Integrated Annual Report 2025-26 450 40. Financial Instruments (Continued) (d) Fair Value Disclosures (Continued) (i) Financial Instruments regularly measured using fair value - recurring items (Continued) Rupees crores Particulars Financial assets/ financial liabilities Fair Value Category Fair value Fair value hierarchy Valuation technique(s) Key inputs (for level 2 and level 3) Significant unobservable input(s) for level 3 hierarchy Relationship of unobservable inputs to fair value and sensitivity 2026 2025 11) Investment in commercial paper Financial Assets Financial instrument measured at FVTOCI - Current — 97.68 Level 2 Discounted Cash Flow and Interest rate Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counter parties. — — Financial instrument measured at FVTPL - Current 124.03 618.63 Level 2 12) Investment in certificate of deposits Financial Assets Financial instrument measured at FVTOCI - Current 170.16 325.95 Level 2 Discounted Cash Flow and Interest rate Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counter parties. — — Financial instrument measured at FVTPL - Current 773.60 2,330.40 Level 2 13) Foreign currency forwards and options, Interest rate swaps & commodity derivatives Financial Liabilities Financial Instruments measured at FVTPL - Noncurrent 7.48 114.79 Level 2 Foreign currency forwards, Interest rate swaps & commodity derivatives - Discounted Cash Flow and Interest rate Options - Black Scholes valuation model Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contract forward rates, discounted at a rate that reflects the credit risk of various counter parties. Strike rate, spot rate, time to maturity, volatility and risk free interest rate. — — Financial Instruments measured at FVTPL - Current 225.22 381.84 Level 2 14) Gross obligation to acquire noncontrolling interest Financial Liabilities Financial Instruments measured at FVTPL - Noncurrent 88.52 86.11 Level 3 Comparable Companies Method / Discounted Cash-flow / Price of recent transactions / Comparable Companies quoted multiples For Comparable Companies Method / Comparable Companies Quoted Multiples - compare the price for which comparable companies are traded on the capital market. For Discounted Cash Flow - Companies Financial projections. These include forecasts of balance sheet, statement of profit and loss account along with underlying assumptions. Interest rates to discount future cashflows, financial projections Any change (increase / decrease) in the discount factor, financial projections etc. would entail corresponding change in the valuation of gross obligation to acquire non-controlling interest. 15) Compulsory convertible preference shares Financial Liabilities Financial Instruments measured at FVTPL - Noncurrent 2,972.76 4,075.27 Level 3 Income Approach - Discounted Cash Flow/ Market Multiple approach For Discounted Cash Flow approach - The discounted cash flow method used to capture the present value of the expected future economic benefits to be derived from the ownership of these investees. The key inputs includes, long term revenue growth rates, balance sheets, statement of profit and loss along with underlying assumptions. For Market Multiple approach - In this approach fair value is derived based on market multiples like Revenue multiple, etc. Interest rates to discount future cashflows, financial projections Market multiples used for benchmarking. Increase or decrease in key assumptions, multiples will result in increase or decrease in valuation.
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