Fiscals 2020, 2019 and 2018, our capital expenditure aggregated to % 507.29 million, = 1,206.01 million, =
4,559.86 million and % 1,811.24 million, respectively. As of the nine months ended December 31, 2020 and for
Fiscals 2020, 2019 and 2018, the Gross Block was 2 22,307.42 million, = 21,855.56 million, = 20,700.44 million
and 2 16,284.26 million.

For the nine months ended December 31, 2020 and for Fiscals 2020, 2019 and 2018, our ROCE was 10.55%,
13.80%, 18.66% and 14.00%, while, given our net worth of % 7,161.88 million, % 6,634.75 million, = 6,278.36
million and 5,412.34 million as on December 31, 2020 and as on March 31, 2020, 2019 and 2018, respectively,
our ROE for the same periods was 7.07%, 6.19%, 15.51% and 5.83%.

Our finance costs have historically been significant as we have undertaken significant capital expenditure in the
earlier years of our business, with a view to further enhance our machining and manufacturing capacities, such as
commissioning the new unit in Pune in 2019 for manufacturing storage solutions. Our finance costs include
interest expenses, other borrowing costs and net gain/loss on foreign currency transactions and translation.
Historically, finance costs have been a material part of our expenses and increased by 31.93% from = 1,124.83
million in Fiscal 2018 to = 1,484.00 million in Fiscal 2020. As a percentage of our total income, our finance costs
have increased from 7.39% of our total income for Fiscal 2018 to 9.89% for Fiscal 2020, primarily as a result of
increase in interest expenses on our long term borrowings to fund our capital expenditure on account of increased
borrowings during this period to meet our high working capital requirements during this period.

As of December 31, 2020, our aggregate outstanding borrowings (including sales bill discounting, sales/purchase
invoice bill discounting, buyer’s credit and letter of credit facilities availed by our Company) was 2 8,901.12
million. Our borrowings increased by = 553.86 million, or 5.62%, from % 9,852.63 million in Fiscal 2019 to =
10,406.49 million in Fiscal 2020, primarily as a result of additional borrowings availed of by us at the end of
Fiscal 2020 to mitigate any unforeseen requirements due to COVID-19 pandemic. For further information, see
Objects of the Offer - Details of the Objects of the Fresh Issue - Repayment/pre-payment, in full or part, of
certain borrowings availed of by our Company” and “Financial Indebtedness” on pages 81 and 322,
respectively.

The actual amount and timing of our future capital requirements may differ from estimates as a result of, among
other factors, unforeseen delays or cost overruns, unanticipated expenses, regulatory changes, economic
conditions, engineering design changes, technological changes and additional market developments and new
opportunities in the automotive, industrial and engineering segments.

Critical Accounting Policies
Useful life of property, plant and equipment and intangibles

The assessment of the useful life of each asset by considering the historical experience and expectations regarding
future operations and expected usage, estimated technical obsolescence, residual value, physical wear and tear
and the operating environment in which the asset is located needs significant judgment by our management. In
case of intangibles, the useful life is determined based on the period over which future economic benefit will flow
to us.

Tools in use

The assessment of useful life of tools in use has been done considering the historical experience and estimated
refurbishment cycle and operating environment.

Income Taxes

The calculation of income taxes requires judgment in interpreting tax rules and regulations. Management judgment
is used to determine the amounts of deferred tax assets and liabilities and future tax liabilities to be recognized.

Fair Value

Certain financial instruments, such as investments in equity securities, derivative financial instruments and certain
elements of borrowings, are carried in the financial statements at fair value, with changes in fair value reflected
in the income statements. Fair values are estimated by reference to published price quotations or by using other
valuation techniques that may include inputs that are not based on observable market data, such as discounted
cash flows analysis.

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