they occur.

230
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
41 Significant accounting judgements, estimates and assumptions (Contd..)
Impairment of investments and goodwill

Determining whether investments and goodwill are impaired requires an estimation of the value in use of the respective asset
or the relevant cash generating units. The value in use calculation is based on Discounted Cashflows Model ("DCF model").
The cash flows projections are based on estimates and assumptions which are considered as reasonable by the management
and do not include restructuring activities that the Group 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 (i.e.
11.20% p.a) used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation
purposes. These estimates are most relevant to goodwill and other intangibles recognised by the Group (refer note 4a and 4b).

Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available
against which the same can be utilised. Significant management judgement is required to determine the amount of deferred
tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax
planning strategies. Refer note 8 and 39 for further disclosures.

Centum Adetel Group SA has carried forwarded tax losses. These losses relate to subsidiaries that have a history of losses
and may not be used to offset taxable income elsewhere in the Group. The subsidiaries neither have any taxable temporary
difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax
assets. On this basis, the Group has determined that it cannot recognise deferred tax assets on the tax losses carried forward.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is measured using valuation techniques including the 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. Refer note
49(a) for further disclosures.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Group, including legal
and contractual claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur
or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of
significant judgement and the use of estimates regarding the outcome of future events. Refer note 45(c) for further disclosures.

Defined benefit plans (gratuity benefits)

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

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in
India, the management considers the interest rates of government bonds where remaining maturity of such bond correspond
to expected term of defined benefit obligation.

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

Further details about gratuity obligations are given in note 43.

231
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
41 Significant accounting judgements, estimates and assumptions (Contd..)
Provision for inventory obsolescence

Inventory obsolescence provision are determined using policies framed by the Company and in accordance with the
methodologies that the Company deems appropriate to the business. There is a significant level of judgment involved in
assessing whether provision for obsolescence for slow moving, excess or obsolete inventory items should be recognized
considering orders in hand, expected orders, alternative usage, etc.

Revenue recognition

The group uses the percentage-of-completion method in accounting for its fixed-price contract. Use of the percentage-of-
completion method requires the Group to estimate the efforts expended to date as a proportion of the total efforts to be
expended. Efforts expended have been used to measure progress towards completion as there is a direct relationship between
input and productivity.

Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become
probable based on the expected contract estimates at the reporting date.

Leases - Determining the lease term of contracts with renewal and termination options – Group as lessee and estimating
the incremental borrowing rate

The Group determines the lease term as the non-cancellable term of the lease.

The Group has lease contracts that include extension and termination options. The Group 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 Group reassesses the lease term if there is a significant 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 significant
leasehold improvements or significant customisation to the leased asset)

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate
(IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar
term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar
economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no
observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. The Group
estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain
entity-specific estimates.

Intangible assets under development

The Group capitalises intangible asset under development for a project in accordance with the accounting policy. Initial
capitalisation of costs is based on management’s judgement that technological and economic feasibility is confirmed, usually
when a product development project has reached a defined milestone according to an established project management
model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash
generation of the project, discount rates to be applied and the expected period of benefits. As at March 31, 2023, the carrying
amount of intangible assets under development is H 227.56 million (March 31, 2022: H 120.14 million)

232
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
42 Related parties
a) Names of related parties and description of relationship

Description of relationship Name of related parties

Parties where control exists Mr. Apparao V Mallavarapu (directly and indirectly exercises over 50% voting
power in the Company)
Subsidiary Companies Centum Electronics UK Limited
Centum Adetel Group SA, France
Centum T&S (Centum Technologies ET Solutions), France (formerly known as
Centum Adeneo SAS)
Centum R&D (Centum Recherche ET development), France (formerly known as
Centum Adeneo CRD SAS)
Centum T&S (Centum Technologies ET Solutions), Canada (formerly known as
Centum Adetel Solution)
Centum E&S (Centum Equipments ET Systemes), Canada (formerly known as
Centum Adetel Equipment)
Centum Adetel Transportation System SAS, France
Centum Adetel Synergies SARL**
Centum T&S Private Limited, India (formerly known as Centum Adeneo India
Private Limited)
Centum T&S (Technologies & Solutions) Belgium SRL (formerly known as
Centum Adeneo Belgium)
Associate Companies HOLIWATT ( formerly known as Centum Adetel Transportation SAS)*
Ausar Energy SAS
Enterprises where key managerial Centum Industries Private Limited
personnel or their relatives exercise
significant influence (where
transactions have taken place)
Key managerial personnel and their Mr. Apparao V Mallavarapu - Chairman and Managing Director
relatives Mrs. Swarnalatha Mallavarapu - Director (resigned w.e.f. May 27, 2023)
Mr. Nikhil Mallavarapu - Whole Time Director
Mrs. Tanya Mallavarapu - Director (appointed w.e.f. May 27, 2023)
Mr. S Krishnan - Independent Director (retired w.e.f. August 14, 2021)
Mr. Pranav Kumar Patel - Independent Director
Mr. Rajiv C Mody - Independent Director
Mr. Manoj Nagrath - Independent Director
Mr. Thiruvengadam P - Independent Director
Mrs. Kavitha Dutt - Independent Women Director
Mr. K S Desikan - Chief Financial Officer
Mr. Nagaraj K.V- Company Secretary (resigned w.e.f. March 10, 2022)
Mrs. Indu H S - Company Secretary (appointed w.e.f. May 24, 2022)
* The Group has divested its stake during the year ended March 31, 2020 and accordingly it has ceased to be a subsidiary and has become an associate
w.e.f March 31, 2020. Further, during the year ended March 31, 2022, the Commercial Court of Lyon has announced opening of judicial recovery based on
which the entire shareholding has been transferred to Forsee Power and accordingly it has ceased to become an associate.
** Centum Adetel Synergies SARL has been merged with Centum T&S (Centum Technologies ET Solutions) (formerly known as Centum Adeneo SAS)
w.e.f; April 01, 2021

233
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
42 Related parties (Contd..)
b) Summary of transactions and outstanding balances with above related parties are as follows:

(H in million)
Particulars March 31, 2023 March 31, 2022
i) Sale of products
Associate Companies
- Ausar Energy SAS 24.00 16.85
ii) Other income / Finance income
Associate Companies
- Ausar Energy SAS 6.03 2.66
iii) Lease rental paid
Enterprises where key managerial personnel or their relatives exercise
significant influence
- Centum Industries Private Limited - 0.57
iv) Exceptional items- Provision for dimunition in value of investment and
receivables
Associate Companies
- HOLIWATT - 436.84
v) Remuneration to key managerial personnel and their relatives
Employee benefit expenses (excluding employee share based payments)
- Mr. Apparao V Mallavarapu 13.63 8.97
- Mr. Nikhil Mallavarapu 13.63 10.42
- Mr. K S Desikan 10.42 8.43
- Mrs. Indu H S 1.08 -
- Mr. Nagaraj K.V - 1.67
vi) Directors' sitting fees (including commission paid to non-executive directors)
- Mr. S Krishnan - 0.28
- Mr. Rajiv C Mody 0.53 0.59
- Mr. Pranav Kumar Patel 0.74 0.74
- Mr. Manoj Nagrath 0.74 0.74
- Mr. Thiruvengadam P 0.71 0.74
- Mrs.V Kavitha Dutt 0.62 0.62
- Mrs. Swarnalatha Mallavarapu 0.59 0.62
vii) Outstanding balances as at the year ended:
a) Trade receivables - Current
Associate Companies
- Ausar Energy SAS 74.74 101.95
b) Trade payables - Current
Payable to key managerial personnel
- Mr. S Krishnan - 0.19
- Mr. Rajiv C Mody 0.50 0.50
- Mr. Pranav Kumar Patel 0.50 0.50
- Mr. Manoj Nagrath 0.50 0.50
- Mr. Thiruvengadam P 0.50 0.50
- Mrs.V Kavitha Dutt 0.50 0.50
- Mrs. Swarnalatha Mallavarapu 0.50 0.50
c) Other non current financial assets - Security deposits
Enterprises where key managerial personnel or their relatives
exercise significant influence
- Centum Industries Private Limited 0.45 0.45

234
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
42 Related parties (Contd..)
(H in million)
Particulars March 31, 2023 March 31, 2022
d) Other current financial liabilities - Accrued salaries and benefits-payable
- Mr. Apparao V Mallavarapu 5.13 0.48
- Mr. Nikhil Mallavarapu 3.74 0.54
- Mr. K S Desikan 2.15 1.71
- Mrs. Indu H S 0.12 -
- Mr. Nagaraj K.V - 0.15
e) Deferred Revenue
Associate Companies
- Ausar Energy SAS 4.57 9.14

c) Key managerial personnel's interests in the share based payments plan:

Share options held by key managerial personnel under the share based payments plan to purchase equity shares are as follows:

March 31, 2023 March 31, 2022

Share based payments plan Exercise price Number Number
outstanding outstanding
Centum ESOP - 2013 plan H 71.25 3,653 3,653
Centum ESOP - 2021 plan H 10.00 14,500 -

No share options have been granted to the non-executive members of the Board of Directors under the share based payments
plans of the Group. Refer to note 47 for further details on the scheme.

Notes:

(i) As the liability for gratuity and leave encashment is provided on actuarial basis for the Group as a whole, the amount
pertaining to the key managerial personnel's are not included.

(ii) Refer note 5 as regards investments in associates.

43 Gratuity and other post-employment benefits plans

(a) Defined contribution plan

The Group contribution to provident fund, employees' state insurance, pension and other funds are considered as defined
contribution plans. The contributions are charged to the consolidated Ind AS statement of profit and loss as they accrue.
Contributions to provident and other funds included in employee benefits expenses (note 34) are as under:
(H in million)
Particulars March 31, 2023 March 31, 2022
Contribution to provident fund 33.29 31.03
Contribution to employees' state insurance 3.80 4.30
Contribution to pension fund 655.21 629.79
692.30 665.12

235
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
43 Gratuity and other post-employment benefits plans (Contd..)
(b) Defined benefit plans

The domestic entities in the Group has a defined benefit gratuity plan. The gratuity plan is governed by the Payment of Gratuity
Act, 1972. Under the act, every employee who has completed five years or more of service gets a gratuity on departure at 15
days salary (based on last drawn basic salary) for each completed year of service. The level of benefits provided depends on
the member’s length of service and salary at retirement age. The Gratuity plan is unfunded.

The following tables summarise the components of net benefit expense recognised in the consolidated Ind AS statement of
profit or loss and amounts recognised in the consolidated Ind AS balance sheet for gratuity benefit:

i. Net benefit expenses (recognized in the consolidated Ind AS statement of profit and loss)
(H in million)
Particulars March 31, 2023 March 31, 2022
Current service cost 12.12 14.06
Interest cost on defined benefit obligation 4.81 4.42
Net benefit expenses 16.93 18.48

ii. Remeasurement (gains)/ loss recognised in other comprehensive income:

(H in million)
Particulars March 31, 2023 March 31, 2022
Actuarial (gain)/ loss on obligations arising from changes in experience (6.57) (4.21)
adjustments
Actuarial (gain)/ loss on obligations arising from changes in financial (1.20) (5.79)
assumptions
Actuarial (gain)/ loss recognised in OCI (7.77) (10.00)

iii. Net defined benefit asset/ (liability)

(H in million)
Particulars March 31, 2023 March 31, 2022
Defined benefit obligation (69.20) (64.79)
Fair value of plan assets - -
Asset / (liability) recognised in the consolidated Ind AS balance sheet (69.20) (64.79)

iv. Changes in the present value of the defined benefit obligation are as follows:
(H in million)
Particulars March 31, 2023 March 31, 2022
Opening defined benefit obligation 64.79 63.49
Current service cost 12.12 14.06
Benefits paid (4.75) (7.18)
Interest cost on the defined benefit obligation 4.81 4.42
Actuarial (gain)/ loss on obligations arising from changes in experience (6.57) (4.21)
adjustments
Actuarial (gain)/ loss on obligations arising from changes in financial (1.20) (5.79)
assumptions
Closing defined benefit obligation 69.20 64.79

236
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
43 Gratuity and other post-employment benefits plans (Contd..)
v. The following pay-outs are expected in future years:
(H in million)
Particulars March 31, 2023 March 31, 2022
Within next one year 7.39 6.51
Between 1 and 2 years 3.03 2.83
Between 2 and 3 years 4.46 2.92
Between 3 and 4 years 3.63 4.07
Between 4 and 5 years 6.49 3.39
Between 5 and 10 years 29.88 27.07

The average duration of the defined benefit plan obligation at the end of the reporting period is 9.94 - 10 years (March 31,
2022: 10 years).

vi. The principal assumptions used in determining gratuity obligations for the group's plan are shown below:

Particulars March 31, 2023 March 31, 2022

Discount rate (in %) 7.30% 7.12%
Salary escalation (in %) 10.00% 10.00%
Employee turnover Age 21 - 30 Yrs : 15% Age 21 - 30 Yrs : 15%
Age 30 - 34 Yrs : 10% Age 30 - 34 Yrs : 10%
Age 35 - 44 Yrs : 5% Age 35 - 44 Yrs : 5%
Age 45 - 50 Yrs : 3% Age 45 - 50 Yrs : 3%
Age 51 - 54 Yrs : 2% Age 51 - 54 Yrs : 2%
Age 55 - 59 Yrs : 1% Age 55 - 59 Yrs : 1%
Retirement age 60 years 60 years
Mortality Rate Indian Assured Indian Assured
Lives Mortality Lives Mortality
(2012-14) (2012-14)
Ultimate Table Ultimate Table

Notes:

i) The estimate of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors such as supply and demand factors in the employment market.

ii) Plan Characteristics and Associated Risks:

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

a. Discount rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds
If bond yields fall, the defined benefit obligation will tend to increase

b. Salary inflation risk : Higher than expected increases in salary will increase the defined benefit obligation

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

237
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
43 Gratuity and other post-employment benefits plans (Contd..)
vii. A quantitative sensitivity analysis for significant assumption is as shown below:
(H in million)
Particulars March 31, 2023 March 31, 2022
Discount rate
Impact on defined benefit obligation due to 1% increase in discount rate (6.07) (5.78)
Impact on defined benefit obligation due to 1% decrease in discount rate 7.15 6.85
Salary escalation rate
Impact on defined benefit obligation due to 1% increase in salary escalation rate 3.41 3.33
Impact on defined benefit obligation due to 1% decrease in salary (3.44) (3.33)
escalation rate
Attrition rate
Impact on defined benefit obligation due to 1% increase in attrition rate (0.48) (0.25)
Impact on defined benefit obligation due to 1% decrease in attrition rate 0.72 0.44

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

44 Leases
I. Company as a lessee

The Group has lease contracts for office facilities and equipment (including vehicles and computer). The lease term for office
facilities is generally 3 to 12 years and for equipments is 2 to 6 years. The Group’s obligations under its leases are secured by
the lessor’s title to the leased assets.

The Group also has certain leases of computer and computer equipment with low value. The Group applies 'lease of low value
assets' recognition exemption for the leases.

The Group has lease contracts that include extension and termination options. The Group 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 Group reassesses the lease term if there is a significant 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 significant
leasehold improvements or significant customisation to the leased asset).

The carrying amounts of right-of-use assets recognised and the movements during the year is as follows:
(H in million)
Plant and Leased
Particulars Building Vehicles Total
machinery computer
Gross block
As at April 1, 2021 731.97 37.10 73.70 68.47 911.24
Additions 98.47 - 21.47 10.34 130.28
Translation adjustment (12.79) - (1.37) (1.14) (15.30)
Disposals / cancellations (166.61) - (13.34) (44.17) (224.12)
As at March 31, 2022 651.04 37.10 80.46 33.50 802.10
Additions 111.37 - 12.89 17.18 141.44
Translation adjustment 39.82 - 5.27 1.74 46.83
Disposals / cancellations (287.27) - (15.93) (5.49) (308.69)
As at March 31, 2023 514.96 37.10 82.69 46.93 681.68

238
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
44 Leases (Contd..)
(H in million)
Plant and Leased
Particulars Building Vehicles Total
machinery computer
Accumulated depreciation
As at April 1, 2021 276.84 3.87 36.77 37.82 355.30
Charge for the year 88.12 4.74 17.94 15.99 126.79
Translation adjustment (7.12) - (2.34) (1.02) (10.48)
Disposals / cancellations (106.05) - (10.76) (33.77) (150.58)
As at March 31, 2022 251.79 8.61 41.61 19.02 321.03
Charge for the year 86.86 4.62 20.56 8.88 120.92
Translation adjustment 20.39 - 4.24 1.42 26.05
Disposals / cancellations (229.65) - (15.93) (5.49) (251.07)
As at March 31, 2023 129.39 13.23 50.48 23.83 216.93
Net block as on March 31, 2023 385.56 23.87 32.21 23.10 464.74
Net block as on March 31, 2022 399.25 28.49 38.85 14.48 481.07

The carrying amounts of lease liabilities recognised and the movements during the year is as follows:
(H in million)
Particulars Amount
As at April 1, 2021 558.88
Additions 130.28
Accretion of interest 13.14
Translation adjustment (9.29)
Reversal of lease liabilities on disposal of asset (73.55)
Payments (143.89)
As at March 31, 2022 475.57
Additions 141.44
Accretion of interest 9.86
Translation adjustment 29.13
Reversal of lease liabilities on disposal of asset (57.63)
Payments (145.00)
As at March 31, 2023 453.37

(H in million)
Particulars March 31, 2023 March 31, 2022
Current 91.79 120.03
Non-current 361.58 355.54

The maturity analysis of lease liabilities are disclosed in note 49.

The effective interest rate for lease liabilities is 1.6% to 12 %.

The following are the amounts recognised in the consolidated Ind AS statement of profit and loss:
(H in million)
Particulars March 31, 2023 March 31, 2022
Depreciation expense of right-of-use assets (refer note 36) 120.92 126.79
Interest expense on lease liabilities (refer note 35) 9.86 13.14
Expense relating to short-term leases and leases of low-value assets (included 46.16 50.21
in other expenses) (refer note 37)
Total amount recognised in profit or loss 176.94 190.14

The Group had total cash outflows for leases of H 191.16 million in March 31, 2023 (March 31, 2022: 194.10 million).

239
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
44 Leases (Contd..)
II. Company as a lessor

The Company has entered into cancellable lease agreements for sub-lease of office space. The lease term is for 3 years with
a cancellation clause of 3 months.

The following amounts recognised in the consolidated Ind AS statement of profit and loss
(H in million)
Particulars March 31, 2023 March 31, 2022
Rental income (refer note 31) 2.27 3.03
2.27 3.03

45 Commitments and contingencies

(a) Capital commitments

(H in million)
Particulars March 31, 2023 March 31, 2022
Estimated amount of contracts remaining to be executed on capital account and 100.54 7.96
not provided for (net of advances)

(b) Power purchase agreement

The Group has commitment in nature of variable lease payment towards purchase of solar and wind power with various
parties whereby the Group has committed to purchase and supplier has committed to sell contracted quantity of solar and
wind power for period as defined in the power purchase agreements.

(c) Contingent liabilities

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

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Group believes
that none of the contingencies described below would have a material adverse effect on the Group's financial condition,
results of operation or cash flow.
(H in million)
As at As at
(i) Particulars of guarantees
March 31, 2023 March 31, 2022
Corporate guarantees 43.91 331.31
Bank guarantees (refer note 13)* 29.21 29.19
* Excludes performance bank guarantees given to various customers as the management is of the view that the same is not required to be disclosed here.

(ii) The Hon'ble Supreme court of India in the month of February 2019 had passed a judgement relating to definition of wages
under the Provident Fund Act, 1952. The Management is of the view that there are interpretative challenges on the application
of the judgement retrospectively. Based on the legal advice and in the absence of reliable measurement of the provision for
earlier periods, the Group has made a provision for provident fund contribution pursuant to the judgement only from the date
of Supreme Court Order. The Group will evaluate its position and update its provision, if required, on receiving further clarity
on the subject. The Group does not expect any material impact of the same.

240
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
45 Commitments and contingencies (Contd..)
(iii) The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post-employment benefits
received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on
which the Code will come into effect has not been notified. The Holding Company and its domestic subsidiaries will assess the
impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

(iv) The Group is involved in legal proceedings, both as plaintiff and as defendant. The Group believes the following claims to be
material.
(H in million)
Disputes* March 31, 2023 March 31, 2022
Matters relating to income tax under dispute: 46.44 46.44
Matters relating to indirect taxes under dispute: 143.34 143.34
Others:
- Stamp duty levy 16.28 16.28
- Property tax 10.86 5.89
- Other claims against the Group not acknowledged as debts 8.11 11.75

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

The Group is subject to legal proceeding and claims, which have arisen in the ordinary course of business. The Group has
reviewed all its pending litigations and proceedings and is not carrying provisions for all the above mentioned amounts in
its books of account, as the Group's Management is confident of successfully litigating the matters and these are disclosed
as contingent liability, where applicable in its consolidated Ind AS financial statements. The Group's Management does not
reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect
on the Group's results of operations or financial condition.

46 Segment information - Disclosure pursuant to Ind AS 108 "Operating Segments"

(a) Information about reportable segments

Basis of identifying operating segments / reportable segments:

(i) Basis of identifying operating segments:

Operating segments are identified as those components of the Group (a) that engage in business activities to earn
revenues and incur expenses (including transactions with any of the Group's other components); (b) whose operating
results are regularly reviewed by the Group’s Chief Operating Decision Maker (CODM) to make decisions about resource
allocation and performance assessment and (c) for which discrete financial information is available.The accounting
policies consistently used in the preparation of financial statements are also applied to record revenue and expenditure
in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based
on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the
segment on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying
services are used interchangeably. The Company therefore believes that it is not practical to provide segment disclosures
relating to such items and accordingly such items are separately disclosed as ‘unallocated’.

(ii) Reportable segments:

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or
absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments.

The Company along with its subsidiaries and an associate are an integrated business unit which addresses the Electronics
System Design and Manufacturing ("ESDM") and accordingly there is only one reportable segment called ESDM in
accordance with the requirement of Ind AS 108 - "Operating segments".

241
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
46 Segment information - Disclosure pursuant to Ind AS 108 "Operating Segments" (Contd..)
(b) Geographical information
(H in million)
Segment revenue* Non-current assets**
Particulars
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
(i) India 2,573.72 2,126.95 1,198.71 1,170.25
(ii) Europe and UK 5,317.11 5,005.85 1,252.68 1,271.98
(iii) North America 1,195.57 562.02 83.58 113.10
(iv) Rest of the world 143.29 104.58 - -
Total 9,229.69 7,799.40 2,534.97 2,555.33
*Revenue by geographical area are based on the geographical location of the customers.
**Non-current assets excludes financial instruments and tax assets.

47 Share-based payments

A Description of the share based payment arrangements

The Holding Company has following share based payment arrangements:

(i) Share option plans (equity settled)

The Holding Company sponsers share option plan -

The Centum Employee Stock Option Plan ('ESOP') - 2013 plan. The details of the aforementioned plan are as follows:

(a) The Centum ESOP - 2013 plan was approved by the directors of the Holding Company in May 2013 and by the
shareholders in August 2013. Centum ESOP - 2013 plan provides for the issue of 250,000 shares to the employees of
the Holding Company and its subsidiaries (whether in India or outside India), who are in whole time employment with
the Holding Company and/or it’s subsidiaries.

The plan is administered by a Compensation committee. Options will be issued to employees of the Holding Company
and/or it’s subsidiaries at an exercise price, which shall not be less than the market price immediately preceding
the date of grant. The equity shares covered under these options vest over a period ranging from twelve to forty eight
months from the date of grant. The exercise period is ten years from the date of vesting.

The Centum Electronics Limited Restricted Stock Unit Plan 2021. The details of the aforementioned plan are as
follows:

(a) The Centum Electronics Limited Restricted Stock Unit Plan 2021 was approved by the shareholders of the Holding
Company in October 2021. Centum RSU - 2021 plan provides for the issue of 1,75,000 shares to the employees of the
Holding Company and its subsidiaries (whether in India or outside India), who are in whole time employment with the
Holding Company and/or it’s subsidiaries.

The plan is administered by the Nomination and Remuneration committee. Options will be issued to employees
of the Holding Company and/or it’s subsidiaries at an exercise price, which shall be equal to the face value of the
shares. RSUs granted under this Plan would vest not earlier than minimum vesting period of 1 (one) year or such
other period as may be prescribed under applicable laws and not later than maximum vesting period of 8 (eight)
years from the date of grant of such RSUs. The exercise period is 5 years from the date of last vesting of RSU.

242
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
47 Share-based payments (Contd..)
B Measurement of fair values

The fair value of employee share options has been measured using Black Scholes model. The fair value of the options and the
input used in the measurement of the grant- date fair values of both the plans are as follows:

Year ended March 31, 2023 Year ended March 31, 2022
Particulars
Centum ESOP - 2013 Centum ESOP - 2013
Fair value at grant date H 11.65 - H 277.30 H 11.65 - H 277.30
Share price at grant date H 71.25 & H 637.05 H 71.25 & H 637.05
Weighted average exercise price (WAEP) H 71.25 H 71.25
Dividend yield (%) 10% 10%
Expected life of share options (years) 1- 4 years 1- 4 years
Risk free interest rate (%) 5.70 - 8.60% 5.70 - 8.60%
Expected volatility (%) 48.31% 48.31%

Year ended March 31, 2023 Year ended March 31, 2022
Particulars
Centum RSU Plan - 2021 Centum RSU Plan - 2021
Fair value at grant date H 420.08 -
Share price at grant date H 455.65 -
Weighted average exercise price (WAEP) H 10.00 -
Dividend yield (%) 2.08% -
Expected life of share options (years) 1- 8 years -
Risk free interest rate (%) 7.12% -
Expected volatility (%) 56.15% -

C Movements during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, Centum ESOP
- 2013 plan during the year:

For the year ended March 31, 2023 For the year ended March 31, 2022
Particulars
Number of options WAEP Number of options WAEP
Options outstanding at April 1, 12,026 71.25 19,026 279.42
Granted during the period - - - -
Forfeited / lapsed during the period - - 7,000 -
Exercised during the period - - - -
Expired during the period - - - -
Options outstanding at March 31, 12,026 71.25 12,026 71.25
Exercisable at March 31, 12,026 71.25 12,026 71.25

The options outstanding as at March 31, 2023 had an exercise price of H 71.25 (March 31, 2022: H 71.25) and the weighted
average remaining contractual life of 3.77 years (March 31, 2022: 4.77 years).

243
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
47 Share-based payments (Contd..)
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, Centum RSU
- 2021 plan during the year:

For the year ended March 31, 2023 For the year ended March 31, 2022
Particulars
Number of options WAEP Number of options WAEP
Options outstanding at April 1, - - - -
Granted during the period 1,30,400 10.00 - -
Forfeited / lapsed during the period 15,000 10.00 - -
Exercised during the period - - - -
Expired during the period - - - -
Options outstanding at March 31, 1,15,400 10.00 - -
Exercisable at March 31, - 10.00 - -

The options outstanding as at March 31, 2023 had an exercise price of H.10 (March 31, 2022: Nil) and the weighted average
remaining contractual life of 7.15 years (March 31, 2022: Nil).

D Expense recognised in the consolidated Ind AS statement of profit and loss

The expense recognised for employee services received during the year is shown in the following table :
(H in million)
As at As at
Particulars of guarantees
March 31, 2023 March 31, 2022
Expense arising from equity settled share based payment transaction (refer note 34) 13.91 0.16

48 Capital management

The Group's capital management is intended to create value for the shareholders by facilitating the meeting of long term and short
term goals of the Group.

The Group determines the amount of capital required on the basis of annual business plan coupled with long term and short term
strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations and long
term and short term bank borrowings.

For the purpose of the Group's capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity shareholders of the Group.

The Group 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 Group may adjust the dividend payment to shareholders,
return capital to shareholders or issue new shares. The Group monitors capital using a gearing ratio, which is net debt divided
by total capital plus net debt. The Group's policy is to keep the gearing ratio at an optimum level to ensure that the debt related
covenants are complied with.

244
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
48 Capital management (Contd..)
(H in million)
Particulars March 31, 2023 March 31, 2022
Borrowings (refer note 19 and 23) 2,627.61 2,725.99
Less: Cash and cash equivalents (refer note 13) 352.71 480.44
Net debt (A) 2,274.90 2,245.55
Capital components
Equity share capital (refer note 16) 128.85 128.85
Other equity (refer note 17) 1,978.32 1,910.83
Total capital (B) 2,107.17 2,039.68
Capital and net debt (C = (A+B)) 4,382.07 4,285.23
Gearing ratio (D=(A/C)) 52% 52%

In order to achieve this overall objective, the Group's capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2023 and year
ended March 31, 2022.

49 Disclosures on Financial instruments

This section gives an overview of the significance of financial instruments of the Group and provides additional information on
balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on
which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are
disclosed in Note 2.3(b) and 2.3(o), to the consolidated Ind AS financial statements.

(a) Financial assets and liabilities

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March
31, 2023 and March 31, 2022.

As at March 31, 2023 (H in million)

Fair value Fair value through Derivative
Total
through statement of other instruments Amortised Total fair
Particulars carrying
statement of comprehensive not in hedging cost value
value
profit or loss income relationship
Financial assets
(i) Investments (other than investments in 13.81 - - - 13.81 13.81
associates)
(ii) Trade receivables - - - 4,115.27 4,115.27 4,115.27
(iii) Cash and cash equivalents - - - 352.71 352.71 352.71
(iv) Bank balances other than cash and - - - 262.20 262.20 262.20
cash equivalents
(v) Other financial assets - 0.02 - 290.85 290.87 290.87
Total 13.81 0.02 - 5,021.03 5,034.86 5,034.86
Financial liabilities
(i) Borrowings - - - 2,627.61 2,627.61 2,627.61
(ii) Lease liabilities - - - 453.37 453.37 453.37
(iii) Trade payables - - - 2,109.71 2,109.71 2,109.71
(iv) Put option liability - - 141.12 - 141.12 141.12
(v) Other financial liabilities - - - 375.92 375.92 375.92
Total - - 141.12 5,566.61 5,707.73 5,707.73

245
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
49 Disclosures on Financial instruments (Contd..)
As at March 31, 2022
(H in million)
Fair value Fair value through Derivative
Total
through statement of other instruments Amortised Total fair
Particulars carrying
statement of comprehensive not in hedging cost value
value
profit or loss income relationship
Financial assets
(i) Investments (other than 13.78 - - - 13.78 13.78
investments in associates)
(ii) Trade receivables - - - 2,768.14 2,768.14 2,768.14
(iii) Cash and cash equivalents - - - 480.44 480.44 480.44
(iv) Bank balances other than cash - - - 333.81 333.81 333.81
and cash equivalents
(v) Other financial assets - - - 364.42 364.42 364.42
Total 13.78 - - 3,946.81 3,960.59 3,960.59
Financial liabilities
(i) Borrowings - - - 2,725.99 2,725.99 2,725.99
(ii) Lease liabilites - - - 475.57 475.57 475.57
(iii) Trade payables - - - 1,140.83 1,140.83 1,140.83
(iv) Put option liability - - 272.94 - 272.94 272.94
(v) Other financial liabilities - - - 325.62 325.62 325.62
Total - - 272.94 4,668.01 4,940.95 4,940.95

(b) Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair
value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference
to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted
equity shares and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities,
measured using inputs 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).

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets
and liabilities measured using inputs that 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.

246
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
49 Disclosures on Financial instruments (Contd..)
(H in million)
Fair value measurements at reporting date using
Particulars
Total Level 1 Level 2 Level 3
March 31, 2023
Financial assets
Investments (other than investments in associates) 13.81 - - 13.81
Derivative assets 0.02 - 0.02 -
Financial liabilities
Borrowings 2,627.61 - 2,627.61 -
Put option liability 141.12 - 141.12 -
March 31, 2022
Financial assets
Investments (other than investments in associates) 13.78 - - 13.78
Financial liabilities
Borrowings 2,725.99 - 2,725.99 -
Put option liability 272.94 - 272.94 -

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

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

(iii) There have been no transfers between Level 1, Level 2 and Level 3 for the years ended March 31, 2023 and March 31, 2022.

(c) Financial risk management objectives and policies

The Group's principal financial liabilities, other than derivatives, comprise loans and borrowings, lease liabilities, trade and
other payables. The main purpose of these financial liabilities is to finance the Group's operations. The Group's principal
financial assets including trade receivables, other financial assets and cash and bank balances derived from its operations.

In the course of its business, the Group is exposed primarily to fluctuations in foreign currency exchange rates, interest rates,
equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments. The Group has
a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial
assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of
Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the
Group’s business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a
change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest
rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market
movements cannot be normally predicted with reasonable accuracy.

247
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
49 Disclosures on Financial instruments (Contd..)
(a) Market risk- Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily
to the Group’s debt obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans
and borrowings affected. With all other variables held constant, the Group’s profit before tax is affected through the
impact on floating rate borrowings, as follows:
(H in million)
Increase / decrease Effect on profit
Particulars
in basis points before tax
March 31, 2023
+50 (5.27)
-50 5.27
March 31, 2022
+50 (4.89)
-50 4.89

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment.

(b) Market risk- Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in foreign exchange rates.

Foreign currency exposure

The following table demonstrate the unhedged exposure in USD / EURO exchange rates as at March 31, 2023 and March
31, 2022. The group's exposure to foreign currency changes for all other currencies are not material.

(H in million)
Particulars Currency March 31, 2023 March 31, 2022
Trade payables and borrowings (including short term USD (20.02) (18.06)
borrowing and long term borrowing)
Trade receivables and cash and cash equivalents USD 10.77 5.69
Net assets / (liabilities) in USD in million USD (9.25) (12.37)
Net assets / (liabilities) in H in million INR (760.52) (934.77)

(H in million)
Particulars Currency March 31, 2023 March 31, 2022
Trade payables and borrowings (including short term EUR (2.71) (1.39)
borrowing and long term borrowing)
Trade receivables and cash and cash equivalents EUR 1.46 1.88
Net assets / (liabilities) in EUR in million EUR (1.25) 0.49
Net assets / (liabilities) in H in million INR (111.59) 41.02

248
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
49 Disclosures on Financial instruments (Contd..)
Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and EURO exchange rates,
with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of
monetary assets and liabilities excluding derivative assets. The Group's exposure to other currency is not material.

(H in million)
Change in Effect on profit or loss
Particulars
currency Strengthening Weakening
March 31, 2023
USD 5% (38.03) 38.03
EURO 5% (5.58) 5.58
March 31, 2022
USD 5% (46.74) 46.74
EURO 5% 2.05 (2.05)

The sensitivity analysis has been based on the composition of the financial assets and liabilities at March 31, 2023 and
March 31, 2022 of entities within the Group having exposure other than their functional currency. The period end balances
are not necessarily representative of the average debt outstanding during the period.

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. Financial instruments that are subject to credit risk and concentration thereof principally
consist of trade receivables, investments, cash and cash equivalents and derivatives.

The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk was
H 5,034.86 million and H 3,960.59 million as at March 31, 2023 and March 31, 2022, respectively, being the total carrying
value of trade receivables, balances with bank, bank deposits, investments (other than investments in associates) and
other financial assets.

Customer credit risk is managed by each entity / business unit based on the Group’s established policy, procedures and
control relating to customer credit risk management. An impairment analysis is performed at each reporting date on an
individual basis for major customers. The Group does not hold collateral as security.Also refer note 12.

With respect to trade receivables, the Group has constituted the terms to review the receivables on periodic basis and
to take necessary mitigations, wherever required. The Group creates allowance for all unsecured receivables based on
lifetime expected credit loss based on a provision matrix. The provision matrix takes into account historical credit loss
experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of
the receivables that are due and rates used in the provision matrix.

Credit risk from balances with bank and financial institutions and in respect to loans and security deposits is managed
by the Group’s treasury department in accordance with the Group's policy. Investments of surplus funds are made only
with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the
concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Group have made certain strategic investments which have been approved by the Board of Directors.

249
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
49 Disclosures on Financial instruments (Contd..)
Liquidity risk

Liquidity risk refers to the risk that the Group cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Group
has obtained fund and non-fund based working capital limits from various banks. The Group invests its surplus funds in
bank fixed deposit, which carry no or low market risk.

The Group monitors its risk of a shortage of funds on a regular basis. The Group's objective is to maintain a balance
between continuity of funding and flexibility through the use of bank overdrafts, bank loans, etc. The Group assessed the
concentration of risk with respect to refinancing its debt and concluded it to be medium.

The following table shows a maturity analysis of the anticipated cash flows excluding interest obligations for the Group's
financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value. Floating rate
interest is estimated using the prevailing interest rate at the end of the reporting period.
(H in million)
Particulars 0 - 1 years 1 to 5 years > 5 years Total
March 31, 2023
Borrowings 2,047.99 577.58 2.04 2,627.61
Lease liabilities 91.79 267.80 114.08 473.67
Trade payables 2,109.71 - - 2,109.71
Other financial liabilities 517.04 - - 517.04
4,766.53 845.38 116.12 5,728.03
March 31, 2022
Borrowings 1,910.25 815.74 - 2,725.99
Lease liabilities 120.03 267.35 107.80 495.18
Trade payables 1,140.83 - - 1,140.83
Other financial liabilities 598.56 - - 598.56
3,769.67 1,083.09 107.80 4,960.56

50 Disclosure under Ind AS 115

a) Timing of revenue recognition

March 31, 2023

(H in million)
Performance Performance
Particulars obligation satisfied obligation satisfied Total
at point in time over time*
Sale of products 6,008.73 - 6,008.73
Sale of services - 2,833.23 2,833.23
Management fees - 79.95 79.95
Sales commission 11.24 - 11.24
Income from foreign subsidies - 296.54 296.54
Total 6,019.97 3,209.72 9,229.69

250
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
50 Disclosure under Ind AS 115 (Contd..)
March 31, 2022
(H in million)
Performance Performance
Particulars obligation satisfied obligation satisfied Total
at point in time over time*
Sale of products 4,571.95 - 4,571.95
Sale of services - 2,761.81 2,761.81
Management fees - 105.10 105.10
Sale of scrips 4.29 - 4.29
Sales commission 12.21 - 12.21
Income from foreign subsidies - 344.04 344.04
Total 4,588.45 3,210.95 7,799.40
* The Group recognises revenue from these sources over time, using an input method to measure progress towards complete
satisfaction of the service, because the customer simultaneously receives and consumes the benefits provided by the Group.

b) Contract Balances:
(H in million)
Particulars March 31, 2023 March 31, 2022
Trade receivables (including unbilled revenue) (refer note 12)
- Non-current (gross) 286.83 269.12
- Current (gross) 3,927.07 2,593.04
- Impairment allowance (allowance for bad and doubtful debts) (98.63) (94.02)
Contract Liabilities
Deferred revenue (refer note 26)
- Current 485.91 385.20
Advance from customers (refer note 26)
- Non-current 167.39 77.30
- Current 1,082.66 755.38

c) Revenue recognised during the year

(H in million)
Particulars March 31, 2023 March 31, 2022
Arising out of contract liabilities as at the beginning of the year 670.26 390.00
670.26 390.00

d) Revenue recognised during the year from the performance obligation satisfied upto previous year (arising out of contract
modifications) amounts to H Nil (March 31, 2022: H Nil)

51 Interests in material partly-owned subsidiaries

Financial information of subsidiaries that have material non-controlling interests is provided below:

1 Details of material partly-owned subsidiaries

Country of
Particulars incorporation and March 31, 2023 March 31, 2022
operation
Centum Adetel Group SA France 77.77% 64.66%

251
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
51 Interests in material partly-owned subsidiaries (Contd..)
2 Accumulated balances of material non-controlling interest:
(H in million)
Particulars March 31, 2023 March 31, 2022
Centum Adetel Group SA* (69.63) (73.89)
* Before consolidation adjustments

3 (Loss) / profit allocated to material non-controlling interest:

(H in million)
Particulars March 31, 2023 March 31, 2022
Centum Adetel Group SA* (23.36) (210.34)
* Before consolidation adjustments

4 Summarised financial position

The summarised financial position of the subsidiary is provided below. This information is based on amounts before inter-
company eliminations and consolidation adjustments.
(H in million)
Particulars March 31, 2023 March 31, 2022
Non-current assets
Property, plant and equipment 63.83 85.46
Other intangible assets 141.72 196.82
Intangible assets under development 227.56 120.14
Right-to-use assets 415.23 432.59
Financial and other assets 554.98 525.99
Total 1,403.32 1,360.99
Current assets
Inventories 231.73 234.36
Financial and other assets 2,279.00 2,398.64
Total 2,510.73 2,632.99
Non-current liabilities
Financial liabilities (including borrowings) 922.81 1,153.98
Other liabilities 23.67 70.35
Total 946.48 1,224.33
Current liabilities
Financial liabilities (including borrowings) 1,799.22 1,612.98
Other liabilities 1,481.57 1,365.77
Total 3,280.79 2,978.75
Total equity (313.23) (209.09)
Attributable to:
Equity holders of parent (243.60) (135.20)
Non-controlling interests (69.63) (73.89)

252
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
51 Interests in material partly-owned subsidiaries (Contd..)
5 Summarised statement of profit and loss

The summarised financial statement of profit and loss of the subsidiary is provided below. This information is based on
amounts before inter-company eliminations and consolidation adjustments.
(H in million)
Particulars March 31, 2023 March 31, 2022
I Income
Revenue from operations 4,204.14 4,556.35
Other Income 7.49 23.94
Finance Income 6.77 7.28
Total Income 4,218.39 4,587.57
II Expenses
Cost of materials consumed 1,145.28 1,332.04
(Increase) / decrease in inventories of work-in-progress and finished goods (0.77) (3.69)
Employee benefit expenses 2,384.96 2,423.62
Finance costs 112.72 114.55
Depreciation and amortisation expenses 206.47 193.72
Other expenses 479.33 503.84
Total Expenses 4,327.99 4,564.09
III Share of profit / (loss) of associates (net) 12.44 (45.74)
IV (Loss) / profit before exceptional items and tax (I-II+III) (97.16) (22.26)
V Exceptional items - 585.19
VI (Loss) / profit before tax expense (IV-V) (97.16) (607.45)
VII Tax Expenses - -
VIII (Loss) / profit after tax for the year (VI-VII) (97.16) (607.45)
IX Other comprehensive income / (expense) (net of tax)
(A) Other comprehensive income to be reclassified to profit or loss in
subsequent periods:
(i) Exchange differences on translation of foreign operations (6.63) 12.26
X Total comprehensive income for the year (VIII + IX) (103.79) (595.19)
Attributable to non-controlling interest (23.36) (210.34)

6 Summarised cashflow information:

(H in million)
Particulars March 31, 2023 March 31, 2022
Cash flow from operating activities 519.53 334.30
Cash flow from investing activities (104.87) (104.06)
Cash flow from financing activities (528.43) (225.94)
Net (decrease) / increase in cash & cash equivalents (113.77) 4.30

52 Previous year numbers have been reclassified/regrouped wherever necessary to confirm to current year classifications.

53 Hedging activities and derivatives

The Group uses foreign exchange forward contracts to manage some of its transaction exposures. These derivative instruments
are not designated as cash flow / fair value hedges and are entered into for periods consistent with foreign currency exposure
of underlying transactions. All transactions in derivative financial instruments are undertaken to manage risks arising from
underlying business activities.
(H in million)
Particulars March 31, 2023 March 31, 2022
Derivative assets (refer note 14) 0.02 -

253
Centum Electronics Limited
Annual Report 2022-23

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
54 As at March 31, 2023, trade payables amounting to H 82.54 million, advance from customers amounting to H 141.62 million and
trade receivables amounting to H 60.16 million towards purchase and sale of goods and services respectively, which are outstanding
beyond permissible time period stipulated under the Master Circular on Import of Goods and Services and Master Circular on
Export of Goods and Services issued by Reserve Bank of India ('the RBI'). Considering that the balances are outstanding for more
than the stipulated time, the Company is in the process of intimating the appropriate regulatory authorities and seeking requisite
approvals for extensions. The management is confident that required approvals would be received and penalties, if any that may
be imposed on the Company would not be material. Accordingly, no adjustments have been made by the management to these
consolidated Ind AS financial statements in this regard.

55 Other statutory information

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

(ii) The Holding Company and its subsidiary incorporated in India does not have any transactions with companies struck off.

(iii) The Holding Company and its subsidiary incorporated in India does not have any charges or satisfaction which is yet to be
registered with ROC beyond the statutory period,

(iv) The Holding Company and its subsidiary incorporated in India has not traded or invested in Crypto currency or Virtual Currency
during the financial year.

(v) Following are the details of the funds advanced by the Holding Company to Intermediaries for further advancing to the Ultimate
beneficiaries:
(Euro. in million)
Name of the Date on which funds Amount of funds
Amount
intermediary to Date of funds are invested by further advanced Ultimate
of funds
which the funds advanced intermediaries to to ultimate Beneficary
advanced
are advanced Ultimate Benefeciaries beneficaries
Centum Electronics May 04, 2022 1.60 June 16, 2022 1.60 Shareholders of
UK Limited November 04, 2022 0.08 November 07, 2022 0.08 Centum Adetel
Group SA

The Holding Company has complied with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999)
and The Companies Act, 2013 for the above transactions and the transactions are not violative of the Prevention of Money
laundering Act, 2022 (15 of 2003).

Complete details of the Intermediary and Ultimate Beneficiary:

Government Relationship with the

Name of the entity Registerd Address
Identification Number Company
Centum Electronics UK Limited 16 Great Queen Street, Covenat 10186046 Subsidiary
Garden, London, WC2B 5AH

As detailed above, the Ultimate Beneficiaries are shareholders of Centum Adetel Group SA from whom the Company through
its step down subsidiary Centum Electronics UK Limited have further acquired additional stake of Centum Adetel Group SA
during the year.

254
Corporate Overview Management Reports Financial Statements

Notes to the consolidated Ind AS financial statements

for the year ended March 31, 2023
55 Other statutory information (Contd..)
(vi) The Holding Company and its subsidiary incorporated in India 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 Group
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 Holding Company and its subsidiary incorporated in India has no 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

(viii) The Group has not been declared as a wilful defaulter by any banks or financial institutions.

56 Events after the reporting period

The board of directors have proposed dividend after the balance sheet date which are subject to approval by the shareholders at
the annual general meeting. Refer note 18 for details.

57 Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in these consolidated Ind
AS financial statements have been rounded off or truncated as deemed appropriate by the management of the Group.

As per our report of even date For and on behalf of Board of Directors of Centum Electronics Limited

For S.R. Batliboi & Associates LLP

Chartered Accountants Apparao V Mallavarapu Nikhil Mallavarapu
ICAI Firm registration number: 101049W/E300004 Chairman and Managing Director Whole Time Director
DIN: 00286308 DIN: 00288551

per Sandeep Karnani Indu H S K.S. Desikan

Partner Company Secretary Chief Financial Officer
Membership number: 061207 Membership number: F12285

Place : Bengaluru, India Place : Bengaluru, India

Date : May 27, 2023 Date : May 27, 2023

255
Centum Electronics Limited
Annual Report 2022-23

Centum Electronics Limited

Corporate Identity Number (CIN) – L85110KA1993PLC013869
Registered Office: No.44, KHB Industrial Area, Yelahanka New Town, Bangalore – 560 106
Tel. No: +91 80 4143 6000 Fax No: +91 80 4143 6005
Email: [email protected] Website: www.centumelectronics.com

Notice of the 30th Annual General Meeting

Notice is hereby given that the Thirtieth (30th) Annual General SPECIAL BUSINESS
Meeting (AGM) of the Members of Centum Electronics Limited
will be held on Friday, August 11, 2023 at 4:30 P.M. IST through Item No.5 – Appointment of Ms. Tanya Mallavarapu (DIN:
Video Conferencing / Other Audio Visual Means (“VC / OAVM”) to 01728446) as a Director
transact the following business. To consider and, if thought fit, to pass the following resolution as
an Ordinary Resolution:
The venue of the meeting shall be deemed to be the Registered
Office of the Company at No. 44, KHB Industrial Area, Yelahanka “RESOLVED THAT pursuant to the provisions of Section 152 and
New Town, Bengaluru- 560 106. all other applicable provisions of the Companies Act, 2013 (“the
Act”) and the Rules framed thereunder (including any statutory
ORDINARY BUSINESS
modification(s) or re-enactment thereof, for the time being in
Item No.1 – Adoption of Standalone Financial Statements force), and pursuant to the recommendation and approval of
the Nomination and Remuneration Committee and the Board
To receive, consider and adopt the audited standalone financial of Directors of the Company, Ms. Tanya Mallavarapu (DIN:
statements of the Company for the financial year ended March 01728446) who was appointed by the Board of Directors as an
31, 2023, including the audited Balance Sheet, the Statement of Additional Director with effect from 27th May, 2023 pursuant to the
Profit and Loss, the Cash Flow Statement, and notes to financial provisions of Section 161 of the Act and the Articles of Association
statements for the year ended on that date along with the reports of the Company, and who holds office as an Additional Director
of the Board of Directors and Auditor’s thereon. up to the date of this Annual General Meeting of the Company,
and in respect of whom the Company has received a notice in
Item No.2 – Adoption of Consolidated Financial Statements
writing under Section 160(1) of the Act from a Member signifying
To receive, consider and adopt the audited consolidated financial his intention to propose Ms. Tanya Mallavarapu’s candidature for
statements of the Company for the financial year ended March the office of the Director, be and is hereby appointed as a Non-
31, 2023, including the audited Balance Sheet, the Statement of executive, Non Independent Director of the Company, liable to
Profit and Loss, the Cash Flow Statement, and notes to financial retire by rotation.
statements for the year ended on that date along with the report
RESOLVED FURTHER THAT the Board of Directors and Company
of the Auditor’s thereon.
Secretary & Compliance Officer of the Company be and are
Item No.3 – Declaration of Dividend hereby severally authorised to do all such acts, deeds and things
as may be necessary, proper, or expedient to give effect to this
To declare a final Dividend of H 4 per equity share (i.e., 40%) of H resolution."
10/- each for the financial year ended 31st March 2023.
Item No.6 – Remuneration payable to the Cost Auditors
Item No.4 - Retirement of Director by Rotation
To consider and if thought fit, to pass the following resolution as
To appoint a Director in place of Mr. Nikhil Mallavarapu (DIN: an Ordinary Resolution:
00288551) who retires by rotation and being eligible, offers
himself for re-appointment.

256
Notice

“RESOLVED THAT pursuant to Section 148 and other applicable and things as may be necessary, proper, or expedient to give
provisions, if any, of the Companies Act, 2013 and the Companies effect to this resolution.”
(Audit and Auditors) Rules, 2014, (including any statutory
By Order of the Board of Directors
modification(s) or re-enactment thereof, for the time being in
For Centum Electronics Limited
force), M/s. K.S. Kamalakara & Co., Cost Accountants (Firm
Registration No. 000296), appointed as Cost Auditors by the Place: Bengaluru Indu H S
Board of Directors to audit the cost records of the Company for Date: May 27, 2023 Company Secretary
the financial year 2023–24, be paid a remuneration of H1,00,000/- & Compliance Officer
(Rupees One Lakh) per annum plus applicable taxes and out-of-
pocket expenses that may be incurred during the course of audit. Registered Office:
No.44, KHB Industrial Area
RESOLVED FURTHER THAT the Board of Directors and Yelahanka New Town
Company Secretary & Compliance Officer of the Company be Bengaluru – 560 106
and are hereby severally authorised to do all such acts, deeds CIN: L85110KA1993PLC013869

257
Centum Electronics Limited
Annual Report 2022-23

NOTES: 7. As per the provisions of the Companies Act, 2013, a member

entitled to attend and vote at the AGM is entitled to appoint a
1. Ministry of Corporate Affairs ("MCA") has vide its circular proxy to attend and vote on his/her behalf. Since the 30th AGM
dated December 28, 2022 read with circulars dated April 08, is being held through VC / OAVM as per the MCA Circulars,
2020, April 13, 2020 and May 05, 2020 (collectively referred to physical attendance of Members has been dispensed with.
as "MCA Circulars") permitted the holding of AGM through Accordingly, the facility for appointment of proxies to attend
VC / OAVM, without the physical presence of Members. In and cast vote for the members will not be made available for
compliance therewith, AGM of the Company is being held the 30th AGM and hence the Proxy Form and Attendance Slip
through VC / OAVM. Also, in compliance with MCA Circulars are not annexed to this Notice.
and SEBI Circular dated January 05, 2023 read with circular
dated May 12, 2020, Notice of the AGM along with the Annual 8. Corporate Members are required to access the link https://
Report 2022-23 is being sent only through electronic mode evoting.kfintech.com and upload a certified copy of the
to those Members whose email addresses are registered Board Resolution authorizing their representative to attend
with the Company / Depositories. the AGM through VC / OAVM and vote on their behalf.
Institutional Investors are encouraged to attend and vote at
2. The Company has enabled the Members to participate the meeting through VC / OAVM.
at the 30th AGM through the VC / OAVM facility provided
by KFin Technologies Limited (previously known as KFin 9. In case of joint holders attending the meeting, only such joint
Technologies Private Limited), Registrar and Share Transfer holder who is higher in the order of names will be entitled to
Agent. The instructions for participation by Members are vote.
given in the subsequent paragraphs. Participation at the
10. The Company has fixed Wednesday, August 2, 2023, as
AGM through VC / OAVM shall be allowed on a first come-
Record Date for determining the members eligible for
first-serve basis.
Dividend on Equity Shares, if declared at the Annual General
3. As per the provisions under the MCA Circulars, Members Meeting.
attending the 30th AGM through VC / OAVM shall be counted
11. Subject to the provisions of the Companies Act, 2013,
for the purpose of reckoning the quorum under Section 103
dividend as recommended by the Board of Directors, if
of the Companies Act, 2013.
approved by the members will be paid on or before Tuesday,
4. The Company has provided the facility to Members to September 5, 2023, to those members whose names appear
exercise their right to vote by electronic means both through in the Register of Members on the Record Date.
remote e-voting and Insta Poll during the AGM. The process
12. Pursuant to Finance Act, 2020, dividend income will be
of remote e-voting with necessary User ID and Password is
taxable in the hands of shareholders w.e.f. April 1, 2020,
given in the subsequent paragraphs. Such remote e-voting
and the Company is required to deduct tax at source from
facility is in addition to voting that will take place at the 30th
dividend paid to shareholders at the prescribed rates. For
AGM being held through VC / OAVM.
the prescribed rates for various categories, the members are
5. Members joining the meeting through VC / OAVM, who have requested to refer to the Finance Act, 2020 and amendments
not already cast their vote by means of remote e-voting, shall thereof.
be able to exercise their right to vote through Insta Poll at
A Resident individual shareholder with PAN and who is not
the AGM. The Members who have cast their vote by remote
liable to pay income tax can submit a yearly declaration in
e-voting prior to the AGM may also join the AGM through VC
Form No. 15G/15H, to avail the benefit of non-deduction of
/ OAVM but shall not be entitled to cast their vote again.
tax at source by sending an email to einward.ris@kfintech.
6. The Company has appointed Mr. S.P. Nagarajan, Practicing com or [email protected]. Shareholders are
Company Secretary (Membership No. ACS 10028), who requested to note that in case their PAN is not registered,
in the opinion of the Board is a duly qualified person, as a the tax will be deducted at a higher rate of 20%.
Scrutinizer who will collate the electronic voting process in
Non-resident shareholders can avail beneficial rates under
a fair and transparent manner. The Scrutinizer shall within
tax treaty between India and their country of residence,
a period of two (2) working days from the date of conclusion
subject to providing necessary documents i.e. No Permanent
of General Meeting, submit his report of the votes cast in
Establishment and Beneficial Ownership Declaration, Tax
favour or against, if any, to the Chairman of the Company.
Residency Certificate, Form 10F, self declaration and any
The result of the same will be disclosed through the Annual
other document which may be required to avail the tax treaty
General Meeting proceedings. The e-voting results will also
benefits by sending an email to [email protected] or
be uploaded in the website of the Company https://www.
[email protected].
centumelectronics.com.

258
Notice

The aforesaid declarations and documents need to be Hyderabad – 500032, Telangana,

submitted by the shareholders latest by Wednesday, August Toll Free No.: 1800-309-4001
2, 2023 E-mail: [email protected]

13. Members are requested to note that the dividends not 18. In line with the MCA Circulars, the notice of the 30th AGM
encashed or claimed within 7 (seven) years from the date of along with the Annual Report 2022-23 are being sent only by
transfer to the Unpaid Dividend Account, will as per Section electronic mode to those Members whose e-mail addresses
124 of the Companies Act, 2013, along with the respective are registered with the Company/ Depositories. Members
shares lying in the pool account be transferred to the Investor may please note that this Notice and Annual Report 2022-
Education and Protection Fund (IEPF). Members who have 23 will also be available on the Company’s website at
not encashed or claimed the dividend for the earlier years https://www.centumelectronics.com, websites of the Stock
are requested to approach the Company / Registrar & Exchanges i.e. BSE Limited and National Stock Exchange
Transfer Agent and whose shares are transferred to IEPF of India Limited at www.bseindia.com and www.nseindia.
can claim by making an application in form IEPF-5 to IEPF com respectively, and on the website of KFin Technologies
Authority through Company’s Nodal Officer and Registrar & Limited at https://evoting.kfintech.com.
Transfer Agent at the earliest. Members can file only one
consolidated claim in a financial year as per the IEPF Rules. 19. Members who have not registered their e-mail address are
requested to register the same in respect of shares held in
14. Members whose shareholding is in the electronic mode electronic form with the Depository through their Depository
are requested to direct change of address notifications and Participant(s) and in respect of shares held in physical form
updates of savings bank account details to their respective by writing to the Company’s Registrar and Share Transfer
Depository Participant(s). Members holding Shares in Agent, KFin Technologies Limited, Selenium Building,
physical form are requested to advise any change of address Tower B, Plot No. 31 & 32, Gachibowli Financial District,
or bank details immediately to our Registrars and Transfer Nanakramguda, Hyderabad-500 032.
Agent, KFin Technologies Limited. Members are also
encouraged to utilize the Electronic Clearing System (ECS) 20. The Statement pursuant to Section 102 (1) of the Companies
for receiving dividends. Act, 2013 with respect to the Special Business set out in the
Notice is annexed hereto.
15. In accordance with the proviso to Regulation 40(1) of the
Securities and Exchange Board of India (Listing Obligations 21. Additional information pursuant to Regulation 36 of the
and Disclosure Requirements) Regulations, 2015, effective SEBI (Listing Obligations and Disclosure Requirements)
from April 1, 2019, transfers of securities of the Company Regulations, 2015 in respect of the Director seeking
shall not be processed unless the securities are held in appointment/ re-appointment at the Annual General Meeting
the dematerialized form with a depository. Accordingly, is furnished and forms a part of the Notice. The Directors
Members holding equity shares in physical form are urged have furnished the requisite consents / declarations for
to have their shares dematerialized to enable to transfer appointment /re-appointment.
shares in a hassle free manner.
22. The following documents will be available for inspection by
16. Members who hold shares in the physical form can the Members electronically during the 30th AGM. Members
nominate a person in respect of all the shares held by them seeking to inspect such documents can send an email to
singly or jointly. Members who hold shares in single name [email protected].
are advised, in their own interest, to avail of the nomination
a) The Register of Directors and Key Managerial Personnel
facility by filling Form No. SH-13 or Form ISR-3 (Declaration
and their shareholding maintained under Section 170 of
to Opt-out). Members holding shares in the dematerialised
the Companies Act, 2013.
form may contact their DP's for recording the nomination in
respect of their holdings. b) The Register of Contracts or Arrangements in which
Directors are interested, maintained under Section 189
17. Forms ISR-1, ISR-2, ISR-3, ISR-4 & SH-13 alongwith the
of the Companies Act, 2013.
supporting documents as stated above are required to be
submitted to KFintech at the address mentioned below: 23. Members are requested to send all communications relating
to Shares including dividend matters to our Registrar and
KFin Technologies Limited (Formerly KFin Technologies
Share Transfer Agents at the following address:
Private Limited)
Unit: Centum Electronics Limited KFin Technologies Limited,
Selenium Tower B, Plot 31-32, Financial District, Selenium Building, Tower B, Plot Nos.31 & 32, Financial
Nanakramguda, Serilingampally Mandal, District,

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Centum Electronics Limited
Annual Report 2022-23

Nanakramguda, Serilingampally Mandal, Hyderabad – Shareholders are advised to update their mobile
500032 number and e-mail ID with their DPs to access e-voting
Toll Free No.1800 309 4001 facility.
Email: [email protected]
iv. The remote e-voting period commences on Tuesday,
24. All documents referred to in the Notice will be available August 8, 2023, at 9.00 a.m. to Thursday, August 10,
for inspection at the Company's Registered Office during 2023, at 5.00 p.m. During this period, the Members
normal business hours on working days up to the date of the of the Company holding shares in physical form or in
Annual General Meeting. dematerialized form, as on the cut-off date being Friday,
August 4, 2023, may cast their vote by electronic means
25. Pursuant to Section 108 of Companies Act, 2013 read with in the manner and process set out hereinabove. The
Rule 20 of Companies (Management and Administration) e-voting module shall be disabled for voting thereafter.
Rules, 2014 and in compliance with the SEBI (Listing Once the vote on a resolution is cast by the Member, the
Obligations & Disclosure Requirements) Regulations, 2015, Member shall not be allowed to change it subsequently.
it is mandatory to extend to the Members of the Company, Further, the Members who have cast their vote
the facility to vote at the Annual General Meeting (AGM) by electronically shall not vote by way of poll, held at the
electronic means. Members of the Company can transact all Meeting.
the items of the business through electronic voting system
as contained in the Notice of the Meeting. v. The voting rights of Members shall be in proportion to
their shares in the paid-up equity share capital of the
PROCEDURE AND INSTRUCTIONS FOR E-VOTING AND Company as on the cut-off date.
ATTENDING THE AGM THROUGH VC / OAVM:
vi. Any person holding shares in physical form and non-
26. The Company has entered into an agreement with KFin individual shareholders, who acquires shares of the
Technologies Limited (KFintech) for facilitating e-voting and Company and becomes a Member of the Company after
for conducting the Annual General Meeting through Video sending of the Notice and holding shares as on the
Conferencing / Other Audio-Visual Means. The instructions cut-off date, may obtain the login ID and password by
are as follows: sending a request at [email protected]. However, if
he / she is already registered with KFintech for remote
i. In compliance with the provisions of Section 108 of the
e-voting then he /she can use his / her existing User ID
Act, read with Rule 20 of the Companies (Management
and Password for casting the vote.
and Administration) Rules, 2014, as amended from time
to time, Regulation 44 of the SEBI Listing Regulations vii. In case of Individual Shareholders holding securities in
and in terms of SEBI vide circular no. SEBI/HO/CFD/ demat mode and who acquires shares of the Company
CMD/CIR/P/2020/242 dated December 9, 2020 in and becomes a Member of the Company after sending
relation to e-voting Facility Provided by Listed Entities, of the Notice and holding shares as on the cut-off
the Members are provided with the facility to cast date may follow steps mentioned below under “Login
their vote electronically, through the e-voting services method for remote e-voting and joining virtual meeting
provided by KFintech, on all the resolutions set forth in for Individual shareholders holding securities in demat
this Notice. The instructions for e-voting are given in mode.”
subsequent paragraphs.
viii. The details of the process and manner for remote
ii. However, in pursuant to SEBI circular no. SEBI/HO/ e-voting and e-AGM are explained herein below:
CFD/CMD/CIR/P/2020/242 dated December 9, 2020
on “e-voting facility provided by Listed Companies”, Step 1 : Access to Depositories e-voting system in case
e-voting process has been enabled to all the individual of individual shareholders holding shares in demat
demat account holders, by way of single login credential, mode.
through their demat accounts / websites of Depositories
/ DPs in order to increase the efficiency of the voting Step 2: Access to KFintech e-voting system in case
process. of shareholders holding shares in physical and non-
individual shareholders in demat mode.
iii. Individual demat account holders would be able to
cast their vote without having to register again with Step 3: Access to join virtual meetings (AGM) of the
the e-voting service provider (ESP) thereby not only Company on KFintech system to participate AGM and
facilitating seamless authentication but also ease vote at the AGM.
and convenience of participating in e-voting process.

260
Notice

Details on Step 1 are mentioned below:

Login method for remote e-voting for Individual shareholders holding securities in demat mode.

Type of shareholders Login Method

Individual Shareholders 1. User already registered for IDeAS facility:
holding securities in Visit URL: https://eservices.nsdl.com
demat mode with NSDL
Click on the “Beneficial Owner” icon under “Login” under ‘IDeAS’ section.
On the new page, enter User ID and Password. Post successful authentication, click on “Access to e-voting”
Click on company name or e-voting service provider and you will be re-directed to e-voting service provider
website for casting the vote during the remote e-voting period.
2. User not registered for IDeAS e-Services
To register click on link : https://eservices.nsdl.com
Select “Register Online for IDeAS” or click at https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.
jsp
Proceed with completing the required fields.
Follow steps given in point 1
3. Alternatively by directly accessing the e-voting website of NSDL
Open URL: https://www.evoting.nsdl.com/
Click on the icon “Login” which is available under ‘Shareholder/Member’ section.
A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number
held with NSDL), Password / OTP and a Verification Code as shown on the screen.
Post successful authentication, you will be redirected to NSDL Depository site wherein you can see e-Voting
page.
Click on Company name or e-Voting service provider name and you will be redirected to e-Voting service
provider website for casting your vote during the remote e-Voting period.
Individual Shareholders 1. Existing user who have opted for Easi / Easiest
holding securities in Visit URL: https://web.cdslindia.com/myeasi/home/login or
demat mode with CDSL
URL: www.cdslindia.com
Click on New System Myeasi
Login with your registered User ID and Password.
After successful login of Easi / Easiest, Option will be made available to reach e-voting page
Click on e-voting service provider name to cast your vote
2. User not registered for Easi/Easiest
Option to register is available at
https://web.cdslindia.com/myeasi/Registration/EasiRegistration
Proceed with completing the required fields.
3. Alternatively, by directly accessing the e-voting website of CDSL
Visit URL: www.cdslindia.com
Provide your demat Account Number and PAN No.
System will authenticate user by sending OTP on registered Mobile & Email as recorded in the demat
Account.
After successful authentication, user will be provided links for the respective ESP, where the e- Voting is in
progress.

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Centum Electronics Limited
Annual Report 2022-23

Type of shareholders Login Method

Individual Shareholder You can also login using the login credentials of your demat account through your DP registered with NSDL /
login through their demat CDSL for e-voting facility.
accounts / Website of
Depository Participant Once logged-in, you will be able to see e-voting option. Once you click on e-voting option, you will be redirected
to NSDL / CDSL Depository site after successful authentication, wherein you can see e-voting feature.
Click on options available against company name or e-voting service provider and you will be redirected to
e-voting website of service provider for casting your vote during the remote e-voting period.

Important note: Members who are unable to retrieve User ID / Password are advised to use Forgot User ID and Forgot Password option
available at respective websites.

Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues related to login through Depository i.e.
NSDL and CDSL.

Login type Helpdesk details

Securities held with NSDL Please contact NSDL helpdesk by sending a request at [email protected] or call at toll free no.: 1800
1020 990 and 1800 22 44 30
Securities held with CDSL Please contact CDSL helpdesk by sending a request at [email protected] or contact at
022- 23058738 or 022-23058542-43

Details on Step 2 are mentioned below: vi. On successful login, the system will prompt you to
select the “EVEN” i.e., ‘Centum Electronics Limited -
Login method for e-voting for shareholders other than Individual AGM” and click on “Submit”
shareholders holding securities in demat mode and shareholders
holding securities in physical mode. vii. On the voting page, enter the number of shares (which
represents the number of votes) as on the Cut-off Date
(A) Members whose email IDs are registered with the Company/ under “FOR/AGAINST” or alternatively, you may partially
Depository Participants (s), will receive an email from enter any number in “FOR” and partially “AGAINST” but
KFintech which will include details of e-voting Event Number the total number in “FOR/AGAINST” taken together shall
(EVEN), User ID and Password. They will have to follow the not exceed your total shareholding as mentioned herein
below process: above. You may also choose the option ABSTAIN. If the
Member does not indicate either “FOR” or “AGAINST”
i. Launch internet browser by typing the URL: https://
it will be treated as “ABSTAIN” and the shares held will
evoting.kfintech.com
not be counted under either head.
ii. Enter the login credentials (i.e. User ID and Password).
viii. Members holding multiple folios/demat accounts shall
In case of physical folio, User ID will be EVEN (e-voting
choose the voting process separately for each folio/
Event Number), followed by folio number. In case of
demat accounts.
Demat account, User ID will be your DP ID and Client
ID. However, if you are already registered with KFintech ix. Cast your votes by selecting an appropriate option and
for e-voting, you can use your existing User ID and click on ‘SUBMIT’. A confirmation box will be displayed.
Password for casting the vote. Click ‘OK’ to confirm, else ‘CANCEL’ to modify. Once
you confirm, you will not be allowed to modify your vote
iii. After entering these details appropriately, click on
subsequently. During the voting period, you can login
“LOGIN”.
multiple times till you have confirmed that you have
iv. You will now reach password change Menu wherein you voted on the resolution.
are required to mandatorily change your password. The
x. Corporate/Institutional Members (i.e. other than
new password shall comprise of minimum 8 characters
Individuals, HUF, NRI etc.) are required to send
with at least one upper case (A- Z), one lower case (a-z),
scanned certified true copy (PDF Format) of the
one numeric value (0-9) and a special character (@,#,$,
Board Resolution/Authority Letter etc., authorizing its
etc.,). It is strongly recommended that you do not share
representative to attend the AGM through VC / OAVM on
your password with any other person and that you take
its behalf and to cast its vote through remote e-voting
utmost care to keep your password confidential.
together with attested specimen signature(s) of the
v. You need to login again with the new credentials. duly authorised representative(s), to the Scrutinizer

262
Notice

at email id [email protected] with a copy marked KFintech. After logging in, click on the Video Conference
to [email protected]. The scanned image of the tab and select the EVEN of the Company. Click on the
above-mentioned documents should be in the naming video symbol and accept the meeting etiquettes to
format “Corporate Name_Even No.” join the meeting. Please note that the members who
do not have the User ID and Password for e-voting or
xi. In case of any queries/grievances, you may refer the have forgotten the User ID and Password may retrieve
Frequently Asked Questions (FAQs) for members and the same by following the remote e-voting instructions
e-voting User Manual available at the ‘download’ section mentioned above.
of HYPERLINK "https://evoting.kfintech.com/"https://
evoting.kfintech.com or call KFin on 1800 309 4001 (toll ii. Facility for joining AGM though VC / OAVM shall open
free). atleast 15 minutes before the commencement of the
Meeting.
(B) Members whose email IDs are not registered with the
Company/Depository Participants(s), and consequently the iii. Members are encouraged to join the Meeting through
Annual Report, Notice of AGM and e-voting instructions Laptops/ Desktops with Google Chrome (preferred
cannot be serviced, will have to follow the below process: browser), Safari, Internet Explorer, Microsoft Edge,
Mozilla Firefox 22.
i. Members who have not registered their email address
and in consequence the Annual Report, Notice of iv. Members will be required to grant access to the webcam
AGM and e-voting instructions cannot be serviced, to enable VC / OAVM. Further, Members connecting from
may temporarily get their email address and mobile Mobile Devices or Tablets or through Laptop connecting
number provided with KFintech, by accessing the link: via Mobile Hotspot may experience Audio/Video loss due
https://ris.kfintech.com/clientservices/mobilereg/ to fluctuation in their respective network. It is therefore
mobileemailreg.aspx. recommended to use Stable Wi-Fi or LAN Connection to
mitigate any kind of aforesaid glitches.
Members are requested to follow the process as guided
to capture the email address and mobile number v. As the AGM is being conducted through VC / OAVM,
for sending the soft copy of the notice and e-voting for the smooth conduct of proceedings of the AGM,
instructions along with the User ID and Password. In Members are encouraged to express their views / send
case of any queries, member may write to einward.ris@ their queries in advance mentioning their name, demat
kfintech.com. account number / folio number, email id, mobile number
at [email protected]. Questions /
ii. Alternatively, member may send an e-mail request queries received by the Company till Wednesday,
at the email id: [email protected] along with August, 9, 2023, shall only be considered and responded
scanned copy of the signed copy of the request letter during the AGM.
providing the email address, mobile number, self-
attested PAN copy and Client Master copy in case of vi. The Members who have not cast their vote through
electronic folio and copy of share certificate in case of remote e-voting shall be eligible to cast their vote
physical folio for sending the Annual report, Notice of through e-voting system available during the AGM.
AGM and the e-voting instructions. E-voting during the AGM is integrated with the VC /
OAVM platform. The Members may click on the voting
iii. After receiving the e-voting instructions, please follow icon displayed on the screen to cast their votes.
all steps above to cast your vote by electronic means.
vii. A Member can opt for only single mode of voting i.e.,
Details on Step 3 are mentioned below: through Remote e-voting or voting at the AGM. If a
Member casts votes by both modes, then voting done
Instructions for all the shareholders, including Individual,
through Remote e-voting shall prevail and vote at the
other than Individual and Physical, for attending the AGM
AGM shall be treated as invalid.
of the Company through VC /OAVM and e-voting during the
meeting. viii. Facility of joining the AGM through VC / OAVM shall be
available for atleast 2000 members on first-come-first-
i. Member will be provided with a facility to attend the
serve basis.
AGM through VC / OAVM platform provided by KFintech.
Members may access the same at https://emeetings. ix. Institutional Members are encouraged to attend and
kfintech.com/ by using the e-voting login credentials vote at the AGM through VC / OAVM.
provided in the email received from the Company/

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Centum Electronics Limited
Annual Report 2022-23

OTHER INSTRUCTIONS: Resolutions set forth in this Notice. A person who is not a
member as on the cut-off date should treat this Notice for
I. Speaker Registration: The Members who wish to speak information purposes only. Once the vote on a resolution(s)
during the meeting may register themselves as speakers is cast by the Member, the Member shall not be allowed to
for the AGM to express their views. They can visit https:// change it subsequently.
emeetings.kfintech.com and login through the User ID and
Password provided in the mail received from KFintech. On V. The results of the electronic voting shall be declared to the
successful login, select ‘Speaker Registration’ which will Stock Exchanges after the AGM. The results along with the
open from Monday, August 7, 2023 to Wednesday, August 9, Scrutinizer’s Report, shall also be placed on the website of
2023. Members shall be provided a ‘queue number’ before the Company.
the meeting. The Company reserves the right to restrict
27. Members who may require any technical assistance or
the speakers at the AGM to only those Members who have
support before or during the AGM are requested to contact
registered themselves, depending on the availability of time
KFin Technologies Limited at toll free number 1-800-3094-
for the AGM.
001 or write to them at [email protected].
II. Post your Question: The Members who wish to post their
28. A video guide assisting the members attending e-AGM either
questions prior to the meeting can do the same by visiting
as a speaker or participant is available for quick reference
https://emeetings.kfintech.com. Please login through the
at URL https://emeetings.kfintech.com/, under the “How It
User ID and Password provided in the mail received from
Works” tab placed on top of the page.
KFintech. On successful login, select ‘Post Your Question’
option which will opened from Monday, August 7, 2023 at
9:00 a.m. to Wednesday, August 9, 2023 at 5:00 p.m.

III. In case of any query and/or grievance, in respect of voting

by electronic means, Members may refer to the Help &
Frequently Asked Questions (FAQs) and e-voting user manual
available at the download section of https://evoting.kfintech. By Order of the Board of Directors
com (KFintech Website) or contact Mr. N Shiva Kumar, For Centum Electronics Limited
Deputy Manager at [email protected] or call KFintech’s
toll free No. 1-800-309-4001 for any further clarifications.

IV. The Members, whose names appear in the Register of Place: Bengaluru Indu H S
Members / list of Beneficial Owners as on Friday, August Date: May 27, 2023 Company Secretary &
4, 2023, being the cut-off date, are entitled to vote on the Compliance Officer

264
Notice

Explanatory Statement pursuant to Section 102 of the Companies Act, 2013

Item No.5: The Board recommends the Ordinary Resolution set out at Item
No. 5 of the Notice for approval by the members.
To appoint Ms. Tanya Mallavarapu (DIN: 01728446) as Non-
Executive Non Independent Director of the Company. Item No. 6:

Pursuant to provisions of Section 152 of the Companies Act, The provisions of Section 148 of the Companies Act, 2013 and
2013 (“the Act”) read with the applicable rules made thereunder, the Companies (Cost Records and Audit) Rules, 2014 mandates
the Board of Directors of the Company (“Board”) at its meeting the Company to get its cost records audited every year. The
held on 27th May, 2023, on the basis of the recommendation Board of Directors has considered the appointment of M/s. K.S.
of the Nomination and Remuneration Committee (“NRC”), Kamalakara & Co., Cost Accountants (Firm Registration No.
had appointed Ms. Tanya Mallavarapu (DIN: 01728446) as an 000296) as the Cost Auditors of the Company for the financial
Additional Director with effect from 27th May, 2023. year 2023-24 at a remuneration of H1,00,000/- (Rupees One Lakh)
apart from applicable taxes and out-of-pocket expenses, if any.
In accordance with the provisions of Section 161 of the Act read
with the applicable rules made thereunder and the Articles of Ratification of remuneration payable to Cost Auditors needs to
Association of the Company, Ms. Tanya Mallavarapu being an be done by the Shareholders of the Company in terms of Section
Additional Director, holds office up to the date of the 30th Annual 148 of the Companies Act, 2013 read with the Companies (Audit
General Meeting (“AGM”). The Company has received a notice in and Auditors) Rules, 2014, due to which consent of the Members
writing from a Member of the Company under Section 160 of the is sought for ratification of the remuneration payable to the Cost
Act proposing the candidature of Ms.Tanya Mallavarapu for the Auditors for the financial year 2023-24.
office of a Director of the Company.
The Board of Directors recommends the Ordinary Resolution
Ms. Tanya Mallavarapu is not disqualified from being appointed as set out in Item No.6 of the Notice for the approval of the
as a Director in terms of Section 164 of the Act and has given his Shareholders.
consent to act as a Director. She is not debarred from holding
the office of a Director by virtue of any order of the Securities and None of the Promoters, Directors, Key Managerial Personnel or
Exchange Board of India or any other such authority. their relatives are interested, financially or otherwise, if any in the
Resolution No.6 of the accompanying Notice except to the extent
A brief profile of Ms. Tanya Mallavarapu, is given in the particulars of their Shareholding, if any in the Company
of Directors under the AGM Notice and report on Corporate
Governance.
By Order of the Board of Directors
Ms. Tanya Mallavarapu is the daughter of Mr. Apparao V
For Centum Electronics Limited
Mallavarapu, Chairman and Managing Director and Dr.
Swarnalatha Mallavarapu. She is the sister of Mr. Nikhil
Mallavarapu, Whole-time Director.

None of the other Directors, Key Managerial Personnel or their Place: Bengaluru Indu H S
relatives are in any way, concerned or interested in the said Date: May 27, 2023 Company Secretary &
Resolutions. Compliance Officer

265
Centum Electronics Limited
Annual Report 2022-23

Details of the Director seeking appointment at the 30th Annual General Meeting [Pursuant to Regulation 36(3)
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard on
General Meeting]

1.Mr. Nikhil Mallavarapu

Date of birth 18.09.1986

Date of appointment 13.02.2020

Profile:

Mr. Nikhil Mallavarapu holds Masters and Bachelors Degrees in Electrical and Computer Engineering from Carnegie Mellon University,
USA. He also holds a MBA from the INSEAD Business School in France.

No. of shares held in the Company 5,89,929

Names of listed entities in which he holds the Directorship as on Centum Electronics Limited
March 31, 2023
Chairman/Member of the Committees of the listed entities Board Member of Stakeholders Relationship Committee and Risk
as on March 31, 2023 Management Committee
Inter-se relationship with other Directors Mr. Nikhil Mallavarapu is the son of Mr. Apparao V Mallavarapu,
Chairman & Managing Director, Dr. Swarnalatha Mallavarapu
and brother of Ms. Tanya Mallavarapu

Mr. Nikhil has been associated with the Company since from August 2012. He has served in different leadership positions including
Manager- New Projects at SEBU, Vice President - Corporate Development at Centum Adetel, President- EMS BU. Prior to joining
Centum, Nikhil worked at the multinational semiconductor company- Analog Devices, as product engineer in the MEMS sensors
division.

2.Ms. Tanya Mallavarapu

Date of birth 09.02.1989

Date of appointment 27.05.2023

Profile:

Tanya is the founder of TMR Design Co. LLP an interdisciplinary design firm that emphasises on innovation, creativity and functionality
in a wide array of industries from healthcare, residential, commercial and hospitality. Prior to this Tanya served as a marketing executive
in the luxury retail industry, involved in building marketing strategies for global retail expansion. She launched an Indian based luxury
brand across cities including New York, Hong Kong, London and Delhi. Prior to this she worked as a business analyst at Intuit creating
revenue models and marketing strategies to launch the newly developed GoPayment product.

Tanya completed her Master’s Degree in Economics from Duke University, in U.S. She graduated from the University of Southern
California with a Bachelor’s Degree in Business Administration and was on the Dean’s List.

No. of shares held in the Company -

Names of Listed entities in which she holds the Directorship as Centum Electronics Limited
on 27th May, 2023
Inter-se relationship with other Directors Ms. Tanya Mallavarapu is the daughter of Mr. Apparao V
Mallavarapu, Chairman & Managing Director, Dr. Swarnalatha
Mallavarapu and sister of Mr. Nikhil Mallavarapu, Whole-time
Director.

266
Notes
Notes
Centum Electronics Limited
TEAMWORK | TECHNOLOGY | TRUST
Corporate Identity Number (CIN) - L85110KA1993PLC013869

Registered Office: No.44, KHB Industrial Area,

Yelahanka New Town, Bangalore - 560 106
Tel. No: +91 80 4143 6000 Fax No: +91 80 4143 6005
Email: [email protected]
Website: www.centumelectronics.com

INDIA FRANCE CANADA

`Avansa’, Plot -58P, 4, Chemin du Ruisseau, 69130 Ecully, 101 Boulevard Marcel-Laurin
Survey No.8, KIADB, France. - Bureau 210
Bengaluru Aerospace Park Tel: +33 4 72 18 08 40 St-Laurent H4N 2M3
Industrial Area, Jala Hobli, Québec, CANADA
Budigere Post, 15 rue Michel Labrousse,
Bengaluru - 562 129 Parc Technologique BELGIUM
Tel: +91 80 71214000 de Basso Combo
31106 Toulouse, France Chaussée de Bruxelles 94b
Yelahanka Tel: +33 (0) 5 34 60 31 58 1410 Waterloo
BELGIUM
No.44, KHB Industrial Area, 335 rue de Rochebrune –
Yelahanka New Town, Zone Centr’Alp, UK
Bengaluru – 560 106 38430 Moirans, France
16, Great Queen Street,
Tel: +33 (0) 4 76 35 09 29
NCC Urban Windsor Covent Garden,
4 rue Emile Baudot, London, WC2B 5AH
76/2, 6th & 8th Floor 91120 Palaiseau, Paris
New Airport Road, US
Tel: +33 (0)1 73 54 10 10
Opp. Jakkur Aerodrome,
1621, Central Avenue,
Allalasandra, Yelahanka,
Cheyenne, WY 82001-4531
Bengaluru - 560 064
Tel: +91 80 4679 8800