(iii) The Company has entered into receivables purchase agreements with banks to unconditionally and irrevocably sell, transfer, assign and convey all the rights, titles and interest of the Company in the receivables as identified. Discounted receivables as on March 31, 2025 are of ' 1143.07 crores (Previous year: ' 790.27 crores). The Company has derecognized these receivables as it has transferred its contractual rights to the banks with substantially all the risks and rewards of ownership and retains no control over these receivables as the banks have the right to further sell and transfer these receivables with notice to the Company.

(iv) At March 31, 2025, the carrying amount of the receivable from the Company's most significant customer was ' 104.96 crores (Previous year: ' 124.92 crores )

(v) Refer Note 15.1 for information on trade receivables pledged as security by the Company.

(vi) Refer Note 32.3 for trade receivables from related parties.

Bonus shares issued during the five years preceding the reporting date

During the year ended March 31, 2022, the Company had issued and allotted 236,980,820 fully paid up Bonus Equity shares of ' 10 each in the ratio of 4:1 (i.e. 4 Bonus Equity shares for every 1 existing equity share of the Company).

Terms/ rights attached to equity shares :

The Company has only one class of equity shares having a par value of ' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. The Board may from time to time pay to the members such interim dividends as appear to it to be justified by the profits of the Company.

During the year ended March 31, 2025, first interim dividend of ' 3.60 per share and second interim dividend of ' 3.60 per share were recognised as distributions to equity shareholders, aggregating ' 213.43 crores (Previous year: first interim dividend of ' 3.60 per share and second interim dividend of ' 3.60 per share were recognised as distributions to equity shareholders, aggregating ' 213.43 crores).

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

CURRENT BORROWINGS

Short term borrowings are either payable in installments within one year or repayable on demand. For short

term borrowings, interest rate ranges from 5.45% to 9.50%.

Terms of repayment

1 Rupee term loan of ' 15.63 Crores is repayable in final instalment in April 2025 (Previous year: ' 78.13 Crores are repayable in 5 quarterly instalments from April 2024)

2 Rupee term loan of ' 84.60 Crores are repayable in 10 half-yearly instalments from September 2025 (Previous year: ' 90.00 Crores are repayable in 12 half-yearly instalments from September 2024)

3 Rupee term loan of ' 103.40 Crores are repayable in 10 half-yearly instalments from September 2025 (Previous year: ' 110.00 Crores are repayable in 12 half-yearly instalments from September 2024)

4 Foreign currency term loan of ' 22.87 Crores is repayable in final instalment in April 2025 (Previous year: ' 66.77 Crores are repayable in 3 half-yearly instalments from April 2024).

5 Foreign currency term loan of ' 120.68 Crores are repayable in 8 quarterly instalments from June 2025 (Previous year: ' 176.58 Crores are repayable in 12 quarterly instalments from June 2024)

6 Foreign currency term loan of ' 146.92 Crores are repayable in 11 quarterly instalments from May 2025 (Previous year: ' 195.43 Crores are repayable in 15 quarterly instalments from May 2024)

7 Foreign currency term loan of ' 569.87 Crores are repayable in 8 quarterly instalments from May 2025 (Previous year: ' 625.37 Crores are repayable in 9 quarterly instalments from February 2025)

8 Foreign currency term loan of ' 641.10 Crores are repayable in 21 quarterly instalments from July 2025 (Previous year: ' 625.37 Crores are repayable in 21 quarterly instalments from July 2025)

9 Foreign currency term loan of ' 414.51 Crores are repayable in 17 quarterly instalments from October 2025 (Previous year: Nil)

10 Foreign currency term loan from Bank of ' 265.16 Crores was repaid in the current year (Previous year: ' 265.16 Crores are repayable in 12 monthly instalments from April 2024)

11 Foreign currency term loan from Bank of ' 95.60 Crores was repaid in the current year (Previous year: ' 95.60 Crores are repayable in 4 quarterly instalments from May 2024)

12 Foreign currency term loan from Bank of ' 250.15 Crores was repaid in the current year (Previous year: ' 250.15 Crores is repayable in one bullet instalment in March 2025)

* Deferred government grants include capital grants for promoting investment, setting up of property, plant and equipment and job creation under various government programmes/ schemes. These grants are being amortised over the useful life of the related property, plant and equipment in proportion to the related depreciation expense recognised. The related unamortised grant amount as on March 31, 2025 is ' 96.58 crores (Previous year: ' 95.76 crores)

Deferred government grant also includes grant related to duty saved on import of capital goods under the Exports Promotion Capital Goods (EPCG) scheme. This is being amortised in profit and loss as and when the criteria of meeting export obligation as mentioned in EPCG license is fulfilled. Under such scheme, the Company is committed to export an amount equivalent to prescribed times of the duty saved on import of capital goods over a specified period of time. The related unamortised grant amount as on March 31, 2025 is ' 34.72 crores (Previous year: ' 30.78 crores)

(i) During the year ended March 31, 2024, the Company had reassessed its uncertain tax position in relation to past years on taxability of income from sale of Carbon Emission Reduction Certificates (CER's) and had written back ' 98.06 crores in respect of assessment years 2008-09 and 2009-10 as 'Tax adjustments in relation to earlier years' after taking into consideration favourable orders received from Income Tax Appellate tribunal ("ITAT") in relation to the above assessment years, elapse of statutory time for further appeal by tax authorities and favourable judicial precedents.

During the year ended March 31, 2025, interest income of ' 3.08 crores has been recognised based on the appeal effect received from income tax Assessing Officer in respect of order of ITAT for the Assessment year 2008-09. However, since the interest income for the complete relevant period was not granted by the assessing officer, a writ petition has been filed by the Company before Hon'ble Delhi High Court for grant of additional interest from the begining of the relevant assessment year.

Related remaining interest income in respect of assessment years 2008-09 and 2009-10 will be considered in the period in which a requisite level of certainty is achieved.

Considering that the in-principle matter of taxability of CERs is yet to attain a finality, the Company will continue to re-assess its tax position, including in relation to other assessment years, and will consider their impact in the relevant period.

* Amount deposited against contingent liability ' 6.54 crores (Previous year: ' 6.54 crores)

** Amount deposited against contingent liability ' 22.66 crores (Previous year: ' 6.77 crores). Contingent liabilities includes the following matters:

(i) Order received in the current year under Goods and Service tax (GST) law for the period from December 2019 to March 2022 of ' 235.07 crores (including penalty and applicable interest of ' 149.84 crores) on account of refund of IGST claimed on exports made using duty free raw materials procured from SEZ / EOU suppliers against Advance Authorisations. The Company has subsequently filed an appeal before Commissioner (Appeals) against this demand and an amount of ' 8.52 crores has been deposited under protest.

(ii) Order received in the current year under Goods and Service tax (GST) law for the period from July 2017 to March 2021 of ' 21.03 crores (including penalty and applicable interest of ' 14.03 crores), on account of non payment of GST on research and development services between internal units of the Company. The Company has subsequently filed an appeal before Commissioner (Appeals) against this demand and an amount of ' 7.00 crores has been deposited under protest.

*** Amount deposited against contingent liability ' 60.69 crores (Previous year: ' 63.42 crores). Contingent liabilities includes the following matters:

(i) Demand/ rectification Orders received in earlier years in respect of assessment years 2017-18 and 2018-

19 having a tax implication of ' 19.96 crores (Previous year ' 19.96 crores) and ' 57.94 crores (Previous year ' 57.94 crores) respectively on account of transfer pricing adjustments, disallowance of research and development expenditure, etc. The Company has filed an appeal before Income Tax Appellate Tribunal against the said orders.

(ii) Final Assessment Order for assessment year 2020-21 received in the current year having adjustment of ' 48.39 Crores with tax implication of ' 16.91 crores (Previous year draft assessment order received with tax adjustments of ' 178.50 crores) on account of transfer pricing adjustments, disallowance u/s 14A and for generation of power from captive power plants, etc. The Company has filed an appeal before Income Tax Appellate Tribunal against the said order.

(iii) Final Assessment Order for assessment year 2021-22 received in the current year having adjustment of ' 98.27 Crores with tax implication of ' 54.19 crores (Previous year draft assessment order received with tax adjustments of ' 258.55 crores and order under section 143(1) with a demand of ' 130.74 crores) on account of transfer pricing adjustments, disallowance for research and development expenditure and for generation of power from captive power plants, etc. The Company has filed an appeal before Income Tax Appellate Tribunal against the said order. Also, refund aggregating to ' 57.33 crores (previous year ' 57.33 crores) for different assessment years have been adjusted against the said demand.

(iv) Intimation order under section 143(1) received in the previous year for assessment year 2022-23 with a demand of ' 68.76 crores for which the Company has filed rectification application before Assessing Officer and an appeal before CIT(Appeals).

**** Amount deposited against contingent liability ' 9.05 crore (Previous year: ' 9.05 crore). Contingent liability includes demand by Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd. (MPPKVV Ltd) of ' 8.73 Crores (Previous year: ' 8.73 crores).

All the above matters are subject to legal proceedings in the ordinary course of business. Based on the facts of the above cases and the management's assessment, the legal proceedings, when ultimately concluded, are not likely to have a material effect on the results of the operations or financial position of the Company.

b. (i) The Company has been served with show cause notices regarding certain transactions as to

why additional customs / excise duty / service tax / goods and service tax amounting to ' 24.22 crores (Previous year: ' 43.00 crores) should not be levied. An amount of ' 0.15 crores (Previous year: ' 7.15 crores) has been deposited against such show cause notices. The Company is of the view that the contention of the respective departments is not tenable and hence the show cause notices may not be sustainable.

(ii) The Company has received a draft Assessment Order for assessment year 2022-23 in which adjustments amounting to ' 197.13 crores are proposed on account of adjustments while passing order under section 143(1), transfer pricing adjustments, disallowance u/s 80G and for generation of power from captive power plants, etc. which are pending before Dispute Resolution Panel as on March 31, 2025. Based on the facts of the case and the management's assessment, the Company is of the view that the proposed adjustments are not likely to sustain.

c. The amounts shown above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of different legal processes which have been invoked by the Company or by the claimant as the case may be, and therefore, cannot be predicted accurately or relate to a present obligations that arise from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate cannot be made.

Note:- During the current year, the Company subscribed to redeemable preference shares issued by its subsidiary, SRF Altech Limited, amounting to ' 150.00 crores. These shares are redeemable at the subsidiary's discretion within a 20-year period from the issuance date. The holders of these shares are entitled to a non-cumulative dividend of 8%, payable at the subsidiary's discretion.

In accordance with relevant accounting standards, the instrument was initially recognized at fair value through profit or loss (FVTPL). The differential between the fair value and the consideration provided has been recorded as an additional investment (deemed contribution) by the Company. Consequently, ' 32.18 crores has been recognized as an investment in a debt instrument, while the remaining ' 117.82 crores has been recognized as an additional equity investment. Further, an interest income of ' 0.83 crores has been accrued on the debt investment during the current year. Also refer to note 5.1 and 5.4(ii)

(i) Superannuation fund

The Company makes contributions to a Trust which in turn contributes to ICICI Prudential Life Insurance Company Limited. Apart from being covered under the Gratuity Plan described below, the employees of the Company also participate in a defined contribution superannuation plan maintained by the

Company. The Company has no further obligations under the plan except making annual contributions based on a specified percentage of each covered employee's salary. From November 1, 2006, the Company provided an option to the employees to receive the said benefit as cash compensation along with salary in lieu of the superannuation benefit. Thus, no contribution is required to be made for the category of employees who opted to receive the benefit in cash.

(ii) Provident fund administered through Regional Provident Fund Commissioner

All employees are entitled to Provident Fund benefits as per the law. For certain category of employees the Company administers the benefits through a recognised Provident Fund Trust. For other employees contributions are made to the Regional Provident Fund Commissioners. The Government mandates the annual yield to be provided to the employees on their corpus. This plan is considered as a Defined Contribution Plan. For the first category of employees (covered by the Trust), the Company has an obligation to make good the shortfall, if any, between the yield on the investments of the trust and the yield mandated by the Government and these are considered as Defined Benefit Plans and are accounted for on the basis of an actuarial valuation.

33.2 Defined benefit plans

The Company sponsors funded defined benefit plans for qualifying employees. The defined benefit plans are administered by separate funds which are legally separate from the Company. These plans are:

(a) Gratuity

(b) Provident fund for certain category of employees administered through a recognised provident fund trust

(i) These plans typically expose the company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk.

Investment Risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Salary Risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

Interest Risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in value of the liability.

Longevity Risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after employment. An increase in the life expectancy of the plan participants will increase the plans liability.

(viii) Sensitivity Analysis

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

Long Term Retention Pay

The Company has a Long Term Retention Pay Plan which covers employees selected on the basis of their current band and their long term value to the Company. The incentive is payable in three year blocks subject to achievement of certain performance ratings. The Company also has a scheme for talent retention of certain identified employees under which an incentive is payable over a period of three years.

34 EMPLOYEE SHARE BASED PAYMENTS

The Company has an Employee Share Purchase Scheme (SRF Long Term Share Based Incentive Plan) to provide equity settled share based payments to eligible employees. Under the said Scheme, the Company has issued equity shares to the eligible employees by entering into a Share Grant Agreement and executing a Share Grant Acceptance Letter and paying the exercise price, if any, as prescribed by the Nomination and Remuneration Committee at the time of grant. Subscribed shares have complete voting and dividend rights. Employees who have been granted equity share are required to pledge their shares as part of the Share Grant Agreement between the Company, Eligible Employee and the SRF Employees Welfare Trust ('Trust'). In case of exit/ termination of employees before their retirement or such other period as may be decided by the Nomination and Remuneration Committee, the shares shall get transferred to the Trust. Such shares will then be issued to another set of eligible employees as and when the Nomination and Remuneration Committee decides subject to the applicable rules and regulations.

The expenses related to the grant of shares under the Scheme are accounted for on the basis of fair value of the share on the grant date (which is the market price of the Company's share on the date of grant less exercise price). The fair value so determined is expensed on a straight line basis over the term of the grant.

35 SEGMENT REPORTING

Based on the guiding principles laid down in Indian Accounting Standard (Ind AS) - 108 "Segment Reporting", the Chairman & Managing Director of the Company is the Chief Operating Decision Maker (CODM) and for the purposes of resource allocation and assessment of segment performance the business of the Company is segregated in the segments below:

• Technical Textiles business: includes nylon tyre cord fabric, belting fabric, polyester tyre cord fabric and industrial yarns and its research and development

• Chemicals business: includes refrigerant gases, industrial chemicals, speciality chemicals, fluorochemicals & allied products and its research and development.

• Performance Films and Foil Business (earlier named as Packaging Film Business): includes polyester films and polypropylene films.

• Others: includes coated fabric, laminated fabric and other ancillary activities.

Segment revenue, results and capital employed include the respective amounts identifiable to each of the segments. Other unallocable expenditure includes expenses incurred on common services provided to the segments, which are not directly identifiable.

In addition to the significant accounting policies applicable to the business segments as set out in note 1B above, the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses

Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments. These amounts relate to continuing operations, unless otherwise stated.

b) Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating cash, trade receivables, inventories and property plant and equipment and intangible assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities and do not include deferred income taxes. While most of the assets / liabilities can be directly attributed to individual segments, the carrying amount of certain assets / liabilities pertaining to two or more segments are allocated to the segments on a reasonable basis.

38 FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

38.1 Capital Management

The Company manages its capital to ensure that it will be able to continue as a going concern and provide reasonable return to the shareholders by maintaining a reasonable balance between debt and equity. The capital structure of the Company consists of net debt (borrowings net of cash and cash equivalents, deposit accounts with maturity beyond three months upto twelve months and current investments) and total equity of the Company. The Company is not subject to any externally imposed capital requirements. The Company's management reviews the capital structure of the Company on periodic basis. As part of its review, the management considers the cost of capital and risk associated with each class of capital. The Company also evaluates its gearing measures using Debt Equity Ratio to arrive at an appropriate level of debt and accordingly evolves its capital structure.

The following methods/ assumptions are used to estimate the fair values:

(a) Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.

(b) Fair valuation of non-current financial assets and financial liabilities has been disclosed to be same as carrying value as there is no significant difference between carrying value and fair value.

(c) Fair value of other long-term borrowings is estimated by discounting future cash flows using current rates (applicable to instruments with similar terms, currency, credit risk and remaining maturities) to discount the future payouts.

(d) The fair value is determined by using the valuation model/ technique with observable/ non-observable inputs and assumptions.

(e) Investment value excludes equity investment in subsidiaries which are shown at cost in balance sheet as per Ind AS 27 "Separate financial statements".

There are no transfers between Level 1, Level 2 and Level 3 during the year ended March 31, 2025 and March 31, 2024.

Level 1:

Quoted prices in the active market: This level of hierarchy includes financial assets that are measured by reference to quoted prices in the active market.

Level 2:

Valuation techniques with significant observable inputs: This level of hierarchy includes items measured using inputs other than quoted prices included within Level 1 that are observable for such items, either directly or indirectly. This level of hierarchy consists of over the counter (OTC) derivative contracts, open ended mutual funds and bonds.

Level 3:

Valuation techniques with significant unobservable inputs: This level of hierarchy includes items measured using inputs that are not based on observable market data (unobservable inputs). Fair value is determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor based on available market data. The main item in this category are unquoted equity instruments and investment in debt investment in a Subsidiary.

The fair value of the financial instruments are determined at the amount that would be received to sell an asset in an orderly transaction between market participants. The following methods and assumptions are used to estimate the fair values:

(i) Investments in mutual funds and bonds : Fair value is determined by reference to quotes from the financial institutions.

(ii) Derivative contracts: The Company has entered into various foreign currency contracts and interest rate swaps contracts to manage its exposure to fluctuations in foreign exchange rates and interest rate respectively. These financial exposures are managed in accordance with the Company's risk management policies and procedures. Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data, i.e., mark to market values determined by the authorized dealers banks and quoted forward exchange rates at the balance sheet date.

38.3 Financial Risk Management

The Company is exposed to various financial risks arising from its underlying operations and finance activities. The Company is primarily exposed to market risk (i.e. interest rate and foreign currency risk) and to credit risk and liquidity risk. The Company's Corporate Treasury function plays the role of monitoring financial risk arising from business operations and financing activities.

Financial risk management within the Company is governed by policies and guidelines approved by the senior management and the Board of Directors. These policies and guidelines cover interest rate risk, foreign currency risk, credit risk and liquidity risk. Company policies and guidelines also cover areas such as cash management, investment of excess funds and the raising of short and long-term debt. Compliance with the policies and guidelines is managed by the Corporate Treasury function within the Company. Review of the financial risk is done on a monthly basis by the Chairman and Managing Director and on a quarterly basis by the Board of Directors. The objective of financial risk management is to contain, where deemed appropriate, exposures on net basis to the various types of financial risks mentioned above in order to limit any negative impact on the Company's results and financial position.

In accordance with its financial risk management policies, the Company manages its market risk exposures by using specific type of financial instruments duly approved by the Board of Directors as and when deemed appropriate. It is the Company's policy and practice neither to enter into derivative transactions for speculative purpose, nor for any purpose unrelated to the underlying business. The Board of Directors / Chairman and Managing Director reviews and approves policies for managing each of the above risks.

38.3.1 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 prices. Market risk comprises of interest rate risk and foreign currency risk. Financial instruments affected by market risk includes loans and borrowings, deposits, investments and derivative financial instruments. The Company enters into derivative contracts as approved by the Board to manage its exposure to interest rate risk and foreign currency risk.

A. Foreign Currency Risk Management

Foreign currency risk also known as Exchange Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Foreign currency risk in the Company is attributable to Company's operating activities, investing activities and financing activities.

In the operating activities, the Company's exchange rate risk primarily arises when revenue / costs are generated in a currency that is different from the reporting currency (transaction risk). In compliance with the Board approved policy, the Company manages the net exposure on a rolling period of 12 month basis and for exposures between a period of 12 to 36 months, hedging is done based on specific exposure. The information is monitored by the Board of Directors on a quarterly basis. This foreign currency risk exposure of the Company are mainly in U.S. Dollar (USD), Euro (EUR), Japanese Yen (JPY) and British Pound Sterling (GBP). The Company's exposure to foreign currency changes for all other currencies is not material.

Foreign exchange derivative and non-derivative financial instruments

The Company uses derivative as well as non-derivative financial instruments for hedging financial risks that arise from its commercial business or financing activities. The Company's Corporate Treasury team manages its foreign currency risk by hedging transactions that are expected to occur within a period of 1 to 36 months for hedges of forecasted sales, purchases, loans and liabilities and capital expenditures. When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the resulting receivable or payable that is denominated in the foreign currency. All identified exposures are managed as per the policy duly approved by the Board of Directors.

The following table details the Company's sensitivity to a 1% increase and decrease in the ' against the relevant foreign currency. The sensitivity analysis includes only outstanding forward exchange contracts as tabulated above and adjusts their translation at the period end for 1% change in forward rates. A positive number below indicates an increase in profit before tax or vice-versa.

B. Interest Rate Risk Management

Interest rate risk arises from movements in interest rates which could have effects on the Company's net income or financial position. Changes in interest rates may cause variations in interest income and expenses resulting from interest-bearing assets and liabilities. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.

The Company manages its interest rate risk by having a portfolio of fixed and variable rate loans and borrowings. The Company enters into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts, calculated by reference to an agreed principal amount outstanding at the time of inception of the swap. Out of the total long term borrowings, the amount of fixed interest loan aggregates to ' 15.63 crores and floating interest loan aggregates to ' 2,103.95 crores (Previous year: Fixed interest loan ' 438.88 crores and Floating interest loan ' 2,139.67 crores).

38.3.2 Credit Risk Management

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables, loans and other financial assets) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. The Company does not require collateral in respect of trade receivables, loans and contract assets.

Credit risk from balances with banks and financial institutions is managed by the Company's treasury department in accordance with the Company's policy. Investments of surplus funds are made only with counterparties who meet the parameters specified in Investment Policy of the Company. The investment policy specifies the limits of investment in various categories of products so as to minimize the concentration of risks and therefore mitigate financial loss due to counterparty's potential failure.

The derivatives are entered into with reputed and well established bank and financial institution.

The cash and cash equivalents and other bank balances are held with banks, financial institution and other counterparties, which are rated AA or above. The Company considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.

The Company limits its exposure to credit risk by investing in liquid debt securities and only with counterparties that have a credit rating of at least AA or above. The Company permits exposure in corporate bonds only upto the specified amount as per its Board policy. Also, mutual fund investments are permitted only in those funds where the corpus size is more than ' 2,000 crores. The Company monitors its investment portfolio on continuous basis to assess whether there has been a significant increase in credit risk whether or not reflected in the published ratings.

Expected credit loss on financial assets:

To manage credit risk for trade receivables, the Company establishes credit approvals and credit limits, periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables.

With regard to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties, from which these financial assets are recoverable, have strong capacity to meet the obligations

38.3.3 Liquidity Risk Management

Liquidity risk is the risk of non-availability of financial facilities available to the Company to meet its financial obligations. The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of money market instruments, bank overdrafts, bank loans, debentures and other types of facilities. The liquidity management is governed by the Board approved liquidity management policy. Any deviation from the policy has to be approved by the Treasury Management comprising of Chairman and Managing Director, Chief Financial Officer and Treasury Head. The Company assesses the concentration of risk with respect to refinancing its debt, guarantee given and funding of its capital expenditure according to needs of the future. The Company manages its liquidity by holding appropriate volumes of liquid assets which are available for its disposal on T 1 basis and by maintaining open credit lines with banks.

The Company has secured bank loans that contain loan covenants. A future breach of any covenants may require the Company to repay the loans earlier than their original payment date.These covenants are monitored by the treasury department and regularly reported to management to ensure compliance with the agreement.

The Company also participates in a supply chain financing arrangement (SCF) with the principal purpose of facilitating efficient payment processing of supplier invoices. The SCF allows the Company to centralise payments of trade payables to the bank rather than paying each supplier individually. While the SCF does not extend payment terms beyond the normal terms agreed with other suppliers that are not participating, the programme assists in making cash outflows more predictable. Also refer note 18.

(c) The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items as described in Para D13 AA of Ind AS 101. Accordingly, exchange loss/ (gain) arising on all long term monetary items financed or re-financed on or before March 31, 2016 relating to acquisition of following depreciable assets are added to/ adjusted from the cost of such assets/ capital work in progress and will be depreciated over the balance useful life of such assets.

(e) The Company has established a comprehensive system of maintenance of information and documents as required by transfer pricing legislation under section 92D for its international transactions as well as specified domestic transactions. Based on the transfer pricing regulations/ policy, the transfer pricing study for the year ended March 31, 2025 is to be conducted on or before due date of the filing of return and the Company will further update above information and records based on the same and expects these to be in existence latest by that date. Management believes that all the above transactions are at arm's length price and the aforesaid legislations will not have material impact on the financial statements, particularly on the amount of tax expense and provision for taxation.

Additionally, during the current year, certain related items of Property, plant and equipment (written off in the previous year) have been reinstated at a cost of ' 30.49 crores and the related insurance claim recognised as income in the standalone statement of profit and loss.

Further, the Company has recognised an income for claim against Business Interruption loss of ' 10.00 Crores during the current year. Any additional cost towards further repair and maintenance, replacement of items of property, plant and equipment, other incidental costs and adjustment from change in estimates (including for insurance claim receivable from insurer) would be considered in the period of incurrence / change.

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

(v) The Company is not declared a wilful defaulter by any bank or financial institution or any other lender.

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

(vii) The Company has complied with the number of layers prescribed under section 2(87) of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.

(viii) There are no funds which 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 persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, 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 on behalf of the Ultimate Beneficiaries.

(ix) There are no funds which have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), 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.

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

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

(xii) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.