(b) The title deeds of immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company except:

a. Flat at Kalyani Nagar in possession of the Company since April 01, 1987, whose title deed is in the name of Shri Anajwala Khozema F & Smt. Anajwala Amina aggregating gross block ' 0.31 million and net block at ' 0.17 million for which exchange deed is registered at authority, however, certified true copy and index II is awaited.

b. Hangar at Lohegoan in possession of the Company since April 01, 1977 aggregating gross block of ' 0.12 million and net block of ' 0.05 million and Tenements at Kharadi- Vimannagar in possession of the Company since April 01, 1981 aggregating gross block of ' 0.16 million and net block of ' 0.01 million for which title deeds are not available with the Company.

(c) Capitalised borrowing costs:

The Company capitalises borrowing costs in the capital work-in-progress (CWIP) first. The amount of borrowing costs capitalised as other adjustments in the above note reflects the amount of borrowing cost transferred from Capital work-in-progress (CWIP) balances. The borrowing costs capitalised during the year ended March 31, 2023 was ' 20.16 million (March 31, 2022: ' 16.96 million). The capitalisation rate ranges from LIBOR 60 bps to LIBOR 100 bps p.a. and EURIBOR 60 bps to EURIBOR 95 bps p.a. refer to note 18(a)

(d) Assets include assets lying with third parties amounting to ' 406.56 Million (March 31, 2022: ' 156.40 Million)

The Company's investment properties consist of three parcels of land situated at Pune, Satara and Chakan.

As at March 31, 2023 and March 31, 2022, the fair values of the properties are ' 1,139.56 million and ' 2,432.95 million respectively. The Company obtains independent valuations for its investment properties at least annually.

These valuations are performed by an accredited independent valuer firm and this firm is a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers ready reckoner rates. The main input used is the ready reckoner rate. All resulting fair value estimates for investment properties are included in Level 2.

The Company has no restrictions (other than the land for which matter is being subjudice and for which no income has been considered) on the realisability of its investment properties and has no contractual obligations to either construct or develop investment properties or for repairs, maintenance and enhancement. Freehold land includes 25 acres of land situated at Pune, 24.13 acres of land situated at Satara and 8.40 acres of land situated at Chakan, which has been given on lease. Due to certain matters being sub-judice, the Company has not executed a lease deed with a related party for one of the said land.

The fair value reduction in the current year is on account of the change in the basis of the ready reckoner rate used for the valuation. Till earlier periods separate ready reckoner value for the industrial area was not available and hence the fair value was derived basis the relevant ready reckoner rate. In the current year, since a separate ready reckoner rate for the industrial area is available, it has been considered for the fair value for disclosure purposes. There is no other change in the basis of fair valuation disclosure.

(a) Bharat Forge Global Holding GmbH (BFGH)

Contributions to the capital reserves of BFGH as per the German Commercial Code (code), forms a part of the equity share capital and accordingly, have been considered as an investment and are redeemable subject to provisions of the code.

(b) Bharat Forge America Inc

During the current year, the Company has invested an amount of ' 826.45 million by acquiring 10,000,000 shares (USD 10.00 million) for further investment by Bharat Forge America Inc into its subsidiary, Bharat Forge Aluminium USA, Inc. The Company has also converted a loan and interest thereon of USD 24.92 million into a capital contribution amounting to ' 2,061.74 million during the current year.

During the previous year, the Company had invested an amount of ' 1,112.08 million by acquiring 15,000,000 shares (USD 15 million) for further investment by Bharat Forge America Inc into its subsidiary, Bharat Forge Aluminium USA, Inc.

(c) Kalyani Powertrain Limited (KPL)

During the current year, the Company has invested an amount of ' 270.55 million by acquiring 27,054,073 right shares of ' 10 each in Kalyani Powertrain Limited.

During the previous year, the Company had invested an amount of ' 1,223.23 million by acquiring 122,324,444 equity shares of ' 10 each for further investment into Tork Motors Private Limited, the acquisition of Kalyani Mobility Inc and other business activities.

During the previous year, the Company had invested in convertible debentures of ' 400 million in July 2021 which had been converted into 40,000,000 equity shares of ' 10 each.

(d) BF Industrial Solutions Limited (BFISL) (formerly Nouveau Power and Infrastructure Private Limited)

During the current year, the Company has invested an amount of ' 1,997.29 million by acquiring 199,729,112 equity shares of ' 10 each and an amount of ' 1,500.00 million by acquiring 150,000,000 preference shares of ' 10 each for further investment by BFISL into its subsidiary JS Auto cast Foundry India Private Limited.

During the previous year, the Company had invested ' 20.00 million by acquiring 2,000,000 equity shares of ' 10 each in BFISL.

During the previous year, the Company had invested in convertible debentures of ' 900 million which were subsequently converted into 90,000,000 equity shares of ' 10 each in that year.

The Company through its wholly owned subsidiary BFISL had acquired Sanghvi Forging & Engineering Limited (SFEL), (which was then renamed BF Industrial Technology and Solutions Limited ) along with its wholly owned subsidiary Sanghvi Europe B.V. on June 28, 2021 for a consideration of ' 770.60 million. SFEL is engaged in the manufacture of heavy forging for industrial applications. SFEL was admitted under Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 of India. The National Company Law Tribunal (NCLT) vide its order dated April 26, 2021, approved the resolution plan for acquiring a controlling stake in SFEL, pursuant to which, the Company has acquired SFEL through BFISL.

(e) Kalyani Strategic Systems Limited (KSSL)

During the current year, the company has invested an amount of ' 60.19 million by converting 12,037,892 partly paid equity shares, paid up the amount of ' 5 per share into fully paid equity shares af ' 10 each. The company has transferred its investments in ACIL and Aeron to KSSL. It has transferred ACIL for an amount of ' 46.41 million by transferring 4,640,908 equity shares of ' 10 each due to which ACIL ceased to be a subsidiary of the Company and Aeron for an amount of ' 137.18 million by transferring 13,718,250 equity shares of 10 each due to which Aeron ceased to be an associate of the Company.

During the previous year, the Company had acquired 17,695,706 fully paid up equity shares of ' 10 each and 5,898,568 partly paid up equity shares of ' 10 each in KSSL, consequent to which it had become a wholly owned subsidiary of the Company.

(f) Kalyani Lightweighting Technology Solutions Limited (KLTSL)

During the current year, the Company has invested an amount of ' 0.10 million by acquiring 1,000 equity shares of ' 10 each.

(g) BF NTPC Energy Systems Limited (BFNTPCESL)

During the earlier year, the shareholders of BFNTPCESL at their extraordinary general meeting held on October 9, 2018 decided to voluntarily liquidate the Company and engaged a liquidator to liquidate the Company under the provisions of Section 59 of Insolvency and Bankruptcy Code 2016.

(h) Avaada MHVIDARBHA Private Limited

During the current year, the Company has invested an amount of ' 113.75 million by acquiring 11,375,000 equity shares of ' 10 each for procurement of solar power.

(i) Compliance with a number of layers

The Company has invested funds in subsidiaries, associates and joint ventures directly or through its wholly owned subsidiaries. The Company has complied with the number of layers prescribed under section 2 (87) of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.

(a) Gupta Energy Private Limited (GEPL)

Shares of GEPL pledged against the facility obtained by Gupta Global Resources Private Limited. This investment is carried at a fair value of ' Nil.

(b) Birlasoft Limited and KPIT Technologies Limited

The Company had invested into 613,000 equity shares of ' 2/- each of KPIT Technologies Limited. The Hon'ble National Company Law Tribunal, Mumbai Bench, had by its order approved the composite scheme of arrangement (Scheme), amongst Birlasoft (India) Limited, KPIT Technologies Limited, KPIT Engineering Limited and their respective shareholder Pursuant to the Scheme, the engineering business of KPIT Technologies Limited had been transferred to KPIT Engineering Limited.

Pursuant to the order during the earlier year, Birlasoft (India) Limited had merged with KPIT Technologies Limited and KPIT Technologies had been renamed as "Birlasoft Limited". KPIT Engineering Limited had been renamed as "KPIT Technologies Limited".

Pursuant to the Scheme, the Company had received 1 equity share of KPIT Technologies Limited of ' 10/-each for 1 equity share of Birlasoft Limited of ' 2/- each. The ratio of cost of acquisition per share of Birlasoft Limited and KPIT Technologies Limited was 56.64% to 43.36%.

(c) Investments at fair value through OCI (fully paid) reflect investment in quoted and unquoted equity securities and quoted debt securities. Refer note 48 for determination of their fair values.

(d) Investments at fair value through profit or loss (fully paid) reflect investment in quoted/unquoted equity and debt securities. Refer note 48 for determination of their fair values.

(e) Avaada MHBuldhana Private Limited [ABPL]

During the previous year, the Company had made an investment in Avaada MHBuldhan Private Limited (ABPL) of ' 20.24 million by acquiring 2,033,850 equity shares of ' 10/- each, as a pre-condition for seeking approval from MSEDCL for Open Access permission by ABPL. Hence, the said investment is made subject to, amongst other conditions, obtaining permission by ABPL from relevant government authorities for the consumption of renewable energy by the Company under open access for a solar plant of ABPL.

(f) TMJ Electric Vehicles Limited (Formerly Tevva Motors (Jersey) Limited)

The Company holds investments in Tevva Motors Limited (held through Tevva Motors (Jersey) Limited), collectively referred to as Tevva. Tevva is a start-up engaged in modular electrification system for a medium range of commercial vehicles and raised additional funding to finance its operations. Post allotment of equity shares by Tevva Motors to the new investors, Tevva has ceased to be an associate of the Group from November 8, 2021. Accordingly, the Company has classified it to be an equity instrument held through fair value through other comprehensive income. Also refer note 32.

(h) Global depository receipts

The Company had issued 3,636,500 equity shares of ' 10/- each (later sub-divided into 18,182,500 equity shares of ' 2/- each) in April 2005 represented by 3,636,500 Global Depository Receipts (GDR) (on sub division 18,182,500 GDRs) evidencing "Master GDR Certificates" at a price of USD 27.50 per GDR (including premium). GDRs outstanding as at year end are 800 (March 31, 2022: 800). The funds raised had been utilized towards the object of the issue.

Holders of GDRs will have no voting rights or other direct rights of a shareholder with respect to the shares underlying the GDR.

(a) Special capital incentive:

Special capital incentive is created during the financial year 1999-2000, amounting to ' 2.50 million under the 1988 Package Scheme of Incentives.

(b) Warrants subscription money:

The Company had issued and allotted to Qualified Institutional Buyers, 10,000,000 equity shares of ' 2/-each at a price of ' 272/- per share aggregating to ' 2,720 million on April 28, 2010, simultaneous with the issue of 1,760, 10.75% Non Convertible Debentures (NCD) of a face value of ' 1,000,000/- at par, together with 6,500,000 warrants at a price of ' 2/- each entitling the holder of each warrant to subscribe for 1 equity share of ' 2/- each at a price of ' 272/- at any time within 3 years from the date of allotment. Following the completion of three years term, the subscription money received on the issue of warrants was credited to the capital reserve as the same is not refundable/adjustable. Further the warrants had lapsed and ceased to be valid from April 28, 2013.

(c) Securities premium:

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

(d) General reserve:

General reserve is created by way of transfer from profits for the year.

(e) Retained earnings:

Retained earnings in the statement of profit and loss represents the balanced undistributed profits of the Company as on the balance sheet date.

(c) Preshipment credit

The loan is secured against hypothecation of inventories (refer note 11) and trade receivables (refer note 12).

Preshipment credit - Rupee (secured and unsecured) is repayable within 90 days and carries interest @ 7.00% to 8.50% p.a.

Preshipment credit - foreign currency (secured and unsecured) is repayable within 90 days to 180 days and carries interest @ SOFR 55 bps to SOFR 150 bps p.a.

(d) Bill discounting with banks

The loan is secured against hypothecation of inventories (refer note 11) and trade receivables (refer note 12).

Bill discounting (secured and unsecured) with banks is repayable within 30 to 210 days.

Rupee and Foreign bill discounting (secured and unsecured) with banks carries an interest @ 7.00% p.a. to 7.75% p.a. and SOFR 55 bps to SOFR 150 bps p.a. & EURIBOR 55 bps to EURIBOR 150 bps p.a. respectively.

(e) Loans availed for a specific purpose and their utilisation for the specified purpose:

During the year ended March 31, 2023, the Company has availed an unsecured term loan and issued listed, rated, unsecured, redeemable, non-convertible debentures on a private placement basis. Proceeds from this term loan and debentures have been utilised for the intended purpose.

(f) Working capital facilities and statements filed with bank

The Company has availed working capital facilities from banks in the form of packing credit, bill discounting and cash credit. The Company has filed quarterly statements with banks with regard to the securities provided against such working capital facilities on a periodic basis. The statements filed by the respective company's are in agreement with the books of accounts of the Company.

The Company has been sanctioned a fund-based limit of ' 34,080 million and a non-fund based limit of ' 7,250 million in respect of working capital facilities by its bankers as at March 31, 2023 and March 31, 2022.

(g) A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as 'IBOR reform'). During the current year, the Company's working capital borrowings denominated in USD have been earmarked to a new benchmark rate i.e. SOFR. The alternative reference rate for US dollar LIBOR is the Secured Overnight Financing Rate (SOFR). As at 31 March 2023, the Company's Foreign Currency Term loans denominated in USD are indexed to US dollar LIBOR. The Company is in process of implementing appropriate fallback clauses for all US dollar LIBOR indexed exposures in the year ended March 31, 2023. These clauses automatically switch the instrument from USD LIBOR to SOFR post June 30, 2023 as announced by the Financial Conduct Authority (FCA).

There is no material impact on the company's finance cost consequent to such a change in the index.

(h) The Company has not been declared a wilful defaulter by any bank or financial institution or government or any government authority.

Derivative instruments at fair value through OCI reflect the negative change in the fair value of foreign exchange forward contracts, designated as cash flow hedges to hedge highly probable forecast sales in US Dollars (USD) and Euro (EUR).

Derivative instruments at fair value through profit or loss reflect the negative change in fair value of cross currency swaps, designated as fair value hedge through which the Company has converted one of its USD loans into a Euro loan to avail the benefit of the negative EURIBOR interest rates.

Terms and conditions of the above financial liabilities:

- Trade payables are non-interest bearing and are generally settled on 60 to 90 days terms.

- Other payables (under note 19 and 23) are non-interest bearing and have an average term of 90 days

- For terms and conditions with related parties, refer note 39.

The above amount of trade payables is net off certain advances given to suppliers (Related parties) amounting to ' 720 million (March 31, 2022: ' 720 million). The Company currently has a legally enforceable right to set off the advance against the respective payables. The Company intends to settle these amounts on a net basis.

For the Company's credit risk management processes, refer note 53.

32. Exceptional items (contd.)

(a) Voluntary retirement scheme compensation (contd.)

had attained 40 years of age and had completed 10 years of service with the Company. The amount of expenditure under these schemes was disclosed as an exceptional item.

(b) Reversal of impairment and gain on the fair valuation on the loss of significant influence in Tevva Motors (Jersey) Ltd.

During the previous year, the Company's associate viz. Tevva Motors Limited (held through Tevva Motors [Jersey] Limited), collectively referred to as "Tevva", a start-up engaged in modular electrification system for a medium range of commercial vehicles, raised additional funding to finance its operations. Post allotment of equity shares to the new investors, Tevva ceased to be an associate of the Company.

The Company's equity investment in Tevva Motors (Jersey) Limited was earlier impaired in the financial year that ended March 31, 2020. With the global EV markets gaining traction and setting higher valuation benchmarks, reversal of impairment and gain on the fair valuation on the loss of significant influence as an associate of ' 1,057.59 million was recorded as a part of "Exceptional items" for the year ended March 31, 2022.

(c) Gain on transfer of shares of Analogic Controls India Limited to Kalyani Strategic Systems Limited

During the year, the Company has transferred shares of its subsidiary Analogic Controls India Limited to its other subsidiary, Kalyani Strategic Systems Limited. The Company has recognised a surplus on the transfer of this investment and the resultant reversal of impairment provision amounting to ' 42.81 million as an exceptional item.

(d) Loss on transfer of shares of Aeron Systems Private Limited to Kalyani Strategic Systems Limited

During the year, the Company has transferred shares of its associate Aeron Systems Private Limited to Kalyani Strategic Systems Limited at its fair value. Loss on the transfer of shares has been recorded as an exceptional item.

(a) Company as lessee (contd.)

The Company had total cash outflows for leases of ' 334.55 million (March 31, 2022: ' 276.99 million). The Company also had non-cash additions to right-of-use assets and lease liabilities of ' 1,381.36 million (March 31, 2022: 311.75 million ) and ' 1,381.36 million (March 31, 2022: ' 311.75 million) respectively.

The Company has several lease contracts that include extension and termination options. These options are negotiated by the management to provide flexibility in managing the leased-asset portfolio and align with the Company's business needs. The management exercises judgment in determining whether the extension and termination options are reasonably certain to be exercised. Refer note 52.

Below are the undiscounted potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term:

Funded scheme

The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed five years of service is entitled to a specific benefit. The level of benefits provided depends on the employee's length of service and salary at retirement age. An employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the Payment of Gratuity Act, 1972. In the case of certain categories of employees who have completed 10 years of service, gratuity is calculated based on 30 days salary (last drawn) for each completed year of service and the cap for gratuity is 20 years. The scheme is funded with insurance companies in the form of qualifying insurance policies.

Risk exposure and asset-liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as the company take on uncertain long term obligations to make future benefit payments.

1) Liability risks

a) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is succesfully neutralises valuation swings caused by interest rate movements. Hence companies are encouraged to adopt asset-liability management.

b) Discount rate risk

Variations in the discount rate used to compute the present value of the liabilities may appear minor, but they can have a significant impact on the defined benefit liabilities.

c) Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities, especially unexpected salary increases provided at management's discretion may lead to uncertainties in estimating this increasing risk.

2) Asset risks

All plan assets are managed by the trust and are invested in various funds (majorly LIC of India). LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds and this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured and also interest rate and inflation risk are taken care of.

The following table summarises the components of a net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plans.

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

The sensitivity analysis above has been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

Weighted average duration of the defined benefit plan obligation (based on discounted cash flows using mortality, withdrawal and interest rate) is 10.59 years (March 31, 2022: 10.83 years).

(b) Special gratuity

The Company has a defined benefit special gratuity plan. Under the gratuity plan, every eligible employee who has completed ten years of service gets an additional gratuity on departure which will be salary of specified months based on the last drawn basic salary. The scheme is unfunded.

1) Liability risks

a) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully neutralises valuation swings caused by interest rate movements. Hence companies are encouraged to adopt asset-liability management.

b) Discount rate risk

Variations in the discount rate used to compute the present value of the liabilities may appear minor, but they can have a significant impact on the defined benefit liabilities.

c) Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting

in a higher present value of liabilities, especially unexpected salary increases provided at the management's discretion may lead to uncertainties in estimating this increasing risk.

2) Unfunded plan risk

This represents unmanaged risks and a growing liability. There is an inherent risk here that the Company may default on paying the benefits in adverse circumstances. Funding the plan removes volatility in the Company's financial statements and also benefit risk through return on the funds made available for the plan.

(c) Provident fund

In accordance with the law, all employees of the Company are entitled to receive benefits under the provident fund. The Company operates two plans for its employees to provide employee benefits in the nature of a provident fund, viz. defined contribution plan and defined benefit plan.

Under the defined contribution plan, the provident fund is contributed to the government administered provident fund. The Company has no obligation, other than the contribution payable to the provident fund (Refer note 28)

Under the defined benefit plan, the Company contributes to the "Bharat Forge Company Limited Staff Provident Fund Trust". The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.

The details of the defined benefit plan based on the actuarial valuation report are as follows:

1) Liability risks:

a) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company successfully neutralises valuation swings caused by interest rate movements. Hence companies are encouraged to adopt asset-liability management.

b) Discount rate risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice can have a significant impact on the defined benefit liabilities.

c) Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at the management's discretion may lead to uncertainties in estimating this increasing risk.

2) Asset risks:

All plan assets are managed by the trust and are invested in various funds (majorly LIC of India). LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds and this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured and also the interest rate and inflation risk are taken care of.

(b) Includes amount pertaining to incentives received under Government schemes, etc.

(c) Includes amount pertaining to classification differences of products, etc.

(d) Includes amount pertaining to matters relating to the applicability of TDS

The Company is contesting the demands and the management, including its tax/legal advisors, believe that its position will likely be upheld in the appellate process. No provision has been recognised in the financial statements for the tax demand raised. The management based on its internal assessment and the advice from its legal counsel believes that it is only possible/remote, but not probable, that the action will succeed.

Note: In cases where the amounts have been accrued, they have not been included above.

Deferred payment liabilities

Sales tax deferral incentives attached to the erstwhile windmill division, which was demerged to BF Utilities Limited (BFUL) under section 392 and 394 of the erstwhile Companies Act, 1956 sanctioned by the High Court of the Judicature at Mumbai, have been passed on thereafter from year to year by the Company to the latter, under an arrangement, with all liabilities and obligations attached thereto taken over completely by BFUL. The net liability outstanding of BFUL after such pass on amounts to ' Nil million (March 31, 2022: ' 45.12 million).

(iv) Board of Directors of the Company in their meeting held on February 14, 2023 have passed the resolution for the re-appointment of Mr. B. N. Kalyani (DIN: 00089380), as the Managing Director of the Company and for being designated as Chairman and Managing Director of the Company, for a period of five (5) years with effect from March 30, 2023 up to March 29, 2028, along with the terms and conditions of the re-appointment including the remuneration payable to him. Pursuant to Section 110 of the Companies Act, 2013 read with Rule 20 and 22 of the Companies (Management and Administration) Rules, 2014, on April 14, 2023, the Company has commenced the process for postal ballot for this proposed appointment and the e-voting for the same will be completed by May 27, 2023.

(1) Transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year end are unsecured with a short term duration unless otherwise stated and interest free except for loans and interest-bearing advance given to supplier Saarloha Advance Material Private Limited. For the year ended March 31, 2023 the Company has not recorded any impairment of receivables relating to the amount owed by related parties other than those disclosed separately above (March 31, 2022: ' Nil). This assessment is undertaken in each financial year by examining the financial position of the related party and the market in which the related party operates.

(2) All transactions were made on normal commercial terms and conditions and at market rates.

(3) For details of guarantees given to related parties, refer note 39.

(a) The Company has issued various financial guarantees/support letters for the working capital requirements of the subsidiary companies. The management has considered the probability for the outflow of the same to be remote.

The Company, for its newly set up plant located at Mambattu, Nellore, Andhra Pradesh for Manufacture of Aluminium Casting, has imported Capital Goods under the Export Promotion Capital Goods Scheme of the Government of India, at concessional rates of duty on an undertaking to fulfill quantified exports. As at March 31, 2022 export obligation aggregates to USD 8.94 million (' 734.93 million), this is to be satisfied over a period of 6 years (Block year 1st to 4th year - 50% and 5th to 6th year - 50%) from December 14, 2018, as specified. Non-fulfilment of such future obligations, in the manner required, if any entails options/rights to the Government to levy penalties under the above referred scheme.

41. Capital Management

For the purpose of the Company's capital management, capital includes issued equity share capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximise shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a net debt-equity ratio, which is net debt divided by

(f) Details of shortfall, cumulative shortfall and reasons for shortfall

During the year ended March 31, 2023, as against the required expenditure of ' 160.5 million (March 31, 2022: ' 169.36 million), the Company has incurred an expenditure of ' 131.49 million (March 31, 2022: ' 169.36 million) and an amount of ' 29.01 million (March 31, 2022: ' 25.80 million) remained unspent due to phase wise implementation of CSR activities. The unspent amount for the year ended March 31, 2023, has been transferred to the unspent CSR account and the same shall be utilised by the Company in the next year for CSR projects undertaken by the Company.

(g) Nature of activities

Ongoing projects

As part of ongoing project for CSR, the Company has undertaken activities such as village development (water, internal roads, livelihood, health & education), promotion of sports, skill development, projects associated with community development & woman empowerment and education activities.

Other than ongoing projects

These include activities related to educational sponsorship, protection of heritage, art and culture and various rural development initiatives.

Statement of compliance

With regard to the investments made, loans given and guarantees given during the year ended March 31, 2023 as well as March 31, 2022, the Company has complied with the relevant regulatory provisions.

Particulars of the intermediaries/beneficiaries/ultimate beneficiaries1 Bharat Forge America Inc.

Registered office: 2150, Schmiede St, Surgoinville, Tennessee 37873, USA Relationship with the beneficiary: Wholly owned Subsidiary

2 Bharat Forge Aluminium USA, Inc.

Registered office: 160, Mine lake Court, Suite 200, Raleigh, North Carolina 27615, USA Relationship with the beneficiary: Step down Subsidiary

3 Kalyani Powertrain Limited

Registered office: S No 49, Industry House, Opposite Kalyani Limited, Mundhwa, Pune 411036 Relationship with the beneficiary: Wholly owned subsidiary

4 BF Industrial Solutions Limited

Registered office: S No 49, Industry House, Opposite Kalyani Limited, Mundhwa, Pune 411036 Relationship with the beneficiary: Wholly owned subsidiary

5 Tork Motors Pvt Ltd, India

Registered office: Plot No. 4/25, Sector No.10, PCNTDA, Pune 411026 Relationship with the beneficiary: Step down subsidiary

47 Details of funds advanced or loaned or invested to any other persons or entities, for lending or investing in other person or entities (Ultimate Beneficiaries) (contd.)

6 Kalyani Mobility Inc.

Registered office: 160, Mine lake Court, Suite 200, Raleigh, North Carolina 27615, USA Relationship with the beneficiary: Step down subsidiary

7 BF Industrial Technology and Solutions Limited

Registered office: 244/6&7 GIDC estate, Waghodia, Gujarat.

Relationship with the beneficiary: Step down subsidiary

The Company has not received any funds from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

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

48. Fair value hierarchy

The following table provides the fair value measurement hierarchy of the Company's assets and liabilities.

(a) Gupta Energy Private Limited (GEPL)

The Company has an investment in the equity instrument of GEPL. The same is classified as fair value through profit and loss. Over the years, GEPL has been making consistent losses. The management of the Company has made attempts to obtain the latest information for the purpose of valuation. However, such information is not available as GEPL has not filed the financial statements with the Ministry Of Corporate Affairs (MCA) since FY 2014-15. In view of the above, the management believes that the fair value of the investment is Nil as at April 1, 2015 and thereafter.

(b) KPIT Technologies Limited

The Company had invested into 613,000 equity shares of ' 2/- each of KPIT Technologies Limited. The Hon'ble National Company Law Tribunal, Mumbai Bench, has by its order approved the composite scheme of arrangement (Scheme), amongst Birlasoft (India) Limited, KPIT Technologies Limited, KPIT Engineering Limited and their respective shareholders. Pursuant to the Scheme, the engineering business of KPIT Technologies Limited has been transferred to KPIT Engineering Limited.

Pursuant to the order, Birlasoft (India) Limited has merged with KPIT Technologies Limited and KPIT Technologies has been renamed as "Birlasoft Limited". KPIT Engineering Limited has been renamed as "KPIT Technologies Limited".

Pursuant to the Scheme, the Company had received 1 equity share of KPIT Technologies Ltd. of ' 10/- each for 1 equity share of Birlasoft Ltd. of ' 2/- each. The ratio of cost of acquisition per share of Birlasoft Ltd. and KPIT Technologies Ltd. was 56.64% to 43.36%.

The investment in shares has been classified under level 1 of the fair value hierarchy as on March 31, 2023 and March 31, 2022.

(c) Avaada MHBuldhana Private Limited

The investment in equity shares of Avaada MHBuldhana Private Limited which was made on September 30, 2021 is governed by the terms of the share purchase agreement and the shares held by the Company are subject to certain restrictions in terms of the ability of the Company to sell the shares and the value at which this can be done. Considering the nature of restrictions and the overall intention of the management in relation to the equity shares, the fair value of such shares for the Company is the same as their cost i.e. the face value.

49. Financial instruments by category

Set out below is a comparison, by class, of the carrying amounts and fair value of the Company's financial instruments as of March 31, 2023; other than those with carrying amounts that are reasonable approximates of fair values:

The management assessed that the fair value of cash and cash equivalent, trade receivables, derivative instruments, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.

Further, the management assessed that the fair value of security deposits, trade receivables and other non-current receivables approximate their carrying amounts largely due to discounting/expected credit loss at rates which are an approximation of current lending rates.

The fair value of the financial assets and liabilities is included in the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

(i) Long-term fixed-rate and variable-rate receivables are evaluated by the Company based on parameters such as the individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

(ii) The fair values of quoted instruments are based on price quotations at the reporting date. The fair value of unquoted instruments, loans from banks as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth rates. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in note 48. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

(iii) The fair values of the unquoted equity shares have been estimated using a cost method (KEIPL), market method (Tevva) as well as DCF model (ASPL and AMPL). The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management's estimate of fair value for these unquoted equity investments.

(iv) The Company enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using valuation techniques, which employ the use of market observable inputs. The most frequently applied valuation techniques include forward pricing using present value calculations. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies and forward rate curves of the underlying. All derivative contracts are fully cash collateralised, thereby eliminating both the counterparty and the Company's own non-performance risk. As at March 31, 2023 the marked-to-market value of derivative asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk. The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognised at fair value.

(v) The Company's borrowings and loans are appearing in the books at fair value since the same are interest bearing. Hence discounting of the same is not required. The own non-performance risk as at March 31, 2023 and March 31, 2022 was assessed to be insignificant.

50. Hedging activities and derivatives Cash flow hedges

Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in cash flow hedges of forecast sales in the US Dollar and Euro. These forecast transactions are highly probable.

The cash flow hedges of the expected future sales during the year ended March 31, 2023 were assessed to be highly effective and a net unrealised (loss)/gain of ' 1,662.18 million (March 31, 2022: ' 3,761.17 million), with a deferred tax liability of ' 418.34 million (March 31, 2022'946.61 million) relating to the hedging instruments, is included in OCI.

The amount removed from OCI during the year and included in the carrying amount of the hedged item as an adjustment for the year ended March 31, 2023 as detailed in note 33, totaling ' 1,373.62 million (gross of deferred tax) (March 31, 2022: ' 1,349.93 million). The amounts retained in OCI at March 31, 2023 are expected to mature and affect the statement of profit and loss till the year ended March 31, 2026.

Fair value hedges

At March 31, 2023 and March 31, 2022, the Company has a cross currency swap agreement in place. During the current year, the company has converted its Rupee Preshipment Credit into USD. Under the original agreement, the interest rate was fixed at 6.30% p.a. but due to cross currency swap arrangement the revised interest rate has been fixed at 4.00% p.a.

In earlier years, the Company has converted one of its USD loans into a Euro loan for interest arbitrage. Under the original agreement, the interest rate was fixed at LIBOR 67 basis points, but due to the cross currency swap arrangement, the revised interest rate has been fixed at EURIBOR 87 basis points, decreasing the corresponding interest cost on the term loan.

52. Significant accounting judgements, estimates and assumptions

The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures, including the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Judgements

In the process of applying the Company's accounting policies, the management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

1) Leases

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Refer to Note 35 for information on potential future rental payments relating to periods following the exercise date of extension and termination options that are not included in the lease term.

Property lease classification - Company as lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, such as the lease term not constituting a major part of the economic life of the commercial property and the present value of the minimum lease payments not amounting to substantially all of the fair value of the commercial property, that it retains substantially all the risks and rewards incidental to ownership of these properties and accounts for the contracts as operating leases.

2) Embedded derivatives

The Company has entered into certain hybrid contracts i.e. where an embedded derivative is a component of a non-derivative host contract, in the nature of financial liability. The Company has exercised judgement to evaluate if the economic characteristics and risks of the embedded derivative are closely related to the economic characteristics and risks of the host. Based on the evaluation, the Company has concluded that, these economic characteristics and risks of the embedded derivatives are closely related to the economic characteristics and risks of the host and thus not separated from the host contract and not accounted for separately.

3) Revenue from contracts with customers

The Company applied the following judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers:

a) Identifying contracts with customers

The Company enters into a Master service agreement ('MSA') with its customers which define the key terms of the contract with customers. However, the rates and quantities to be supplied are separately agreed through purchase orders. management has exercised judgement to determine that contract with customers for the purpose of Ind AS 115 is MSA and customer purchase orders for the purpose of identification of performance obligations and other associated terms.

b) Identifying performance obligation

The Company enters into contract with customers for sale of goods and tooling income. The Company determined that both the goods and tooling income are capable of being distinct. The fact that the Company regularly sells these goods on a standalone basis indicates that the customer can benefit from it on an individual basis. The Company also determined that the promises to transfer these goods are distinct within the context of the contract. These goods are not input to a combined item in the contract. Hence, the tooling income and the sale of goods are separate performance obligations.

c) Determination of timing of satisfaction of performance obligation

The Company concluded that the sale of goods and tooling income is to be recognised at a point in time because it does not meet the criteria for recognising revenue over a period of time. The Company has applied judgement in determining the point in time when the control of the goods and tooling income is transferred based on the criteria mentioned in the standard read along with the contract with customers, applicable laws and considering the industry practices which are as follows:

(1) Sale of goods

The goods manufactured are "Build to print" as per design specified by the customer for which the tools/dies are approved before commercial production commences. Further, the dispatch of goods is made on the basis of the purchase orders obtained from the customer taking into account the just in time production model with customer.

(2) Tooling income

Tools are manufactured as per the design specified by the customer which is approved on the basis of the customer acceptance. The management has used judgement in identification of the point in time where the tools are deemed to have been accepted by the customers.

d) Litigations

The Company has various ongoing litigations, the outcome of which may have a material effect on the financial position, results of operations or cash flows. The Company's legal team regularly analyses current information about these matters and assesses the requirement for provision for probable losses including estimates of legal expenses to resolve such matters. In making the decision regarding the need for loss provision, the management considers the degree of probability of an unfavourable outcome and the ability to make a sufficiently reliable estimate of the amount of loss. The filing of a law suit or formal assertion of a claim against the Company or the disclosure of any such suit or assertions, does not automatically indicate that a provision of a loss may be appropriate.

Considering the facts on hand and the current stage of certain ongoing litigations where it stands, the Company forsees the remote risk of any material claim arising from claims against the Company. Management has exercised significant judgement in assessing the impact, if any, on the disclosures in respect of litigations in relation to the Company.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

l) Estimating the incremental borrowing rate to measure lease liabilities

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

2) Impairment of non-financial assets (tangible and intangible)

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or Cash Generating Unit's (CGU's) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. In determining the fair value less costs to disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples or other available fair value indicators.

3) Defined benefit plans

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

The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change only at intervals in response to demographic changes. Future salary increases, discount rates and return on planned assets are based on expected future inflation rates for India. Further details about defined benefit plans are given in note 37.

4) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using different valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements and estimates include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer notes 48 and 49 for further disclosures.

5) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about the risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company's past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Further, the Company also evaluates the risk with respect to expected loss on account of loss in time value of money which is calculated using the average cost of capital for relevant financial assets.

The Company assesses the impairment of investments in subsidiaries, associates and joint ventures which are recorded at cost. The recoverable amount requires estimates of profit, discount rate, future growth rate, terminal values, etc. based on management's best estimate.

6) Provision for inventories

The management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory items with the respective net realisable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete slow-moving items and net realisable value. The management is satisfied that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.

53. Financial risk management objectives and policies

The Company's principal financial liabilities other than derivatives comprise loans and borrowings, trade payables and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI and FVTPL investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. The Company's senior management is supported by a Finance and Risk Management Committee (FRMC) that advises on financial risks and the appropriate financial risk governance framework for the Company. The FRMC provides assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. Further, all the derivative activities for risk management purposes are carried out by experienced members of the senior management who have the relevant expertise, appropriate skills and supervision. It is the Company's policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarised below.

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 three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments in mutual funds, FVTOCI investments and derivative financial instruments.

The sensitivity analysis in the following sections relates to the position as at March 31, 2023 and March 31, 2022.

The sensitivity analysis has been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at March 31, 2023 and comparatively as at March 31, 2022. The analysis excludes the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations and provisions.

The below assumptions have been made in calculating the sensitivity analysis:

• The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at March 31, 2023 and March 31, 2022 including the effect of hedge accounting.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates, other than 5.97% rated unsecured non-convertible debentures, 5.80% rated unsecured non-convertible debentures & 5.90% rupee term loan from a bank which have a fixed interest rate.

The Company generally borrows in foreign currency, considering the natural hedge it has against its export. Long-term and short-term foreign currency debt obligations carry floating interest rates.

The Company avails short term debt in foreign currency up to a tenure of 9 months, in the nature of export financing for its working capital requirements. LIBOR/SOFR or EURIBOR for the said debt obligations is fixed for the entire tenor of the debt, at the time of availment.

The Company has an option to reset LIBOR or EURIBOR either for 6 Months or 3 months for its long-term debt obligations. To manage its interest rate risk, the Company evaluates the expected benefit from either the LIBOR or EURIBOR resetting options and accordingly decides. The Company also has the option for its long-term debt obligations to enter 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-upon notional principal amount.

As at March 31, 2023, the Company's 49.07 % of total long-term borrowings are covered under a floating rate of interest (March 31, 2022: 72.05%).

Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require ongoing purchase of steel. Due to the significant volatility of the price of steel, the Company has agreed with its customers for pass-through of increase/decrease in prices of steel. There may be lag effect in case of such pass-through arrangements.

Commodity price sensitivity

The Company has back to back pass through arrangements for volatility in raw material prices for most of the customers. However, in a few cases there may be a lag effect in the case of such pass-through arrangements and might have some effect on the Company's profit and equity.

Equity price risk

The Company is exposed to price risk in equity investments and classified on the balance sheet as fair value through profit and loss and through other comprehensive income. To manage its price risk arising from investments in equity, the Company diversifies its portfolio. Diversification and investment in the portfolio is done in accordance with the limits set by the Board of Directors.

At the reporting date, the exposure to unlisted equity securities at fair value was ' 4,210.65 million (March 31, 2022: ' 4,099.77 million). Sensitivity analysis of major investments has been provided in Note 48.

At the reporting date, the exposure to listed equity securities at fair value was ' 727.17 million (March 31, 2022: ' 647.32 million). An increase/decrease of 10% on the NSE market index could have an impact of approximately ' 72.72 million (March 31, 2022: ' 64.73 million) on the OCI or equity attributable to the Company. These changes would not have an effect on profit and loss.

Other price risks

The Company invests its surplus funds in mutual funds which are linked to debt markets. The Company is exposed to price risk for investments that are classified as fair value through profit and loss. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Diversification and investments in the portfolio are done in accordance with Company's investment policy approved by the Board of Directors. Accordingly, increase/decrease in interest rates by 0.25% will have an impact of ' 37.66 million (March 31, 2022: ' 48.64 million).

Credit risk

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

Trade receivable

Customer credit risk is managed by the Company's established policy, procedures and control relating to customer credit risk management. Further, the Company's customers include marquee Original Equipment Manufacturers and Tier I companies, having long standing relationships with the Company. Outstanding customer receivables are regularly monitored and reconciled. On March 31, 2023, receivables from the Company's top 5 customers accounted for approximately 34.36% (March 31, 2022: 35.19%) of all the receivables outstanding. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on the provision matrix (Refer table below). Further, an

impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The calculation is based on historical data and subsequent expectations of receipts. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in note 12. The Company does not hold collateral as security except in the case of a few customers. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

Other receivables, deposits with banks, mutual funds and loans given

Credit risk from balances with banks, financial institutions and mutual funds is managed in accordance with the Company's approved investment policy. Investments of surplus funds are made only with approved Counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company's Board of Directors on a regular basis and the said limits get revised as and when appropriate. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through the counterparty's potential failure to make payments.

The Company's maximum exposure to credit risk for the components of the balance sheet on March 31, 2023 and March 31, 2022 is the carrying amounts as illustrated in the respective notes except for financial guarantees and derivative financial instruments. The Company's maximum exposure relating to financial guarantees and financial derivative instruments is noted in note 38 and note 50 respectively.

Liquidity risk

Cash flow forecasting is performed by the Treasury function. Treasury monitors rolling forecasts of the Company's liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration compliance with internal cash management. The Company's treasury invests surplus cash in marketable securities as per the approved policy, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned forecasts. At the reporting date, the Company held mutual funds of ' 16,691.97 million (March 31, 2022: ' 19,957.17 million) and other liquid assets of ' 3,979.54 million (March 31, 2022: ' 3,780.81 million) that are expected to readily generate cash inflows for managing liquidity risk.

As per the Company's policy, there should not be a concentration of repayment of loans in a particular financial year. In case of such concentration of repayment, the Company evaluates the option of refinancing the entire or part of repayments for extended maturity. The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders and the Company is also maintaining surplus funds with short term liquidity for future repayment of loans.

The management believes that the probability of any outflow on account of financial guarantees issued by the Company being called on is remote. Hence the same has not been included in the above table. Further, as and when required, the Company also gives financial support letters to subsidiaries.

54. Standards issued but not yet effective

The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, the MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:

(a) Amendments to Ind AS 1 - Presentation of Financial Statements

The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence the decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.

(b) Amendments to Ind-AS 12: Income Taxes

The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its financial statements.

(c) Amendments to Ind-AS 8: Accounting Policies, Changes in Accounting Estimates and Errors

The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact on its financial statements.

55. Other statutory information

55.1. There is no proceeding initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

55.2. The Company does not have any charge which is yet to be registered with the Registrar of Companies beyond the statutory period. With regard to the satisfaction of charges, a few cases of the company are outstanding with ROC due to technical reasons and the company is in the process of obtaining no dues certificates from the lenders, which the Company will be filing with the Registrar of Companies for satisfaction of the related charges.

55.3. The Company has not traded or invested in Cryptocurrency or Virtual Currency during the financial year.

55.4. During the year ended March 31, 2023, the Company was not a party to any approved scheme which needs approval from a competent authority in terms of Sections 230 to 237 of the Companies Act, 2013.