2.4.2 Impairment Testing of Investments:

The Company values its investments in certain joint venture entities using discounted cash flow (DCF) method and are tested for impairment annually or more frequently, if indicators of impairment exist. DCF method uses cash flow projections based on financial budgets covering three to five years period approved by these entities management.

The Key assumptions used in the estimation of these investments recoverable amount are set out below. The values assigned to the key assumptions represent their management's assessment of future trends in the relevant industries and economic environment and have been based on historical data from both external and internal sources.

The Company has performed sensitivity analysis around the key assumptions and has concluded that no reasonable change in the key assumption would result in the recoverable amount of investments in joint ventures to be less than the carrying value of investment and accordingly, no impairment charges were recognised during the year for these investments.

2.9.1 The Company follows adequate provisioning policy for writing down the value of slow moving, non-moving and surplus inventories along with provision towards net realisable value. Write down of Inventories (Net of reversals) for the year is H 63.62 crore (Previous year: H 32.58 crore). Inventory values shown above are net of the write down.

2.9.2 Working Capital Borrowings are unsecured (Previous year: H 17.77 crore are secured by hypothecation of inventories of the Company) (Note 2.24).

2.11.1 (a) Working Capital Borrowings are unsecured (Previous year: H 17.77 crore are secured by hypothecation of

inventories and Book debts of the Company) (Note 2.24).

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

Shares kept in Abeyance

Pursuant to provisions of Section 126 of the Companies Act, 2013, the issue of 61,985 Fully Paid Equity Shares (Previous year: 61,985 Equity Shares) are kept in abeyance.

2,077 and 948 Rights Equity Shares were issued and kept in abeyance against 61,985 and 28,295 Fully Paid Equity Shares of Face Value H 2 each, respectively, which aggregates to 3,025 Rights Equity Shares (Previous year: 3,025 Equity Shares) kept in abeyance.

2.17.4 Rights, Preferences and Restrictions attached to Equity Shares

The Company has only one class of Equity Shares having a par value of H 2 per share. The holder of the equity share is entitled to dividend right and voting right in the same proportion as the capital paid-up on such equity share bears to the total paid-up equity share capital of the Company. The Company declares dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in the same proportion as the capital paid-up on the equity shares held by them bears to the total paid-up equity share capital of the Company.

2.17.5 Rights Issue

(a) During the previous year, for enlarging the capital base of the Company, the Board of Directors of the Company had approved issue of 2,20,73,935 equity shares of face value of H 2 each (the "Rights Equity Shares") at a price of H 1,812 per Rights Equity Share (including premium of H 1,810 per Rights Equity Share), in the ratio of 6 Rights Equity Shares for every 179 existing fully-paid equity shares held by the eligible equity shareholders as on 10^th January 2024, the record date. The Rights Issue Committee of the Company approved allotment of 2,20,70,910 Rights Equity Shares, keeping 3,025 Rights Equity Shares in abeyance. In accordance with the terms of issue, the Company received H 983.73 crore (net of refund and share issue expenses) on application at H 453 per Rights Equity Share (including a premium of H 452.50 per share), i.e., 25% of the issue price from eligible equity shareholders and shares were allotted.

During the year, the Board made first call of H 453 per Rights Equity Share (including a premium of H 452.50 per share) in June 2024 and second and final call of H 906 per Rights Equity Share (including a premium of H 905 per share) in December, 2024 and collected H 2,989.92 crore (net of share issue expenses of H 2.08 crore, adjusted against securities premium). As at 31^st March 2025, an aggregate amount of H 7.85 crore is unpaid on the calls made, of which H 0.10 crore have been received pending appropriation.

(b) There has been no deviation in the use of proceeds of the Rights Issue, from the objects stated in the Offer document.

2.17.6 The Company does not have any Holding Company.

The Description of the nature and purpose of each reserve within equity is as follows:

a. Capital Reserve: Capital Reserve is mainly the reserve created during business combination of erstwhile Aditya Birla Chemicals (India) Limited and Aditya Birla Nuvo Limited with the Company.

b. Securities Premium: Securities Premium is credited when shares are issued at premium. It can be used to issue bonus shares, write-off equity related expenses like underwriting costs, etc.

c. Treasury Shares: The reserve for shares of the Company held by the Grasim Employees Welfare Trust (ESOP Trust). The Company has issued employees stock option scheme for its employees. The shares of the Company have been purchased and held by ESOP Trust to issue and allot to employees at the time of exercise of ESOP by Employees.

d. Employee Share Option Outstanding: The Company has stock option schemes under which options to subscribe for the Company's shares have been granted to certain employees, including key management personnel. The share-based payment reserve is used to recognise the value of equity-settled share-based payments provided to employees, as part of their remuneration.

e. General Reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. Consequent to introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.

f. Retained Earnings: Amount of retained earnings represents accumulated profit and losses of the Company as on reporting date. Such profits and losses are after adjustment of payment of dividend, transfer to any reserves as statutorily required and adjustment for realised gain/loss on derecognition of equity instruments measured at FVTOCI. Actuarial Gain/(Loss) arising out of Actuarial valuation is immediately transferred to Retained Earnings.

g. Debt Instrument through OCI: It represents the cumulative gains/(losses) arising on the fair valuation of debt instruments measured at fair value through OCI, net of amount reclassified to Profit or loss on disposal of such instruments.

h. Equity Instrument through OCI: It represents the cumulative gains/(losses) arising on the fair valuation of Equity Shares (other than investments in Subsidiaries, Joint Ventures and Associates, which are carried at cost) measured at fair value through OCI, net of amounts reclassified to Retained Earnings on disposal of such instruments.

i. Effective portion of Cash Flow Hedges: It represents the effective portion of the fair value of forward contracts, designated as cash flow hedge.

2.19.1 Nature of Security, Repayment Terms and Break-up of Current and Non-Current

Unsecured Borrowings:

Bank loans contain certain debt covenants relating to limitation on indebtedness, debt-equity ratio, net Borrowings to EBITDA ratio and debt service coverage ratio. The limitation on indebtedness covenant gets suspended if the Company meets certain prescribed criteria. The debt covenant related to limitation on indebtedness remained suspended as of the date of the authorisation of the financial statements. The Company has also satisfied all other debt covenants prescribed in the terms of bank loan.

The other bank loans do not carry any financial debt covenant.

Repayment Terms:

(i) 34 quarterly instalments from 31^st January 2026. Remaining 6 quarterly instalments of H 0.20 crore each, 16 quarterly instalments of H 1.00 crore each, 8 quarterly instalments of H 4.00 crore each and 4 quarterly instalments of H 7.70 crore each.

(ii) 34 quarterly instalments from 31^st January 2024. However, the loan has been pre-paid during the year.

(iii) 34 quarterly instalments from 31^st December 2024. Remaining 4 quarterly instalments of H 0.18 crore each, 16 quarterly instalments of H 0.88 crore each, 8 quarterly instalments of H 3.50 crore each and 4 quarterly instalments of H 6.74 crore each.

(iv) 34 quarterly instalments from 31^st March 2025. Remaining 5 quarterly instalments of H 1.25 crore each, 16 quarterly instalments of H 6.25 crore each, 8 quarterly instalments of H 25.00 crore each and 4 quarterly instalments of H 48.13 crore each.

(v) 34 quarterly instalments from 30^th June 2025. Remaining 6 quarterly instalments of H 4.50 crore each, 16 quarterly instalments of H 22.50 crore each, 8 quarterly instalments of H 90.00 crore each and 4 quarterly instalments of H 173.25 crore each.

Birla Advanced Knits Private Limited ("BAKPL"), a Joint Venture of the Company, engaged in manufacturing man made cellulose fibre knit fabrics stopped its operations as the business became non-viable due to loss of synergies and integrated operations consequent to discontinuation of textile business of joint venture partner. Accordingly, the Company has created a provision of H 89 crore during the year towards its estimated exposure [Note 3.10 (i)].

AV Terrace Bay Inc, Canada ("AVTB"), a joint venture of the Company, operating in paper-grade pulp business, temporarily idled its business operations due to prevailing market conditions during the previous year. Accordingly, based on observable evidence, the Company had created a provision of H 436 crore during the previous year towards its estimated exposure [Note 3.10 (iii)].

(i) The amounts receivable from customers become due after expiry of credit period which on an average up to 120 days. There is no significant financing component in any transaction with the customers.

(ii) The Company provides agreed upon performance warranty for selected range of products and services. The amount of liability towards such warranty is immaterial.

(iii) The Company does not have any remaining performance obligation as contracts entered for sale of goods are for a shorter duration. There are no contracts for sale of services wherein, performance obligation is unsatisfied to which transaction price has been allocated.

(iv) Revenue recognised from Contract liability (Advances from Customers):

The Contract liability outstanding at the beginning of the year was H 311.50 crore (Previous year: H 264.55 crore), out of which H 284.40 crore (Previous year: H 239.28 crore) has been recognised as revenue during the year ended 31^st March 2025 and balance amount are refunded during the year.

(^3.10 8 Exceptional Items

(i) Birla Advanced Knits Private Limited ("BAKPL"), a Joint Venture of the Company, engaged in manufacturing man made cellulose fibre knit fabrics stopped its operations as the business became non-viable due to loss of synergies and integrated operations consequent to discontinuation of textile business ofjoint venture partner. Accordingly, during the year ended 31^st March 2025, the Company has recognised an impairment charge of H 25 crore against the carrying value of its equity investment in BAKPL. Further, a provision has been created towards its estimated exposure of H 89 crore. Total charge of H 114 crore is recognised as an Exceptional Item.

(ii) During the year ended 31^st March 2025, the Company has written-off one of its Capital Work-in-Progress worth H 49.98 crore, this is on account of prolonged litigation led delay in construction leading to non-suitability of structure, hence the management decided to dismantle the same.

(iii) During the previous year, the Company recognised a charge of H 715.60 crore as an Exceptional Item representing impairment against the carrying value of its investment in AV Terrace Bay Inc, Canada ("AVTB"), a Joint Venture of the Company and a provision towards its estimated exposure and advance against equity in AVTB.

The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of the matters stated above to have a material adverse impact on the Company's financial condition, results of operations or cash flows. It is not practicable to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.

4.2 Competition Commission of India (CCI) has passed an order dated 16^th March 2020 under Section 4 of the Competition Act, 2002, imposing a penalty of H 301.61 crore in respect of the Viscose Staple Fibre turnover of the Company. The Company filed an appeal before the National Company Law Appellate Tribunal (NCLAT) and NCLAT, vide Order dated 4^th November 2020, stayed the recovery of the penalty amount during the pendency of the Appeal and directed the Company to deposit 10% of the penalty amount by 19^th November 2020, which the Company has complied. The Appeal is pending before the NCLAT.

Without considering that an Appeal is already pending against the aforesaid Order, the CCI passed another Order dated 3^rd June 2021, levying a penalty of H 3.49 crore with the Order passed on 16^th March 2020. The Company filed Writ Petition before the Hon'ble Delhi High Court against the Order of the CCI. The CCI appeared before the Hon'ble Delhi High Court and assured that no precipitative steps shall be taken against the Company till the disposal of the matter.

The Company believes that it has strong grounds against both these said orders, on merit and accordingly no provision has been made in the accounts.

(^4.4 8 Operating Segments

The Company has presented segment information in its Consolidated Financial Statements, which are part of the same annual report. Accordingly, in terms of provisions of Indian Accounting Standard on Segment Reporting (Ind AS 108), no disclosure related to the segment are presented in the Standalone Financial Statements.

4.5.3 Disclosure of Related Party Transactions:

Terms and Conditions of Transaction with Related Parties

The transactions with related parties are made in the normal course of business and on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest-free (except for loans and investments in short-term instruments) and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. The below transactions are as per approval of the Audit Committee.

The Company has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(^4.6 8 Retirement Benefits

4.6.1 Defined Benefit Plans as per Actuarial Valuation:

Gratuity (funded by the Company):

The Company operates a Gratuity plan through a trust for its all employees. The Gratuity plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of service, whichever is earlier, of an amount equivalent to 15 to 30 days' salary for each completed year of service as per rules framed in this regard. Vesting occurs upon completion of five continuous years of service in accordance with Indian law. In case of majority of employees, the Company's scheme is more favourable as compared to the obligation under payment of Gratuity Act, 1972.

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method as prescribed by the Ind AS-19 - 'Employee Benefits', which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measure each unit separately to build up final obligation.

Inherent Risk:

The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, this exposes the Company to actuarial risk such as adverse salary growth, changes in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to any longevity risk.

Pension:

The Company provides pension to few retired employees as approved by the Board of Directors of the Company. Inherent Risk:

The plan is of a defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse increase in salary increases for serving employees/pension increase for pensioners or adverse demographic experience can result in an increase in cost of providing these benefits to employees in future. In this case the pension is paid directly by the Company (instead of pension being bought out from an insurance company) during the lifetime of the pensioners/beneficiaries and hence the plan carries the longevity risks.

(xi) There are no amounts included in the Fair Value of Plan Assets for:

a) Company's own financial instrument

b) Property occupied by or other assets used by the Company

(xii) Basis used to determine Discount Rate:

Discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date, applicable to the period over which the obligation is to be settled.

(xiii) Asset Liability matching Strategy:

The money contributed by the Company to the fund to finance the liabilities of the plan has to be invested.

The trustees of the plan are required to invest the funds as per the prescribed pattern of investments laid out in the income tax rules for such approved schemes. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively.

There is no compulsion on the part of the Company to fully pre-fund the liability of the Plan. The Company's philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.

(xiv) Salary Escalation Rate:

The estimates of future salary increases are considered taking into account inflation, seniority, promotion, increments and other relevant factors.

(xv) Sensitivity Analysis:

Sensitivity Analysis have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market condition at the accounting date. There have been no changes from the previous periods in the methods and assumptions used in preparing the sensitivity analysis.

(xvi) The best estimate of the expected Contribution for the next year amounts to H 74.72 crore (Previous year:

H 3.51 crore).

4.6.1.2 Compensated Absences:

The obligation for compensated absences is determined in the same manner as gratuity. Expected amount towards settlement of leaves for next one year is H 46.22 crore (Previous year: H 41.95 crore). Charge for the year amounting to H 60.30 crore (Previous year: H 57.58 crore) has been recognised in the Statement of Profit and Loss.

4.6.1.3 The details of the Company's Defined Benefit Plans in respect of the Company managed Provident Fund Trust:

Contribution to the recognised provident fund are substantially defined contribution plan. The Company is liable for any shortfall in the fund assets based on the Government specified rate of return. Such shortfall, if any, is recognised in the Statement of Profit and Loss as an expense in the year of incurring the same. The Company does not expect any shortfall.

Amount recognised as expense and included in the Note 3.6 as 'Contribution- Company owned Provident Fund' is H 52.37 crore (Previous year: H 39.39 crore) and Amount recognised as preoperative expense and included in note 2.1.5 as 'Contribution - Company owned Provident Fund' is H 3.49 crore (Previous year: H 5.46 crore).

4.7.2 Government Grant (Ind AS 20)

As at 31^st March 2025, the Company has outstanding interest-free loans of H 33.00 crore (Contractual Value: H 40.63 crore) from a State Government, repayable in full in next one to five years. Company has done the initial recognition of loan at fair value using prevailing market interest rate for an equivalent loan. As at 31^st March 2025, the difference of H 7.63 crore between contractual Value and fair value of loan is the government grant which will be recognised in the Statement of Profit and Loss over the remaining period of loan.

During the year, the Company has been granted a subsidy of H 19.56 crore under investment promotion policy of a State Government. An amount of H 9.78 crore has been received during the year and balance will be received in two equal installments in third year and fifth year from the approval of grant. The Company has recognised the grant by creating deferred income to be amortised over the useful life of the asset. Accordingly, the Company has recognised H 2.54 crore as grant income in the Statement of Profit and Loss.

4.7.3 Corporate Social Responsibility

The Company has spent H 88.42 crore on Corporate Social Responsibility Projects/ initiatives during the year (Previous year: H 58.39 crore) which are included in different heads of expenses in the Statement of Profit and Loss.

The amount required to be spent under Section 135 of the Companies Act, 2013 for the year ended 31^st March 2025 is H 35.90 crore (Previous year: H 34.02 crore) i.e. 2% of average net profits for last three financial years, calculated as per Section 198 of the Companies Act, 2013.

f 4.9 8 Financial Instruments-Disclosure, Accounting Classifications and Fair Value Measurements (Ind As 107)

A. Disclosure of Financial Instruments:

i. Investments in Equity Instruments (other than Subsidiaries, Joint Ventures and Associates) designated at FVTOCI

These investments have been designated on initial recognition to be measured at FVTOCI as these are strategic investments and are not intended for sale.

ii. Investment in Debentures and Bonds measured at FVTOCI

Investments in Debentures or Bonds meet the contractual cash flow test as required by Ind AS 109- Financial Instruments. However, the business Model of the Company is such that it does not hold these investments till maturity as the Company intends to sell these investments as and when need arises. Hence, the same have been measured at FVTOCI.

iii. Investment in Mutual Fund Units and Preference Shares measured at FVTPL

Preference Shares and Mutual Funds have been measured on initial recognition at FVTPL as these financial assets do not pass the contractual cash flow test as required by Ind AS 109- Financial Instruments, for being measured at amortised cost or FVTOCI, hence, classified at FVTPL.

C. Fair Value Measurements (Ind AS 113):

The fair values of the Financial Assets and Liabilities are included at the amount, at which the instrument could be

exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments based

on the input that is significant to the fair value measurement as a whole:

Level 1: This hierarchy uses quoted (unadjusted) prices in active markets for identical assets or liabilities. The fair value of all Equity Shares which are traded on the stock exchanges, is valued using the closing price at the reporting date.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on company specific estimates. The mutual fund units are valued using the closing Net Asset Value. Investments in Debentures or Bonds are valued on the basis of dealer's quotation based on fixed income and money market association (FIMMDA).

If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

The management assessed that cash and bank balances, trade receivables, loans, trade payables, borrowings (cash credits, commercial papers, foreign currency loans, working capital loans) and other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

During the reporting year ending 31^st March 2025 and 31^st March 2024, there was no transfer between level 1 and level 2 fair value measurement.

4.9.1 Key Inputs for Level 1& 2 Fair valuation Technique:

1. Mutual Funds: Based on Net Asset Value of the Scheme (Level 2)

2. Debentures or Bonds: Based on market yield for instruments with similar risk profile/ maturity, etc. (Level 2)

3. Listed Equity Investments (other than Subsidiaries, Joint Ventures and Associates): Quoted Bid Price on

Stock Exchange (Level 1)

4. Derivative Liabilities (Level 2)

(a) The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable yield curves and an appropriate discount factor.

(b) The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates and interest rate curve of respective currencies.

(c) The fair value of currency swap is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies, interest rate curves and an appropriate discount factor.

4.9.4 Relationship of Unobservable Inputs to Level 3 fair values (Recurring):

A. Equity Investments - Unquoted:

A 100 bps increase/decrease in the net worth, the carrying value of the shares would increase/decrease by H 16.39 crore (as at 31^st March 2024: increase/decrease by H 14.08 crore).

B. Preference Shares:

A 100 bps increase/decrease in the discount rate used while all the other variables were held constant, the carrying value of the shares would decrease by H 0.88 crore or increase by H 0.89 crore (as at 31^st March 2024: decrease by H 0.86 crore or increase by H 0.84 crore).

(^4.10 8 Financial Risk Management Objectives (IND AS 107)

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

The Company's activities expose it to market risk, liquidity risk and credit risk and foreign exchange.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments, including investments and deposits, foreign currency receivables, payables and borrowings.

The Company's overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. The Company uses derivative financial instruments, to hedge foreign currency risk exposure. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Management updates the Audit Committee / Risk Management Committee/ Board of Directors on a quarterly basis about the implementation of the above policies. It also updates on periodical basis about various risk to the business and the status of various activities planned to mitigate such risks.

Details relating to the risks are provided here below:

A. Foreign Exchange Rate Risk:

Foreign exchange risk is the risk of impact related to fair value or future cash flows of an exposure in foreign currency, which fluctuate due to changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates to import of fuels, raw materials and spare parts, plant and equipment, exports, foreign currency borrowings and net investment in foreign subsidiaries /Joint ventures.

The Company regularly evaluates exchange rate exposure arising from foreign currency transactions. The Company follows the established risk management policies and standard operating procedures. It uses derivative instruments like forward covers to hedge exposure to foreign currency risk.

When a derivative is entered into for the purpose of hedge, the Company negotiates the terms of those derivatives to match the terms of the foreign currency exposure.

(i) Foreign Currency Sensitivity:

The sensitivities are based on financial assets and liabilities held at 31^st March 2025 that are not denominated in Indian Rupees. The sensitivities do not take into account the Company's sales and costs and the results of the sensitivities could change due to other factors such as changes in the value of financial assets and liabilities as a result of nonforeign exchange influenced factors.

B. 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 prevailing market interest rates. For all long-term borrowings in foreign currency with floating interest rates, the risk of variation in the interest rates is mitigated through interest rate swaps. The Company constantly monitors the credit markets and revisits its financing strategies to achieve an optimal maturity profile and financing cost.

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate borrowings, which is monitored on continuous basis. For foreign currency long-term borrowings with floating rates, the risk of variation in the interest rates is mitigated through interest rate swaps. These swaps are designated to hedge underlying debt obligations. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.

C. Equity Price Risk:

The Company is exposed to equity price risk arising from Equity Investments (other than Subsidiaries, Joint Ventures and Associates, which are carried at cost).

Equity Price Sensitivity Analysis:

The Sensitivity analysis below has been determined based on the exposure to equity price risk at the end of the reporting period.

If equity prices of the quoted investments increase/decrease by 5%, Other Comprehensive income for the year ended 31^st March 2025 would increase/decrease by H 544.10 crore (for the year ended 31^st March 2024 by H 573.29 crore).

D. Credit Risk:

Credit risk arises when a customer or counterparty does not meet its obligations under a customer contract or financial instrument, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from its financing/ investing activities, including deposits with banks, mutual fund investments, investments in debt securities and foreign exchange transactions. The Company has no significant concentration of credit risk with any counterparty.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

(i) Trade Receivables:

Trade receivables are consisting of a large number of customers. The Company has credit evaluation policy for each customer and, based on the evaluation, credit limit of each customer is defined. Wherever the Company assesses the credit risk as high, the exposure is backed by either bank, guarantee/letter of credit or security deposits.

Total Trade receivables as on 31^st March 2025 is H 2,553.92 crore (31^st March 2024 is H 1,974.31 crore)

The Company does not have higher concentration of credit risks to a single customer.

Single largest customers of the Company have exposure of 3.00% of total sales (31^st March 2025: 4.15%) and in receivables 3.50% (31^st March 2024: 4.60%).

The ageing analysis of the receivables (net of provision) has been considered from the date the invoice falls due, refer note 2.11.2.

As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default in payments and makes appropriate provision for loss allowance at each reporting date wherever outstanding is for longer period and involves higher risk.

As per policy receivables are classified into different buckets based on the overdue period ranging from 6 months to one year to more than two years. There are different provisioning norms for each bucket which are ranging from 10% to 100%.

(ii) Investments, Derivative Instruments, Cash and Cash Equivalents and Bank Deposits:

Credit Risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as the said deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies. Credit Risk on Derivative Instruments is generally low as the Company enters into the Derivative Contracts with the reputed Banks.

Investments of surplus funds are made only with approved Financial Institutions/Counterparty. Investments primarily include investment in units of quoted Mutual Funds, quoted Bonds, Non-Convertible Debentures issued by Government/Semi-Government Agencies/PSU Bonds/High Investment grade Corporates, etc. These Mutual Funds and Counterparties have low credit risk.

The Company has standard operating procedures and investment policy for deployment of surplus liquidity, which allows investment in debt securities and mutual fund schemes of debt and arbitrage categories and restricts the exposure in equity markets.

Compliances of these policies and principles are reviewed by internal auditors on periodical basis.

Total Non-current and current investments as on 31^st March 2025 is H 39,635.27 crore (31^st March 2024 H 39,212.17 crore).

E. Liquidity Risk:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company's treasury team is responsible for managing liquidity, funding as well as settlement. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company's liquidity position through rolling forecasts and long range business forecasts on the basis of expected cash flows.

F. Capital Management:

The Company's objectives when managing capital are to (a) maximise shareholder value and provide benefits to other stakeholders and (b) maintain an optimal capital structure to reduce the cost of capital.

For the purposes of the Company's capital management, capital includes issued capital, securities premium and all other equity reserves attributable to the equity holders.

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

(iii) As on 31^st March 2025 there is no unutilised amounts in respect of any issue of securities and long-term borrowings from banks and financial institutions except as mentioned in Note 2.13. The funds have been utilised for the specific purpose for which it were raised.

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

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

(vi) The Company has not entered in to 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).

(vii) The Company is in compliance with the number of layers prescribed under Clause (87) of Section 2 of the Companies Act read with the Companies (Restriction on number of Layers) Rules, 2017.

(viii) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

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

(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

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

(^4.13 8 Authorisation of Financial Statements:

The financial statements for the year ended 31^st March 2025 were approved by the Board of Directors on 22^nd May 2025.