Note:

Buildings include '250, being cost of five ordinary shares of '50 each of Nariman Bhavan Premises Co-operative Society Limited and '500 being cost of ten

ordinary shares of '50 each of Parekh Market Premises Co-Operative Society Limited, which entitle the ownership.

¹ The title deeds of immovable properties included in property plant and equipment are held in the name of the Company, except title deeds of immovable properties having gross carrying amount aggregating ' 21.3 million (2022: ' 21.3 million) and net carrying amount aggregating ' 21.3 million (2022: ' 21.3 million),which have been transferred to the Company, pursuant to the Schemes of Amalgamation (refer Note 47) and their title transfer proceedings are under progress.

² The transaction of sale of assets of Mechatronics business to Schaeffler Technologies Solution India Private Limited, which was approved by the Board of Directors of the Company at its meeting held on 27 July 2022. The assets net of WDV ' 325.3 million which were disclosed as assets held for sale, have been sold during the year.

During the year ended December 31, 2023 the Company has acquired 100% shares 1,204,758 of '10/- each of KRSV Innovative Auto Solutions Private Limited (in the following “Koovers” ) for a total purchase consideration of ' 1,424.0 million in 100% cash consideration. Consquently, Koover’s has became a subsidiary of the Company. (refer Note 53)

The Company follows suitable provisioning norms for writing down the value of Inventories towards slow moving and non-moving inventory. As at December 31, 2023, provision for write-down of inventories to net realisable value is '949.3 million (2022: '1,148.6 million).

b) Rights, preferences and restrictions attached to equity shares:

The Company has a single class of equity shares having par value of '2 per share. Accordingly, all equity shares rank equally with regard to one vote per share held. The dividends proposed by the Board of directors is subject to the approval of shareholders at the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the Company, the equity shareholders are eligible to receive assets of the Company, after distribution of all preferential amounts, in the proportion to their shareholding.

e) The Company in aggregate has not issued, any equity shares allotted as fully paid up pursuant to contract without consideration received in cash, Bonus Shares issued and shares bought back during the period of 5 years immediately preceding the financial year.

The above information has been compiled by the Company on the basis of information made available by vendors during the year ended December 31, 2023 and year ended December 31, 2022. This has been relied upon by auditors

The Company’s exposure to currency and liquidity risks related to trade payables is disclosed in Note 40.

The management determines the information reported under Note 44 and 48 reporting is sufficient to meet the disclosure objective with respect to disaggregation of revenue and geographical segment under Ind AS 115 Revenue from contract with Customers. Hence, no separate disclosures of disaggregated revenues are reported.

Amounts in brackets represents previous year amounts.

Terms and conditions with related parties;

The sales to and purchases from related parties including fixed Assets and other expenses are made in the normal course of business and on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free.

Names and details of fellow subsidiaries, affiliates and subsidiary having transaction value in excess of 10% in line transactions during the year.

39. Derivative instruments:

The Company’s exposure to foreign currency fluctuations relates to foreign currency assets, liabilities and forecasted cash flows. The Company limits the effects of foreign exchange rate fluctuations by following established risk management policies including the use of derivatives like forward contracts. The Company has entered into foreign currency forward contracts, majority having maturity of less than one year from reporting date, to hedge its risks associated with foreign currency fluctuations relating to such highly probable transactions. The currencies in which these transactions are mainly denominated is in US Dollars.

The Company has import and export transactions in foreign currencies. Imports are higher than exports and hence the Company has foreign currency exposure to the extent of imports being higher than exports. The risk of foreign currency fluctuation is mitigated through hedging. Please refer Note 39 for details of foreign currency exposure.

The Company’s exposure to foreign currency risk at the end of reporting period are as follows:

Foreign Currency Sensitivity

The following table demonstrates sensitivity to a reasonable possible change in major foreign currencies like USD and EUR with all other variables held constant:

40. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• market risk [refer 40 (A) below]

• liquidity risk [refer 40 (B) below]

• credit risk [refer 40 (C) below]

In the course of its business, the Company is exposed primarily to aforesaid risks, which may impact the fair value of its financial instruments. The Company has a risk management system which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as credit risks. The risk management strategy is approved by Board of Directors which is implemented by the Company’s management. The risk management framework aims to create a stable business planning environment by reducing the impact of market related risks, credit risks and currency fluctuations on the Company’s earnings. The risks identified through the risk management system are analysed and evaluated by the Company’s management and reported to the Board of Directors periodically along with report of planned mitigation measures.

A) Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(i) Foreign currency risk

The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollars and Euro. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company’s functional currency (Indian Rupees).

(ii) Interest rate risk

Interest rate risk exposure: The Company does not have interest bearing borrowings and interest rate risk is towards opportunity cost on investment in tax free bonds. Surplus funds are being invested in bank deposits at fixed interest rates and the tenure is managed to match with the Company’s liquidity profile.

B) Liquidity risk

The Company’s principal sources of liquidity are cash and cash equivalents and cash flows generated from operations. The Company regularly monitors actual cash flows and forecasts to ensure that the Company maintains sufficient liquidity to meet the operation needs.

The following table shows the maturity analysis of the Company’s financial liabilities based on contractually agreed undiscounted cash flows (except lease liabilities refer Note 49) at the balance sheet date:

C) Credit Risk

Credit risk is the unexpected loss in financial instruments if the counter parties fails to discharge it’s contractual obligations in entirety and timely. The Company is exposed to credit risks arising from it’s operating and financing activities such as trade receivables, loans and advances and other financial instruments. The carrying amounts of financial assets represent the maximum credit exposure.

Trade receivables

Credit risk on trade receivables is limited due to the Company’s diversified customer base which includes public sector enterprises and reputed private corporates. For trade receivables, the Company computes expected credit loss allowance based on provision matrix which is prepared considering customer’s industry segment and historically observed overdue rate over expected life of trade receivables ranging from 0.04% to 0.78%, except for few customer where specific provisions is being created. The expected credit loss allowance is considered as a percentage of net receivable position.

41. Capital management

For the purpose of Company’s capital management, capital includes equity share capital and all other reserves attributable to equity shareholders. The Company has a long-term strategy of pursuing profitable growth. Capital is managed proactively to secure the existence of the Company as a going concern in the long-term and create financial flexibility for profitable growth in order to add value to the Company. A further aim of the capital management is to ensure long-term availability of liquidity, maintain strong credit ratings and ensure optimal capital structure in order to support business through continuing growth and maximising shareholders value. The Company funds it’s operations through internal accruals and the Management along with the Board of Directors regularly monitor the returns on capital as well as dividend levels to shareholders.

42. Employee benefits: Post employment benefit plans Defined contribution plans

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund and Superannuation Fund which are defined contribution plans. The Company has no obligations other than to make the specified contributions. The contributions are charged to the Statement of Profit and Loss as they accrue. The amount recognised as an expense towards contribution to Provident Fund for the year aggregated to ' 206.1 million (2022: ' 189.1 million) and contribution to superannuation fund for the year aggregated to ' 33.4 million (2022: ' 33.1 million).

Defined benefit plans

The Company has defined benefit plans that provide gratuity benefit. The gratuity plan entitles an employee, who has rendered at least five years of continuous service, to receive one-half month’s salary for each year of completed service at the time of retirement/exit. The Scheme is funded by the plan assets.

Financial assets other than trade receivables

Credit risk on cash and cash equivalents, bank balances other than cash and cash equivalents is limited as the Company generally invest in deposits with banks which have high credit rating assigned by external agencies. Credit risk on loans given to subsidiaries are assessed for credit risk based on the underlying valuation of the entity and their ability to repay within the contractual repayment terms. Based on the Company’s historical experience, the credit risk on other financial assets is low.

Characteristics of defined benefit plans and risks associated with them:

Valuations of defined benefit plan are performed on certain basic set of pre-determined assumptions and other

regulatory framework which may vary over time. Thus, the Company is exposed to various risks in providing the above

benefit plans which are as follows:

(i) 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 (i.e. value of defined benefit obligation).

(ii) 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 used to determine the present value of obligation will have a bearing on the plan’s liability.

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

(iv) Investment Risk: The Company has funded with well established Govt. of India undertaking & other IRDA approved agency and therefore, there is no material investment risk.

(ii) Secondary segment information

The geographical information analyses the Company’s revenues and non-current assets by the Company’s country of domicile (i.e. India) and outside India. In presenting the geographical information, segment revenue has been based on geographical location of customers and segment assets which have been based on the geographical location of the assets.

46. The tax year for the Company being the year ending March 31, 2024, provision for taxation for the year ended December 31, 2023 is aggregate of provision made for three months ended March 31, 2023 and provision based on amounts for remaining nine months ended December 31, 2023, the ultimate tax liability of which will be determined on the basis of figures for the fiscal year April 1, 2023 to March 31, 2024.

The Company’s international transactions with associated enterprises are at arm’s length, as per the independent accountant’s report for the year ended March 31, 2023. The Management believes that the Company’s international transactions with associated enterprises post March 31, 2023 continue to be at arm’s length and that transfer pricing legislations will not have any impact on the Ind AS financial statements, particularly on the amount of tax expenses for the year and the amount of provision for taxation at the year end.

In the year 2019 the Company elected to exercise the option permitted under section 115BAA of the Income-tax Act 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019 with effect from April 1, 2019. Accordingly, the Company has recognised provision for Income Tax and deferred tax expenses for the twelve months ended December 31, 2019 on the basis of estimated annual effective income tax rate.

47. Amalgamation of INA Bearings India Private Limited and LuK India Private Limited with the company

Scheme of Amalgamation of INA Bearings India Private Limited and LuK India Private Limited (jointly referred to as ‘transferor companies’) with Schaeffler India Limited, has been approved by the National Company Law Tribunal, Chennai and Mumbai Benches vide their orders dated June 13, 2018 and October 8, 2018 respectively.

48. Revenue (Ind AS 115)

The Company is manufacturing and distribution of bearings, engine systems and transmission components, chassis applications and clutch systems. All sales are made at a point in time and revenue recognised upon satisfaction of the performance obligations which is typically upon dispatch/ delivery.

49. Leases1. Practical expedients applied

• Applied discount rate based Incremental borrowing rate as per portfolio of leases of similar assets in similar economic environment with a similar period

• Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

• Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

2. The Company’s significant leasing/ licensing arrangements are mainly in respect of residential / office premises. Leases generally have a lease term ranging from 12 months to 120 months. Most of the leases are renewable by mutual consent on mutually agreeable terms.

51. Pursuant to the approval of the shareholders accorded on December 19, 2021 vide postal ballot conducted by the Company, each equity share of face value of ' 10/- per share was subdivided into 5 equity share of face value of ' 2/-per share with record date February 9, 2022.

52. Consequent to the approvals received from the Board of Directors of the Company at its meeting held on May 23, 2022, the Company has entered into a business transfer agreement on June 29, 2022 with CATENSYS India Private Limited and has sold its Chain Drive business under Automotive Technologies segment by way of a slump sale on a going concern basis for a lumpsum consideration of ' 294.2 million. The gain on sale of business amounting to ' 149.8 million has been recognised as an exceptional item in the above results.

53. The Board of Directors of the Company on August 28, 2023 had approved acquisition of 100% shares 12,04,758 of '10/-each of KRSV Innovative Auto Solutions Private Limited (in the following “Koovers” ) for a total purchase consideration of ' 1,424.0 million in 100% cash consideration. Schaeffler india Limited has completed the above acquisition by acquring 100% shareholding of Koovers on September 8, 2023 in cash consideration. Consquently, Koover’s has became a subsidiary of the Company. The expenditure towards acquistion of Koovers mainly includes professional/ consulting fees, stamp duties and other costs amounting to ' 47.0 million has been recognised as an exceptional items. Koovers offers spare parts solution to Indian Automotive aftermarket workshops via B-to-B e-commerce platform. The acquistion is in line with Schaeffler India’s strategic initiatives for growth and provides a synergy potential. It will be a key enabler for the aftermarket ecosystem, inculding distribution partner and help to play an important role in the fast growing and evolving aftermarket digital landscape.

54. Other Statutory Information

1. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

2. The Company does not have any transactions with companies struck off.

3. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the

statutory period.

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

5. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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.

6. The Company has not received any fund from any person(s) or entity(ies), 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.

7. The Company does not have any such transaction which is not recorded in the books of account 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).

55. The figures for the previous year have been regrouped/reclassified wherever necessary, to make them comparable. The impact of such reclassification/regrouping is not material to the financial statements.

56. The financial statement are approved for issued by the Board of Directors in their meeting held on February 16, 2024.