41.12 Provisions

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it is
probable that the Company will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the

consideration required to settle present obligation at the end of
reporting period, taking into account the risk and uncertainties
surrounding the obligation. When a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows (when the effect of
the time value of money is material).

Provisions for legal claims, service warranties, volume discounts
and returns are recognised when the Company has a present legal
or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation
and the amount can be reliably estimated. Provisions are not
recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that
an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.

41.13 Financial instruments

A financial instrument is any contract that gives rise to a financial
asset of one entity and a financial liability or equity instrument of
another entity.

Financial assets
Initial recognition

All the financial assets and financial liabilities are initially recognised
at its fair value plus or minus, in the case of a financial asset or
financial liability not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition or issue of the
financial asset or financial liability. However, trade receivables that
do not contain a significant financing component are measured at
transaction price.

Subsequent measurement

(a) Financial assets

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost
if it is held within a business model whose objective is to hold
the asset in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

(ii) Financial assets at fair value through other comprehensive
income (FVTOCI)

A financial asset is subsequently measured at FVTOCI if it is
held within a business model whose objective is achieved by
both collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.

(iii) Financial assets at fair value through profit or loss (FVTPL)
Financial assets which are not classified in any of the above

categories are subsequently measured at FVTPL . A gain or
loss on a debt investment that is subsequently measured at
FVTPL and is not part of a hedging relationship is recognised
in the Statement of Profit and Loss and presented net in the
period in which it arises. Interest income from these financial
assets is included in other income.

Classification of financial assets at fair value through profit
or loss

The Company classifies at FVTPL certain financial assets like
debt investments (bonds, debentures and mutual funds) that
do not qualify for measurement at either amortised cost or
FVTOCI.

Derecognition

The Company derecognises a financial asset when the
contractual rights to the cash flows from the financial asset
expire or it transfers the financial asset and the transfer
qualifies for derecognition under Ind AS 109 'Financial
Instruments'. A financial liability (or a part of a financial liability)
is derecognised from the Company's balance sheet when
the obligation specified in the contract is discharged or
cancelled or expires.

(b) Financial liabilities

Financial liabilities are subsequently carried at amortized cost
using the effective interest rate method. For trade and other
payables maturing within one year from the Balance Sheet date,
the carrying amounts approximate fair value due to short
maturity of these instruments.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amounts is
reported in the balance sheet where there is a legally enforceable
right to offset the recognised amounts and there is an intention
to settle on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the
normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.

41.14 Impairment of financial assets

The Company assesses on a forward looking basis the expected
credit losses associated with its assets carried at amortised cost.
The impairment methodology applied depends on whether there
has been a significant increase in credit risk. Note 34 details how the
Company determines whether there has been a significant increase
in credit risk. For trade receivables, the Company applies the
simplified approach required by Ind AS 109 "Financial instruments”,
which requires expected lifetime losses to be recognised from initial
recognition of the receivables.

41.15 Fair value measurement

Fair value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement
is based on the presumption that the transaction to sell the asset or

transfer the liability takes place either:

Ý in the principal market for the asset or liability, or

Ý in the absence of a principal market, in the most advantageous
market for the asset or liability.

The principal or the most advantageous market must be accessible
by the Company.

Fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing the
asset or liability, assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset takes into account
a market participant’s ability to generate economic benefits by using
the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed
in the financial statements are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that
is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for
identical assets or liabilities;

Level 2 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is directly or
indirectly observable;

Level 3 - Valuation techniques for which the lowest level input that
is significant to the fair value measurement is
unobservable.

For assets and liabilities that are recognised in the Financial
Statements on a recurring basis, the Company determines whether
transfers have occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level input that is
significant to the fair value measurements as a whole) at the end of
each reporting period.

For the purpose of fair value disclosures, the Company has
determined the classes of assets and liabilities on the basis of the
nature, characteristics and risks of the asset or liabilities and the
level of the fair value hierarchy as explained above.

41.16 Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash
and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid investments
with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts.

41.17 Contract assets

Contract Assets are recognised when the Company has the rights
to consideration in exchange for goods and services that the
Company has transferred to a customer and when such right is
conditional upon something other than passage of time.

41.18 Other operating revenue

Commission on order based sales is recognised as and when the
performance obligation is satisfied and the right to receive the
consideration is established.

41.19 Dividends

Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the entity,
on or before the end of the reporting period but not distributed at the
end of the reporting period.

41.20 Earnings per share

Basic earnings per share is calculated by dividing the net profit for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the year. For the
purpose of calculating diluted earnings per share, the net profit for
the year attributable to equity shareholders and the weighted
average number of shares outstanding during the year are adjusted
for the effects of dilutive potential equity shares, if any.

As per our report of even dated attached.

For Price Waterhouse & Co Chartered Accountants LLP For and on behalf of Board of Directors of Kennametal India Limited

Firm Registration Number: 304026E/ E300009

Shivakumar Hegde Venkatesan Vijaykrishnan Amit Laroya

Partner Managing Director Chairman

Membership Number: 204627 DIN - 07901688 DIN - 00098933

Bengaluru Bengaluru Bengaluru

August 13, 2025 August 13, 2025 August 13, 2025

Suresh Reddy K V Anupriya Garg

Chief Financial Officer Company Secretary

Bengaluru Membership Number - 18612
August 13, 2025 Bengaluru

August 13, 2025