Investor Presentaiton

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2023 204 c) Price Risk: ii) The Group is affected by the price stability of certain commodities. Due to the significantly increased volatility of certain commodities like Natural Rubber, Synthetic Rubber and other Chemicals, the Group enters into purchase contracts on a short to medium Term and forward foreign exchange contracts are entered into to bring in stability of price fluctuations. The Group's investments in Quoted and Unquoted Securities are susceptible to market price risk arising from uncertainties about future values of investment securities. The group manages the securities price risk through investments in debt funds and diversification by placing limits on individual and total investments. Reports on Investment Portfolio are reviewed on regular basis and all approvals of investment decisions are done in concurrence with the senior management. As at 31st March 2023 the investments in debt mutual funds and Bonds amounts to 3071.00 Crores (Previous year 3644.25 Crores). A 1% point increase or decrease in the NAV with all other variables held constant would have lead to approximately an additional *31 Crores (Previous Year 36 Crores) on either side in the statement of profit and loss. Credit Risk Is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. It arises from credit exposure to customers, financial instruments viz., Investments in Equity Shares, Bonds, Debt Funds, Fixed Deposits-others and Balances with Banks. The Group's marketing policies are well structured and all replacement sales are predominantly through dealers and the outstanding are secured by dealer deposits. As regards sales to O.E., and other institutional sales, the Group carries out periodic credit checks and also limits the exposure by establishing maximum payment period for customers and by offering prompt payment discounts. The outstanding trade receivables due for a period exceeding 180 days as at the year ended 31st March, 2023 is 0.02 % (31st March, 2022 -0.25%) of the total trade receivables. The group uses Expected Credit Loss (ECL) Model to assess the impairment loss or gain. The allowance for lifetime ECL on customer balances for the year ended 31st March 2023 was 3.16 Crores and for the year ended 31st March 2022 was 2.99 Crores. Particulars Balance at the beginning Impairment loss recognised Impairment loss reversed Year Ended 31.03.2023 (Crores) Year Ended 31.03.2022 2.99 3.24 0.17 0.42 0.67 2.99 Balance at the end 3.16 The Group holds cash and deposits with banks which are having highest safety rankings and hence has a low credit risk. Investments in mutual funds are primarily debt funds, which have high safety ratings and are monitored on a monthly basis and the Group is of the opinion that its mutual fund investments have low credit risk.

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