Integrated Annual Report 2025-26 452 (ii) Financial Instruments measured at amortised cost Rupees crores Particulars Carrying Value Fair value Fair value Level 1 Level 2 Level 3 As at 31st March, 2026 Financial assets a) Investments.............................................................. 1,362.42 1,381.07 994.80 386.27 — b) Financial Services Receivable...................... 1,39,262.20 1,50,008.31 — — 1,50,008.31 Financial liabilities Non-Current Borrowings.......................................... 73,469.93 76,927.81 23,677.78 53,250.03 — As at 31st March, 2025 Financial assets a) Investments.............................................................. 1,759.30 1,793.03 1,268.53 524.50 — b) Financial Services Receivable...................... 1,23,512.32 1,25,309.28 — — 1,25,309.28 Financial liabilities Non-Current Borrowings.......................................... 79,707.19 80,865.46 22,261.52 58,603.94 — There were no transfers between Level 1 and Level 2 during the year. Valuation methodologies of financial instruments not measured at fair value Below are the methodologies and assumptions used to determine fair values for the above financial instruments which are not recorded and measured at fair value in the company’s financial statements. These fair values were calculated for disclosure purposes only. Investments The fair value of government and other securities that are quoted is based on the quoted market prices at the end of the reporting period. For other unquoted investments, the fair value is estimated by discounting expected future cash flows using current market rates. Financial Services Receivable The fair values of financial services receivables are calculated using a portfolio-based approach, grouping loans as far as possible into homogenous groups based on similar characteristics. The fair value is then extrapolated to the portfolio using discounted cash flow models that incorporate interest rate estimates considering all significant characteristics of the loans. This fair value is then reduced by impairment allowance which is already calculated incorporating probability of defaults and loss given defaults to arrive at fair value net of risk. Non-Current Borrowings The fair value of borrowings which have a quoted market price in an active market is based on its market price and for other borrowings the fair value is estimated by discounting expected future cash flows, using current interest rates. Except for the above, the carrying value of financial assets/liabilities measured at amortised cost represent reasonable estimate of fair value. 41. Significant acquisitions and changes in ownership SML Mahindra Limited (SML) (Formerly known as SML Isuzu Limited) On 1st August, 2025, the Group acquired 58.96% in SML Mahindra Limited (Formerly known as SML Isuzu Limited). SML is a listed company in India primarily in the business of manufacturing and sale of light commercial vehicles (LCVs) and medium commercial vehicles (MCVs) in the automobile industry and has a product portfolio comprising buses, trucks, and specific application vehicles. Consequent to gaining of control, the results of SML have been consolidated by the Group from 1st August, 2025 on a line-by-line basis. 40. Financial Instruments (Continued) (d) Fair Value Disclosures (Continued)
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