12 Provisions, contingent liabilities and
contingent assets
Provisions

The Company recognises a provision
when there is a present obligation (legal
or constructive) as a result of past events
and it is more likely than not that an
outflow of resources would be required
to settle the obligation and a reliable
estimate can be made.

When the Company expects some or
all of a provision to be reimbursed, for
example, under an insurance contract, the
reimbursement is recognised as a separate
asset, but only when the reimbursement is
virtually certain.

The expense relating to a provision is
presented in the statement of profit and
loss net of any reimbursement.

If the effect of the time value of money is
material, provisions are discounted using
a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.
When discounting is used, the increase in
the provision due to the passage of time is
recognised as a finance cost.

Contingent liabilities

T contingent liability is a possible obligation
that arises from past events whose existence
will be confirmed by the occurrence or
non-occurrence of one or more uncertain
future events beyond the control of the
Company or a present obligation that is not
recognised because it is not probable that
an outflow of resources will be required
to settle the obligation. A contingent
liability also arises in extremely rare cases

where there is a liability that cannot be
recognised because it cannot be measured
reliably. The Company does not recognize
a contingent liability but discloses its
existence in the financial statements unless
the possibility of an outflow of resources
embodying economic benefits is remote.
Contingent liabilities and commitments
are reviewed by the management at each
balance sheet date.

Contingent assets

Tontingent assets are not recognised in the
financial statements. However, contingent
assets are assessed continually and if it is
virtually certain that an inflow of economic
benefits will arise, the asset and related
income are recognised in the period in
which the change occurs.

13 Revenue recognition

Tevenue from sale of products is recognised
upon transfer of control of products to
customers at the time of shipment to
or receipt of goods by the customers, as
per agreed terms.

Tevenues towards satisfaction of a
performance obligation are measured based
on the transaction price (net of variable
consideration), which is the consideration,
net of tax collected from customers and
remitted to government authorities such
as goods and services tax and applicable
discounts and allowances.

Excess of revenue earned over billings on
contracts is recognised as unbilled revenue.
Unbilled revenue is classified as Trade
receivables when there is unconditional
right to receive cash, and only passage
of time is required, as per contractual
terms. Advance from customers ("contract
liability") is recognised when the Company
has received consideration from the
customer before it delivers the goods.

Tther operating revenue includes revenue
from various ancillary revenue generating
activities like Scrap sales and Material
handling income which are recognised
at a point in time, in accordance with
the terms of the relevant agreements,
as and when material is shipped, or
services are performed.

14 Taxation

Tncome tax expense represents the sum of
current tax and deferred tax.

a) Current tax

T urrent income tax assets and liabilities
are measured at the best estimate of
amount expected to be recovered from
or paid to the taxation authorities.
The tax rates and tax laws used to
compute the amount are those that
are enacted or substantively enacted,
at the reporting date.

Turrent income tax relating to
items recognised outside profit or
loss is recognised outside profit or
loss i.e. in other comprehensive
income or in equity.

b) Deferred tax

Teferred tax is provided on temporary
differences between the tax bases of
assets and liabilities and their carrying
amounts at the reporting date.

Teferred tax assets and liabilities are
measured using substantively enacted
tax rates expected to apply to taxable
income in the years in which the
temporary differences are expected to
be received or settled.

Teferred tax assets and liabilities are
offset if such items relate to taxes on
income levied by the same governing

tax laws and the Company has a legally
enforceable right for such set off.

Teferred tax assets are recognised for
all deductible temporary differences
and unused tax losses only if it is
probable that future taxable amounts
will be available to utilise those
temporary differences and losses.
The carrying amount of deferred tax
assets is reviewed at each reporting
date and reduced to the extent that
it is no longer probable that sufficient
taxable profit will be available to allow
all or part of the deferred tax asset
to be utilised. Unrecognised deferred
tax assets are re-assessed at each
reporting date and are recognised to
the extent that it has become probable
that future taxable profits will allow
the deferred tax asset to be recovered.

Teferred tax relating to items
recognised outside profit or loss
is recognised outside profit or
loss i.e. in other comprehensive
income or in equity.

Teferred tax assets/liabilities are
not recognised for below mentioned
temporary differences:

(i) Tt the time of initial
recognition of goodwill;

(ii) T nitial recognition of assets or liabilities
(other than in a business combination)
at the time of the transaction, (a)
affects neither the accounting profit
nor taxable profit or loss and (b) does
not give rise to equal taxable and
deductible temporary differences

The Company considers whether it is
probable that a taxation authority will
accept an uncertain tax treatment.

If the Company concludes that it is
probable that the taxation authority
will accept an uncertain tax treatment,
the Company determines the taxable
profit (tax loss), tax bases, unused tax
losses, unused tax credits or tax rates
consistently with the tax treatment
used or planned to be used in its income
tax filings. However, if the Company
concludes that it is not probable that
the taxation authority will accept an
uncertain tax treatment, the Company
reflects the effect of uncertainty in
determining the related taxable profit
(tax loss), tax bases, unused tax
losses, unused tax credits or tax rates.

15 Government grants

Government grants are recognised where
there is reasonable assurance that the grant
will be received and all attached conditions
will be complied with.

G government grant that becomes
receivable as compensation for expenses
or losses incurred is recognised in profit
or loss on a systematic basis over the
periods in which the Company recognises
as expenses the related costs for which
the grants are intended to compensate,
unless the conditions for receiving the grant
are met after the related expenses have
been recognised. In this case, the grant is
recognised when it becomes receivable.

Government grants related to assets are
presented in the balance sheet at fair value
as deferred income and are recognised in
profit or loss on a systematic basis over the
expected useful life of the related assets.

Gevenue from export benefits arising from
duty drawback scheme, remission of duties
and taxes on exported product scheme
are recognized on export of goods in
accordance with their respective underlying
scheme at fair value of consideration
received or receivable.

Ghe benefit accrued under the above
grants is included under the head "Revenue
from Operations" under 'Export and
other incentives'.

16 Employee benefits

Short-term employee benefits
Wages and salaries including non monetary
benefits that are expected to be settled
within the operating cycle after the end of
the period in which the related services are
rendered, are measured at the undiscounted
amount expected to be paid. A liability is
recognised for the amount expected to be
paid under short-term cash bonus, if the
Company has a present legal or constructive
obligation to pay this amount as a result of
past service provided by the employee and
the obligation can be estimated reliably.

Defined contribution plans
Provident fund administered through
Regional Provident Fund Commissioner,
Superannuation Fund and Employees'
State Insurance Corporation are defined
contribution schemes. Contributions to such
schemes are charged to the statement of
profit and loss in the year when employees
have rendered services entitling them
to contributions. The Company has no
obligation, other than the contribution
payable to such schemes.

Defined benefit plans

Ghe Company has defined benefit gratuity
plan and provident fund for certain
category of employees administered
through a recognised provident fund trust.
Provision for gratuity and provident fund for
certain category of employees administered
through a recognised provident fund trust
are determined on an actuarial basis
at the end of the year and charged to
Statement of Profit and Loss, other than
remeasurements. The cost of providing
these benefits is determined using the
projected unit credit method.

Gemeasurements, comprising of actuarial
gains and losses and the effect of the
asset ceiling, (excluding amounts included
in net interest on the net defined benefit
liability and return on plan assets), are
recognised immediately in the balance
sheet with a corresponding debit or
credit to retained earnings through other
comprehensive income in the period in
which they occur. Remeasurements are not
reclassified to statement of profit and loss
in subsequent periods.

Ghen the benefits of a plan are changed
or when a plan is curtailed, the resulting
change in benefit that relates to past
service ('past service cost' or 'past service
gain') or the gain or loss on curtailment is
recognised immediately in profit or loss.
The Company recognises gains and losses
on the settlement of a defined benefit plan
when the settlement occurs.

Other long-term employee benefits
Ghe Company also has other long-term
employee benefits in the nature of
compensated absences. Provision for
compensated absences are determined
on an actuarial basis at the end of the
year and charged to Statement of Profit
and Loss. The cost of providing these
benefits is determined using the projected
unit credit method.

Share based payments
Gmployees of the Company receive
remuneration in the form of equity-settled
share based payments under SRF Long

term Share-based incentive plan (SRF
LTIP), whereby employees render services
as consideration for equity instruments
of the Company.

Ghare-based compensation represents the
cost related to share-based awards granted
to employees. The grant date fair value
of equity-settled share-based payment
arrangements granted to employees is
generally recognised as an employee
benefits expense, with a corresponding
increase in equity, over the vesting period
of the awards. The amount recognised
as an expense is adjusted to reflect the
number of awards for which the related
service and non-market performance
conditions are expected to be met, such
that the amount ultimately recognised
is based on the number of awards that
meet the related service and non-market
performance conditions at the vesting date.
On modification of an equity settled award,
the Company re-estimates the fair value of
stock option as on the date of modification
and any incremental expense is expensed
over the period from the modification date
till the vesting date.

Ghe Company estimates the fair value of
stock options using option pricing model.
The cost is recorded under the head
employee benefit expense in the statement
of profit and loss with corresponding
increase in "Share based payment reserve".

17 Earnings per share

Gasic earnings per share (EPS) is calculated
by dividing the net profit or loss for the year
attributable to equity shareholders by the
weighted average number of equity shares
outstanding during the year.

Gor the purpose of calculating diluted
earnings per share, the net profit or loss for
the year attributable to equity shareholders

and the weighted average number of shares
outstanding during the year are adjusted
for the effects of all dilutive potential
equity shares except where the results will
be anti-dilutive.

Dilutive potential equity shares are deemed
converted as at the beginning of the year,
unless issued at a later date. Dilutive potential
equity shares are determined independently
for each year presented.

18 Cash and cash equivalents

Dash and cash equivalent in the balance sheet
comprise cash at banks and on hand and
short-term deposits with an original maturity of
three months or less, which are subject to an
insignificant risk of changes in value.

19 Financial instruments

D financial instrument is any contract that
gives rise to a financial asset of one entity
and a financial liability or equity instrument of
another entity.

Initial Recognition and measurement
Drade receivables and debt securities issued are
initially recognised when they are originated.
All other financial assets and financial liabilities
are initially recognised when the Company
becomes a party to the contractual provisions of
the instrument.

D financial asset (unless it is a trade receivable
without a significant financing component)
or financial liability is initially measured at fair
value plus or minus, for an item not at FVTPL,
transaction costs that are directly attributable
to its acquisition or issue. A trade receivable
without a significant financing component is
initially measured at the transaction price.

A) Financial Assets

Classification and Subsequent measurement

For purposes of subsequent measurement,
financial assets of the Company are classified in
three categories:

a) At amortised cost

b) At fair value through profit and loss (FVTPL)

c) Dt fair value through other comprehensive
income (FVTOCI)

Hnancial assets are not reclassified subsequent
to their initial recognition unless the Company
changes its business model for managing
financial assets, in which case all affected
financial assets are reclassified on the first day of
the first reporting period following the change in
the business model.

Hnancial asset is measured at amortised cost if
both the following conditions are met:

a) Dhe asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

b) Dontractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI)
on the principal amount outstanding.

Dfter initial measurement, such financial assets
are subsequently measured at amortised cost
using the effective interest rate (EIR) method.
Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of
the EIR. The EIR amortisation is included in
other income in the statement of profit and
loss. The losses arising from impairment are
recognised in the standalone statement of profit
and loss. This category generally applies to trade
and other receivables.

D debt investment is measured at FVTOCI if it
meets both of the following conditions and is not
designated at FVTPL:

- it is held within a business model whose
objective is achieved by both collecting
contractual cash flows and selling
financial assets; and

- fts contractual terms give rise on specified
dates to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.

Dinancial assets not classified as measured
at amortised cost or FVTOCI are measured at
FVTPL. Financial assets included within the
FVTPL category are measured at fair value
with all changes recognised in the statement of
profit and loss.

Equity Instruments

Dll equity instruments in the scope of Ind AS 109
are measured at fair value. Equity instruments
which are held for trading are measured at fair
value through profit and loss.

Dor all other equity instruments, the Company
may make an irrevocable election to present
subsequent changes in the fair value in other
comprehensive income.

The Company makes such election on an
instrument by instrument basis. The classification
is made on initial recognition and is irrevocable.

Df the Company decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends,
are recognised in other comprehensive income.
This cumulative gain or loss is not reclassified
to statement of profit and loss on disposal of
such instruments.

Dnvestments in Subsidiaries which meet the
definition of an equity instrument or provide
access to returns associated with an underlying
ownership interest are carried at cost less
accumulated impairment losses. Where an

indication of impairment exists, the carrying
amount of the investment is assessed and written
down immediately to its recoverable amount.
On disposal of investments in subsidiaries, the
difference between net disposal proceeds and
the carrying amounts are recognized in the
Standalone Statement of Profit and Loss.

Dnvestments in Subsidiaries which do not meet
the definition of an equity instrument or provide
access to returns associated with an underlying
ownership interest in subsidiaries are accounted
as financials instruments and initially recognised
at its fair value. The difference, if any, between
the fair value and the consideration given is
recognised as an additional investment (deemed
contribution) by the Company.

Derecognition

D financial asset (or, where applicable, a part of
a financial asset) is primarily derecognised (i.e.
removed from the balance sheet) when:

a) Dhe rights to receive cash flows from the
asset have expired, or

b) Dhe Company has transferred its rights
to receive cash flows from the asset
or has assumed an obligation to pay
the received cash flows in full without
material delay to a third party under a
'pass-through' arrangement; and either (i)
the Company has transferred substantially
all the risks and rewards of the asset, or
(ii) the Company has neither transferred
nor retained substantially all the risks and
rewards of the asset, but has transferred
control of the asset.

When the Company has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates
if and to what extent it has retained the risks
and rewards of ownership. When it has neither
transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred
control of the asset, the Company continues to
recognise the transferred asset to the extent
of the Company's continuing involvement.
In that case, the Company also recognises an
associated liability. The transferred asset and
the associated liability are measured on a basis
that reflects the rights and obligations that the
Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured
at the lower of the original carrying amount of the
asset and the maximum amount of consideration
that the Company could be required to repay.
Any gain or loss on derecognition is recognised
in profit or loss.

When the Company has retained substantially
all the risks and rewards of ownership of the
transferred asset, the Company continues to
recognise the transferred asset in its entirety
and recognises a financial liability for the
consideration received.

Impairment of financial assets
Che Company recognizes loss allowance using
the expected credit loss (ECL) model for the
financial assets which are not fair valued
through profit or loss. Loss allowance for
trade receivables and contract assets with no
significant financing component is measured at
an amount equal to lifetime ECL. For all financial
assets with contractual cash flows other than
trade receivable and contract assets, ECLs are
measured at an amount equal to the 12-month
ECL, unless there has been a significant increase
in credit risk from initial recognition in which case
those are measured at lifetime ECL. The amount
of ECL (or reversal) that is required to adjust the
loss allowance at the reporting date is recognised
as an impairment gain or loss in the Statement of
Profit and Loss.

When determining whether the credit risk of a
financial asset has increased significantly since
initial recognition and when estimating ECLs, the
Company considers reasonable and supportable
information that is relevant and available
without undue cost or effort. This includes both
quantitative and qualitative information and
analysis, based on the Company's historical
experience and informed credit assessment,
that includes forward-looking information.
The Company considers a financial asset to
be in default when the asset is unlikely to be
realised in full.

Credit Impaired Financial Assets
Ct each reporting date, the Company assesses
whether financial assets carried at amortised cost
and debt securities at FVTOCI are credit-impaired.
A financial asset is 'credit-impaired' when one or
more events that have a detrimental impact on
the estimated future cash flows of the financial
asset have occurred.

Evidence that a financial asset is credit-impaired
includes the following observable data:

• significant financial difficulty of the debtor;

• a breach of contract such as a default; or

• it is probable that the debtor will enter
bankruptcy or other financial reorganisation

Cresentation of allowance for ECL in

the balance sheet

Eoss allowances for financial assets measured
at amortised cost are deducted from the gross
carrying amount of the assets.

Write Off

Che gross carrying amount of a financial asset is
written off when the Company has no reasonable
expectations of recovering a financial asset in its
entirety or a portion thereof. However, financial
assets that are written off could still be subject
to enforcement activities in order to comply
with the Company's procedures for recovery
of amounts due.

B) Financial liabilities and Equity instruments
Initial recognition and measurement
Cll financial liabilities are recognised initially
at fair value, net of directly attributable
transaction costs, if any.

Che Company's financial liabilities includes
borrowings, trade and other payables including
financial guarantee contracts and derivative
financial instruments.

Subsequent measurement

(i) Borrowings

Corrowings are subsequently measured at
amortised cost. Any differences between
the proceeds (net of transaction costs)
and the redemption/repayment amount
is recognised in profit and loss over the
period of the borrowings using the effective
interest rate method.

(ii) Trade and other payables

Crade and other payables represent
liabilities for goods and services provided
to the Company prior to the end of the
financial year and which are unpaid.

Offsetting of financial instruments
Cinancial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the
assets and settle the liabilities simultaneously.

Financial guarantee contracts
Cinancial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified
entity fails to make a payment when due in
accordance with the terms of a debt instrument.
Financial guarantee contracts are recognised

initially as a liability at fair value, adjusted for
transaction costs that are directly attributable to
the issuance of the guarantee. Where premiums
are received on initial recognition, liability is
recognized on a net basis.

Derecognition

C financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the derecognition of the original
liability and the recognition of a new liability.
The difference in the respective carrying amounts
is recognised in the statement of profit and loss.

Equity instrument

Cquity instruments are any contract that
evidences a residual interest in the assets of an
entity after deducting all of its liabilities.

Cebt or equity instruments issued by the Company
are classified as either financial liabilities or as
equity in accordance with the substance of the
contractual arrangements and the definitions of
a financial liability and an equity instrument.

20 Derivative and non derivative financial
instruments and hedge accounting

Cnitial recognition and subsequent

measurement

The Company uses derivative financial
instruments (such as forward currency
contracts, interest rate swaps and full
currency swaps) or non derivative financial
assets / liabilities to hedge its foreign
currency risks and interest rate risks.
The Company has opted for ""Hedge
Accounting"" for certain of its derivative as
well as non-derivative financial instrument
used for hedging. Accordingly, for such

offsetting changes in fair value or cash
flows and are assessed on an ongoing basis
to determine that they actually have been
highly effective throughout the financial
reporting periods for which they were
designated. These financial instruments are
initially recognised at fair value on the date
on which a derivative contract is entered
into and are subsequently re-measured
at fair value. Derivatives are carried as
financial assets when the fair value is
positive and as financial liabilities when the
fair value is negative.

Hny gains or losses arising from changes
in the fair value of derivatives are taken
directly to profit or loss, except for the
effective portion of cash flow hedges, which
is recognised in OCI and later reclassified to
profit and loss when the hedge item affects
profit or loss.

tor the purpose of hedge accounting,
hedges are classified as:

a) Hair value hedges when hedging the
exposure to changes in the fair value
of a recognised asset or liability.

b) Hash flow hedges when hedging the
exposure to variability in cash flows
that is either attributable to a particular
risk associated with a recognised asset
or liability or a highly probable forecast
transaction or the foreign currency risk
in an unrecognised firm commitment.

H edges that meet the strict criteria for
hedge accounting are accounted for, as
described below:

Fair value hedges

The change in the fair value of a hedging
instrument is recognised in the statement
of profit and loss. The change in the fair

value of the hedged item attributable to
the risk hedged is recorded as part of the
carrying value of the hedged item and
is also recognised in the statement of
profit and loss.

tf the hedged item is derecognised, the
unamortised fair value is recognised
immediately in profit or loss. When an
unrecognised firm commitment is designated
as a hedged item, the subsequent
cumulative change in the fair value of the
firm commitment attributable to the hedged
risk is recognised as an asset or liability with
a corresponding gain or loss recognised in
statement of profit and loss.

Cash flow hedges

The effective portion of the gain or loss on
the hedging instrument is recognised in
other comprehensive income in the cash
flow hedge reserve, while any ineffective
portion is recognised immediately in the
statement of profit and loss.

The Company uses certain forward currency
contracts as hedges of its exposure to
foreign currency risk in forecast transactions
and firm commitments. The ineffective
portion relating to foreign currency
contracts is recognised in the statement
of profit and loss. In some cases, the
Company separates the premium element
and the spot element of a forward contract
and designates only the change in fair value
of the spot element of forward exchange
contracts as the hedging instrument in
cash flow hedging relationships. In such
cases, the changes in the fair value of the
premium element of the forward contract
or the foreign currency basis spread of the
financial instrument is accumulated in a
separate component of equity as 'cost of
hedging'. The changes in the fair value of
such premium element or foreign currency
basis spread are reclassified to profit or

loss as a reclassification adjustment on a
straight-line basis over the period of the
forward contract or the financial instrument.

The Company also designates non
derivative financial liabilities, such as
foreign currency borrowings from banks,
as hedging instruments for the hedge
of foreign currency risk associated with
highly probable forecasted transactions
and, accordingly, applies cash flow hedge
accounting for such relationships.

Tmounts recognised as other comprehensive
income are transferred to profit or loss
when the hedged transaction affects profit
or loss, such as when the hedged financial
income or financial expense is recognised
or when a forecast transaction occurs.

tf the hedging instrument expires or is
sold, terminated or exercised without
replacement or rollover (as part of the
hedging strategy), or if its designation as
a hedge is revoked, or when the hedge
no longer meets the criteria for hedge
accounting, the hedge accounting will be
discontinued prospectively. Any cumulative
gain or loss previously recognised in other
comprehensive income remains separately
in other equity if the forecast transaction
or the foreign currency firm commitment
is expected to occur else the amount shall
be immediately reclassified from the cash
flow hedge reserve to profit or loss as a
reclassification adjustment.

21 Fair value measurement

The Company measures some of its
financial instruments at fair value at each
balance sheet date.

Tair value is the price that would be
received to sell an asset or paid to transfer
a liability in an orderly transaction between

market participants at the measurement
date. The fair value measurement is based
on the presumption that the transaction
to sell the asset or transfer the liability
takes place either:

a) In the principal market for the asset
or liability, or

b) In the absence of a principal market,
in the most advantageous market for
the asset or liability.

The principal or the most advantageous
market must be accessible by the Company.
The fair value of an asset or a liability is
measured using the assumptions that
market participants would use when pricing
the asset or liability, assuming that market
participants act in their economic best
interest. A fair value measurement of a
non-financial asset takes into account a
market participant's ability to generate
economic benefits by using the asset in
its highest and best use or by selling it
to another market participant that would
use the asset in its highest and best use.
The Company uses valuation techniques
that are appropriate in the circumstances
and for which sufficient data are available
to measure fair value, maximising the
use of relevant observable inputs and
minimising the use of unobservable inputs.
All assets and liabilities for which fair value
is measured or disclosed in the financial
statements are categorised within the fair
value hierarchy, described as follows, based
on the lowest level input that is significant
to the fair value measurement as a whole:

a) level 1 — Quoted (unadjusted) market
prices in active markets for identical
assets or liabilities.

b) level 2 — Inputs other than quoted
prices included in Level 1 that are

observable for the asset or liability,
either directly (i.e. as prices) or
indirectly (i.e. derived from prices).

c) level 3—Inputs for the asset or liability
that are not based on observable
market data (unobservable inputs).

Tor assets and liabilities that are recognised
in the financial statements on a recurring
basis, the Company determines whether
transfers have occurred between levels in
the hierarchy by re-assessing categorisation
(based on the lowest level input that is
significant to the fair value measurement as
a whole) at the end of each reporting period.

Tor the purpose of fair value disclosures,
the Company has determined classes of
assets and liabilities on the basis of the
nature, characteristics and risks of the asset
or liability and the level of the fair value
hierarchy as explained above.

22 Segment Reporting

Tccordance with Ind AS 108 - Operating
Segments, The Chief Operating Decision Maker
evaluates the Company’s performance and
allocates the resources based on an analysis
of various performance indicators by business
segments. Inter segment sales and transfers are
reflected at market prices.

Tnallocable items includes general corporate
income and expense items which are not
allocated to any business segment.

Segment Policies:

The Company prepares its segment information in
conformity with the accounting policies adopted
for preparing and presenting the standalone
financial statements of the Company as a whole.
Common allocable costs are allocated to each
segment on an appropriate basis.

23 Dividend

The Company recognises a liability to make
cash distributions to equity holders when the
distribution is authorised and the distribution
is no longer at the discretion of the Company.
As per the corporate laws in India, a
distribution is authorised when it is approved
by the shareholders. A corresponding amount is
recognised directly in equity.

24 Non-current assets held for sale and
discontinued operations

Non-current assets (or disposal groups) are
classified as held for sale if their carrying
amounts will be recovered principally through a
sale transaction rather than through continuing
use. The appropriate level of management
must be committed to a plan to sell, an active
programme to locate a buyer and complete the
plan has been initiated, the sale is considered
highly probable and is expected within one year
from the date of classification.

N on-current assets (or disposal groups) held for
sale are measured at the lower of their carrying
amount and fair value less costs to sell. Assets and
liabilities classified as held for sale are presented
separately from other assets and liabilities in the
balance sheet. Property, plant and equipment
and intangible assets once classified as held for
sale are not depreciated or amortised.

T discontinued operation is a component of the
Company that either has been disposed of, or is
classified as held for sale, and:

a) Tepresents a separate major line of business
or geographical area of operations,

b) fe part of a single co-ordinated plan to
dispose of a separate major line of business
or geographical area of operations, or

c) fe a subsidiary acquired exclusively with a
view to resale.

In August 2025, MCA notified the
following amendments to:

i. Ind AS 1, Presentation of Financial
Statements, applicable w.e.f. April 1, 2025 -

The amendment relates to classification
of liabilities as current or non-current and
non-current liabilities with covenants. In the
context of classifying a liability as current,
it removes the requirement of existence of
a right to defer settlement for at least 12
months after the reporting date, and instead
requires that the said right should exist on
the reporting date and have substance.
The amendment also introduces guidance
on classification of liabilities with covenants.
The Company has no impact of these
amendments in its classification criteria of
current and non-current liabilities.

ii. Ind AS 7, Statement of Cash Flows and
Ind AS 107, Financial Instruments -
Disclosures, applicable w.e.f. April 1, 2025

- The amendment in Ind AS 7 requires to
inform users of financial statements of the
existence of supplier finance arrangements
and explain the nature of the arrangements,
the carrying amount of liabilities and the
range of payment due dates. Ind AS 107
has been amended to add supplier finance
arrangements as a factor that may cause
concentration of liquidity risk. The Company
has reviewed the amendment and based
on its evaluation made relevant disclosure
(Refer note 18)

iii. Ind AS 12, International Tax Reform - Pillar
Two Model Rules, applicable immediately

- The amendments provide a temporary
mandatory relief from deferred tax
accounting for top-up tax and requires the
Company to disclose that it has applied
the relief. This relief is immediate and

applies retrospectively. There is no impact
of the amendment on the standalone
financial statements.

B. Standards issued but not yet effective

Tursuant to the amendment to Ind AS
1 - Presentation of Financial Statements,
where an entity breaches a loan covenant
on or before the reporting date and the
liability becomes payable on demand, it
must be classified as current, even if the
lender subsequently agrees not to demand
repayment. It is classified as current
because, at the reporting date, the entity
does not have the right to defer settlement
for at least 12 months. However, if the lender
has already provided—by the reporting
date—a grace period extending at least
12 months beyond that date, during which
the breach can be rectified and repayment
cannot be demanded, the liability is
classified as non-current.

This amendment is to be applied
retrospectively for annual reporting periods
beginning on or after 1 April 2026, in
accordance with Ind AS 8, Accounting
Policies, Changes in Accounting Estimates
and Errors. The Company does not expect a
significant impact of this amendment on the
Standalone Financial Statements.

C SIGNIFICANT ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS

The preparation of financial statements requires
management to make judgments, estimates
and assumptions that affect the application of
accounting policies and the reported amounts
of assets, liabilities, income and expenses.
Actual results may differ from these estimates.

I udgements, estimates and underlying
assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised
in the period in which the estimates are revised
and in any future periods affected. In particular,
information about significant areas of estimation,
uncertainty and critical judgments in applying
accounting policies that have the most significant
effect on the amounts recognised in the financial
statements is included in the following notes.

A) Judgements

• Ilassification and lease term
determination of leasing arrangement

- Note B.8

• Ierecognition of trade receivables
and hedge effectiveness - Note B.19
and Note B.20

• P resentation of amounts related to
supply chain financing arrangements
in the balance sheet and in the
statement of cash flows - Note 18

• Issessment of Uncertain Tax
Treatements - Note B.14

• Issessment of classification and
recognition of government grants

- Note B.15

Notes:

(i) B orrowing cost capitalised during the year (net of interest income) is ' 36.18 crores (Previous year: ' 33.19 crores)
with a capitalisation rate ranging from 4.57% to 5.39% (Previous year: 4.33% to 6.39%).

(ii) Bhe industrial freehold land measuring 32.41 acres at the Company's plant in Gummudipoondi, Tamil Nadu had
been acquired by the Company w.e.f. January 01, 2001 pursuant to a scheme of amalgamation sanctioned by the
Hon'ble High Court of Judicature at Madras and the Hon'ble High Court of Delhi. Out of the said land, there is a
dispute on a land parcel of 2.74 acres. Based on the legal documentation available, the Company is of the view that
it has an acceptable title, and the said dispute is not tenable.

(iii) Bapital expenditure incurred during the year includes ' 17.61 crores (Previous year: ' 19.68 crores) on account of
research and development. Depreciation for the year includes depreciation of ' 17.72 crores (previous year: ' 17.06
crores), on assets deployed in research and development as per note 40 (a) below.

(iv) Refer to note 15.1 for information on PPE pledged as security by the Company.

(v) Refer to note 40(c) for additions / adjustments on account of exchange differences during the year.

(vi) Capital Work in Progress

(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, 2026 are of ' 873.88 crores (Previous year: ' 1143.07
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) Tt March 31, 2026, the carrying amount of the receivable from the Company's most significant customer
was ' 80.02 crores (Previous year: ' 104.96 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 :

Dhe 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, 2026, first interim dividend of ' 4.00 per share and second interim
dividend of ' 5.00 per share were recognised as distributions to equity shareholders, aggregating ' 266.77
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).

I n 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

S hort term borrowings are either payable in instalments within one year or repayable on demand. For short

term borrowings, interest rate ranges from 3.01% to 8.00%.

Terms of repayment

1 Supee term loan of ' 79.20 Crores are repayable in 8 half-yearly instalments from September 2026
(Previous year: ' 84.60 Crores are repayable in 10 half-yearly instalments from September 2025)

2 Supee term loan of ' 96.80 Crores are repayable in 8 half-yearly instalments from September 2026
(Previous year: ' 103.40 Crores are repayable in 10 half-yearly instalments from September 2025)

3 Soreign currency term loan of ' 66.73 Crores are repayable in 4 quarterly instalments from June 2026
(Previous year: ' 120.68 Crores are repayable in 8 quarterly instalments from June 2025)

4 Soreign currency term loan of ' 103.39 Crores are repayable in 7 quarterly instalments from May 2026
(Previous year: ' 146.92 Crores are repayable in 11 quarterly instalments from May 2025)

5 Soreign currency term loan of ' 315.10 Crores are repayable in 4 quarterly instalments from May 2026
(Previous year: ' 569.87 Crores are repayable in 8 quarterly instalments from May 2025)

6 Soreign currency term loan of ' 652.24 Crores are repayable in 18 quarterly instalments from April 2026
(Previous year: ' 641.10 Crores are repayable in 21 quarterly instalments from July 2025)

7 Soreign currency term loan of ' 431.75 Crores are repayable in 15 quarterly instalments from April 2026
(Previous year:' 414.51 Crores are repayable in 17 quarterly instalments from October 2025)

Effective November 21, 2025, the Government of India has consolidated multiple existing labour legislations
into a unified framework comprising four labour Codes collectively referred to as the 'New Labour Codes'
Under Ind AS 19, changes to employee benefit plans arising from legislative amendments constitute a plan
amendment, requiring recognition of past service cost immediately in the statement of profit and loss.
The New Labour Codes have resulted in one time increase in provision for employee benefit of the Group.
The incremental impact of ' 84.22 crores, comprising past service cost in relation to gratuity of ' 62.10
crores and long-term compensated absences of ' 22.12 crores has been recognised and presented as 'One
time impact of new Labour Codes' under 'Exceptional Item' in the Standalone Statement of profit and loss
for the year ended March 31, 2026.

Ehe Company continues to monitor the finalisation of Central / State Rules and any clarifications from the
Government on other aspects of the New Labour Codes and would provide appropriate accounting effect in
the relevant period on the basis of such developments as needed.

The Company has an uncertain tax position related to taxability of income from sale of Carbon Emission
Reduction ('CERs') certificates in respect of certain past years, In this regard, during the current year, the
Company has received a favourable order from Income Tax Appellate tribunal ('ITAT) for assessment years
2011-12 and 2013-14. Based on the above order and favourable judicial precedents, the Company has
written back tax provisions amounting to ' 99.12 crores in respect of above assessment years.

Turing the year ended March 31, 2025, interest income of ' 3.08 crores was also recognised based on the
appeal effect received from income tax Assessing Officer pursuant to an order of ITAT for the Assessment
year 2008-09 in respect of taxability of income from sale of CE? 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 during previous year before Hon'ble Delhi High Court for grant of additional interest from
the beginning of the relevant assessment year, which is pending decision by the Hon'ble High Court.
Accordingly, the related interest income in respect of relevant assessment years will be recognised in the
period in which a requisite level of certainty is achieved.

Tonsidering that the in-principle matter of taxability of CERs is yet to attain 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 ' 16.97 crores (Previous year: ' 22.66 crores).

Contingent liabilities includes the following matters:

(i) Arder received in the previous 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 said amount
was included as a part of contingent liability for the previous year. During the current year,
the Company has filed an appeal before Commissioner (Appeals) against this demand and a
favourable order has been received setting aside the original demand.

(ii) Arder received in the previous 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 alleged non payment of GST on research and development services
between internal units of the Company. The Company has filed an appeal before Commissioner
(Appeals) against this demand and an amount of ' 7.00 crores has been deposited under protest.

(iii) Arder received in the current year for the period from 2018-19 to 2022-23 amounting to ' 49.62
crores (including penalty and applicable interest of ' 33.85 crores) on account of alleged
non-reversal of input tax credit in relation to exempted supplies (primarily due to slump sale of
Engineering Plastic business in 2019-20) and other miscellaneous items. The Company has filed
an appeal before Commissioner (Appeals) against this demand and an amount of ' 1.58 crores
has been deposited under protest.

(iv) Order received in the current year covering period from 2020-21 to 2023-24, raising a total
demand of ' 46.18 crores (including penalty and applicable interest of ' 20.67 crores) on account
of alleged short payment of duty due to misclassification of imported goods under various Customs
Tariff Items. The Company has filed an appeal before CESTAT, Chennai against this demand and
an amount of ' 0.97 crores has been deposited under protest.

*** Amount deposited against contingent liability ' 1.20 crores (Previous year: ' 60.69 crores).

Contingent liabilities includes the following matters:

(i) Aemand/ rectification Orders were received in earlier years in respect of assessment years
2017-18 and 2018-19 having a tax implication of ' 19.96 crores and ' 57.94 crores respectively on
account of transfer pricing adjustments, disallowance of research and development expenditure,
etc. The Company had filed an appeal before Income Tax Appellate Tribunal against the said
orders. During the current year, the Income Tax Appellate Tribunal has passed an order in favor
of the Company and reduced respective demands to nil.

(ii) Final Assessment Order for assessment year 2020-21 received in the previous year having
adjustment of ' 48.39 crores with tax implication of ' 16.91 crores (Previous year ' 16.91 crores)
on account of transfer pricing adjustments, disallowance u/s 14A and for generation of power
from captive power plants, etc. In the previous year, 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 previous year having
adjustment of ' 98.27 Crores with tax implication of ' 54.19 crores (Previous year ' 54.19
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 had filed
an appeal before Income Tax Appellate Tribunal against the said order Also, till the previous year,
refund aggregating to ' 57.33 crores for different assessment years have been adjusted against
the said demand.

Auring the current year, the Income Tax Appellate Tribunal has passed an order in favor of the
Company and reduced the demand to nil.

(iv) Intimation order under section 143(1) was received in earlier years for assessment year 2022-23
with a demand of ' 68.76 crores for which the Company had filed rectification application before
Assessing Officer and an appeal before CIT(Appeals). The Company has received a favorable
order from CIT (Appeals) wherein demand has been reduced to Nil.

Additionally, final Assessment Order for assessment year 2022-23 has been received in the
current year having adjustment of ' 30.54 Crores with tax implication of ' 10.67 crores (previous
year draft assessment order received with tax adjustment of ' 197.13 crores) on account of
transfer pricing adjustments, disallowance u/s 80G and for generation of power from captive
power plants, etc. However, the Company has received a demand against this assessment order
of ' 327.44 crores primarily due to apparent computational errors. Accordingly, contingent liability
in respect of the said order has been considered only to the extent of the above tax adjustments.
The Company has filed an appeal before Income Tax Appellate Tribunal against the said order for
deletion of adjustments and rectification of the computational errors.

****Amount deposited against contingent liability ' 9.05 crore (Previous year: ' 9.05 crore).

Contingent liability includes:

(i) Aemand by Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Ltd. (MPPKVV Ltd) of
' 8.73 Crores (Previous year: ' 8.73 crores).

(ii) A iscellaneous petition filed by Tamil Nadu DISCOM before the Tamil Nadu Electricity Regulatory
Commission, Chennai against Vaayu Renewable Energy (Tapi) and SRF alleging non-fulfilment
of minimum power consumption requirements as required under the Electricity Act, 2003 on
a continual basis and seeking retrospective withdrawal of captive user benefits availed by
the Company (cross subsidy surcharge) for the period 2016-17 to 2021- 22 aggregating to
' 43.13 crores.

All the above matters are subject to legal proceedings in the ordinary course of business. In the
opinion of the management, 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. Ahe 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 ' 4.92 crores (previous year:
' 24.22 crores) should not be levied. An amount of ' 0.38 crores (Previous year: ' 0.15 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

c. Ahe 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.

* Converted using closing exchange rate - USD 94.53, Euro 108.61 and THB 2.88 (Previous year USD 85.48, Euro
92.11 and THB 2.52)

Note:- During the previous 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 had been recognized as an investment in a debt instrument, while the remaining ' 117.82 crores
had been recognized as an additional equity investment. An interest income of ' 2.62 crores (Previous
year: ' 0.83 crores) has been accrued on the debt investment during the current year. Also refer to note
5.1 and 5.4(ii)

The expenses incurred on account of the above defined contribution plans have been included in Note 25

"Employee Benefits Expenses" under the head "Contribution to provident and other funds".

(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

Tll 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.

The cost of the defined benefit plans and other long term benefits are determined using actuarial
valuations. Actuarial valuations involve making various assumptions that may differ from actual
developments in the future. These includes the determination of the discount rate, future salary
increases and mortality rate. Due to these complexities involved in the valuation probability are highly
sensitive to the changes in these assumptions. All assumptions are reviewed at each reporting date.
The present value of the defined benefit obligation and the related current service cost and planned
service cost have been measured using the projected unit cost method.

Gratuity:

Plan assets comprises primarily of investments in HDFC Group Unit Linked Plan Fund and ICICI
Prudential Life Fund. The average duration of the defined benefit obligation is 9.07 years (Previous
year: 9.14 years). The Company expects to make a contribution of ' 72.81 crores (Previous year:
' 15.69 crores) to the defined benefit plans during the next financial year.

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. The scheme
has been discontinued during the current year.

34 SHARE BASED PAYMENT ARRANGEMENTS
(A) EMPLOYEE SHARE PURCHASE SCHEME

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.

(B) EMPLOYEE STOCK OPTION SCHEME

The Company has an Employee Stock Option Scheme to provide equity settled share based payments
to eligible employees. During the year, under the said Scheme options were granted to the eligible
employees of the Company.

The employee services received in respect of the options granted are measured at the fair value of the
options on the grant date. The fair value of the options determined at the grant date is expensed over
the respective vesting periods of each tranche of options on a straight line basis, with a corresponding
increase in equity. Each vesting tranche is accounted for as a separate grant.

The Company estimates the number of options expected to vest and revises such estimates at each
reporting date, with a corresponding adjustment to employee share based payment expense.

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

Boint 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

Begment 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.

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:

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

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

• Berformance 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.

Begment 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.

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, 2026 and
March 31, 2025.

Level 1:

Tuoted 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:

Taluation 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:

Taluation 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) I nvestments 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.

(iii) Tnquoted equity investments: Fair value is determined based on the recoverable value as per
agreement with the investee.

(iv) I nvestment in debt instruments: Fair value is determined as present value of amount receivable
at end of term.

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.

Tinancial 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.

T n 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

M arket 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

Moreign 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 foreign currency exposures after considering eligible
natural offsets. Hedging decisions are based on exposure visibility, tenor and business requirements and
are reviewed periodically by the Board of Directors. 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 currency sensitivity analysis

The Company is mainly exposed to changes in USD, EUR, JPY and GBP exchange rates.

Mhe 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 foreign currency denominated
monetary items as tabulated above and adjusts their translation at the period end for 1% change in foreign
currency rates. This analysis assumes that all other variables, in particular interest rates, remain constant.
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 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 ' Nil crores and floating interest loan aggregates to ' 2,084.00 crores
(Previous year: Fixed interest loan aggregates to ' 15.63 crores and Floating interest loan aggregates to
' 2,103.95 crores).

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that
portion of loans and borrowings affected. With all other variables held constant, the Company's profit
before tax is affected through the impact on floating rate long term borrowings, as follows:

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.

Che 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.

Che 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:

Co 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
and where the risk of default is negligible and accordingly no provision for excepted credit loss has been
provided on these financial assets other than as detailed below.

38.3.3 Liquidity Risk Management

L iquidity 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. Also refer note 18.

Tlso refer note 10 for receivables purchase agreements entered into by the Company as a part of its
liquidity risk management policy.

(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, 2026 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.

(g) In December 2023, the operations of Technical Textile Business plant, located in Manali Industrial
Area, Chennai, Tamil Nadu, were disrupted due to cyclone with flooding and waterlogging in the plant
premises. This incident led to damage of certain items of Property, Plant and Equipment and Inventory.
Plant operations were resumed in a phased manner by February 2024. The Company is covered under its
insurance policy on a 'Reinstatement Value basis' against the estimated losses. Based on the best estimates
of the management, expected loss had been considered in these standalone financial statements under the
respective heads (net of claim recoverable):

Additionally, during the previous year, certain related items of Property, plant and equipment (written off in
earlier years) 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.

Aurther, the Company had recognised an income for claim against Business Interruption loss of ' 10.00
Crores during the previous year.

^A Amount in absolute ' 2,000 (Previous year: ' 2,000)

Amount in absolute ' 45 (Previous year: ' 36)

(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) d irectly 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) d irectly 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.

As per our report of even date attached

For B S R & Co. LLP For and on behalf of the Board of Directors

Chartered Accountants

ICAI Firm registration no. 101248W/W-100022

Ashish Bansal Ashish Bharat Ram Kartik Bharat Ram Bharti Gupta Ramola

Partner Chairman and Managing Joint Managing Director Director

Membership No.: 077569 Director DIN - 00008557 DIN - 00356188

DIN - 00671567

Place : Gurugram Samir Kashyap Rajat Lakhanpal

Date : May 5, 2026 President & CFO Senior Vice President

(Corporate Compliance)
and Company Secretary

Place : Gurugram
Date : May 5, 2026