Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short-term and long-term debt. We are exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, our exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies. Our Board of Directors and its Audit Committee are responsible for overseeing our risk assessment and management policies. Our major market risks of foreign exchange, interest rate and counter-party risk are managed centrally by our group treasury department, which evaluates and exercises independent control over the entire process of market risk management. We have a written treasury policy, and we do regular reconciliations of our positions with our counter-parties. In addition, internal audits of the treasury function are performed at regular intervals. Components of Market Risk Foreign Exchange Risk Our foreign exchange risk arises from our foreign operations, foreign currency revenues and expenses (primarily in U.S. dollars, Russian roubles, U.K. pounds sterling, Brazilian reals, Swiss francs, Euros and Mexican pesos), foreign currency investments (primarily in U.S. dollars and Euros) and foreign currency borrowings (in Russian roubles, Mexican pesos and Brazilian reals). A significant portion of our revenues are in these foreign currencies, while a significant portion of our costs are in Indian rupees. As a result, if the value of the Indian rupee appreciates relative to these foreign currencies, our revenues measured in Indian rupees may decrease. The exchange rate between the Indian rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, we use both derivative and non-derivative financial instruments, such as foreign exchange forward contracts, option contracts, currency swap contracts and foreign currency financial liabilities, to mitigate the risk of changes in foreign currency exchange rates in respect of our highly probable forecast transactions and recognized assets and liabilities. We do not use derivative financial instruments for trading or speculative purposes. In respect of our forward option contracts and currency swaps, a 10% decrease/increase in the respective exchange rates of each of the currencies underlying such contracts would have resulted in an approximately Rs.4,059/(3,688) million increase/(decrease) in our hedging reserve and an approximately Rs.7,294/(7,192) million increase/(decrease) in our net profit from such contracts as of March 31, 2026. For details on derivative financial instruments to hedge the foreign exchange rate risk and a detailed analysis of our foreign exchange risk, please refer to Note 2 9 (“Financial instruments”) and Note 30 (“Financial risk management”) of our consolidated financial statements. Commodity Rate Risk Our exposure to market risk with respect to commodity prices primarily arises from our purchases and sales of active pharmaceutical ingredients, including the raw material components for such active pharmaceutical ingredients. These are commodity products whose prices may fluctuate significantly over short periods of time. The prices of our raw materials generally fluctuate in line with commodity cycles, although the prices of raw materials used in our active pharmaceutical ingredients business are generally more volatile. Costs of raw materials forms the largest portion of our cost of revenues. We evaluate and manage our commodity price risk exposure through our operating procedures and sourcing policies. As of March 31, 2026, we have not entered into any material derivative contracts to hedge our exposure to fluctuations in commodity prices. 97 Interest Rate Risk As of March 31, 2026, we had outstanding Rs. 3,799 million of loans carrying a floating interest rate of 3 Months T-bill + 84 bps; Rs. 41 ,500 million of loans carrying a floating interest rate of T-bill + 35 to 55 bps; Rs.12,690 million of loans carrying a floating interest rate of REPO + 75 bps; Rs.1,423 million of loans carrying a floating interest rate of Key rate + 3.48% to 3.98%; Rs.2,795 million of loans carrying a floating interest rate of TIIE + 1.35%; and Rs.727 million of loans carrying a floating interest rate of CDI + 1.55% “CDI” means the Interbank Certificate of Deposit (Certificado de Depósito Interbancário), “Key rate” means the key interest rate published by the Central Bank of Russia, “REPO” means the “Repurchasing option” rate published by the Reserve Bank of India, “SOFR” means Secured Overnight Financing Rate”, “T-bill” means India Treasury bill and “TIIE” means the Equilibrium Inter-banking Interest Rate (Tasa de Interés Interbancaria de Equilibrio). These loans expose us to risks of changes in interest rates. Our treasury department monitors the interest rate movement and manages the interest rate risk based on its policies, which include entering into interest rate swaps as considered necessary. Interest Rate Profile . The interest rate profile of our short-term borrowings from banks is as follows: As of March 31, 2026 2025 Currency(1) Interest Rate(2) Currency(1) Interest Rate(2) RUB Key rate + 348 bps to 398 bps RUB Key rate + 470 bps to 590 bps MXN TIIE + 1.35% MXN TIIE + 1.35% INR T-bill + 35 bps to 55 bps INR 7.50% REPO + 75 bps T-bill + 35 bps to 70 bps BRL CDI+1.55% BRL CDI+1.55% U.S.$ 6 Month SOFR + 10 bps to 65 bps The interest rate profile of our long-term borrowings (other than obligations under leases) is as follows: As of March 31, 2026 2025 Currency(1) Interest Rate(2) Currency(1) Interest Rate(2) Rupee term loan from bank INR 3 Months T-bill + 84 bps INR 3 Months T-bill + 84 bps (1) “BRL” means Brazilian reals, “INR” means Indian rupees, “MXN” means Mexican pesos, “RUB” means Russian rubles and “U.S.$” means U.S. dollars. (2) “CDI” means Brazilian interbank deposit rate (Certificado de Depósito Interbancário), “Key rate” means the key interest rate published by the Central Bank of Russia, “REPO” means the “Repurchasing option” rate published by the Reserve Bank of India, “SOFR” means Secured Overnight Financing Rate, “T-bill” means India Treasury bill interest rate and “TIIE” means the Equilibrium Inter-Banking Interest Rate (Tasa de Interés Interbancaria de Equilibrio). Maturity profile . The aggregate maturities of interest-bearing long-term borrowings (other than obligations under leases), based on contractual maturities, as of March 31, 2026 are as follows: Maturing in the year endingMarch 31, (All amounts in Rs. Millions) 2027 Rs. 3,799 Rs. 3,799 Counter-party risk encompasses settlement risk on derivative contracts and credit risk on cash and term deposits (i.e., certificates of deposit). Exposure to these risks is closely monitored and kept within predetermined parameters. Our group treasury department does not expect any losses from non-performance by these counter-parties. For the year ended March 31, 2026, every 10% increase or decrease in the floating interest rate component applicable to our loans and borrowings would affect our net profit by Rs.347 million. 98