1. The capital-work-in-progress mainly consist of property, plant and equipment under construction / installation and which are not ready for use at year end.

2. There are no such projects under capital-work-in progress, whose completion is overdue or has exceeded its cost compared to its original plan as of 31 March 2024 and 31 March 2023.

i) Goodwill represents goodwill arisen on amalgamation of Shriram Automotive Product Limited. Goodwill is tested for impairment on annual basis and wherever there is an indication that the recoverable amount is less than its carrying amount based on a number of factors including in business plan, operating results, future cash flows and economic conditions. The recoverable amount is determined based on higher of value in use and fair value less cost to sell. The Company generally uses discounted cash flows method to determine the recoverable amount. These discounted cash flow calculation are based on financial forecasts, cash flow projections take into account past experience and represent management's best estimate about future developments.

li) The Company has not revalued its other intangible assets during the year.

Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to dividend and one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount, in proportion to their shareholding.

iii) There are no shares allotted as fully paid up pursuant to contracts without payment being received in cash during the period of five years immediately preceding 31 March 2024.

The Board pursuant to shareholder's approval in the annual general meeting held on 06 July 2023, allotted 2,20,24,912 equity shares as bonus share in the ratio of 1:1.

**During the year ended 31st March 2022, the Company has concluded the buyback of 3,50,000 equity shares (at a price of Rs 1020/- per equity share) as approved by the Board of Directors on 30 July 2021. This has resulted in a total cash outflow of Rs 449.7 million (including tax on buyback of Rs 82.4 million & transaction cost of Rs 10.3 million). In line with the requirement of the Companies Act 2013, an amount of Rs 446.2 million has been utilized from retained earnings. Further, capital redemption reserve of Rs 3.5 million (representing the nominal value of the shares bought back) has been created as an apportionment from General reserve. Consequent to such buyback, the paid-up equity share capital has reduced by Rs 3.5 million.

g) The Board of directors, in its meeting of 13 May 2024, has proposed final dividend of Rs 5/-per equity share (face value of Rs. 10 per equity share) to equity shareholders for the year ended 31 March 2024. This dividend together with the interim dividend of Rs.5/- per equity share, aggregating total dividend to Rs. 10/- per equity share for the financial year 2023-24. The final dividend is subject to the approval of shareholders in Annual General Meeting of the Company and same has not been recognised as liability in financial statements for the year ended 31 March 2024.

h) The Board of directors, in its meeting of 08 May 2023, has proposed final special "Golden Jubilee" dividend of Rs.5/-per equity share (face value of Rs. 10 per equity share) to equity shareholders for the year ended 31 March 2023. This dividend together with the interim dividend of Rs.10/- per equity share, aggregating total dividend to Rs. 15/-per equity share for the financial year 2022-23 which was subsequently approved by the shareholders in the Annual General Meeting held on 04 July 2023 and paid thereof.

Nature and purpose of reserves:

Preference share redemption reserve

The Company issued 10,00,000 nos. of preference shares in financial year 1997-98 of Rs. 100/- each and the same were redeemed during the financial years viz- 2002-03 and 2003-04. Further, the Company issued 28,85,760 nos. of preference shares of Rs. 100/- each in financial year 2019-20 and same were redeemed in the financial year 2019-20. Accordingly, the preference share redemption reserve of Rs. 388.58 million was created. In the financial year 2023-24, Rs. 220.25 million has been used for issuance of bonus share and balance reserve amount is available for the purposes as specified under the provisions of the Companies Act, 2013.

Capital redemption reserve

The Company bought back 3,50,000 equity shares in the financial year 2021-22 and created capital redemption reserve as per the applicable provision of the Companies Act, 2013. The reserve amount is available for the purposes as specified under the provisions of the Companies Act, 2013.

Revaluation reserve

In the Financial year 1995-96, the Company had revalued its existing property, plant and equipment and created a revaluation reserve for the same.

Retained earnings

Retained earnings represents the net profit/(loss) retained by the Company for its core business activities. Also, includes remeasurement gains / (loss) on defined benefit plans.

General reserves

General reserves represents amount appropriated out of retained earnings.

Cash flow hedge reserve

Cumulative changes in the fair value of financial instruments designated as effective hedge are recognised in cashflow hedge reserve through OCI (net of taxes). Amounts recognised in the cash flow hedge reserve are reclassified to the statement of profit and loss when the underlying transaction occurs.

* Working capital loans of Rs. 1,050.02 million (previous year: 1,017.08 million) are secured by way of first pari passu charge on inventories and trade receivables of the Company, present and future and second pari passu charge on all the movable and immovable property of the Company, present and future . Further, working capital loans of Rs. 850.00 million (previous year: 105.00 million) is secured by way of lien on the bank deposit of Rs. 850.00 million (previous year: Rs. 250.50 million).

The sensitivity analysis has been determined based on possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The sensitivity analysis present above may not be representative of the actual change in the defined obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be co-related.

Risk Factors in actuarial assumptions

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

Liquidity Risk: This is the risk that the Company is not able to meet the short term gratuity payouts. This may arise due to non availability of enough cash/ cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

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

Demographic Risk: The Company has used certain mortality and attrition assumption in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/ fall in interest rate.

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

The following payments are expected future cash flows to the defined benefit plan (undiscounted in future years):

Regulatory framework/ Governance / Benefits under the plan:

The gratuity benefit is a post employment benefit. It is calculated at the terminal salary (Basic VDA) at the time of separation of the employee according to the provisions of Payment of Gratuity Act, 1972. However, there is no restriction on the maximum amount of gratuity payable. The plan assets are managed by independent Board of Trustees, appointed by the Company. The trust is a separate legal entity and is recognized by the Commissioner of Income Tax, under the provisions of Schedule IV the the Income Tax Act, 1961. The Board of trustees manages the entire plan assets through Life Insurance Corporation of India, SBI Life Insurance, Bajaj Allianz Life Insurance Company and HDFC Life Insurance Co. Under this policy, the eligible employees are entitled to receive gratuity payments upon their separation in lumpsum after deduction of necessary taxes. The fund managers do not disclose the composition of their portfolio investment, accordingly break-down of plan assets by investment type has not been disclosed.

Asset Liability Matching Strategies

The Company has purchased insurance policy, which is a cash accumulation plan. Interest on the fund balances during the year is accumulated at the interest rate declared by insurance company at the end of the financial year. Gratuity claims are settled by the insurance company out of the fund, thus mitigating any liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of the liabilities. Thus, the Company is exposed to movement in interest rate."

Effect of plan on Entity's future cash flows

The company has purchased insurance policies to provide for payment of gratuity to the employees. The contribution to the funds are made on a quarterly basis based on estimated shortfall in plan assets from liabilities. Expected contribution during the next annual reporting period is Nil (Rs 23.72 million) Maturity profile of the defined benefit obligation based on weighted average duration is 10 Years.

The plan assets are managed by independent Board of Trustees through Life Insurance Corporation of India, SBI Life Insurance, Bajaj Allianz Life Insurance Company and HDFC Standard Life Insurance Co. Under this policy, the eligible employees are entitled to receive gratuity payments upon their separation in lumpsum after deduction of necessary taxes. The fund managers do not disclose the composition of their portfolio investment, accordingly break-down of plan assets by investment type has not been disclosed. Estimate of the future salary increase is based on factors such as inflation, seniority, promotions, demand and supply in employment market.

v) Provident fund

In respect of certain employees, provident fund contributions are made to trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Fund and Miscalleneous Provisions Act,1952 and shortfall, if any, shall be made good by the Company. The rate is determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in earlier years. As at 31 March 2024, the Company has surplus in the trust administered by the Company.

The Company has elected not to recognise a lease liability for current leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. The Company does not have any liability to make variable lease payments for the right-to-use the underlying asset recognised in the financial statements.

Total cash outflow for short-term leases for the year ended 31 March 2024 is Rs. 20.36 million (previous year Rs. 19.73 million).

Segment reporting

The Company is engaged in a single segment i.e. the business of "automotive components" from where it is earning its revenue and incurring expense. The operating results are regularly reviewed and performance is assessed by its Chief Operating Decision Maker (CODM). All the company's resources are dedicated to this single segment and all the discrete financial information is available for this segment.

ii) Outstanding export obligation required to be fulfilled under the EPCG scheme against import of some machines/ capital equipments is as under:

a) average export obligation of Rs 2,618.30 million every year (previous year Rs. 1,927.01 million every year) to be fulfilled till the time specific export obligation is discharged and

b) specific export obligation of Rs. 67.30 million (previous year Rs. 21.80 million) to be fulfilled over a period of maximum up to 5 years. Customs duty saved against outstanding export obligation is Rs. 11.13 million (previous year Rs.3.34 million).

The Company has other commitments, for purchase / sales orders which are issued after considering requirements as per operating cycle for purchase / sale of goods, employee benefits including union agreements in normal course of business. The Company does not have any other long term commitments or material non-cancellable contractual commitments, which may have a material impact on the financial statements.

*Rs. 55.0 million were held back in financial year 2022-23 to be paid as per terms of the Share Purchase Subscription Agreement. On 01 February 2024, Rs. 39.88 million paid to sellers after adjustment of Rs. 15.12 million on account of closing adjustments as per terms of Share Purchase Subscription Agreement. This has resulted into reduction in investment of SPR Engenious Limited in SPR EMF Innovations Private Limited (formerly EMF Innovations Private Limited) by Rs. 15.12 million.

ii) With regard to the above investments made during the financial year 2022-23 and financial year 2023-24, the Company has complied with the relevant provisions of the applicable laws.

iii) No fund has been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Group shall, 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 provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

ii) Fair value hierarchy

The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:

The following is the basis of categorising the financial instruments measured at fair value into Level 1 to Level 3."

Level 1 - This level includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - This level includes financial assets and liabilities, measured using inputs other than quoted prices 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).

Level 3 - This level includes financial assets and liabilities, measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

The Company's objective for managing capital is to ensure as under:

i) Ensure the company's ability to continue as a going concern

ii) Maintain a strong credit rating and debt equity and capital gearing ratio in order to support business and maximize the shareholders' value.

iii) Maintain an optimal capital structure.

iv) Compliance of financial covenants under the borrowing facilities.

The Company manages its capital structure keeping in view of:

i) Compliance of financial covenants under the borrowing facilities

ii) Changes in economic conditions

In order to achieve this overall objective of capital management, amongst other things, the Company aims to ensure that it meets financial covenants attached to the borrowings facilities defining capital structure requirements, where breach in meeting the financial covenants may permit the lender to call the borrowings. There have been no breach in the financial covenants of any borrowing facility in the current period. There is no change in the objectives, policies or processes for managing capital over previous year. To maintain the capital structure, the Company may vary the dividend payment to shareholders.

For the purpose of capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company and net debt includes total liabilities, comprising interest bearing loans and borrowings, excluding any dues to subsidiaries or group companies less cash and cash equivalents.

The Company monitors capital on the basis of the debt to capital ratio, which is calculated as interest-bearing debts adjusted with available cash and bank balances divided by total capital (equity attributable to owners of the Company).

The Company's principal financial liabilities, other than derivatives, comprise of loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, and cash and cash equivalents that it derives directly from its operations. The Company also holds FVTPL current 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 under appropriate policies and procedures.

i) 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, FVTPL current investments and derivative financial instruments.

a) Foreign exchange risk

The Company is exposed to foreign exchange risk through its sales and purchases from overseas in foreign currencies mainly in USD, EURO, CNY and JPY. The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently, the results of the Company's operations may be adversely affected as the rupee appreciates/ depreciates against these currencies."

b) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in 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. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

To manage this, the Company enters into cross currency 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.

The Company is not exposed to any significant /material interest rate risk.

ii) 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, foreign exchange transactions and other financial instruments. Credit risk is managed by Company's established policy, procedures and control relating to customer credit risk management.

Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The Company uses expected credit loss model to assess the impairment loss and makes an allowance for doubtful debts using expected credit loss model on case to case basis.

iii) Liquidity risk

The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans. Liquidity risk is managed by Company's established policy & procedures made under liquidity risk management framework. The Company manages liquidity risk by maintaining adequate reserves, banking facilities, and reserve borrowing facilites,by continuously forecast and actual cash flows, and by matching the maturity profile of financial assets and liabilities.

The financial assets and liabilities have been appropriately disclosed in financial statements as current and non current portion. The maturity period of non current financial assets and financial liabilities ranges between 1 to 6 years except lease liabilities where period may vary as per respective lease agreements.

iv) Commodity risk

Commodity price risk is the financial risk on the Company's profitability upon fluctuations in the prices of commodities since they are primarily driven by external market forces. Sharp fluctuations in commodity prices can affect production costs, product pricing and earnings. This price volatility makes it imperative for an entity to manage the impact of commodity price fluctuations across its value chain to effectively manage its financial performance and profitability. To mitigate these risks, the company employs multiple levers, each chosen based on a cost benefit analysis and the extent of exposure to commodity price fluctuations. These include assessing the feasibility of passing any adverse fluctuations onto customers through price increases, continuously engaging in cost optimisation initiatives and process improvement exercises. The Company also explores options such as localizing imports/ implementing global sourcing strategies to ensure most cost effective sourcing. Based on the assessment by the Company and after factoring the ability to optimise costs and pass on prices to customers, no individual commodity is expected to have a significant adverse impact on the financial performance/profitability beyond its materiality threshold approved by the Board.

v) Other price risks

The Company has deployed its surplus funds into various financial instruments including units of mutual funds. The Company is exposed to NAV (net asset value) price risks arising from investments in these funds. The value of these investments is impacted by movements in interest rates, liquidity and credit quality of underlying securities.

47. Hedge accounting

i) Forwards contracts

The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counter party for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on quoted prices for similar assets and liabilities in active markets or inputs that are directly or indirectly observable in the market place.

The Company has designated foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast cash transactions. The related hedge transactions for balance lying in cash flow hedging reserve are expected to occur and reclassified in the statement of profit or loss within 6 months.

Hedge effectiveness is determined at the inception of the hedge relationship. To ensure that an economic relationship exists between the hedged item and hedging instrument, the Company matches the critical terms of the hedged items and hedging instruments.

48. The Company does not have any long term contracts including derivative contracts for which there are any material foreseeable losses.

49. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund (IEPF) by the Company during the year.

53. The Board pursuant to shareholder's approval in the annual general meeting held on 06 July 2023, allotted 22,024,912 equity shares as bonus share in the ratio of 1:1 to those shareholders who held shares as on record date i.e. 24 July 2023.

54. During the year. Company has acquired 62 % of equity share in SPR Takahata Precision India Private Limited (formerly Takahata Precision India Private Limited) through its wholly owned subsidiary SPR Engenious Limited. Further, the Company has provided following corporate guarantee in favour of the bank to provide additional security against term loan granted by the bank:

55. The Company has invested Rs. 2,300.00 million (previous year: Rs. 1200.00 million) in SPR Engenious Limited (SEL), its wholly owned subsidiary (WOS), which has been incorporated on 26 September 2022 with the Registrar of Companies (Delhi & Haryana) through right issue with purpose of diversifying its product portfolio in the areas related to the automotive segment. During the year, the company has infused Rs. 700.00 million through subscription of equity share capital of SPR Engenious Limited (SEL), wholly owned subsidiary of the company. Further, SEL has infused Rs. 700.00 million by way of subscription to the equity share capital of SPR EMF Innovations Private Limited (formerly EMF Innovations Private Limited) (SPR-EMFI), step down subsidiary of the company. Accordingly, the shareholding of SEL in SPR-EMFI has increased from 51.00% to 66.42%. Accordingly, SEL became the material subsidiary in terms of Regulation 24(1) of SEBI Listing Regulations 2015. Further, SEL commenced manufacturing operations on 27 March 2024, at its facility located at Pithampur, Madhya Pradesh.

56. The Board of Directors of the Company in its meeting held on 08 February 2023 has approved acquisition of majority stake of 75% in SPR Takahata Precision India Pvt Ltd. (SPR-TPIPL) through SPR Engenious Limited (SEL), its wholly-owned subsidiary. The definitive agreements in connection with the acquisition transaction were executed on 09 February 2023.

Further, on 14 October 2023, the Board of Directors of the Company approved the proposal for amending the Share Purchase Agreement (SPA) and Shareholders' Agreement (SHA) in the form of addendums to the SPA and SHA dated 9 February 2023 with respect to acquisition of 62% stake in SPR-TPIPL through SEL. The acquisition of SPR-TPIPL has been completed on 16 October 2023. With this, SPR-TPIPL has become a step-down subsidiary of the Company.

57. The Company has no transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

58. (i) No proceedings have been initiated or are pending against the Company for holding any benami property under the

Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

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

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

59. There are no charges or satisfaction yet to be registered with ROC beyond the statutory period.

60. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

61. The Company is not declared wilful defaulter by any bank or financial institution or government or any government authority

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

63. During FY 2023-24, the Company has provided loans, made investment and given guarantee to its wholly owned subsidiary and its step down subsidiary pursuant to provisions of section 186 (4) to be utilised by them for the purpose of its normal business activity.

64. Figures of previous year have been regrouped/ reclassified, wherever necessary, to correspond with the figures of the current period. The impact of such regrouping/ reclassification is not material to these standalone financial statements.

65. In terms of SEBI Circular No. SEBI/HO/DDHS/P/CIR/2021/613 dated 10 August 2021, the company falls under the definition of "Large Corporate" (LC) as on 31 March 2024 based on following details:

In terms of SEBI Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated 19 October 2023, the Company has not made 25% of the incremental borrowings which amounts to Rs. 35.85 million, by way of issuance of debt securities during the financial year 2023-24 due to the following reasons:

i) The amount of borrowing required to be raised through debt securities is too insignificant.

ii) The cost of raising funds through debt securities for this small amount is not competitive.

66. The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014, inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall only use such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such change were made and ensuring that the audit trail cannot be disabled. The new requirement is applicable with effect from the financial year beginning on 1 April 2023.

During the year, the audit trail (edit log) at the application level for the accounting software were operating for all relevant transactions recorded in the software.

However, the audit trail (edit logs) feature for any direct changes made at the database level was not enabled for the accounting software SAP ECC used for maintenance of books of account.