అకౌంట్స్ గమనికలుAvalon Technologies Ltd.

Mar 31, 2025

15 Provisions and Contingent Liabilities

Provisions : Provisions are recognized when
there is a present obligation as result of a
past event, it is probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation and
there is a reliable estimate of the amount of
the obligation. Provisions are measured at the
best estimate of the expenditure required to
settle the present obligation at the Balance
sheet date and are not discounted to its
present value unless the effect of time value
of money is material. When discounting is
used, the increase in the provision due to the
passage of time is recognized as a finance
cost.

Contingent Liabilities : Contingent liabilities
are disclosed when there is a possible
obligation arising from past events, the
existence of which will be confirmed only
by the occurrence or non occurrence of
one or more uncertain future events not
wholly within the control of the Company or
a present obligation that arises from past
events where it is either not probable that an
outflow of resources will be required to settle
or a reliable estimate of the amount cannot
be made. When there is a possible obligation
or a present obligation in respect of which
likelihood of outflow of resources embodying
economic benefits is remote, no provision or
disclosure is made.

16 Segment Reporting

The Company is engaged in providing
Electronics Manufacturing Services (EMS) with
capabilities in printed circuit board assembly,
custom cable and wire harnesses, etc. Since
the Chief Operating Decision Maker (Board of
Directors) review the operating results as a
whole for purposes of making decisions about
resources to be allocated and to assess its
performance, the entire operations are to
be classified as a single business segment,
namely EMS.

17 Earnings Per Share

Basic earnings per share is calculated by
dividing the net profit or loss for the period
attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the period. Earnings

considered in ascertaining the Company''s
earnings per share is the net profit for the
period after deducting equity dividends and
any attributable tax thereto for the period. The
weighted average number of equity shares
outstanding during the period and for all
periods presented is adjusted for events, such
as bonus shares, other than the conversion
of potential equity shares, that have changed
the number of equity shares outstanding,
without a corresponding change in resources.
For the purpose of calculating diluted
earnings per share, the net profit or loss for
the period attributable to equity shareholders
and the weighted average number of shares
outstanding during the period is adjusted
for the effects of all dilutive potential equity
shares.

18 Share issue expense

The transaction costs of an equity transaction
are accounted for as a deduction from equity
to the extent they are incremental costs
directly attributable to the equity transaction.

19 Investment in subsidiaries

I nvestment in subsidiaries are measured at
cost less accumulated impairment as per Ind
AS 27.

20 Cash & Cash Equivalents

Cash and cash equivalents comprises
cash on hand and at banks and short-term
deposits with an original maturity of three
months or less that are readily convertible
to known amounts of cash and which are
subject to an insignificant risk of changes in
value.

21 Exceptional items

Exceptional items are those items that
management considers, by virtue of their size
or incidence, should be disclosed separately
to ensure that the financial information
allows an understanding of the underlying
performance of the business in the year, so
as to facilitate comparison with prior periods.
Such items are material by nature or amount
to the year''s result and require separate
disclosure in accordance with Ind AS.

3 CRITICAL ACCOUNTING JUDGEMENTS,

ASSUMPTIONS AND KEY SOURCES OF

ESTIMATION UNCERTAINTY

The following are the critical judgements,
assumptions concerning the future, and key

sources of estimation uncertainty at the end of the
reporting period that may have a significant risk
of causing a material adjustment to the carrying
amounts of assets and liabilities within the next
Financial year.

3.1 Useful lives of property, plant and

equipment

As described above, the charge in respect of
periodic depreciation for the year is derived after
determining an estimate of an asset''s expected
useful life and the expected residual value at the
end of its life. The useful lives and residual values
of Company''s assets are determined by the
management at the time the asset is acquired
and reviewed annually. The lives are based
on historical experience with similar assets as
well as anticipation of future events, which may
impact their life, such as changes in technical or
commercial obsolescence arising from changes
or improvements in production or from a change
in market demand of the product or service output
of the asset.

3.2 Employee Benefits

The cost of defined benefit plans are determined
using actuarial valuation, which involves making
assumptions about discount rates, expected
rates of return on assets, future salary increases,
and mortality rates. Due to the long-term nature
of these plans, such estimates are subject to
significant uncertainty.

3.3 Taxation

Significant assumptions and judgements are
involved in determining the provision for tax
based on tax enactments, relevant judicial
pronouncements and tax expert opinions,
including an estimation of the likely outcome of
any open tax assessments / litigations. Deferred
income tax assets are recognized to the extent
that it is probable that future taxable income will be
available, based on estimates thereof. Significant
assumptions are also involved in evaluating the
recoverability of deferred tax assets recognised
on unused tax losses.

3.4 Provisions and contingencies

Critical judgements are involved in measurement
of provisions and contingencies and estimation
of the likelihood of occurrence thereof based on
factors such as expert opinion, past experience
etc.

3.5 Impairment of Trade receivable - Expected
Credit loss

The impairment provisions for trade receivables
are based on assumptions about risk of default.
The Company uses judgement in making these
assumptions and selecting the inputs for the
impairment calculation, based on Company''s
past history at the end of each reporting period

3.6 Impairment of Investment in Subsidiaries

The company carries out an assessment of
impairment in respect of investments in subsidiaries
where any indications of impairment exist as at

the balance sheet date. The determination of
recoverable amount for this purpose requires the
use of critical assumpations and judgements.

4 RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs ("MCA") notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. For
the year ended March 31, 2025, MCA has notified Ind
AS - 117 Insurance Contracts and amendments to
Ind AS 116 - Leases, relating to sale and leaseback
transactions, applicable to the Company w.e.f.
April 1, 2024. The Company has reviewed the new
pronouncements and based on its evaluation has
determined that it does not have any significant
impact in its financial statements.

As at March 31, 2025, there are no Ind AS Standards/
amendments that have been issued but are not
yet effective.

f) Critical judgements in determining the lease term

In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option, or not to exercise a termination option. Extension options (or
periods after termination options) are only included in the lease term if the lease is reasonably certain to be
extended (or not terminated).

For leases of buildings, the following factors are normally the most relevant:

(a) If there are significant penalties to terminate (or not extend), the Company is typically reasonably
certain not terminate (or to extend).

(b) If any lease hold improvements are expected to have a significant remaining value the Company is
typically reasonably certain to extend (or not terminate).

(c) Otherwise, the Company considers other factors including historical lease durations and the costs and
business disruption required to replace the leased asset

The lease term is reassessed if an option is actually exercised (or not exercised) or the Company
becomes obliged to exercise (or not exercise it). The assessment of reasonable certainty is only revised
if a significant event or a significant change in circumstances occurs, which affects the assessment,
and that is within the control of the lessee. During the current financial year, there was no revision in the
lease terms.

(g) Extension and termination options

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

# (i) Pursuant to the Initial Public Offering, the Company on April 12, 2023, allotted 73,39,449 Equity Shares at a face value
of 2/- (Rupees Two) each for cash, at a premium of 434/- per share aggregating to ^3200 Million.

## Number of employee stock options granted (including Series C granted on September 24, 2024 - 88,919 and Series D
granted on December 27, 2024 - 84,652) for the company''s employees - 6,18,621 and for the subsidiaries'' employees -
13,34,700 and outstanding as at March 31, 2025 of the company - 2,77,700 and for the subsidiaries'' employees - 6,91,214.
During the year ended March 31, 2025, the company has allotted 4,44,424 shares out of which 1,75,575 Equity shares
are for the company''s employees and balance for the subsidiaries'' employees.

Number of employee stock options granted for the company''s employees - 5,20,050 and for the subsidiaries''
employees - 12,59,700 and outstanding as at March 31, 2024 of the company - 3,67,524 and for the subsidiaries''
employees - 9,51,923. During the year ended March 31, 2024, the company has allotted 4,20,115 shares out of
which 1,52,526 Equity shares are for the company''s employees and balance for the subsidiaries'' employees."

10.2 Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having par value of ''2/ each. Each holder of the Equity
Share is entitled to one vote per share. The dividend proposed by the Board of Directors, if any, is subject to
the approval of the shareholders at the ensuing Annual General Meeting. Repayment of Capital on liquidation
will be in proportion to the number of equity shares held.

10.5 Equity shares movement during 5 years preceding the reporting date

(i) Shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash: Nil

(ii) Sub-division of equity shares:

The Shareholders in their extra-ordinary general meeting dated 27.06.2022 had approved sub-division of
each fully paid up equity share of nominal value of E 100 (Rupees One Hundred Only), into fifty equity shares
having a face value of E2/- (Rupees Two only) each. As a result of the same, the issued share capital has
changed from 1,59,667 Equity Shares of ''100/- each to 79,83,350 Equity Shares of ''2/- each.

Consequently, the Authorised Share Capital of the Company changed to '' 220 millions divided into 8,50,00,000
Equity Shares of ''2 each and 5,00,000 Preference Shares of ''100/-each.

Nature and Purpose of Other Reserves

(a) Reserves and Surplus
Securities Premium

Securities premium is used to record the premium on issue of securities. The reserve is utilised in accordance
with the provisions of the Act. During the year ended 31^st March 2024, the securities premium has been
utilised against share issue expense (net of tax benefit) in connection with the IPO of the Company (Refer
No. 10.1)

Special Economic Zone Re-investment Allowance Reserve

The Special Economic Zone (SEZ) Reinvestment Reserve has been created out of profit of eligible SEZ unit
as per provisions of section 10AA(l)(ii) of the Income-tax Act, 1961 for acquiring new plant and machinery.
Utilisations out of the same as per the extant provisions of the Income Tax Act, 1961, are reclassified from this
reserve to retained earnings in the year of utilisation.

ESOP Reserve

Employee stock option reserve relates to the share options granted by the Company to the Company''s and
subsidiary''s employees under its stock option plan. (Refer No. 29)

Retained Earnings

Retained Earnings represents Company''s cumulative earnings since its formation less the dividends /
Capitalisation, if any. These reserves are free reserves which can be utilised for any purpose as may be
required. All adjustments arising on account of transition to Ind AS are recorded here.

(b) Share application money pending allotment

Share application money pending allotment represents amounts received towards issue of shares for which
shares are pending to be allotted as at the balance sheet date.

Note 22.1:

The Company had recognised a Government Grant being the estimated value of reimbursement towards
stipend paid to apprentices under the National Apprentice Training Scheme, once it is reasonably certain that
the Company had met the related conditions and also that the grant would be received. The amount has been
netted off against corresponding stipend expense in Note No. 22- Employee Benefit Expenses. During the year,
based on evaluation of the recoverability of the amount by the management, an amount of ''2.98 Million (31^st
March 2024 - 16.91 Million) has been written off. The Company does not anticipate any issues in realisation of the
balance amount.

(i) Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of
the company by the weighted average number of Equity shares outstanding during the year. Diluted EPS
amounts are calculated by dividing the profit/(loss) attributable to equity holders of the company by the
weighted average number of Equity shares outstanding during the year, respectively adjusted for effect of
dilution.

(ii) Imapct of dilution on weighted average number of shares is computed after factoring the impact of ESOP.
(Refer note 10)

(iii) Share transactions that have occurred during 2023-24:

(a) Issue of ordinary shares - The Company has issued 73,39,449 Equity Shares at a face value of 2/- each
for cash, at a premium of 434/- per share through Initial Public Offer (IPO).

(b) Issue of ordinary shares - The Company has issued 4,20,115 Equity Shares at a face value of 2/- each for
cash, at a premium of 18/- per share upon exercise of Employee stock options by the eligible employees.

(iv) Share transactions that have occurred during 2024-25:

(a) Issue of ordinary shares - The Company has issued 4,44,424 Equity Shares at a face value of 2/- each for
cash, at a premium of 18/- per share upon exercise of Employee stock options by the eligible employees.

NOTE 28: SEGMENT REPORTING

28.1 The Company is engaged in providing Electronics Manufacturing Services (EMS) with capabilities in printed
circuit board assembly, custom cable and wire harnesses, etc. Since the Chief Operating Decision Maker (Board
of Directors) review the operating results as a whole for purposes of making decisions about resources to be
allocated and to assess its performance, the entire operations are to be classified as a single business segment,
namely EMS. The geographical segments considered for disclosure are - India and Rest of the World. All the
manufacturing facilities are located in India.

28.3 Information about major customers

Revenue from one external customer having more than 10% each of the Company''s total revenue amounting
to 994.24 million for March 31, 2025 (Revenue from one external customer having more than 10% each of the
Company''s total revenue amounting to 868.81 million for March 31, 2024).

NOTE 29: SHARE BASED PAYMENTS

During the financial year 2022 - 23, in pursuant to resolutions adopted by the Board of Directors and Shareholders
both dated July 7, 2022, the Company has instituted the ESOP Scheme, which is an equity settled share based
payment scheme.. The ESOP Scheme has been instituted to grant stock options exercisable into Equity Shares to
eligible employees of the Company. In terms of the ESOP Scheme, grants to eligible employees will be made by
the Nomination and Remuneration Committee or the Board, based on the determination of a criteria described
under ESOP Scheme.

The ESOP Scheme has been instituted in compliance with the Securities and Exchange Board of India (Share
Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Shareholders, through their resolution dated July 7, 2022, have approved a maximum of 3,000,000 options,
exercisable into 3,000,000 Equity Shares under the ESOP Scheme. The vesting period under the ESOP Scheme shall
be a minimum of one and a maximum of seven years, and the specific vesting schedule applicable to each
employee will be as mentioned in the letter of grant issued to such employee. Employees covered by the plan
are granted an option to purchase shares subject to certain vesting conditions. Each employee share option
converts into one equity share of the Company on exercise of option.

The Board of the Company at its meeting held on July 19, 2022 had granted 17,79,750 options under the ESOP
Scheme. Subsequently, the Board at its meetings held on September 24, 2024 & December 27, 2024 have granted
88,919 options & 84,652 options respectively.

NOTE 30: EMPLOYEE BENEFIT PLANS
A. Defined contribution plans

The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any
expense recognised in relation to these schemes represents the value of contributions payable during the
period by the Company at rates specified by the rules of those plans. The only amounts included in the
balance sheet are those relating to the prior months contributions that were not due to be paid until after
the end of the reporting period.

The major defined contribution plans operated by the Company are as below:

(a) Provident fund and pension

I n accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952, eligible
employees of the Company are entitled to receive benefits in respect of provident fund, a defined
contribution plan, in which both employees and the Company make monthly contributions at a specified
percentage of the covered employees'' salary.

The contributions, as specified under the law, are made to Employee Provident Fund Organisation.

B. Defined benefit plans

The defined benefit plans operated by the Company are as below:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible
employees, which is funded with HDFC Life Group UL Future Secure Plan. The plan provides for a lump-sum
payment to vested employees at retirement, death while in employment or on termination of employment
of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon
completion of five years of service. The Company accounts for the liability for gratuity benefits payable in
the future based on an actuarial valuation.

In the opinion of the management, the carrying amounts of financial assets and financial liabilities
recognised in the financial statements are a reasonable approximation of their fair values. Hence, no
separate disclosures of fair value has been made.

The fair value of investment in Mutual Fund is determined based on Net Assets Value published by respective
funds (Level - 2 - Fair value hierarchy)

31.3 Financial risk management

The Company is exposed to Market risk, Credit risk and Liquidity risk.The Company monitors and manages
the financial risks relating to the operations of the Company through internal risk reports which analyse
exposures by degree and magnitude of risks.

The following disclosures summarize the Company''s exposure to financial risks. Quantitative sensitivity
analysis have been provided to reflect the impact of reasonably possible changes in market rates on the
financial results, cash flows and financial position of the Company.

31.3.1 Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in market conditions. Market risk mainly comprises of interest rate risk, currency
risk. Financial instruments affected by market risk includes borrowings, non-current investments, trade
payables, trade receivables and current investments. The Company''s activities expose it primarily to the
financial risks of changes in foreign currency exchange rates, interest rates and other price risk.

There has been no change to the Company''s exposure to market risks or the manner in which these
risks are being managed and measured.

(a) 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 changes in interest rates
primarily relates to outstanding floating rate debt and investments in fixed deposits. The company
has investments in INR denominated fixed deposits and a portion of it''s working capital debt is
denominated in foreign currency. These credit facilities are subject to periodic interest rate resets.
Based on the past experience the variability of interest investments and working capital loan are
not expected to be material. Further there are only short term foreign currency debt in the form of
packing credit which are subject to minimal changes in interest rate during it''s term.

(b) Foreign currency risk

The company undertakes transactions denominated in foreign currencies; consequently, exposures
to exchange rate fluctuations arise. Significant portion of the companies purchases and sales are
denominated in foreign currency and hence, a natural hedge exists as a result of which, major
foreign exchange fluctuations in import payables gets offset against export receivables. Apart from
the above, exchange rate exposures are also managed within approved policy parameters by
constant monitoring.

31.3.2 Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Company. The company has adopted a policy of only dealing with creditworthy
counterparties as a means of mitigating the risk of financial loss from defaults. The company''s exposure
of its counterparties are continuously monitored and the aggregate value of transactions concluded is
spread amongst counterparties. Credit exposure is controlled by counterparty limits that are reviewed
and approved by the management.

Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on
the financial condition of accounts receivable. The maximum exposure to credit risk at the reporting
date is the carrying value of each class of financial assets disclosed in Note 8. The company does not
hold collateral as security. The Company has evaluated the concentration of risk with respect to trade
receivables as low, as its customers are located in several jurisdictions and industries and operate in
largely independent markets.

Credit risk arising from other balances with banks is limited and there is no collateral held against these
because the counterparties are banks with high credit ratings assigned by the international credit rating
agencies. Similarly, credit risk arising from investment in Mutual Funds are held without any collateral
but credit risk is limited as the company deals with counterparties of repute and excellent track record.

31.3.3 Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has
established an appropriate liquidity risk management framework for the management of the
company''s short-term, medium-term and long-term funding and liquidity management requirements.
The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve
borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the
maturity profiles of financial assets and liabilities.

The following tables detail the company''s remaining contractual maturity for its non-derivative financial
liabilities with agreed repayment periods. The tables have been drawn up based on the contractual
maturities of financial liabilities based on the earliest date on which the Company can be required to
pay.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on
the basis of information collected by the company. This has been relied upon by the auditors. According to the
records available with the Company certain amount have been identified as dues to suppliers registerd under
Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED Act''). The disclosure pursuant to the said
MSMED Act are as follows:

The Company has completed the Initial Public Offering of 19,839,446 equity shares of face value of ''2 each at an
issue price of '',436 per equity share, consisting of a fresh issue of 7,339,449 equity shares aggregating to ''3200
million and an offer for sale of 12,499,997 equity shares aggregating to ''5450 million by the Selling Share Holders.
Consequently, the equity shares of the company were listed on National Stock Exchange of India Limited (NSE)
and BSE Limited (BSE) w.e.f April 18, 2023.

The Company has received an amount of E 2,995.70 Million (net of IPO expenses including GST thereon) from
proceeds out of the fresh issue of equity shares. The utilisation of net IPO proceeds is summarised below:

(a) The company does not have any long term contracts for which there were any material foreseeable losses.

(b) There are no amounts required to be transferred to the Investor Education and Protection Fund by the
Company as on the reporting date.

(c) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or
any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including
foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

(d) There are no funds which have been received by the company from any person(s) or entity(ies), including
foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that
the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security
or the like from or on behalf of the Ultimate Beneficiaries.

(e) The Company is not declared as a wilful defaulter by any bank or financial institution or other lender or
Government or Government authorities. Accordingly, no disclosures are made in this regard.

(f) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

(g) The Company does not have any such transaction which is not recorded in the books of account 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,196l).

Explanation for Variance in ratios by more than 25%

1. (March 2025 vs March 2024)

(i) Decrease in Current ratio is due to increase in Trade payables.

(ii) I ncrease in Debt Service Coverage ratio is due to significant decrease in repayment of borrowings
during the year.

(iii) Increase in Return on equity ratio is due to increase in Net profit during the year

(iv) Increase in Inventory Turnover ratio is due to increase in Turnover during the year.

(v) Increase in Net Capital Turnover ratio is due to increase in Turnover during the year

(vi) Increase in Return on Capital Employed is due to increase in Earnings before Interest and Taxes during
the year

NOTE 43:

Previous years figures have been regrouped / reclassified wherever necessary to conform to current year''s
classification / presentation.

As per our report of even date attached For and on behalf of the Board of Directors
For Varma & Varma

Chartered Accountants

Firm Registration Number : 004532S

Sd/- Sd/- Sd/-

P R Prasanna Varma Kunhamed Bicha Suresh Veerappan

Partner Chairman & Managing Director Chief Financial Officer

Membership No. 025854 DIN: 00819707

Sd/-

Place: Chennai Ajay Shukla

Date: May 6, 2025 Company Secretary

---

Mar 31, 2024

15 Provisions and Contingent Liabilities

Provisions : Provisions are recognized when there is a present obligation as result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance sheet date and are not discounted to its present value unless the effect of time value of money is material. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent Liabilities : Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.

16 Segment Reporting

The Company is engaged in providing Electronics Manufacturing Services (EMS) with capabilities in printed circuit board assembly, custom cable and wire harnesses, etc. Since

the Chief Operating Decision Maker (Board of Directors) review the operating results as a whole for purposes of making decisions about resources to be allocated and to assess its performance, the entire operations are to be classified as a single business segment, namely EMS.

17 Earnings Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company''s earnings per share is the net profit for the period after deducting equity dividends and any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

18 Share issue expense

The transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction.

19 Investment in subsidiaries

I nvestment in subsidiaries are measured at cost less accumulated impairment as per Ind AS 27.

20 Cash & Cash Equivalents

Cash and cash equivalents comprises cash on hand and at banks and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

21 Exceptional items

Exceptional items are those items that management considers, by virtue of their size or incidence, should be disclosed separately to ensure that the financial information allows an understanding of the underlying performance of the business in the year, so as to facilitate comparison with prior periods. Such items are material by nature or amount to the year''s result and require separate disclosure in accordance with Ind AS

3 CRITICAL ACCOUNTING JUDGEMENTS, ASSUMPTIONS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The following are the critical judgements, assumptions concerning the future, and key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next Financial year.

3.1. Useful Lives of Property, Plant and Equipment

As described above, the charge in respect of periodic depreciation for the year is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the management at the time the asset is acquired and reviewed annually. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.

3.2. Employee Benefits

The cost of defined benefit plans are determined using actuarial valuation, which involves making assumptions about discount rates, expected rates of return on assets, future salary increases, and mortality rates. Due to the long-term nature of these plans, such estimates are subject to significant uncertainty.

3.3. Taxation

Significant assumptions and judgements are involved in determining the provision for tax based on tax enactments, relevant judicial pronouncements and tax expert opinions, including an estimation of the likely outcome of any open tax assessments / litigations. Deferred income tax assets are recognized to the extent that it is probable that future taxable income will be available, based on estimates thereof. Significant assumptions are also involved in evaluating the recoverability of deferred tax assets recognised on unused tax losses.

3.4 Provisions and Contingencies

Critical judgements are involved in measurement of provisions and contingencies and estimation of the likelihood of occurrence thereof based on factors such as expert opinion, past experience etc.

3.5 Impairment of Trade Receivable -Expected Credit Loss

The impairment provisions for trade receivables are based on assumptions about risk of default. The Company uses judgement in making these assumptions and selecting the inputs for the impairment calculation, based on Company''s past history at the end of each reporting period

3.6 Impairment of Investment in Subsidiaries

The Company carries out an assessment of impairment in respect of investments in subsidiaries where any indications of impairment exist as at the balance sheet date. The determination of recoverable amount for this purpose requires the use of critical assumptions and judgements.

4 RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. As at March 31, 2024, there are no Ind AS Standards/ amendments that have been issued but are not yet effective.

f) Critical Judgements in determining the Lease Term

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

For leases of buildings, the following factors are normally the most relevant:

(a) If there are significant penalties to terminate (or not extend), the Company is typically reasonably certain not terminate (or to extend).

(b) I f any lease hold improvements are expected to have a significant remaining value the Company is typically reasonably certain to extend (or not terminate).

(c) Otherwise, the Company considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset

The lease term is reassessed if an option is actually exercised (or not exercised) or the Company becomes obliged to exercise (or not exercise it). The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects the assessment, and that is within the control of the lessee. During the current financial year, there was no revision in the lease terms.

g) Extension and Termination Options

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

10.5 Equity shares movement during 5 years preceding the reporting period

(i) Shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash:

During the year 2019-20, pursuant to an agreement entered with the shareholders of a related entity, the company issued 8,386 equity shares of '' 100 Each at a price of '' 12,700 Share (including premium) in-lieu of the shares held by the said shareholders in the related entity.

(ii) Sub-division of equity shares:

The Shareholders in their extra-ordinary general meeting dated 27.06.2022 had approved sub-division of each fully paid up equity share of nominal value of '' 100 (Rupees One Hundred Only), into fifty equity shares having a face value of ''2/- (Rupees Two only) each. As a result of the same, the issued share capital has changed from 1,59,667 Equity Shares of ''100/- each to 79,83,350 Equity Shares of ''2/- each. Consequently, the Authorised Share Capital of the Company is changed to '' 220 millions divided into 8,50,00,000 Equity Shares of ''2 each and 5,00,000 Preference Shares of ''100/-each.

(iii) Issue of Bonus shares

As per recommendation of the Board of Directors in their meeting held on 24.06.2022 and approval of the shareholders dated 27.06.2022 the Company had issued 4,79,00,100 bonus equity shares of face value of '' 2/- each in ratio of 6:1 (i.e. 6 Bonus Shares for every 1 Equity Share), which were allotted to the shareholders on 27.06.2022. Consequently, the issued, subscribed and paid-up share capital had increased to '' 111.76 Millions comprising of 5,58,83,450 equity shares of face value of '' 2/- each.

10(a).2 Terms and rights attached to Mandatorily Convertible Preference Shares:

The company has allotted 3,50,000 Cumulative, Non participating, 10% Optionally Convertible Preference shares (OCPS) of '' 100 each vide a Share Subscription Agreement (“SSA”) dated 1st March, 2018, which was classified as a financial liability measured at amortised cost till 31st March, 2022. During the year ended 31st March, 2023, in view of the proposed public offering, the company had entered into an amendment agreement to the SSA which stipulates a mandatory conversion of the OCPS and accordingly, the same

Nature and Purpose of Other Reserves

(a) Securities Premium

Securities premium is used to record the premium on issue of securities. The reserve is utilised in accordance with the provisions of the Act. During the year ended 31st March 2024, the securities premium has been utilised against share issue expense (net of tax benefit) in connection with the IPO of the Company (Refer No. 10.1)

(b) Special Economic Zone Re-investment Allowance Reserve

The Special Economic Zone (SEZ) Reinvestment Reserve has been created out of profit of eligible SEZ unit as per provisions of section 10AA(l)(ii) of the Income-tax Act, 1961 for acquiring new plant and machinery. Utilisations out of the same as per the extant provisions of the Income Tax Act, 1961, are reclassified from this reserve to retained earnings in the year of utilisation.

(c ) ESOP Reserve

Employee stock option reserve relates to the share options granted by the Company to the Company''s and subsidiary''s employees under its stock option plan. (Refer No. 29)

(d) Retained Earnings

Retained Earnings represents Company''s cumulative earnings since its formation less the dividends / Capitalisation, if any. These reserves are free reserves which can be utilised for any purpose as may be required. All adjustments arising on account of transition to Ind AS are recorded here.

(e) Share application money pending allotment

Share application money pending allotment represents amounts received towards issue of shares for which shares are pending to be allotted as at the balance sheet date.

Pursuant to the IPO (refer Note No. 38), the Company had opened the bid/offer on 23rd March,2023 to the Anchor investors and received '' 4016.28 Million on March 31, 2023. Out of this, the Company has allocated 73,39,449 towards fresh issue of equity shares and such shares have been issued at a price of '' 436/- per share on April 12, 2023. Out of the balance amount, '' 123.78 Million has been refunded subsequently and '' 692.50 Million relates to the proceeds received by the Company on behalf of selling shareholders. These amounts were carried under Note 15.B - Other financial liabilities as at March 31, 2023.

(i) Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the company by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit/(loss) attributable to equity holders of the company by the weighted average number of Equity shares outstanding during the year.

(ii) Dilutive component of ESOP outstanding as at 31st March, 2024 and 31st March, 2023 is computed after factoring the impact of sub-division, issue of bonus shares and ESOP. (Refer note 10)

(iii) Share transactions that have occurred during 2022-23:

(a) Issue of shares against mandatorily convertible preference shares (Refer note no. 10A.2)

(b) Issue of ordinary shares - The Company has issued 11,73,543 equity Shares at a face value of 2/- each for cash, at a premium of 424.06/- per share on private placement basis.

(c) Issue of ordinary shares - The Company has issued 7,98,339 Equity Shares at a face value of 2/- each for cash, at a premium of 373.78/- per share on private placement basis.

(iv) Share transactions that have occurred during 2023-24:

(a) Issue of ordinary shares - The Company has issued 73,39,449 Equity Shares at a face value of 2/- each for cash, at a premium of 434/- per share through Initial Public Offer (IPO).

(b) Issue of ordinary shares - The Company has issued 4,20,115 Equity Shares at a face value of 2/- each for cash, at a premium of 18/- per share upon exercise of Employee stock options by the eligible employees.

28.1 The Company is engaged in providing Electronics Manufacturing Services (EMS) with capabilities in printed circuit board assembly, custom cable and wire harnesses, etc. Since the Chief Operating Decision Maker (Board of Directors) review the operating results as a whole for purposes of making decisions about resources to be allocated and to assess its performance, the entire operations are to be classified as a single business segment, namely EMS. The geographical segments considered for disclosure are - India and Rest of the World. All the manufacturing facilities are located in India.

28.3 Information about major Customers

Revenue from one external customer having more than 10% each of the Company''s total revenue amounting to 868.61 million (Revenue from two external customer having more than 10% each of the Company''s total revenue amounting to 1205.13 million for March 31, 2023).

NOTE 29: SHARE BASED PAYMENTS

During the financial year 2022 - 23, in pursuant to resolutions adopted by the Board of Directors and Shareholders both dated July 7, 2022, the Company has instituted the ESOP Scheme, which is an equity settled share based payment scheme.. The ESOP Scheme has been instituted to grant stock options exercisable into Equity Shares to eligible employees of the Company. In terms of the ESOP Scheme, grants to eligible employees will be made by the Nomination and Remuneration Committee or the Board, based on the determination of a criteria described under ESOP Scheme.

The ESOP Scheme has been instituted in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Shareholders, through their resolution dated July 7, 2022, have approved a maximum of 30,00,000 options, exercisable into 30,00,000 Equity Shares under the ESOP Scheme. The vesting period under the ESOP Scheme shall be a minimum of one and a maximum of seven years, and the specific vesting schedule applicable to each employee will be as mentioned in the letter of grant issued to such employee. Employees covered by the plan are granted an option to purchase shares subject to certain vesting conditions. Each employee share option converts into one equity share of the Company on exercise of option.

Subsequently, the Board of the Company at its meeting held on July 19, 2022 have granted 17,79,750 options under the ESOP Scheme.

A. Defined Contribution Plans

The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period.

The major defined contribution plans operated by the Company are as below:

(a) Provident fund and pension

I n accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees'' salary.

The contributions, as specified under the law, are made to Employee Provident Fund Organisation.

B. Defined Benefit Plans

The defined benefit plans operated by the Company are as below:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees, which is unfunded. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

NOTE 31: FINANCIAL INSTRUMENTS 31.1 Capital Management

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at the year end, the Company has only one class of equity shares.

31.3 Financial Risk Management

The Company is exposed to Market risk, Credit risk and Liquidity risk.The Company monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks.

The following disclosures summarize the Company''s exposure to financial risks. Quantitative sensitivity analysis have been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial position of the Company.

31.3.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market conditions. Market risk mainly comprises of interest rate risk, currency risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables and current investments. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and other price risk.

There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.

(a) 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 changes in interest rates primarily relates to the companies outstanding floating rate debt and investments in fixed deposits. The group has investments in INR denominated fixed deposits and a portion of it''s working capital debt is denominated in foreign currency. These credit facilities are subject to periodic interest rate resets. Based on the past experience the variability of interest investments and working capital loan are not expected to be material. Further there are only short term foreign currency debt in the form of packing credit which are subject to minimal changes in interest rate during it''s term.

(b) Foreign Currency risk

The company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Significant portion of the companies purchases and sales are denominated in foreign currency and hence, a natural hedge exists as a result of which, major foreign exchange fluctuations in import payables gets Offset export receivables. Apart from the above, exchange rate exposures are also managed within approved policy parameters by constant monitoring.

31.3.2 Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The company''s exposure of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management.

Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 8. The company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Credit risk arising from other balances with banks is limited and there is no collateral held against these because the counterparties are banks with high credit ratings assigned by the international credit rating agencies. Similarly, credit risk arising from investment in Mutual Funds are held without any collateral but credit risk is limited as the company deals with counterparties of repute and excellent track record.

31.3.3 Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company''s short-term, medium-term and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the company. This has been relied upon by the auditors. According to the records available with the Company certain amount have been identified as dues to suppliers registerd under Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED Act''). The disclosure pursuant to the said MSMED Act are as follows:

The Company has completed the Initial Public Offering of 1,98,39,446 equity shares of face value of ''2 each at an issue price of ''436 per equity share, consisting of a fresh issue of 73,39,449 equity shares aggregating to ''3,200 million and an offer for sale of 1,24,99,997 equity shares aggregating to ''5,450 million by the Selling Share Holders. Consequently, the equity shares of the company were listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) w.e.f April 18, 2023.

The Company has received an amount of '' 2,995.70 Million (net of IPO expenses including GST thereon) from proceeds out of the fresh issue of equity shares. The utilisation of net IPO proceeds is summarised below:

(a) The company does not have any long term contracts for which there were any material foreseeable losses.

(b) There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company as on the reporting date.

(c) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

(d) There are no funds which have been received by the company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

(e) The Company is not declared as a willful defaulter by any bank or financial institution or other lender or Government or Government authorities. Accordingly, no disclosures are made in this regard.

(f) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

(g) The Company does not have any such transaction which is not recorded in the books of account 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).

(h) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

Explanation for Variance in ratios by more than 25%

1. (March 2024 vs March 2023)

(i) Current ratio comparatively increased due to repayment of short term borrowings.

(ii) Decrease in Debt - Equity ratio is due to repayment of borrowings through IPO funds

(iii) Decrease in Debt Service Coverage Ratio is due to prepayment of debt during the year.

(iv) Decrease in Inventory Turnover Ratio is due to increase in inventory during the year as per the business plan.

NOTE 42:

Pursuant to resolution passed by the Members in the Extraordinary General Meeting dated 06.07.2022 and as approved by Registrar of the Company, w.e.f. 29.07.2022, the Company has been converted from Private Limited Company into a Public Limited Company including adoption of new Memorandum of Association and new Articles of Association as applicable to Public Company in place of existing Memorandum of Association and Articles of Association of the Company.

NOTE: 43

Previous years figures have been regrouped / reclassified wherever necessary to conform to current year''s classification / presentation.

As per our report of even date attached For and on behalf of the Board of Directors

For Varma & Varma

Chartered Accountants

Firm Registration Number : 004532S

Sd/- Sd/- Sd/-

P R Prasanna Varma Kunhamed Bicha R M Subramanian

Partner Chairman & Managing Director Chief Financial Officer

Membership No. 025854 DIN: 00819707

Sd/-

Place: Chennai Rajesh V

Date: May 16, 2024 Company Secretary

---

Mar 31, 2023

Critical judgements in determining the lease term

I n determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).

For leases of buildings, the following factors are normally the most relevant:

(a) If there are significant penalties to terminate (or not extend), the Company is typically reasonably certain not terminate (or to extend).

(b) If any lease hold improvements are expected to have a significant remaining value the Company is typically reasonably certain to extend (or not terminate).

(c) Otherwise, the Company considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset

The lease term is reassessed if an option is actually exercised (or not exercised) or the Company becomes obliged to exercise (or not exercise it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects the assessment, and that is within the control of the lessee. During the current financial year, there was no revision in the lease terms.

g) Extension and termination options

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

#(i) Board of directors in its meeting dated February 20, 2023, issued 11,73,543 Equity Shares at a face value of 2/- (Rupees Two) each for cash, at a premium of 424.06/- per share on private placement basis.

(ii) Board of directors in its meeting dated 30th November 2022, issued 7,98,339 Equity Shares at a face value of 2/- (Rupees Two) each for cash, at a premium of 373.78/- per share on private placement basis.

10.2Rights, preferences and restrictions attached to shares

The Company has only one class of equity shares having par value of '' 2/ each. Each holder of the Equity Share is entitled to one vote per share. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders at the ensuing Annual General Meeting.

10.5 Shares allotted as fully paid-up pursuant to contract(s) without payment being received in cash.

During the year 2019-20, pursuant to an agreement entered with the shareholders of a related entity, the company issued 8,386 equity shares of '' 100 Each at a price of '' 12,700 Share (including premium) in-lieu of the shares held by the said shareholders in the related entity.

10.6Equity shares movement during 5 years preceding the reporting date

(i) Sub-division of equity shares:

The Shareholders in their extra-ordinary general meeting dated 27.06.2022 approved sub-division of each fully paid up equity share of nominal value of E 100 (Rupees One Hundred Only), into fifty equity shares having a face value of ?2/- (Rupees Two only) each. As a result of the same, the issued share capital has changed from 1,59,667 Equity Shares of '' 100/- each to 79,83,350 Equity Shares of '' 2/- each.

The Authorised Share Capital of the Company is changed to '' 220 millions divided into 8,50,00,000 Equity Shares of '' 2 each and 5,00,000 Preference Shares of '' 100/-each.

(ii) Issue of Bonus shares

As per recommendation of the Board of Directors in their meeting held on 24.06.2022 and approval of the shareholders dated 27.06.2022 the Company has issued 4,79,00,100 bonus equity shares of face value of '' 2/- each in ratio of 6:1 (i.e. 6 Bonus Shares for every 1 Equity Share), which were allotted to the shareholders on 27.06.2022. Consequently, the issued, subscribed and paid-up share capital has increased to '' 111.76 Millions comprising of 5,58,83,450 equity shares of face value of '' 2/- each.

(iii) There are no shares bought back during the period of 5 years immediately preceding the reporting date.

Nature and Purpose of Other Reserves

(a) Securities Premium

Represents premium on issue of securities

(b) Special Economic Zone Re-investment Allowance Reserve

The Special Economic Zone (sez) Reinvestment Reserve has been created out of profit of eligible SEZ unit as per provisions of section 10AA(1)(ii) of the Income-tax Act, 1961 for acquiring new plant and machinery. Utlisations out of the same as per the extant provisions of the Income Tax Act, 1961, are reclassified from this reserve to retained earnings in the year of utlisation.

(c) ESOP Reserve

The ESOP reserve is used to recognise the grant date fair value of options issued to employees under Avalon - Employees stock option plan (Refer No. 29)

(d) Retained Earnings

Retained Earnings represents Company''s cumulative earnings since its formation less the dividends / Capitalisation, if any. These reserves are free reserves which can be utilised for any purpose as may be required. All adjustments arising on account of transition to Ind AS are recorded under this reserve.

The above includes re-classification of the following reserves:

a) Revaluation Reserve of the company. The company had elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognized as at date of transition 1 April, 2021 measured as per the previous GAAP (under revaluation model in respect of certain class of assets) and use that carrying value as its deemed cost as of the transition date. The corresponding revaluation reserve on transition date has been grouped under retained earnings.

b) Government Grant in the form of Capital Subsidy that was received in earlier years and in respect of which there are no un-fulfilled obligations have also been re-classified from Capital Reserve to Retained Earnings.

(e) Share application money pending allotment

Pursuant to the Initial Public Offering, the Company has opened the bid/offer on 23rd March,2023 to the Anchor investors and received '' 4016.28 Million on March 31, 2023. Out of this, the Company has allocated 73,39,449 towards fresh issue of equity shares and such shares have been issued at a price of '' 436/- per share on April 12, 2023. Out of the balance amount, '' 123.78 Million has been refunded subsequently and '' 692.50 Million relates to the proceeds received by the Company on behalf of selling shareholders. These amounts are carried under Note 15.B - Other financial liabilities.

Note 13.2 - Preference Shares

(i) The company has allotted 3,50,000 Cumulative, Non participating, 10% Optionally Convertible Preference shares (OCPS) of '' 100 each vide a Share Subscription Agreement (“SSA”) dated March 1, 2018, which shall stand converted within a period of 4 years (conversion period) from the date of issue upon occurrence of the conversion event as per the terms of issue. The OCPS shall be redeemed any time, at the option of the holder, upon expiry of the Conversion period but not later than 20 years. Taking into account the fact that the company does not have a right to convert these shares into equity and that the dividend on the same approximates the market borrowing rate for comparable loans, the said instrument has been classified as a financial liability measured at amortised cost till March 31, 2022.

During the year ended March 31, 2023, in view of the proposed public offering, the company had entered into an amendment agreement to the SSA dated July 22, 2022 which stipulates a mandatory conversion of the 3,50,000 OCPS into a maximum of 97,796 equity shares, before the filing of updated draft of the red herring prospectus (the “UDRHP”) by the Company with the Securities and Exchange Board of India (“SEBI”) or any other authority, as may be required in connection with the initial public offer of the Equity Shares of the Company. Pursuant to the same, vide resolution passed in the EGM of the company held on February 8, 2023, 350,000 Preference Shares of '' 100/- each has been converted into 97,796 equity shares of '' 2/- each.

In view of the above amendment agreement and the confirmation of the number of shares to be issued and price thereof by the subsequent conversion event, these Preference Shares, which was classified as financial liability under Long Term Borrowing till March 31, 2022 now meets the criterion of Equity and accordingly the amount has been reclassified as ''Instruments entirely equity in nature'' effective from the date of the aforementioned amendment agreement till the date of conversion into Equity shares as above.

18.2 Disaggregation of revenue information

The company is engaged in Electronics Manufacturing Services (ems) with capabilities in Printed Circuit Assembly Boards (PCBA''s), custom cable, wire harness, metal, plastic, magnetics components and assemblies with enhanced capabilities in engineering design and development. As per the management, the disaggregation of revenue based on geography are depicted in Note 28.2.

As per section 115BAA of the I.T Act inserted by the Taxation Laws (Amendment) Act, 2019, w.e.f. April 1, 2020 i.e., A.Y.2020-21 an option is granted to the domestic companies to compute corporate tax at a reduced rate of 22%, provided the taxpayer does not avail specified exemptions/incentives and complies with other conditions specified in section 115BAA of the I.T Act. Based on an evaluation of relative tax benefits, the company intends to opt for the lower tax regime u/s 115BAA from FY 2022-23 onwards, and accordingly, its tax expenses for the period ended 31st March, 2023 and its deferred tax asset (net) as at 31st March, 2023 has been measured on this basis.

(i) Basic EPS amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit/(loss) attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

(ii) As required under Ind AS 33 “Earnings per share” the effect of sub-division (refer note no. 10.6) and bonus issue (refer note no. 10.6) has been adjusted retrospectively for the purpose of computing earnings per share for all the periods presented retrospectively.

(iii) Share transactions that have occurred during the year:

(a) Issue of shares against mandatorily convertible preference shares (Refer note no. 13.2(i))

(b) Issue of ordinary shares - The Company has issued 11,73,543 equity Shares at a face value of 2/- each for cash, at a premium of 424.06/- per share on private placement basis.

(c) Issue of ordinary shares - The Company has issued 7,98,339 Equity Shares at a face value of 2/- each for cash, at a premium of 373.78/- per share on private placement basis.

(iv) Share transactions that have occurred after the reporting period - Refer Note No. 11( e).

NOTE: 28 - SEGMENT REPORTING

The Company is engaged in providing Electronics Manufacturing Services (ems) with capabilities in printed circuit board assembly, custom cable and wire harnesses, etc. Since the Chief Operating Decision Maker (Board of Directors) review the operating results as a whole for purposes of making decisions about resources to be allocated and to assess its performance, the entire operations are to be classified as a single business segment, namely EMS. The geographical segments considered for disclosure are - India and Rest of the World. All the manufacturing facilities are located in India.

NOTE: 29 - SHARE BASED PAYMENTS

During the financial year 2022 - 23, in pursuant to resolutions adopted by the Board of Directors and Shareholders both dated July 7, 2022, the Company has instituted the ESOP Scheme, which is an equity settled share based payment scheme.. The ESOP Scheme has been instituted to grant stock options exercisable into Equity Shares to eligible employees of the Company. In terms of the ESOP Scheme, grants to eligible employees will be made by the Nomination and Remuneration Committee or the Board, based on the determination of a criteria described under ESOP Scheme.

The ESOP Scheme has been instituted in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Shareholders, through their resolution dated July 7, 2022, have approved a maximum of 3,000,000 options, exercisable into 3,000,000 Equity Shares under the ESOP Scheme. The vesting period under the ESOP Scheme shall be a minimum of one and a maximum of seven years, and the specific vesting schedule applicable to each employee will be as mentioned in the letter of grant issued to such employee. Employees covered by the plan are granted an option to purchase shares subject to certain vesting conditions. Each employee share option converts into one equity share of the Company on exercise of option.

Subsequently, the Board of the Company at its meeting held on July 19, 2022 have granted 520,050 options under the ESOP Scheme and none of these options have been vested or exercised till date.

The following table sets forth the particulars of the ESOP Scheme, including options granted thereunder.

NOTE: 30 - EMPLOYEE BENEFIT PLANS

A. Defined contribution plans

The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period.

The major defined contribution plans operated by the Company are as below:

(a) Provident fund and pension

In accordance with the Employee''s Provident Fund and Miscellaneous Provisions Act, 1952, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees'' salary.

The contributions, as specified under the law, are made to Employee Provident Fund Organisation.

B. Defined benefit plans

The defined benefit plans operated by the Company are as below:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees, which is unfunded. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

The current service cost and the net interest expense for the year are included in the ''Employee benefits expense'' line item in the statement of profit and loss.

The remeasurement of the net defined benefit liability is included in other comprehensive income.

(iv)Risk Exposure

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

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

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

NOTE: 31 - FINANCIAL INSTRUMENTS31.1 Capital management

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at the year end, the Company has only one class of equity shares.

During the year 2020-21, the company had invested in equity instruments of a related entity. The investment was made during the month of January, 2021 at the fair value prevailing on the date of investment. In the management''s opinion, owing to the short period between date of investment and the reporting date and taking into account the fact that there were no significant changes in the investee''s net assets or market outlook in the interim period, the investment price is regarded as the best estimate of its fair value as at the reporting date. In view of the above, disclosure of the sensitivity of fair value measurement in unobservable inputs is not considered relevant.

In the opinion of the management, the carrying amounts of financial assets and financial liabilities recognised in the financial statements are a resonable approximation of their fair values. Hence,no separate disclosures of fair value has been made.

31.3 Financial risk management

The Company is exposed to Market risk, Credit risk and Liquidity risk.The Company monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyse exposures by degree and magnitude of risks.

The following disclosures summarize the Company''s exposure to financial risks. Quantitative sensitivity analysis have been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial position of the Company.

31.3.1 Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market conditions. Market risk mainly comprises of interest rate risk, currency risk. Financial instruments affected by market risk includes borrowings, investments, trade payables, trade receivables. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates, interest rates and other price risk.

There has been no change to the Company''s exposure to market risks or the manner in which these risks are being managed and measured.

(a) 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 changes in interest rates primarily relates to the companies outstanding floating rate debt. The company has INR denominated long term debt and a portion of its working capital debt is denominated in foreign currency. These credit facilities are subject to periodic interest rate resets. Based on the past experience the variability of interest on long term loans is not expected to be material. Further there are only short term foreign currency debt in the form of packing credit which are subject to minimal changes in interest rate during it''s term.

(b) Foreign Currency risk

The company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Significant portion of the companies purchases and sales are denominated in foreign currency and hence, a natural hedge exists as a result of which, major foreign exchange fluctuations in import payables gets offsett export receivables. Apart from the above, exchange rate exposures are also managed within approved policy parameters by constant monitoring.

I n management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

31.3.2 Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. The company''s exposure of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management.

Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the financial condition of accounts receivable. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 9. The company does not hold collateral as security. The Company has evaluated the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Credit risk arising from other balances with banks is limited and there is no collateral held against these because the counterparties are banks with high credit ratings assigned by the international credit rating agencies.

31.3.3 Liquidity risk

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the company''s short-term, medium-term and long-term funding and liquidity management requirements. The company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The following tables detail the company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay.

32. FIRST-TIME IND AS ADOPTION

32.1 Mandatory exceptions and optional exemptions

The Company has prepared the opening Balance Sheet as per Ind AS as at date of transition 1 April, 2021 by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities.

However, this principle is subject to the certain exceptions and certain optional exemptions availed by the Company as detailed below: The effect on reported financial position and financial performance of the Company on transition to Ind AS has been provided hereunder, which also includes reconciliations of total equity and total comprehensive income for comparative years under Indian GAAP to those reported for respective years under Ind AS.

Mandatory exceptions to retrospective application Estimates

On assessment of estimates made under the previous GAAP financial Information, the Company has concluded that there is no necessity to revise such estimates under Ind AS, as there is no objective evidence of an error in those estimates.

Classification and measurement of financial assets

The Company has followed classification and measurement of financial assets in accordance with Ind AS 109 - Financial Instruments on the basis of facts and circumstances that existed at the date of transition to Ind AS.

Impairment of Financial Assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or

effort to determine the credit risk as at the date that financial instruments were initially recognized in order to compare it with the credit risk as at the transition date.

However, as permitted by Ind AS 101, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there have been significant increases in credit risk since initial recognition

Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transaction occurring on or after date of transition 1 April, 2021.

Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the amortized cost criteria or the fair value through other comprehensive income (FVTOCI) criteria based on the fact and circumstances that existed as of the transition date.

Optional exemptions from retrospective application

Deemed cost for property, plant and equipment and intangible assets

The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognized as at date of transition 1 April, 2021 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date. The Company had followed the revaluation model for the purpose of subsequent measurement of certain items of its property, plant and equipment. In accordance with the aforementioned election of deemed cost option, the balance in revaluation reserve as on 1st April, 2021 has been re-classified as part of retained earnings.

Deemed cost for investments in subsidiaries

On transition, Ind AS 101 allows an entity to consider carrying values as deemed cost for investments held in subsidiaries, associates and joint ventures. Accordingly, the Company has elected to measure carrying values as per previous GAAP as deemed cost for its investments held in subsidiaries.

(ii) Accounting for Leases as per Ind AS H6

Under previous GAAP, lessee classified a lease as an operating or a finance lease based on whether or not the lease transferred substantially all risk and rewards incident to the ownership of an asset. Operating lease were expensed in the statement of profit and loss. Under Ind AS 116, all arrangement that fall under the definition of lease except those for which short-term lease exemption or low value exemption is applied, the Company has recognised a right-of-use assets and a lease liability on the lease commencement date. Right-of-use assets is amortised over the lease term on a straight line basis and lease liability is measured at amortised cost at the present value of future lease payments

(iii) Measurement of Financial Liabilities at Amortised Cost

Under IGAAP, financial liabilities were carried at cost. Under Ind AS, certain financial liabilities are subsequently measured at amortised cost which involves the application of effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or financial liability.

(iv) Measurement of Financial Assets at Amortised Cost

Under previous GAAP, the security deposits paid for lease rent are shown at the transaction value. Whereas under Ind AS, the same are initially discounted and subsequently recorded at amortized cost at the end of every financial reporting year. Accordingly, the difference between the transaction and discounted value of the security deposits paid is recognized as part of the Right of Use Asset and is amortized over the period of the lease term. Further, interest is accreted on the present value of the security deposits paid for lease rent.

(v) Reclassification of Preference Share Capital

Under previous GAAP, Preference shares were classified as a part of share capital. However, under Ind AS, financial instruments are classified as a liability or equity according to the substance of the contractual arrangement and not its legal form. These Preference share instruments were evaluated and it was concluded that the same does not contain any equity component and hence they have been classified as a financial liability under Ind AS. Further, dividend on these preference shares have been recognised as finance cost as required under Ind AS 109.

(vi) Deferred Tax Adjustments of the above

Under Previous GAAP, deferred taxes were recognized for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognized using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The above difference, together with the consequential tax impact of the other Ind AS transitional adjustments lead to temporary differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or through statement of profit and loss or other comprehensive income.

(vii) Adjustment for Errors/ Prior Period Errors

(a) Valuation of Inventory

The company has developed a policy for evaluating the net relisable value of inventory considering certain technical parameters with due regard to the ageing theref and basis the same, an analysis of the carrying value of inventory across the periods covered by these finanical statements have been carried out. Based on the review as above, necessary impact of write down in respect of value of inventory identified as no longer usable has been given in the respective period in accordance with Ind AS 8.

(b) Income tax for earlier years

The company has carried out a review of the outstanding provisions carried in the Balance Sheet in respect of Income Tax payable towards earlier years and basis the same, certain provisions identified as no longer payable have been written back in these financial statements.

32.4 Effect of Ind AS adoption on the statement of cash flows

There are no changes to the cash flows from operating, financing and investing activities as reported in the cash flow statement for the year ended March 31, 2022 drawn up under the previous GAAP on account of transition to Ind AS, other than those arising due to reclassification of the previous year figures to conform to the current year''s layout.

a) Future cash outflows, if any, in respect of above are determinable only on receipt of judgement/decisions pending at various forums/ authorities or final outcome of matter.

b) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required.

In respect of matters where it is only possible, but not probable that outflow of economic resources would be required to settle the matter, the same are disclosed as contingent liability.

c) The Company does not expect any reimbursements from third parties in respect of the above contingent liabilities.

40 No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

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

Explanation for Variance in ratios by more than 25%

1. (March 2023 vs march 2022)

(i) Increase in current ratio is due to receipt of funds from anchor investors.

(ii) Decrease in Debt - Equity ratio & Return on Equity ratio is due to increase in Equity on account of result of share application money from anchor investors.

(iii) Decrease in inventory turnover ratio is on account of increase in inventories to meet the increased operational requirements.

(iv) Reduction in Net Capital turnover ratio is due to improving working capital position on receipt of funds from anchor investors.

(v) Decrease in Return on Capital Employed ratio is due to increase in capital on receipt of Share application money from anchor investors

42 Pursuant to resolution passed by the Members in the Extraordinary General Meeting dated 06.07.2022 and as approved by Registrar of the Company w.e.f. 29.07.2022 the Company has been converted from Private Limited Company into a Public Limited Company including adoption of new Memorandum of Association and new Articles of Association as applicable to Public Company in place of existing Memorandum of Association and Articles of Association of the Company.

Subsequent to the year end the Company has completed the Initial Public Offering of 19,839,446 equity shares of face value of E2 each at an issue price of ^436 per equity share, consisting of a fresh issue of 7,339,449 equity shares aggregating to ^3,200 Million and an offer for sale of 12,499,997 equity shares aggregating to ^5,450 Million. The equity shares of the Company were listed on National Stock Exchange of India Limited (nse) and BSE Limited (BSE) w.e.f April 18, 2023.

The Company completed its Initial Public Offering (ipo) of its equity shares which have been listed on BSE Limited ("BSE”") and National Stock Exchange of India Limited (“”NSE””) with effect from April 18, 2023. The net proceeds from the fresh issue of the IPO would be utilised towards the following:

i) Prepayment or repayment of all or a portion of certain outstanding borrowings availed by our Company and one of our Material Subsidiaries, i.e. Avalon Technology and Services Private Limited;

ii) Funding the working capital requirements of our Company; and

iii) General corporate purposes

43 Previous years figures for the previous years have been regrouped / reclassified wherever necessary to conform to current year''s classification / disclosure.