Notes to Accounts of SPR Auto Technologies Ltd

Mar 31, 2026

2.A.8. Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Company will be required to settle the obligation, and
a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the end of the reporting period, taking into account the risks and
uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, a receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.

2.A.9. Contingent liabilities

A disclosure for a contingent liability is made when there is a possible obligation or a present
obligation that may, but probably will not require an outflow of resources.

When there is a possible obligation or a present obligation in respect of which the likelihood on
outflow of resources is remote, no provision or disclosure is made.

2.A.10. Revenue recognition

Sale of products/services

Revenue from the sale of products or services is recognised upon transfer of control to customers.
Revenue is measured at the amount of consideration which the Company expects to be entitled

to in exchange for transferring distinct goods or services to a customer as specified in the contract,
excluding amounts collected on behalf of third parties (for example, taxes and duties collected on
behalf of the government). A receivable is recognized upon satisfaction of performance obligations as
per the contracts and is measured at transaction price.

Variable consideration

If the consideration in a contract includes a variable amount, the Company estimates the amount of
consideration to which it will be entitled in exchange for transferring the goods to the customer. The
variable consideration is estimated at contract inception and continuing until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue recognised does not occur
when the associated uncertainty with the variable consideration is subsequently resolved.

Contract assets

A contract asset is the right to consideration in exchange for goods or services transferred to the
customer. If the Company performs by transferring goods or services to a customer before the
customer pays consideration or before payment is due, a contract asset is recognised for the earned
consideration that is conditional.

Contract liabilities

A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer
pays consideration before the Company transfers goods or services to the customer, a contract
liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract
liabilities are recognised as revenue when the Company performs under the contract.

Export benefits

Export benefit entitlements is in the nature of income, and are recognised when the right to receive
benefit is established in respect of the exports made and the realisation is reasonably certain.

2.A.11. Inventories

Inventories are valued at lower of cost and net realisable value. Costs incurred in bringing each
product to its present location and condition is accounted for as follows:

i) Raw materials, loose tools and store and spares : cost includes cost of purchase and other
costs incurred in bringing the inventories to their present location and condition. Cost is
determined on weighted average basis. Raw materials and other supplies held for use in the
production of inventories are not written down below cost if the finished products in which
they will be incorporated are expected to be sold at or above cost.

ii) Work in progress: cost includes cost of direct materials and labour and a proportion of
manufacturing overheads based on the normal operating capacity.

iii) Finished goods: cost includes cost of direct materials and labour and a proportion of
manufacturing overheads based on the normal operating capacity.

iv) Stock-in-trade: cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined weighted average
basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.

!. (B) Other accounting policy information

2.B.1. Other income

Interest income

Interest income from a financial asset is recognised when it is probable that the economic benefits
will flow to Company and the amount of income can be measured reliably. Interest income is accrued
on time basis, by reference to the principal outstanding and at the interest rate as applicable.

Miscellaneous income

Other revenues are recognised on accrual basis, except where there are uncertainties in realisation
/ determination of income and in such case income is recognised on realisation / certainty.

2.B.2. Research and development

Revenue expenditure on research and development, inclusive of dies for new model development,
is charged as expense in the year in which incurred. Capital expenditure is included in property,
plant, equipment and intangible assets.

2.B.3. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time the assets are substantially
ready for their intended use or sale.

Interest income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the statement of profit and loss in the period in which
they are incurred.

2.B.4. Earnings per share

Basic earnings per share is calculated by dividing profit or loss attributable to the owners of the
Company by weighted average number of equity shares outstanding during the financial year. The
weighted average number of equity shares outstanding during the year is adjusted for events of
bonus issue, share split and any new equity issue.

For the purpose of calculating diluted earnings per share, profit or loss attributable to the owners
of the Company and the weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.

2.B.5. Impairment of assets

The carrying values of property, plant and equipment, right of use assets and intangible assets or
cash generating units are reviewed at each Balance sheet date for impairment. If any indication of
impairment exists, the recoverable amount of such assets is estimated and impairment is recognised,
if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount
is the greater of the net selling price and their value in use. Value in use is arrived at by discounting
the future cash flows to their present value based on an appropriate discount factor. When there is
indication that an impairment loss recognised for an asset in earlier accounting periods no longer
exists or may have decreased such reversal of impairment loss is recognised in the statement of
profit and loss..

In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss on the following financial assets and credit risk
exposure:

• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans,
debt securities, deposits and bank balance

• Trade receivables under Ind-AS 115

• Financial guarantee contracts which are not measured as at FVTPL

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on:

• Trade receivables

The application of simplified approach does not require the Company to track changes in
credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.
If, in a subsequent period, credit quality of the instrument improves such that there is no
longer a significant increase in credit risk since initial recognition, then the entity reverts to
recognising impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the entity expects to receive (i.e., all
cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is
required to consider:

• All contractual terms of the financial instrument (including prepayment extension, call and
similar options) over the expected life of the financial instrument. However, in rare cases
when the expected life of the financial instrument cannot be estimated reliably, then the
entity is required to use the remaining contractual term of the financial instrument.

• Cash flows from the sale of collateral held or other credit enhancements that are integral to
the contractual terms.

• As a practical expedient, the Company uses a provision matrix to determine impairment loss
allowance on portfolio of its trade receivables. The provision matrix is based on its historically
observed default rates over the expected life of the trade receivables and is adjusted for
forward-looking estimates. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.

• ECL impairment loss allowance (or reversal) recognised during the period is recognised as
income/expense in the statement of profit and loss.

2.B.6. Segment reporting

An operating segment is a component of the Company that engages in business activities from
which it may earn revenues and incur expenses, including revenues and expenses that relate
to transactions with any of the Company’s other components, and for which discrete financial
information is available. The Company is primarily engaged in the manufacturing and assembling of
automotive components for the automotive industry. All operating segments’ operating results are
reviewed regularly by the Company’s Chief Operating Decision Maker (“CODM”) to make decisions
about resources to be allocated to the segments and assess their performance. CODM believes
that these are governed by same set of risk and returns hence CODM reviews as one balance sheet
component.

2.B.7. Foreign currency transactions and translations

Transactions in foreign currency are recorded on initial recognition at the exchange rate prevailing
on or closely approximating to the date of transaction.

At the end of each reporting period, monetary items denominated in foreign currencies are
retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at the rates prevailing at the date when the
fair value was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.

Exchange differences on monetary items are recognised in the statement of profit and loss in the
period in which they arise except exchange differences on transactions entered into in order to
hedge certain foreign currency risks.

For foreign currency denominated financial assets measured at amortised cost or FVTPL, the
exchange differences are recognised in statement of profit and loss except for those which are
designated as hedging instruments in a hedging relationship.

2.C. Application of new standards and amendments

The Ministry of Corporate Affairs (‘MCA’) notified new standards or amendment to existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. The Company applied
following amendments for the first-time during the current year which are effective from 01 April 2025:

(a) Lack of exchangeability - Amendments to Ind AS 21

MCA via notification dated 7 May 2025, announced amendments to Ind AS 21, The Effects of
Changes in Foreign Exchange Rates, to specify how an entity should assess whether a currency
is exchangeable and how it should determine a spot exchange rate when exchangeability is
lacking. The amendments also require disclosure of information that enables users of its financial
statements to understand how the currency not being exchangeable into the other currency
affects, or is expected to affect, the entity’s financial performance, financial position and cash flows.

The amendments do not have any material impact on the financial statements.

(b) Classification of liabilities as current or non-current and non-current liabilities with covenants
- Amendments to Ind AS 1

MCA via notification dated 13 August 2025 announced amendments to Ind AS 1, Presentation of
Financial Statements, which elaborate on guidance set out in Ind AS 1 by:

• clarifying that the right to defer settlement of a liability for at least 12 months after the
reporting period;

a) must have substance, and

b) must exist at the end of the reporting period;

• stating that management’s expectations around whether the settlement of a liability would
be deferred or not, does not impact the classification of the liability;

• including requirements for liabilities that can be settled using an entity’s own instruments; and

• stating that at the reporting date, the entity does not consider covenants that will need to
be complied with in the future when considering the classification of the debt as current or
non-current.

In addition, an entity is required to disclose when a liability arising from a loan agreement is
classified as non-current and the entity’s right to defer settlement is contingent on compliance
with future covenants within twelve months.

The amendments do not have any material impact on the classification of the Company’s liabilities
as at the balance sheet date.

(c) Supplier finance arrangements - Amendments to Ind AS 7 and Ind AS 107

MCA via notification dated 13 August 2025 announced amendments to Ind AS 7, Statement
of Cash Flows and Ind AS 107, Financial Instruments: Disclosures which introduced disclosure
requirements with the objective to enable users of financial statements to assess how supplier
finance arrangements affect an entity’s liabilities, cashflows and exposure to liquidity risk.

The amendments do not have any material impact on the financial statements.

(d) International tax reform - pillar two model rules - Amendments to Ind AS 12

MCA via notification dated 13 August 2025 announced amendments to Ind AS 12, Income Taxes,
which includes:

• a temporary exception to the recognition and disclosure of deferred taxes arising from the
implementation of the Pillar Two model rules; and

• additional disclosure requirements targeted at a reporting entity’s exposure to income taxes
in periods in which the Pillar Two Model legislation is enacted or substantively enacted but
not yet in effect.

The amendments do not have a material impact on the financial statements.

2.D. New standards and amendments to existing standards which are issued but are not yet effective
and have not been early adopted by the Company:

(a) Classification of liabilities as current or non-current and non-current liabilities with covenants
- Amendments to Ind AS 1

Paragraph 74 of Ind AS 1 currently effective for the year ended 31 March 2026 requires the entity
not to classify the liability as current, if there is a breach of a material covenant of a long-term
loan arrangement on or before the end of the reporting period with the effect that the liability
becomes payable on demand on the reporting date, however, the lender agreed, after the reporting
period and before the approval of the financial statements for issue, not to demand payment as a
consequence of the breach.

MCA vide notification dated 13 August 2025, has introduced amendment under Paragraph 74 of Ind
AS 1 which requires the entity to classify the liability as current under the aforementioned situation
because, at the end of the reporting period, it does not have the right to defer its settlement for
at least twelve months after that date. Such amendment has been made effective for annual
reporting periods beginning on or after 01 April 2026 retrospectively in accordance with Ind AS 8.

This amendment is not expected to have a material impact on the financial statements.

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having face 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.

**During the year ended 31 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 449.70 million (including tax on buyback
of Rs 82.40 million and transaction cost of Rs 10.30 million). In line with the requirement of the
Companies Act 2013, an amount of Rs 446.20 million has been utilized from retained earnings.
Further, capital redemption reserve of Rs 3.50 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 3.50 million.

g) Dividends

i) The Board of directors, in its meeting held on 11 May 2026 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 2026. 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 2025-26. 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 2026.

ii) The Board of directors, in its meeting held on 7 May 2025, 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 2025. 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 2024-25. The final dividend has been
approved by the Shareholders in Annual General Meeting of the Company held on 01 August 2025.

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 re-measurement 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
cash flow 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.

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

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.

Regulatory framework/ Governance / Benefits under the plan:

The Gratuity benefit is a post employment benefit. It is calculated at the terminal salary at the time of
separation of the employee in accordance with the provisions Code of Social Security, 2020. 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.

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 Miscellaneous
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.

36. Related party disclosure

As per Indian Accounting Standard - 24 the Company’s related parties and transactions with them are disclosed
below :

The Board of trustees manages the entire plan assets through Life Insurance Corporation of India, SBI
Life Insurance, Bajaj Allianz Life Insurance Company , HDFC Life Insurance Co. and ICICI Prudential Life
Insurance Under this policy, the eligible employees are entitled to receive gratuity payments upon their
separation in lumpsum after deduction of necessary taxes. Total investment as on 31 March 2026 is Rs
1,570.72 million, Rs 664.32 million in traditional and Rs 906.4 million in ULIP plan. The fund managers do
not disclose the composition of their portfolio investment in case of traditional plan, accordingly break¬
down of plan assets by investment type has not been disclosed, portfolio investment in case of ULIP plan
are as under:

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 (previous year: Nil) Maturity
profile of the defined benefit obligation based on weighted average duration is 7 Years.

The Company does not face a significant liquidity risk with regard to its lease liabilities to meet the obligations
related to lease liabilities as and when they fall due.

39. 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.

Notes:

a) There are no non-current assets domiciled outside India.

b) During the financial year ended 31 March 2026, revenue from one customer amounting to Rs. 5,808.53
million (previous year Rs. 4,575.25 million) represents 10% or more of the Company''s'' revenue from
operations.

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.

There is no transfer between the fair value measurement hierarchy amongst level 1, level 2 and level 3
during the year ended 31 March 2025 and 31 March 2026.

* The fair values are based on net asset value

** This is the transaction price as at which the investment was made. In accordance with the Share Holder''s
Agreement (''SHA'') executed between the Company and Lalganj Power Private Limited, Fourth Partner
Solar Power Private Limited (investees), the holding company of the investees or any of their nominees
have an obligation to buy-back the aforementioned equity shares held by the company for an amount, at
the price at which the shares were acquired by the Company.

***The fair value is based on the valuation model which considers the present value of expected payment,
discounted using a risk-adjusted discount rate. The own non-performance risk was assessed to be
insignificant.

****The fair values are based on exchange rates as at the reporting date.

# During the year, there has not been any additions / deletions in level 3 investment.

45. Capital management

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

i) Maintain 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 funding requirement of the Company is primarily met through internal accruals and borrowings. The
net debt position is as under:

46. Financial risk management

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 trade and other receivables, cash and cash equivalents and loans
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, liquidity risk, commodity price risk and other price 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 two types of risks, foreign exchange risk and interest
rate 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, JPY and CNY. 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.

Sensitivity

Variable interest rate loan are exposed to interest rate risk, impact on profit before tax / total equity
may be as follows:

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.

(a) Expected credit loss

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.

(c) Treasury related credit risk

Credit risk on cash and cash equivalents and other deposits with the banks is limited as the Company
generally invests in deposits with banks with high credit ratings assigned by external credit rating
agencies, accordingly the Company considers that the related credit risk is low. Impairment on
these items is measured on 12- month expected credit loss basis.

Significant Increase in credit risk (SICR)

The Company considers a financial instrument to have experienced a significant increase in credit
risk when on any financial instrument, the payment is due more than 30 days beyond its contractual
payments.

iii) Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through
the use of bank overdrafts and bank loans. Liquidity risk is managed by company’s established policy
and procedures made under liquidity risk management framework. The Company manages liquidity risk
by maintaining adequate reserves, banking facilities, and reserve borrowing facilities, 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 5 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
the Company 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 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. The price risk related to investment in mutual fund schemes is not significant
considering the relatively short tenure of the underlying portfolio of mutual fund schemes in which the
Company has invested.

Sensitivity

Investments in mutual funds are exposed to other price risks, impact on profit before tax / total equity
may be as follows:

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.

51. Summary of quarterly statements to banks

As disclosed in note no. 21 to the standalone financial statements, the Company has been sanctioned a working
capital limit in excess of Rs. 50.00 million by working capital consortium comprising of IDBI Bank (Lead Bank) ,
State Bank of India, Axis Bank, HDFC Bank, Citi Bank, HSBC Bank, DBS Bank and ICICI Bank, based on the security
of current assets. The quarterly returns/statements, in respect of the working capital limits have been filed by
the Company with the banks and such returns/statements are in agreement with the books of account of the
Company for the respective periods which were subject to audit/review. Below table represents the summary of
reconciliation of the quarterly statements filed by the Company with the banks:

53. The Government of India has notified the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code
on Social Security, 2020 and the Occupational Safety, Health, and Working Conditions Code, 2020 ("Labour
Codes") with effect from November 21, 2025 which consolidates 29 existing labour laws. Based on the draft
rules and FAQs issued by the ministry of labour and employment and best available information, the Company
has estimated the financial implications thereof and has made an additional provision of Rs. 237.42 million for
the year ended 31 March 2026. Considering the materiality, regulatory driven and non -recurring nature of the
impact, the Company has presented such incremental impact under "Exceptional item".

54. During the year ended 31 March 2024, the Company had 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 had provided following corporate guarantee in favour of the
bank to provide additional security against term loan granted by the bank:

Private Limited became wholly-owned subsidiaries (with SPR Auto Interior Solutions Private Limited
also classified as an unlisted material subsidiary), and SPR Auto Interior Solutions Chakan Private
Limited became a step-down subsidiary of the Company.

58. On 02 April 2026, the Company has received certificate from Ministry of Corporate Affairs (MCA) for
name change from Shriram Pistons & Rings Limited to SPR Auto Technologies Limited.

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

60. (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 do not have any 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.

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

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

63. The Company is not declared willful defaulter by any bank or financial institution or government or
any government authority

64. 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.

65. During the year ended 31 March 2026, the Company has provided loans, made investment and given
guarantee to persons including 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.

55. During the year, the Company has invested Rs. 500.00 million in SPR Engenious Limited, its wholly-owned
subsidiary, by subscribing to 50.00 million equity shares of Rs. 10 each. During the previous year, the Company
has invested Rs. 2,300.00 million and Rs 200.00 million on 19 December 2024 and 04 March 2025 respectively in
SPR Engenious Limited (SEL), its wholly owned subsidiary (WOS) by ways of subscription to equity share capital
through right issue with the purpose of diversifying its product portfolio in the areas related to the automotive
segment.

56. On 07 March 2025, the Company has entered into a Share Purchase Agreement with existing shareholders of
Karna Intertech Private Limited (''Karna'') to acquire 100% equity stake in Karna for Rs. 50.00 million. Accordingly,
the Company has acquired 100% equity shareholding in Karna on 01 April 2025 and Karna has become a wholly
owned subsidiary of the Company.

57. The Board of Directors of the Company, at its meeting held on 24 November, 2025, approved the acquisition
of 100% equity shares of SPR Auto Interior Lighting solutions Private Limited (formerly Antolin Lighting India
Private Limited ) and SPR Auto Interior Solutions Private Limited (formerly Grupo Antolin India Private Limited)
along with SPR Auto Interior Solutions Chakan Private Limited (formerly Grupo Antolin Chakan Private Limited),
the subsidiary of SPR Auto Interior Solutions Private Limited. A Share Purchase Agreement was executed
on 05 December 2025. The acquisition was completed on 08 January, 2026, resulting in the Company
acquiring 100% of SPR Auto Interior Lighting solutions Private Limited , 100% of SPR Auto Interior
Solutions Private Limited and ~99.99% of SPR Auto Interior Solutions Chakan Private Limited.
Consequently, SPR Auto Interior Lighting solutions Private Limited and SPR Auto Interior Solutions

66. In terms of SEBI circular No. SEBI/HO/DDHS/P/CIR/2021/613 dated 10 August 2021, as amended by SEBI circular
No. SEBI/HO/DDHS/DDHS-RACPOD1/ P/CIR/2023 /172 dated 19 October 2023, the Company does not meet all
the prescribed conditions to qualify as a ''Large Corporate’, hence, not classified as a Large Corporate as on 31
March 2026. Therefore, the disclosure requirements as per the said circulars are not applicable.

67. 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 was 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. Further, the audit trail
(edit logs) feature for any direct changes made at the database level was enabled w.e.f. 24 January 2025 for the
accounting software SAP ECC used for maintenance of books of accounts and was operating till 31 December
2025. During the year, w.e.f. 01 January 2026, the company has changed its accounting software from SAP ECC
to SAP Hana Rise which is on cloud. The audit trail (edit log) at application level is effective.

68. 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.

The accompanying summary of accounting policies and significant explanatory notes form an integral part of
these standalone financial statements.

---

Mar 31, 2025

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.

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having face 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 2025.

*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 31 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) Dividends

i) The Board of directors, in its meeting held on 07 May 2025 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 2025. 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 2024-25. 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 2025.

ii) The Board of directors, in its meeting held on 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 has been approved by the Shareholders in Annual General Meeting of the Company held on 24 July 2024.

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 cash flow 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.

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.

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 , HDFC Life Insurance Co. and ICICI Prudential Life Insurance Under this policy, the eligible employees are entitled to receive gratuity payments upon their separation in lumpsum after deduction of necessary taxes. Total investment as on 31 March 2025 is Rs 1,484.22 million, Rs 817.92 million in traditional and Rs 666.30 million in ULIP plan. The fund managers do not disclose the composition of their portfolio investment in case of traditional plan, accordingly break-down of plan assets by investment type has not been disclosed, portfolio investment in case of ULIP plan are as under:

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 (previous year: Nil) Maturity profile of the defined benefit obligation based on weighted average duration is 10 Years.

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 Miscellaneous 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 2025, the Company has surplus in the trust administered by the Company.

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 3,407.61 million every year (previous year Rs. 2,618.30 million every year) to be fulfilled till the time specific export obligation is discharged and

b) specific export obligation of Rs. 179.95 million (previous year Rs. 67.30 million) to be fulfilled over a period of maximum up to 5 years. Customs duty saved against outstanding export obligation is Rs. 24.34 million (previous year Rs.11.13 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.

*Represents reduction in investment value of SPR Engenious Limited in SPR Takahata Precision India Private Limited (formerly Takahata Precision India Private Limited) on account of amount received from selling shareholders of SPR Takahata Precision India Private Limited (formerly Takahata Precision India Private Limited) towards post-closing adjustments in terms of Share Purchase Agreement as under:

-Rs. 0.07million from Takahata Precision Co. Limited, Japan

-Rs. 2.05 million from Takahata Precision Pte. Limited, Singapore

*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 ininvestment 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 investments made during the financial year 2023-24 and financial year 2024-25, 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 company 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.

Fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31 March 2025

There is no transfer between the fair value measurement hierarchy amongst level 1, level 2 and level 3 during the year ended 31 March 2024 and 31 March 2025.

* The fair values are based on net asset value

** This is the transaction price as at which the investment was made. In accordance with the Share Holder''s Agreement (''SHA'') executed between the Company and Lalganj Power Private Limited, Fourth Partner Solar Power Private Limited (investees), the holding company of the investees or any of their nominees have an obligation to buyback the aforementioned equity shares held by the company for an amount, at the price at which the shares were acquired by the Company.

***The fair value is based on the valuation model which considers the present value of expected payment, discounted using a risk-adjusted discount rate. The own non-performance risk was assessed to be insignificant.

****The fair values are based on exchange rates as at the reporting date.

# During the year, there has not been any additions / deletions in level 3 investment.

45. Capital management

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

i) Maintain 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 funding requirement of the Company is primarily met through internal accruals, leading to a negative net debt position as under:

46. Financial risk management

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 trade and other receivables, cash and cash equivalents and loans 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, liquidity risk, commodity price risk and other price 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 two types of risks, foreign exchange risk and interest rate 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, JPY and CNY. 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 and bank loans. Liquidity risk is managed by company''s established policy and 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 5 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 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.

’. 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.

51. Summary of quarterly statements to banks

As disclosed in note no. 21 to the standalone financial statements, the Company has been sanctioned a working capital limit in excess of Rs. 50.00 million by working capital consortium comprising of IDBI Bank (Lead Bank) , State Bank of India, Axis Bank, HDFC Bank, Citi Bank, HSBC Bank, DBS Bank and ICICI Bank, based on the security of current assets. The quarterly returns/statements, in respect of the working capital limits have been filed by the Company with the banks and such returns/ statements are in agreement with the books of account of the Company for the respective periods which were subject to

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, during the year ended 31 March 2024.

54. During the year ended 31 March 2024, the Company had 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 had provided following corporate guarantee in favour of the bank to provide additional security against term loan granted by the bank:

55. The Company has infused Rs. 2,300.00 million and Rs 200.00 million on 19 December 2024 and 04 March 2025 respectively (previous year: Rs. 2,300.00 millions) in SPR Engenious Limited (SEL), its wholly owned subsidiary (WOS) by ways of subscription to equity share capital through right issue with the purpose of diversifying its product portfolio in the areas related to the automotive segment.

Further, SEL has invested Rs. 2176.23 million on 24 December 2024 by way of acquisition of 100% stake in the equity share capital of SPR TGPEL Precision Engineering Limited (formerly TGPEL Precision Engineering Limited) (SPR TGPEL) pursuant to Share Purchase Agreement dated 10 December 2024. With this investment, SPR TGPEL has become the step down subsidiary of the Company.

56. The Companys'' 4,40,49,824 equity shares with face value of Rs. 10 each, fully paid up has been listed and admitted for trading on Bombay Stock Exchange (BSE) w.e.f. Tuesday 04 February 2025 under the scrip code 544344.

57. On 07 March 2025, the Company has entered into a Share Purchase Agreement with existing shareholders of Karna Intertech Private Limited (''Karna'') to acquire 100% equity stake in Karna for Rs. 50.00 million. Accordingly, the Company has acquired 100% equity shareholding in Karna on 01 April 2025 and Karna has become a wholly owned subsidiary of the Company.

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

59. (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 do not have any 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.

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

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

62. The Company is not declared willful defaulter by any bank or financial institution or government or any government authority.

63. 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.

64. During the year ended 31 March 2025, the Company has provided loans, made investment and given guarantee to persons including 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.

65. In terms of SEBI circular No. SEBI/HO/DDHS/P/CIR/2021/613 dated 10 August 2021, as amended by SEBI circular No. SEBI/ HO/DDHS/DDHS-RACPOD1/ P/CIR/2023 /172 dated 19 October 2023, the Company does not meet all the prescribed conditions to qualify as a ''Large Corporate'', hence, not classified as a Large Corporate as on 31 March 2025. Therefore, the disclosure requirements as per the said circulars are not applicable.

66. The Company had been accepting deposits under Fixed Deposit Scheme as per Section 58A of the Companies Act, 1956 and Section 73 to 76 of the Companies Act, 2013 (refer note 17 and 21). During the year, the Company has fully repaid the deposits including the unclaimed matured deposits. As on 31 March 2025, there are no outstanding deposits under the Fixed Deposit Scheme and the Company has discontinued the Fixed Deposit Scheme.

67. 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 was 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. Further, the audit trail (edit logs) feature for any direct changes made at the database level was enabled w.e.f. 24 January 2025 for the accounting software SAP ECC used for maintenance of books of accounts.

68. 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.

The accompanying summary of accounting policies and significant explanatory notes form an integral part of these standalone financial statements.

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Mar 31, 2024

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.

		Rs. million
	As at	As at
	31 March 2024	31 March 2023
i) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for	232.71	196.11

41. Contingent liabilities	As at 31 March 2024	Rs. million As at 31 March 2023
Claims against the Company disputed and not acknowledged as debts - Sales tax*	94.56	88.46
- Service tax*	19.79	18.77
- Excise Duty*	-	9.54
- Goods & Services Tax*	10.44	0.11
- Income tax*	1.43	1.43
- Employees'' State Insurance#	28.83	28.83
- Labour matters#	298.02	246.06
- Commercial matters	25.84	24.97

All the above matters are subject to legal proceedings in the ordinary course of business. In the opinion of the management, the legal proceedings, when ultimately concluded, will not have a material effect on operations or the financial position of the Company.

* refer note 37

# this pertains to the legal proceedings related to labour cases.

42. Capital and other commitments

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.

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Mar 31, 2023

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.

The Board of directors, in its meeting of May 08, 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 March 31, 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. 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 March 31, 2023.

"Working capital loans of Rs. 1017.08 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, plant & equipment and right of use assets (land) of the Company, present and future and Rs. 105.00 million is secured by way of lien on the bank deposit of Rs. 250.50 million.

*The short term deposits have been raised under Section 58A of the Companies Act, 1956 and Section 73 to 76 of the Companies Act, 2013 for maturity period of 1 year.

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.

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 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 Rs. 23.72 million (Rs. 96.21 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.

iv) Provident fund

The Company has an obligation to fund any shortfall in yield of the trust''s investments over the rate declared by Government. 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.

Leases :

The Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate/implicit interest rate and the Right of Use asset at its carrying amount as if the standard had been applied since the commencement date of the lease, but discounted at the lessee''s incremental borrowing rate/implicit interest rate at the date of initial application.

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.

Contingent liabilities		Rs. million
	As at	As at
	March 31, 2023	March 31, 2022
i) Disputed
- Sales tax*	88.46	2841.46
- Service tax	18.77	18.64
- Excise Duty	9.54	-
- Goods & Services Tax	0.11	-
- Income tax	1.43	1.43
- Employees'' State Insurance	28.83	28.83
- Interim Relief to Workers	8.09	8.09

All the above matters are subject to legal proceedings in the ordinary course of business. In the opinion of the management, the legal proceedings, when ultimately concluded, will not have a material effect on operations or the financial position of the Company.

* The contingent liability has reduced on account of setting aside the demand by Appellate Authorities in stock transfer matters (Rs. 2126.60 millions) and on account of partial relief/ remand back in VAT matters (Rs. 559.50 millions) with directions to Assessing Officer for fresh assessment. The Company has precedent of favourable orders on similar matters. The Company is of the view that as there is no demand against such orders passed by Assessing Officer, hence, contingent liability against these matters cease to exist as on 31.03.2023.

ii)	Bills discounted from banks	31.02	23.90
iii)	Claims not acknowledged as debts	262.94	243.07

Commitments
			Rs. million
		As at March 31, 2023	As at March 31, 2022
i)	Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for	196.11	161.54

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. 1927.01 million every year (previous year Rs. 1750.23 million every year) to be fulfilled till the time specific export obligation is discharged and

b) specific export obligation of Rs. 21.80 million (previous year Rs. 109.20 million) to be fulfilled over a period of maximum up to 5 years. Customs duty saved against outstanding export obligation is Rs. 3.34 million (previous year Rs. 17.23 million).

iii) 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.

With regard to the above investments made during the year ended March 31, 2023, the Company has complied with the relevant provisions of the applicable laws.

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 .

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 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.

For the purpose of capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company.

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.

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 and JPY. The Company holds derivative financial instruments such as foreign exchange forward and 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.

Each percentage point change in the foreign exchange rates has an impact of 0.86% (previous year : 0.84%) on Company''s operating margins.

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.

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.

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.

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.

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

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.

During the year ended 31^st 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 July 30, 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.

SPR International Auto Exports Limited ("Subsidiary Company") was incorporated in 2005 and has not commenced any operations since then. Board of Directors of Subsidiary Company in their meeting held on April 05, 2022 and its shareholders in Annual General Meeting held on June 28, 2022 decided to make an application to the Registrar of Companies, under Section 248 (2) of the Companies Act, 2013 read with Rule 4, 5, 6 and 8 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, for removing the name of the Company from Register of Companies. The application for removal of the name of the Subsidiary Company was submitted on September 13, 2022. The name of subsidiary company has been struck off from the Register of Companies on March 7, 2023 by the Registrar of Companies (Delhi & Haryana) and with this, the said company is dissolved.

The Company has invested Rs. 1,200.0 millions in SPR Engenious Limited (SEL), its wholly owned subsidiary (WOS), which has been incorporated on September 26, 2022 with the Registrar of Companies (Delhi & Haryana) with the purpose of diversifying its product portfolio in the areas related to the automotive segment.

The Board of directors of the company in its meeting held on February 08, 2023 has approved acquisition of majority stake of 75% in Tahakata Precision India Pvt Ltd. (TPIL) through SPR Engenious Limited (SEL), its wholly owned subsidiary. Takahata Precision Co. Ltd., Japan is the ultimate parent of TPIL and specialist in design and manufacturing of precision injection moulded components having a variety of functional products for automotive applications. The definitive agreements in connection with the proposed acquisition transaction has been executed on February 09, 2023.

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

Figures in brackets denote previous year figures.

---

Mar 31, 2022

Goodwill represents goodwill arised 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.

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.

The Board of directors, in its meeting of May 06, 2022, has proposed final dividend of Rs. 4 per equity share (face value of Rs. 10 per equity share) to equity shareholders for the year ended March 31, 2022. This dividend together with the interim dividend of Rs. 6 per equity share, aggregating total dividend to Rs. 10 per equity share for the financial year 2021-22. 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 March 31, 2022.

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 illquid 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.

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 retirement/ resignation 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 plan assets through Life Insurance Corporation of India (LIC), 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 resignation or death 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 Rs 96.21 million (Rs 48.59 million) Maturity profile of the defined benefit obligation based on weighted average duration is 10 Years.

Provident fund

The Company has an obligation to fund any shortfall in yield of the trust''s investments over the rate declared by Government. 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.

Leases :

The Company recorded the lease liability at the present value of the lease payments discounted at the incremental borrowing rate and the Right of Use asset at its carrying amount as if the standard had been applied since the commencement date of the lease, but discounted at the lessee''s incremental borrowing rate at the date of initial application.

The Company does not face a significant liquidity risk with regard to its lease liabilities to meet the obligations related to lease liabilities as and when they fall due.

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.

In view of Supreme Court Judgement dated February 28, 2019 clarifying the definition of ''basic wages'' under Employees'' Provident Fund and Miscellaneous Provisions Act 1952, the Company has made compliance w.e.f March 2019 onwards. In respect of retrospective application of this judgement, the Company will continue to assess the impact of further developments and deal with it appropriately accordingly.

Outstanding export obligation to be fulfilled over a period of maximum up to 5 years under the EPCG scheme against import of some machines is Rs. 8860.35 million (previous Rs. 8846.58 million). Customs duty saved against outstanding export obligations is Rs. 17.23 million (previous year Rs. 68.76 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.

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) To ensure the company''s ability to continue as a going concern

ii) Maintaining a strong credit rating and debt equity 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.

For the purpose of capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company.

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.

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 and JPY. The Company holds derivative financial instruments such as foreign exchange forward and 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.

Each percentage point change in the foreign exchange rates has an impact of 0.84% (previous year : 0.84%) on Company''s operating margins.

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.

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.

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 5 years.

43. 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.

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

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.

During the year ended 31^st 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 July 30, 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 .

SPR International Auto Exports Limited ("Subsidiary Company") was incorporated in 2005 and has not commenced any operations since then. In the Board of directors'' meeting of subsidiary company dated April 04,2022, it has been decided to make an application to the Registrar of Companies under Section 248(2) of the Companies Act, 2013 read with Rule 4,5,6 and 8 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, for removing the name of the Company from Register of Companies. The subsidiary company has total assets of Rs 0.54 Million in the form of cash and bank balances as on 31^st March 2022.

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

The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India, however, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

Estimation of Uncertainties relating to the pandemic from COVID 19:

The Company has considered the possible effects that may result from the pandemic relating to COVID 19 on the carrying amount of all assets and liabilities as at March 31'' 2022. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the company as at the date of approval of these Financial Statements has used internal and external sources on the expected future performance of the company. The Companyexpects the carrying amount of these asset/liabilities will be recovered/ settled and subsequent liquidity is available to fund the business operations. The impact of COVID 19 on the Company''s Financial Statements may differ from that estimated at the date of approval of these Financial Statements and would be recognized prospectively.

Previous year figures have been re-grouped / reclassified, wherever necessary to confirm to current year''s classification. Figures in brackets denote previous year figures.

---

Mar 31, 2021

The sensitivity analysis has been determined based on possible changes of the assumpti ons occurring at the end of the reporti ng period, while holding all other assumpti ons 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 illquid 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 assumpti on in valuati on 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.

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 retirement/ resignation 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 plan assets through Life Insurance Corporation of India (LIC), 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 resignation or death 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 Rs 48.59 million (Rs 103.77 million) Maturity profile of the defined benefit obligation based on weighted average duration is 10 Years.

iv) Provident fund

The Company has an obligation to fund any shortfall in yield of the trust''s investments over the rate declared by Government. 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.

32. Related party disclosure

As per Indian Accounting Standard - 24 the Company''s related parties and transactions with them are disclosed below :

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Mar 31, 2017

1. First-time adoption of Ind-AS

These financial statements of the Company for the year ended March 31,2017 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101-First Time adoption of Indian Accounting Standard, with April 1, 2015 as the transition date and IGAAP as the previous GAAP. The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended March 31,2017 and the comparative information. A reconciliation of the transition from previous GAAP to Ind AS of the Company''s Balance Sheet, Statement of Profit and Loss, is given in note 3.2 and 3.3. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have been set out in note 3.1.

2. Exemptions availed on first time adoption of Ind-AS 101

Deemed cost for property, plant and equipment, and intangible assets

The Company has elected to continue with carrying value of all its property, plant & equipment and intangible assets recognized as on April 01, 2015 (the transition date) measured as per previous GAAP and used that carrying value its deemed cost as on transition date.

Derecognition of financial assets and financial liabilities

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after 1 April 2015 (the transition date).

Classification of debt instruments

The Company has determined the classification of debt instruments in terms of whether they meet the amortised cost criteria or the FVTOCI criteria based on the facts and circumstances that existed as of the transition date.

Impairment of financial assets

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increase in credit risk since initial recognition, as permitted by Ind AS 101.

Pistons/Piston Pins/Piston Rings/Cylinder liners/Conrod are sold as individual components as well as composite units. Hence, combined value has been shown.

Under previous GAAP , revenue from sale of products was presented net of excise duty under revenue from operations. Whereas under Ind AS , revenue from sale of products includes excise duty. The corresponding excise duty expense presented separately on the face of statement of profit and loss. The change does not affect total equity as at April 01, 2015 and March 31, 2016, profit before tax or total profit for the year ended March 31, 2016.

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 Parent 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 Parent 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 Parent Company has used certain mortality and attrition assumption in valuation of the liability. The Parent 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 Parent 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. 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 retirement/ resignation 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 Parent Company. The trust is a separate legal entity and is recognized by the Commissioner of Income Tax, under the provisions of Schedule IV the Income Tax Act, 1961.

The Board of trustees manages the plan assets through Life Insurance Corporation of India (LIC), 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 resignation or death in lump sum 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 Parent 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 Parent Company is exposed to movement in interest rate. Effect of plan on Entity''s future cash flows

The Parent 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 Rs 114.41 million (Rs 33.21 million) Maturity profile of the defined benefit obligation based on weighted average duration is 10 Years.

iv) Provident fund

The Parent Company has an obligation to fund any shortfall in yield of the trust''s investments over the rate declared by Government. The rate is determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Parent Company has been higher in earlier years.

3. Related party disclosure

As per Indian Accounting Standard - 24 the Company''s related parties and transactions with them are disclosed below :

A. List of related parties

Subsidiary company SPR International Auto Exports Limited

Key management personnel Shri Pradeep Dinodia, Chairman

Shri Hari S. Bhartia, Director

Smt Meenakshi Dass, Director

Shri Ravinder Narain, Director

Shri C.Y.Pal, Director

Dr. Alexander Sagel, Director

Shri M.Sekimoto, Director

Shri Inderdeep Singh, Director

Shri Toru Suzuki, Director

Shri A.K Taneja, Managing Director & CEO

Shri R. Srinivasan, Jt. Managing Director & Company Secretary

Shri Luv D. Shriram, Whole Time Director

Dr. Peter Neu, Director

Shri Noritada Okano, Director

Close members of the family of key management personnel

Shri A.K Taneja Smt. Anita Taneja

Late Shri B.N.Taneja (till January 23, 2017)

Shri R. Srinivasan Smt. Usha Srinivasan

Smt. R. Srirangam Smt. R. Vijayalakshmi Shri. R. Ramaswamy Shri. R. Venkatesh

Shri Luv D. Shriram Late Smt. Santosh D. Shriram (till June 22, 2016)

Smt. Meenakshi Dass Shri Arjun D. Shriram Shri Kush D. Shriram Smt Nandishi Shriram Smt. Arati Shriram

Shri Ravinder Narain Smt. Manju Narain

Smt. Rasika Dayal Smt. Sarika Narain

Entity over which , Key management personnel and their Shriram Automotive Products Ltd.

Close members of the family has significant influence or ^{Shriram Alpine Sales} FVt ^Ltd.

_cont_rol Shriram Veritech Solutions Pvt. Ltd.

Sera Com Pvt. Ltd.

Manisha Commercial Pvt. Ltd Sarva Commercial Pvt. Ltd.

Charat Ram Shriram Pvt. Ltd.

Deepak C. Shriram & Sons HUF Shabnam Commercial Pvt. Ltd.

Pradeep Dinodia HUF

Entity in which Key management personnel and their Close Shriram Automotive Products Ltd.

members of the family is Key management personnel ^{Shriram Alpine Sales Pvt}. Ltd

Post-employment defined benefit plan entity Shriram Pistons & Rings Ltd Gratuity Fund Trust

Shriram Pistons & Rings Ltd. Officers'' Provident Fund Trust

4. Segment reporting

The Group 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.

Revenue from one customer amounts to Rs 1945.41 million (previous year Rs 1846.46 million). No other single customer represents 10% or more to the Group revenue for financial year ended March 31, 2017 and March 31, 2016.

Outstanding export obligation to be fulfilled over a period of maximum up to 5 years under the EPCG scheme against import of some machines is Rs. 2982.71 Millions (previous year Rs. 3465.22 Millions). Customs duty saved against outstanding export obligations is Rs.10.73 million (previous year Rs. 66.35 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.

The carrying value of above financial assets and financial liabilities approximate its fair value.

5. Capital management

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

i) To ensure the company''s ability to continue as a going concern.

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

iii) Maintain an optimal capital structure.

iv) Compliance financial covenants under the borrowing facilities.

For the purpose of capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company.

The Company manages its capital structure keeping in view of:

i) Compliance of financial covenants of 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 facilities 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.

6. Financial risk management

The Company''s principal financial liabilities, other than derivatives, comprise 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 derive 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 and JPY. The Company holds derivative financial instruments such as foreign exchange forward and 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 are adversely affected as the rupee appreciates/ depreciates against these currencies.

Each percentage point change in the foreign exchange rates has an impact of 0.59% on Company''s operating margins.

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. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss.

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 facilities, 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 5 years.

46. 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 in puts 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 in cash flow hedging reserve are expected to occur and reclassified to revenue 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.

ii) Cross currency Interest Rate Swaps

Under cross currency interest rate swap contracts, the Company agrees to exchange the principal and interest payment of its loans liabilities in foreign currency for equivalent amount in net present value terms in Indian rupees. Such contracts enable the Company to mitigate the risk of exchange rate and cash flow exposures on the issued variable rate debt in foreign currency.

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.

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

8. 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.

9. Previous year figures have been re-grouped / reclassified, wherever necessary to confirm to current year''s classification. Figures in brackets denote previous year figures.

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Mar 31, 2016

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources.

When there is a possible obligation or a present obligation in respect of which the likelihood on outflow of resources is remote, no provision or disclosure is made.

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

2. 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.

3. Previous year figures have been re-grouped / reclassified, wherever necessary to confirm to current year''s classification. Figures in brackets denote previous year figures.