iii) Estimation of Fair Value

The Company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties.

The fair values of investment properties have been determined by Mr. Vineet O Agarwal, who is a registered valuer as defined under rule 2 of Companies Registered Valuers and Valuation) Rules, 2017. All resulting fair value estimates for investment properties are included in level 3.

i. The Company acquired 100% equity shares of Inalfa Gabriel Sunroof Systems Private Limited ("IGSSPL") from Asia Investments Private Limited and entered into a technical collaboration with Inalfa Roof Systems Group B.V., of the Netherlands ('Inalfa') to undertake the activities of manufacture and sale of the automotive sunroofs through IGSSPL. The Board of Directors of Gabriel India Limited (“the Company") also accorded its approval to execute the joint venture agreement between Inalfa, the Company and IGSSPL, subject to receipt of requisite approvals, pursuant to which the shareholding of Inalfa and Gabriel India in IGSSPL will be in the ratio of 51:49 in accordance with the terms contained therein.

ii. The Company has incorporated a wholly owned subsidiary in Belgium in order to undertake research and development activities for vehicle components.

C. Rights, preferences and restrictions attached to Equity shares:

The Company has only one class of share referred to as equity shares having a par value of Re.l 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. In the unlikely 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 and amount paid on equity shares held by the shareholders.

There were no bonus shares issued or allotted for consideration other than cash or shares bought back during the current financial year and immediately preceding financial year.

Nature and purpose of reserves

Securities Premium : Securities Premium account comprises of the premium on issue of shares. The reserve is utilised in accordance with the specific provisions of the Companies Act, 2013.

General Reserve : The General Reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the General reserve will not be reclassified subsequently to the statement of profit and loss.

Cash Flow Hedge Reserve : The Cash Flow Hedge Reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow hedge reserve will be reclassified to statement of profit and loss only when the hedged items affect the profit or loss.

Retained Earnings: Retained Earnings comprises of the undistributed earning after tax, kept aside to meet future obligations.

Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end of the reporting period. These claims are expected to be settled in the next financial year. Management estimates the provision based on historical warranty claim information and any recent trends that may suggest future claims could differ from historical amounts.

Other provision represents estimates made for probable claims arising out of litigations/disputes pending with authorities under various statutes. The probability and the timing of the outflow with regard to these matters depend on the ultimate settlement/conclusion with the relevant authorities.

C. The entire amount of the provision of ' 126.97 million (March 31, 2023: ' 162.24) million is presented as bifurcated into non-current and current based on the past experience, the Company does not expect all employees to avail the full amount of accrued leave or require payment for such leave within the next 12 months.

Fair values for trade receivable, trade payable and cash and cash equivalents have not been disclosed because there carrying amount are a reasonable approximation of their fair values.

2 Fair value hierarchy

Fair value of the financial instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

The fair value of financial instruments that are not traded in an active market is determined using market approach and valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. Derivatives are valued using valuation techniques with market observable inputs such as foreign exchange spot rates and forward rates at the end of the reporting period, yield curves, risk free rate of returns, volatility etc., as applicable. Investment in mutual funds are valued based on the NAV obtained from asset management company.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The fair value of trade receivables, trade payables and other current financial assets and liabilities is considered to be approximate to their carrying amounts of these items due to their short-term nature. Where such items are Non-current in nature, the same has been classified as Level 3 and fair value determined using discounted cash flow basis.

NOTE 36 FINANCIAL RISK MANAGEMENT

The Company's activities expose it to market risk, liquidity risk and credit risk. In order to minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as a trading or speculative instruments.

This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements.

The Company's risk management is carried out by the finance department under policies approved by the Board of Directors. Finance department identifies, evaluates and hedges financial risks.

A) Credit risk

Credit risk arises from cash and cash equivalents, deposits with banks, investment in mutual funds, security deposits, loans and advances classified at amortised cost or fair value through profit or loss as well as credit exposures to trade receivables and contract assets.

i) 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) and from its investing activities, including deposits with banks, loans, investment in mutual funds, and equity instruments, security deposits, foreign exchange transactions and other financial instruments.

ii) Trade receivables

Customer credit risk is managed through established policy, procedures and control relating to customer credit risk management. Further, Company’s customers includes Original Equipment Manufacturers (OEMs) and After Market (AM) dealers having long standing relationship with the Company. Outstanding customer receivables are regularly monitored and reconciled. At March 31,2024, receivable from Company’s top 10 customers accounted for approximately 13% of sales (March 31,2023: 12%) of which 94% (March 31,2023: 94%) are receivables outstanding. An impairment analysis is performed at each reporting date on an individual basis for major clients. The Company

uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. The Company does not hold collateral security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions.

iii) Other receivables, deposits with banks and loans given

Other financial assets that are potentially subject to credit risk consists of loan given to subsidiary and employees. The Company assesses the recoverability from these financial assets on regular basis. Factors such as business and financial performance of counterparty, their ability to repay, regulatory changes and overall economic conditions are considered to assess future recoverability. The Company charges interest on such loans at arms length rate considering counterparty’s credit rating. Based on the assessment performed, the Company considers all the outstanding balances of such financial assets to be recoverable as on balance sheet date.

B) Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying business, the Company's treasury maintains flexibility in funding by maintaining availability under committed credit lines.

The development of financial assets and liabilities is monitored on an ongoing basis. Internal directives regulate the duties and responsibilities of liquidity management and planning. Management monitors rolling forecasts of the Company's liquidity position and cash and cash equivalents on the basis of expected cash flows.

(i) Financing Arrangement

The Company has obtained fund and non-fund based working capital line from banks. The Company invests its surplus funds in bank fixed deposit and liquid schemes of mutual funds, which carry low mark to market risks.

(ii) Maturities of financial liabilities

The table below analyses the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for:

- all non-derivative financial Liabilities', and

- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of the cash flows.

C) Market risk - Commodity price sensitivity

The Company has significant usage of commodities like Steel, Oil, Aluminum exposing it to price risk arising out of market fluctuations. Commodity price risk exposure is evaluated and managed through procurement and other related operating policies. As the Company has a back to back pass through arrangements for volatility in raw material prices there is limited impact on the profit and loss and equity of the Company.

D) Market risk - Foreign currency risk

The Company enters into international transactions and is exposed to resultant foreign exchange risk, primarily with respect to the USD, CNH (RMB), EUR and JPY. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company's functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions.

Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. For hedges of foreign currency purchases and sales, the Company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item. The Company therefore performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess effectiveness. Ineffectiveness is recorded in the Statement of Profit and Loss.

NOTE 37 CAPITAL MANAGEMENT

For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. In order to maintain the capital structure, the Company pays dividend to the shareholders.

Risk Management

The Company has equity capital and other reserves attributable to the equity shareholders, as the primary source of capital with limited reliance on borrowings/ debts.

NOTE 38 SEGMENT REPORTING

As per para 4 of Ind AS-108 (Operating Segments), if a single financial report contains both the consolidated financial statements of a parent that is within the scope of this Indian Accounting Standard as well as the parent’s separate financial statements, segment information is required only in the consolidated financial statements. Accordingly segment information has been provided only in the consolidated financial statements.

NOTE 39 DISCLOSURE IN ACCORDANCE WITH IND AS - 19 ON EMPLOYEE BENEFITS

a) Defined contribution plans

The Company has certain defined contribution plans. Contributions are made to employees family pension fund, superannuation fund, employee state insurance and other funds in India for employees as per local regulations. The contributions are made to employees family pension fund, superannuation fund, employee state insurance and other funds are administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

b) Post-employment obligations Gratuity

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to fund managed by Life Insurance Corporation of India. Contributions are made as per the working by LIC of India.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.

Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed

i) Asset volatility : All plan assets are maintained in a trust managed by a public sector insurer viz.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 but 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. Also interest rate and inflation risk are taken care of.

ii) Changes in bond yields: A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of plans' bond holdings

iii) Future salary increase 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.

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 able to neutralise valuation swings caused by interest rate movements. Hence the Company is encouraged to adopt asset-liability management.

The Company's assets are maintained in a trust fund managed by public sector insurance via, LIC of India. LIC has been providing consistent and competitive returns over the years. The plan asset mix is in compliance with the requirements of the respective local regulations.

c) Defined benefit liability and employer contributions

The Company has agreed that it will aim to eliminate the deficit in gratuity plan over the years. Bonding levels are monitored on an annual basis and the current agreed contribution rate is 12% of the basic salaries. The Company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly.

The honorable Supreme Court has issued a judgement in February, 2019 in relation to inclusion of certain allowances in the definition of basic wages as defined under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952. The Company has completed its evaluation and it believes that there will not be any additional liability due to supreme court judgement. The Company will continue to monitor and evaluate its position based on future events and developments

Note

(i) The above matters related to Direct taxes demand (along with the applicable interest and penalties wherever levied)

pertains to the following matters

(a) The Income Department had issued a demand order to the Company for year FY 2000-01 and FY 2001-02 disallowing the interest cost incurred by the Company pertaining to funds utilised for loans advances to its wholly owned subsidiary Stallion Shox (now merged with the Company). The demand raised by the Income Tax Department for FY 2000-01 and FY 2001-02 amounts to ' 7.67 million and 4.59 million respectively. The Company has filed an appeal against this order at High Court.

(b) With respect to FY 2013-14, the Income tax department had a demand order amounting to ' 15.08 million including penalties. The demand was raised by the Income Tax Department by disallowing the certain deduction claimed by the Company, charging of certain receipts as business income which was considered as capital receipt by the Company. The Company has filed an appeal against the order which is pending at CIT (Appeals).

(c) With respect to FY 2016-17, the Income tax department had a demand order amounting to ' 15.66 million. The demand was raised by the Income Tax Department by disallowing the management fees to the extent of 20% of the expense paid or provided by the Company in the FY 2016-17 which was payable by the Company to its Fellow Subsidiary. The department has filed an appeal against the order which is pending for hearing at High Court.

(d) With respect to FY 2017-18 and FY 2018-19, the Income tax department had a demand order amounting to ' 18.92 million and ' 38.47 million respectively. The demand was towards disallowance of management fees to the extent of 20% of the expense paid or provided by the Company in the respective years which was payable by the Company to its Fellow Subsidiary. The Company has filed an appeal against the order which is pending at CIT (Appeals).

(e) With respect to FY 2019-20, the Income tax department had a demand order amounting to ' 25.10 million. The demand was raised towards disallowance of multiple expense including management fees to the extent of 20% of the expense paid or provided by the Company in the respective years which was payable by the Company to its Fellow Subsidiary, deduction under section 80G of chapter VIA for CSR Expenditure and expenditure pertaining to Education Cess. The Company has filed an appeal against the order which is pending at CIT (Appeals).

(f) The Company has received an order from Income Tax Department raising an demand of ' 2.10 million for FY 202021 towards disallowance of certain expenditures claimed by the Company under section 43B. The matter is pending for hearing at CIT appeals.

(ii) The above matters related to Indirect taxes demand (along with the applicable interest and penalties wherever levied)

pertains to the following matters

(a) The Company has received multiple demands from Excise department for various years amounting to ' 51.04 which mainly pertains to demand raised by the department on sales tax on deferred income and duty on drawings and tools which were provided by the Company's customer. The cases are pending at various level of authorities with the department.

(b) The Company has received multiple demands from Service Tax department for various years amounting to ' 3 which mainly pertains to disallowance of CENVAT credit claimed on freight services which was claimed by the Company in the respective years. The cases are pending at various level of authorities with the department.

(c) Central Sales Tax demand of ' 19.08 million raised under the by various states under respective State VAT Laws, on account of non-submission of the declaration C form and H Form pending to be received from the customers. The cases are pending at various level of authorities with the department.

(d) The Company has received demand orders from Goods and Service Tax Authority of various states for various period raising an demand of ' 47.62 million which mainly pertains to disallowance of credit claimed via return TRAN 1 filed during transition period and difference between GSTR 2A and GSTR 3B. The cases are pending at various level of authorities with the department.

(e) The Company had received a demand from BOCW department amounting to ' 0.99 million related to BOCW dues payable for construction activities at Dewas plant.

NOTE 46 CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year, the Company was required to spend ' 25.64 million (i.e. 2% of the Average Net Profit of the three preceding years) on CSR Activities which represented donations/ contributions to Companies which are engaged in CSR activities eligible under Section 135 of the Companies Act, 2013 as specified in Schedule VII. In furtherance to the budgeted expenditure the Company has spent ' 25.64 million (Previous year Budgeted CSR amount ' 20.71 million & Actual CSR spent ' 20.71 million) on the CSR Activities during the year.

NOTE 47 ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III

(i) Details of benami property held

No proceedings have been initiated on or are pending against the Company under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

The Company has no borrowings from banks and financial institutions secured against current assets.

(iii) Willful defaulter

The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

(v) Compliance with number of layers of companies The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vi) Compliance with approved scheme(s) of arrangements The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(vii) Utilisation of borrowed funds and share premium The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall: a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries The Company has not received any fund from any person or entity, 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

(viii) Undisclosed income There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(x) Valuation of PP&E, intangible asset and investment property The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(xi) Registration of charges or satisfaction with Registrar of Companies There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xii) Title deeds of immovable properties not held in the name of company The title deeds of all the immovable properties as disclosed in Note 2 and 3 to the financial statements, are held in the name of the Company.