(t) Provisions and Contingencies

Provisions are recognised when the Company has a
present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the
amount of the obligation.

Provisions are measured at the present value of
management’s best estimate of the expenditure required
to settle the present obligation at the end of the reporting
period. When the Company expects some or all of a
provision to be reimbursed, for example, under an
insurance contract, the reimbursement is recognised as
a separate asset, but only when the reimbursement is
virtually certain. The expense relating to a provision is
presented in the Statement of Profit and Loss net of any
reimbursement.

A disclosure for contingent liabilities is made when
there is a possible obligation arising from past events,
the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the
Company or a present obligation that arises from past
events where it is either not probable that an outflow of
resources embodying economic benefits will be required
to settle the obligation or a reliable estimate of the
obligation amount cannot be made.

Onerous Contracts

If the Company has a contract that is onerous, the
present obligation under the contract is recognised and
measured as a provision. However, before a separate
provision for an onerous contract is established, the
Company recognises any impairment loss that has
occurred on assets dedicated to that contract.

An onerous contract is a contract under which the
unavoidable costs (i.e., the costs that the Company
cannot avoid because it has the contract) of meeting
the obligations under the contract exceed the economic
benefits expected to be received under it. The unavoidable
costs under a contract reflect the least net cost of exiting
from the contract, which is the lower of the cost of
fulfilling it and any compensation or penalties arising
from failure to fulfil it. The cost of fulfilling a contract
comprises the costs that relate directly to the contract
(i.e., both incremental costs and an allocation of costs
directly related to contract activities).

(u) Segment Reporting

Operating segments are reported in a manner consistent
with the internal reporting provided to the chief operating
decision maker.

The chief operating decision maker is responsible for
allocating resources and assessing performance of
the operating segments and has been identified as the
Executive Director of the Company. Refer Note 37 for
segment information presented.

(v) Use of Estimates

The preparation of financial statements in conformity
with Ind AS requires the management to make
judgments, estimates and assumptions that affect the
reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities
during and at the end of the reporting period. Although
these estimates are based on the management’s best
knowledge of current events and actions, uncertainty
about these assumptions and estimates could result
in the outcomes requiring a material adjustment to
the carrying amounts of assets or liabilities in future
periods.

(w) Exceptional Items

Exceptional items are those items that management
considers, by virtue of their size or incidence (including
but not limited to impairment charges and acquisition
and restructuring related costs), should be disclosed
separately to ensure that the financial information
allows an understanding of the underlying performance
of the business in the year, so as to facilitate comparison
with prior periods. Such items are material by nature
or amount to the year’s result and require separate
disclosure in accordance with Ind AS. The determination
as to which items should be disclosed separately requires
a degree of judgement. The details of exceptional items
are set out in Note 45.

(x) Events after the Reporting Period

If the Company receives information after the reporting
period, but prior to the date of approval for issue, about

conditions that existed at the end of the reporting
period, it will assess whether the information affects
the amounts that it recognises in its separate financial
statements. The Company will adjust the amounts
recognised in its financial statements to reflect any
adjusting events after the reporting period and update
the disclosures that relate to those conditions in light
of the new information. For non-adjusting events after
the reporting period, the Company will not change the
amounts recognised in its separate financial statements
but will disclose the nature of the non-adjusting event
and an estimate of its financial effect, or a statement
that such an estimate cannot be made, if applicable.

(y) Standards notified but not yet effective

The amendments to the standards that are notified by
the Ministry of Corporate Affairs (MCA), but not yet
effective, up to the date of issuance of the Company’s
financial statements are disclosed below. The Company
will adopt these amendments to the standards, when
they become effective.

(i) Amendments to Ind AS 1 - Classification of
Liabilities as Current or Non-current and Non-current
Liabilities with Covenants and Ind AS 10 - Events
after the Reporting Period

Ind AS 10 has been amended to remove the previous
treatment under which a lender’s post reporting date
waiver - granted before the financial statements were
approved for issue - of a breach of a material covenant in
a long-term loan arrangement that occurred on or before
the end of the reporting period, resulting in the liability
becoming payable on demand at the reporting date, was
regarded as an adjusting event.

For annual reporting periods beginning on or after
1st April, 2026, any breach of a covenant - whether
material or immaterial - occurring on or before the
reporting date will, in accordance with Ind AS 1, require
the related liability to be classified as current, unless
the lender has granted a waiver of the breach on or
before the reporting date and has agreed not to demand
repayment for at least 12 months after the reporting date
as a consequence of the breach. Such a waiver shall be
treated as an adjusting event.

The amendments are effective for annual reporting
periods beginning on or after 1st April, 2026.

The amendments are not expected to have any material
impact on the standalone financial statements.

3 Significant accounting judgements, estimates and

assumptions

The preparation of standalone financial statements in
conformity with Ind AS requires management to make
judgements, estimates and assumptions, that affect

the application of accounting policies and the reported
amounts of assets, liabilities, income, expenses and
disclosures of contingent assets and liabilities at the
date of these standalone financial statements and the
reported amounts of revenues and expenses for the
years presented. Actual results may differ from these
estimates. Estimates and underlying assumptions
are reviewed at each Balance Sheet date. Revisions
to accounting estimates are recognised in the period
in which the estimate is revised and future periods
affected.

This Note provides an overview of the areas that involved
a higher degree of judgement or complexity, and of items
which are more likely to be materially adjusted due to
estimates and assumptions turning out to be different
than those originally assessed. Detailed information
about each of these estimates and judgements is
included in relevant notes together with information
about the basis of calculation for each affected line item
in the standalone financial statements.

The areas involving critical estimates or judgementsare:- Employee Benefits (Estimation of Defined Benefit
Obligations) - Notes 2(p) and 36

Post-employment benefits represent obligations that will
be settled in future and require assumptions to estimate
benefit obligations. Post-employment benefit accounting
is intended to reflect the recognition of benefit costs over
the employees’ approximate service period, based on
the terms of the plans and the investment and funding
decisions made. The accounting requires the Company
to make assumptions regarding variables such as
discount rate and salary growth rate. Changes in these
key assumptions can have a significant impact on the
defined benefit obligations.

- Estimation of Expected Useful Lives of Property,
Plant and Equipment - Notes 2(c) and 4.1

Management reviews its estimate of useful lives of
property, plant and equipment at each reporting date,
based on the expected utility of the assets. Uncertainties
in these estimates relate to technical and economic
obsolescence that may change the utility of property,
plant and equipment.

- Contingencies - Notes 2(t) and 34

Legal proceedings covering a range of matters are
pending against the Company. Due to the uncertainty
inherent in such matters, it is often difficult to predict
the final outcome. The cases and claims against the
Company often raise factual and legal issues that are
subject to uncertainties and complexities, including the
facts and circumstances of each particular case/claim,
the jurisdiction and the differences in applicable law. The

Company consults with legal counsel and other experts
on matters related to specific litigations where considered
necessary. The Company accrues a liability when it is
determined that an adverse outcome is probable and the
amount of the loss can be reasonably estimated. In the
event, an adverse outcome is possible or an estimate is
not determinable, the matter is disclosed.

- Valuation of Deferred Tax Assets - Notes 2(q)
and 20

Deferred income tax expense is calculated based on
the differences between the carrying value of assets
and liabilities for financial reporting purposes and their
respective tax bases that are considered temporary in
nature. Valuation of deferred tax assets is dependent on
management’s assessment of future recoverability of the
deferred tax benefit. Expected recoverability may result
from expected taxable income in the future, planned
transactions or planned optimising measures. Economic
conditions may change and lead to a different conclusion
regarding recoverability.

- Fair Value Measurements - Note 39

When the fair values of financial assets and financial
liabilities recorded in the Balance Sheet cannot be
measured based on quoted prices in active markets, their
fair values are measured using valuation techniques,
including the discounted cash flow model, option pricing
method, underlying asset model, comparable companies
multiple method and comparable transaction method
which involve various judgements and assumptions.

- Net Realisable Value of Inventories - Notes 2(g) and
46

Management estimates the net realisable value of
inventories after taking into consideration various
assumptions viz., future selling prices, overheads and
costs to complete, which are subject to high degree
of estimation uncertainly and the actual realization
of which may differ based on actual turn of events
subsequent to the Balance Sheet date. Changes in these
key assumptions can have a significant impact on the
inventory valuation.

4.5 The Company has taken borrowings from banks which carry charge over certain property, plant and equipment
(Refer Notes 15 and 42 for details).

4.6 Contractual Obligations - Refer Note 35(a) for disclosure of contractual commitments for the acquisition of
property, plant and equipment.

4.7 Aggregate amount of depreciation has been included under ‘Depreciation and Amortisation Expense’ in the
Statement of Profit and Loss (Refer Note 27).

4.8 Title deeds of immovable properties/Lease agreements set out in Note 4.1 and 5.3, where applicable, are in
the name of the Company except as set out below which includes properties held in the name of Graphite
Vicarb India Limited (GVIL)/Powmex Steels Limited (PSL). The immovable properties of GVIL/PSL, inter alia, got
transferred to and vested in the Company pursuant to the respective Schemes of Arrangement in earlier years.

Nature and Purpose of Each Reserve
Capital Reserve

Capital reserve has been primarily created on amalgamation in earlier years. The same can be utilised in
accordance with the provisions of the Companies Act, 2013.

Capital Redemption Reserve

The Act requires that where a company purchases its own shares out of free reserves or securities premium
account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital
redemption reserve. The capital redemption reserve may be applied by the company, in paying up unissued
shares of the company to be issued to shareholders of the company as fully paid bonus shares. The Company
had established this reserve pursuant to the redemption of preference shares issued in earlier years.

Securities Premium

Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for
limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act,
2013.

General Reserve

Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net
income at a specified percentage in accordance with applicable regulations. The purpose of these transfers
was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the
Company for that year, then the total dividend distribution is less than the total distributable results for that
year. Consequent to introduction of Companies Act, 20 13, the requirement to mandatorily transfer a specified
percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred
to the general reserve can be utilised only in accordance with the specific requirements of Companies Act,
2013.

Retained Earnings

Retained earnings are the profits/(losses) that the Company has earned/incurred till date, less any transfers
to general reserve, dividends paid to shareholders. Retained earnings includes re-measurement gain/(loss) on
defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earning
is a free reserve available to the Company.

@ In compliance with the provisions laid under Section 135 of the Companies Act, 2013 read with Companies (Corporate
Social Responsibility Policy) Rules, 2014 and Companies (Corporate Social Responsibility Policy) Amendment Rules,
2021, the Company has provided for expenditure towards unspent Corporate Social Responsibility (CSR) towards
on-going projects. Subsequent to the year-end, the said amount which is remaining unspent under Section 135(5) of
the Act, on account of on-going projects, has been transferred to a special account opened by the Company within
prescribed time limit in a scheduled bank.

In respect of other than on-going projects, there are no unspent amounts that are required to be transferred to a fund
specified in Schedule VII of the Companies Act, in compliance with Second Proviso to Sub-section 5 of Section 135 of
the Act.

*Amount is below the rounding off norms adopted by the Company.

33 The Company has lease contracts for various lands which has lease terms between 30 and 999 years. The Company’s
obligations under its leases are secured by the lessor’s title to the leased assets. Generally, the Company is restricted
from assigning and subleasing the leased assets. There are several lease contracts that include extension and
termination options and Company had initially made one-time lump-sum lease payments and there is no further
cash outflow. For carrying amounts of right-of-use assets recognised and the movements during the period (Refer
Note 5.3).

The Company also has cancellable lease arrangements for certain accommodation. Terms of such lease include
one month’s notice by either party for cancellation, option for renewal on mutually agreed terms and there are no
restrictions imposed by such lease arrangements. The Company has applied the ‘short-term lease’ exemptions for
these leases. Rental expense recorded for short-term leases or cancellable in nature amounts to Rs. 3.39 Crores
(Previous Year - Rs. 3.51 Crores).

36 Employee Benefits

(I) Post-employment Defined Benefit Plans

(A) Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The gratuity
plan is governed by the Payment of Gratuity Act,1972 without ceiling limit, except Rs. 0.20 Crore for Powmex
division. As per the plan, the Gratuity Fund Trusts, administered and managed by the Trustees and funded
primarily with Life Insurance Corporation of India (LICI), make payment to vested employees at retirement,
death, incapacitation or termination of employment, of an amount based on the respective employee’s salary
and the tenure of employment. Vesting occurs upon completion of five years of service. The Trustees are
responsible for the overall governance of the plan and to act in accordance with the provisions of the trust
deed and rules in the best interests of the plan participants. Each year an Asset-Liability matching study is
performed in which the consequences of the strategic investment policies are analysed in terms of risk and
return profiles. Investment and contribution policies are integrated within this study. Liabilities with regard
to the Gratuity Plan are determined by actuarial valuation as set out in Note 2(p)(ii) above, based upon which,
the Company makes contributions to the Employees’ Gratuity Funds.

Assumptions regarding future mortality experience are based on mortality tables of ‘Indian Assured Lives
Mortality (2012-2014) published by the Institute of Actuaries of India’.

The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant
factors, such as demand and supply in the employment market.

* Net off of Rs. 0.72 Crore shown under Advance to Gratuity (Refer Note 13) (31st March, 2025 - Rs. 0.01 Crore).

@ Recognised under ‘Contribution to Provident and Other Funds’ in Note 25.

(B) Provident Fund

Contributions towards provident funds are recognised as expense for the year. The Company has set up
Provident Fund Trusts in respect of certain categories of employees which are administered by Trustees. Both
the employees and the Company make monthly contributions to the Funds at specified percentage of the
employee’s salary and aggregate contributions along with interest thereon are paid to the employees/nominees
at retirement, death or cessation of employment. The Trusts invest funds following a pattern of investments
prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate
of interest declared annually by the Government under The Employees’ Provident Funds and Miscellaneous
Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.

In view of the Company’s obligation to meet shortfall, if any, on account of interest, Provident Fund Trusts set
up by the Company are treated as defined benefit plans.

The Actuary has carried out actuarial valuation of plan’s liabilities and interest rate guarantee obligations
as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in
the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of
Rs. 0.02 Crore (Previous Year - Rs. 0.10 Crore) has been provided towards future anticipated shortfall with
regard to interest rate obligation of the Company as at the Balance Sheet date. Further during the year, the
Company’s contribution of Rs. 0.21 Crore (Previous Year - Rs. 0.24 Crore) to the Provident Fund Trusts has
been expensed under the ‘Contribution to Provident and Other Funds’ in Note 25. Disclosures given hereunder
are restricted to the information available as per the Actuary’s Report -

(II) Post-employment Defined Contribution Plans

During the year, an amount of Rs. 14.09 Crores (Previous Year - Rs. 12.70 Crores) has been recognised as
expenditure towards above defined contribution plans of the Company.

(A) Superannuation Fund

Certain categories of employees of the Company participate in superannuation, a defined contribution plan
administered by the Trustees. The Company makes quarterly contributions based on a specified percentage
of each covered employee’s salary. The Company has no further obligations under the plan beyond its annual
contributions.

(B) Provident Fund

Certain categories of employees of the Company receive benefits from a provident fund, a defined contribution
plan. Both the employee and employer make monthly contributions to a government administered fund at
specified percentage of the covered employee’s qualifying salary. The Company has no further obligations
under the plan beyond its monthly contributions.

(III) Leave Obligations

The Company provides for accumulation of leave by certain categories of its employees. These employees can
carry forward a portion of the unutilised leave balances and utilise it in future periods or receive cash (only in
case of earned leave) in lieu thereof as per the Company’s policy. The Company records a provision for leave
obligations in the period in which the employee renders the services that increases this entitlement.

The total provision recorded by the Company towards this obligation was Rs. 32.61 Crores (including Past
Service Cost amounting to Rs. 3.85 Crores) and Rs. 28.58 Crores as at 31st March, 2026 and 31st March,
2025 respectively. The amount of the provision is presented as current, since the Company does not have an
unconditional right to defer settlement for any of these obligations. However, based on past experience, the
Company does not expect all employees to take the full amount of accrued leave or require payment within the
next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next
12 months. Also Refer Note 45.

(IV) Risk Exposure

Through its defined benefit plans, the Company is exposed to some risks, the most significant of which are
detailed below:

Discount Rate Risk

The Company is exposed to the risk of fall in discount rate. A fall in discount rate will eventually increase the
ultimate cost of providing the above benefit thereby increasing the value of the liability.

Salary Growth Risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan
participants. An increase in the salary of the plan participants will increase the plan liability.

Demographic Risk

In the valuation of the liability, certain demographic (mortality and attrition rates) assumptions are made. The
Company is exposed to this risk to the extent of actual experience eventually being worse compared to the
assumptions thereby causing an increase in the benefit cost.

Investment Risk

The present value of the defined benefit plan liability is calculated using a discount rate which is determined
by reference to market yields at the end of the reporting period on government bonds. If the actual return on
plan asset is below this rate, it will create a plan deficit. However, the risk is partially mitigated by investment
in LIC managed fund.

37 Segment InformationA. Description of Segments and Principal Activities

The Company’s Executive Director examines the Company’s performance on the basis of its business and has
identified three reportable segments:

a) Graphite and Carbon Segment engaged in the production of Graphite Electrodes, Other Miscellaneous
Graphite and Carbon Products and related Processing/Service Charges.

b) Steel Segment engaged in manufacturing of High Speed Steel and Alloy Steel.

c) Others Segment engaged in manufacturing/laying of GRP Pipes (Also Refer Note 4.10) and Power
Generating Unit exclusively for outside sale.

Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss
in the Standalone Financial Statements. Also, the Company’s borrowings (including finance costs), income
taxes, investments and derivative instruments are managed at head office and are not allocated to operating
segments.

Sales between segments are carried out on cost plus appropriate margin and are eliminated on consolidation.
The segment revenue is measured in the same way as in the Statement of Profit and Loss.

Segment assets and liabilities are allocated based on the operations of the segment and the physical location
of the assets.

(iv) Terms and Conditions of Transactions with Related Parties -

Transactions relating to dividend were on the same terms and conditions that applied to other shareholders. No provisions
are held against receivables from related parties. There are no loans outstanding with related parties other than disclosed

above.

Sales made to / purchases made from related parties are on the same terms as applicable to third parties in an arm’s length
transaction and in the ordinary course of business. The Company mutually negotiates and agrees prices, discount and
payment terms with the related parties by benchmarking the same to transactions with non-related parties. Trade receivables
and Trade payable outstanding balances are unsecured, interest free and require settlement in cash. No guarantee or other
security has been received / given against these receivables / payables.

# As the future liability for gratuity is provided on actuarial basis for the Company as a whole, the amount pertaining to an
individual is not ascertainable and therefore, not included above.

* Amounts are below the rounding off norm adopted by the Company.

(ii) Fair Values

The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods
and assumptions used to estimate the fair values are consistent with those used for the year ended 31st March, 2025.
The following methods and assumptions were used to estimate the fair values:

(a) The fair values of the quoted shares and exchange traded funds are based on price quotations at the reporting
date. The fair value of unquoted equity shares of National Stock Exchange Limited and Godi India Private Limited
(GIPL) and compulsorily convertible preference share of GIPL have been estimated using a discounted cash
flow analysis, option pricing method, net asset value, comparable companies multiple method and comparable
transaction method as determined appropriate. The valuation requires management to make certain assumptions
about the model inputs, including forecast cash flows, discount rate, credit risk, volatility, earnings per share and
price earnings ratio of comparable companies in the sector. Cost of other unquoted equity instruments has been
considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements
and cost represents the best estimate of fair value within that range. The probabilities of the various estimates
within the range can be reasonably assessed and are used in management’s estimate of fair value for these
unquoted equity investments, as applicable.

(b) In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of
these mutual fund units in the published statements as at the year end. Net asset values represent the price
at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such
units from the investors. Accordingly, such net asset values are analogous to fair market value with respect to
these investments, as transactions of these mutual funds are carried out at such prices between investors and
the issuers of these units of mutual funds.

(c) The management has assessed that the fair values of Trade Receivables, Cash and Cash Equivalents, Other
Bank Balances, Other Financial Assets, Investments in Debentures, Bonds, Corporate Deposits, Trade Payables,
Borrowings (including Interest Accrued) and Other Financial Liabilities approximate to their respective carrying
amounts largely due to the short-term maturity of these instruments.

(d) Investments in venture capital funds are valued using valuation techniques, which employs the use of market
observables inputs and the assessment of Net Asset Value (NAV) given by funds.

(e) Perpetual Bonds and Market Linked Debentures are valued based on the trends observed in primary and secondary
markets mainly Volume Weighted Average Yield (VWAY) of primary reissuances of the same ISIN through book
building and secondary trades in the same ISIN of the same issuer of similar maturity.

(f) The fair value of remaining financial instruments is determined on the basis of discounted cash flow model using
current lending/discount rates, as considered appropriate.

For financial assets carried at fair value, the carrying amounts are equal to their respective fair values.

(iii) Fair Value Hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments
that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are
disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in
determining fair value, the Company has classified its financial instruments into three levels prescribed under the
accounting standard. An explanation of each level follows below -

Level 1 : Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2 : The fair value of financial instruments that are not traded in an active market (for example, over-the-counter
derivatives) is determined using valuation techniques which maximise the use of observable market data and rely
as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.

Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3. This is the case for unlisted equity securities included in level 3.

The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the
reporting period. There are no transfers between level 1 and level 2 fair value measurements during the year ended
31st March, 2026 and 31st March, 2025.

Fair Value Measurements using Significant Unobservable Inputs (Level 3)

Fair valuation of unquoted equity investments is based on valuation report using given weighted average of net asset
value, comparable companies multiple method, option pricing method and comparable transaction method. A change in
significant unobservable inputs used in such valuation (mainly earnings per share and price earnings ratio of comparable
companies in the sector) is not expected to have a material impact on the fair values of such assets as disclosed above.

40. Financial Risk Management

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

The Company’s senior management oversees the management of above risks. The senior executives working to manage the
financial risks are accountable to the Audit Committee and the Board of Directors. This process provides assurance to the
Company’s senior management that the Company’s financial risks-taking activities are governed by appropriate policies
and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies
and the Company’s risk appetite.

This Note explains the sources of risk which the entity is exposed to and how the entity manages the risk. The Board of
Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(A) Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is
exposed to credit risk from its operating activities (primarily Trade Receivables) and from its investing activities comprising
Deposits with Banks, Investments in Mutual Funds and Debentures.

Trade Receivables

Trade receivables are typically unsecured and are derived from revenue earned from customers. Customer credit risk is
managed by each business unit subject to the Company’s established policy and procedures which involve 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. Outstanding customer receivables are regularly monitored and any shipments
to major customers are generally covered by letters of credit or other forms of credit assurance.

The Company’s exposure to customers is diversified and is monitored by the Company’s senior management periodically.
Other Financial Assets

Credit risk from balances with banks, term deposits, loans, investments, corporate deposits and derivative instruments
is managed by Company’s finance department. Investments of surplus funds are made only with approved counterparties
who meet the minimum threshold requirements. The Company monitors ratings, credit spreads and financial strength of
its counterparties.

The Company’s maximum exposure to credit risk for the components of the Balance Sheet as of 31st March, 2026 and 31st
March, 2025 is the carrying amounts as disclosed below.

Financial Assets that are neither Past Due nor Impaired

None of the Company’s cash equivalents with banks, loans and investments were past due or impaired as at 31st March,
2026 and 31st March, 2025. Of the total trade receivables, Rs. 386.17 Crores as at 31st March, 2026 and Rs. 296.87 Crores
as at 31st March, 2025 consisted of customer balances that were neither due nor impaired as at such respective dates.

Financial Assets that are Past Due but not Impaired

The Company’s credit period for customers generally ranges from 0 - 180 days. The ageing of trade receivables that are past
due but not impaired (net of impairment) is given below:

Receivables are deemed to be past due or impaired with reference to the Company’s normal terms and conditions of
business. These terms and conditions are determined on a case-to-case basis with reference to the customer’s credit quality
and prevailing market conditions. Receivables that are classified as ‘past due’ in the above tables are those that have not
been settled within the terms and conditions that have been agreed with that customer.

Other than trade receivables, the Company has no significant class of financial assets that is past due but not impaired.

(B) Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations
without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to
meet its cash and collateral requirements. The Company closely monitors its liquidity position and maintains adequate
sources of financing.

(C) 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, debt and equity investments and derivative financial instruments.

Foreign currency risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. The Company transacts business in local currency and in foreign currencies (primarily
US Dollar and Euro). The Company has foreign currency trade receivables, trade payables and other financial assets/
liabilities and is therefore, exposed to foreign currency risk.

The Company strives to achieve asset-liability offset of foreign currency exposures and only the net position is hedged where
considered necessary. The Company manages its foreign currency risk by hedging appropriate percentage of its foreign
currency exposure per established risk management policy.

The Company uses forward exchange contracts to hedge the effects of movements in foreign exchange rates on foreign
currency denominated assets and liabilities.

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 risk of changes in market interest rates relates primarily to
the Company’s debt interest obligation. Further, the Company engages in financing activities at market linked rates, any
changes in the interest rate environment may impact future rates of borrowings. To manage this, the Company may enter
into interest rate swaps. The management also maintains a portfolio mix of floating and fixed rate debt.

The Company’s fixed rate borrowings and investments comprising Deposits with Banks, Commercial Papers, Corporate
Deposits and Bonds/Debentures are carried at amortised cost. They are, therefore, not subject to interest rate risk as
defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of changes in
market interest rates.

(iii) Equity Price Risk

The Company invests in listed and non-listed equity securities, exchange traded fund which are susceptible to market price
risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk
through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are
submitted to the Company’s senior on a regular basis.

(iv) Securities Price Risk

Securities price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded
prices.

The Company invests its surplus funds in various debt instruments. These comprise of mainly liquid schemes of mutual
funds, perpetual bonds & market linked debentures. To manage its price risk arising from investments in mutual funds,
perpetual bonds and market linked debentures, the Company diversifies its portfolio.

These investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields
which may impact the return and value of such investments.

(a) Securities Price Risk Exposure

The Company’s exposure to securities price risk arises primarily from investments in mutual funds, perpetual bonds and
market linked debentures held by the Company and classified in the Balance Sheet as fair value through profit or loss (Refer
Note 39).

(b) Sensitivity

The sensitivity of profit or loss to changes in Net Assets Values (NAVs) and interest rate as at year end for investments in
mutual funds, perpetual bonds and market linked debentures and venture capital funds.

(v) Commodity Price Risk

Exposure to market risk with respect to commodity prices primarily arises from the Company’s sales of graphite electrodes,
including the raw material components for such products. Cost of raw materials forms the largest portion of the Company’s
cost of sales. Market forces generally determine prices for the graphite electrodes sold by the Company. These prices may be
influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global
and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the
Company earns from the sales of graphite electrodes. Commodity price risk exposure is evaluated and managed through
operating procedures and sourcing policies. The Company has not entered into any derivative contracts to hedge exposure
to fluctuations in commodity prices.

41 Capital Management
(a) Risk Management

The Company’s objectives when managing capital are to -

• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and

• maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.

The Company monitors capital on the basis of the Gearing Ratio. Net debt are long-term and short-term debts as reduced
by cash and cash equivalents. The Company is not subject to any externally imposed capital requirements. The Company’s
policy is to keep the gearing ratio between 0% and 15%.

The following table summarises the capital of the Company:

# Second Charge existed for all the periods presented for loans repayable on demand from banks disclosed under Current
Borrowings (Refer Note 15).

43 Based on income tax assessment orders received by the Company in respect of Assessment Years 2018-19 and 2019-20,
the Company had received refunds amounting to Rs. 417.10 Crores (Previous Year - Rs. 417.10 Crores) in earlier years.
The Company had preferred appeals against the short allowance of deduction claimed by the Company. Pending disposal
of such appeals, no credit/ adjustment has been made on a prudent basis.

44 Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of
GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Hon’ble High Court at Calcutta
vide Order dated 22nd May, 2009, such assets and liabilities remains included in the books of the Company under the
name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier
years).

45 On November 21, 2025, the Government of India notified provisions of 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
(collectively referred to as the ‘New Labour Codes’) which consolidate twenty nine existing labour laws into a unified
framework governing employee benefits during employment and post employment. The Company has assessed and
disclosed the incremental impact of these changes on the basis of the best information available, consistent with the
guidance provided by the Institute of Chartered Accountants of India. Considering the impact arising out of an enactmen
of the new legislation is an event of non-recurring nature, the Company has presented this incremental impact aggregating
Rs. 10.64 Crores consisting of certain employee benefits primarily arising due to change in wage definition under “Exceptiona
Item” in the standalone financial statements for the year ended 31st March, 2026. The Company continues to monitor th*
finalisation of Central and State rules, clarifications from the Government on other aspects of the New Labour Codes and
will provide appropriate accounting effects based on such developments as needed.

46 The Company, in accordance with the applicable Ind AS has recognized the related inventory on Net Realizable Value (NRV
basis to the extent applicable and has accordingly written down the carrying cost of inventory. The value of such write down
(Balance Sheet position) as at 31st March, 2026 is Rs. 16.87 Crores (Previous Year - Rs. 17.88 Crores) in respect of raw
materials, Rs. 21.37 Crores (Previous Year - Rs. 79.67 Crores) in respect of work-in-progress and Rs. 6.39 Crores (Previous
Year - Rs. 12.20 Crores) in respect of finished goods respectively, aggregating to Rs. 44.63 Crores (Previous Year - Rs
109.75 Crores) (Refer Note 12.2).

47 The Company has used accounting software for maintaining its books of account which has a feature of recording audi
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software
except that audit trail feature is not enabled at the database level insofar as it relates to SAP HANA accounting software
Further, no instance of audit trail feature being tampered with was noted in respect of accounting software where the audi
trail has been enabled.

Additionally, at application level, the audit trail of prior years have been preserved by the Company as per the statutory
requirements for record retention to the extent it was enabled and recorded in the respective years.

49 Other Statutory Information

(i) No proceedings has been initiated or are pending against the Company for holding any benami property under the
Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) The Company does not have any transactions with companies struck off under Section 248 of Companies Act, 2013
or Section 560 of Companies Act, 1956.

(iii) There are no charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company has not traded or invested in crypto currency or virtual currency during the financial year.

(v) The Company has not advanced or loaned or invested funds (either from borrowed funds or share premium or any
other sources or kind of funds) to or in any other persons or entities, including foreign entities (Intermediaries) with
the understanding that the Intermediary shall:

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

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

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

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

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

(vii) The Company does 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.

(viii) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.

(ix) The Company has no Core Investment Companies (CICs) as a part of the Group, which are registered with the Reserve
Bank of India.

(x) The Company is in compliance with the number of layers prescribed under clause (87) of Section 2 of the Companies
Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).