The cost of inventories recognized as an expense during the year in respect of continuing operations was Rs. 40939.71 Lakhs for the year ended 31st March 2022 and Rs. 33571.85 Lakhs for the year ended 31st March 2021.

The amount of write-down of inventories to net realisable value recognised as an expense was Rs.2546.07 Lakhs for the year ended 31st March 2022 and Rs.2679.79 Lakhs for the year ended 31st March 2021. The amount of goods in transit is Rs.818.44 lakhs (Rs. 340.24 lakhs for previous year)

The mode of valuation of inventories has been stated in note "m" in significant accounting policies.

c) Rights, Preference and restrictions attached to Equity shares

1) The Company has only one class of Equity shares having a face value of Rs 2/- each. Each holder of equity share is entitles to one vote per share held. In the event of liquidation of Company, the holders of equity share will be entitles to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to the number of equity shares held by the share holders.

2) The financial statements of the company were approved by Board of Directors on 28-05-2022.

‘Forfeited Debentures have been transferred to Capital Reserve on total redemption of the remaining debentures in the same series.

General reserve: General Reserve is created out of profit after tax earned by the Company by way of transfer from surplus in the statement of profit and loss.The Company can use this Reserve for payment of dividend and issue of fully paid-up shares. As General Reserve is“created by transfer of one component of equity to another and is not an item of other comprehensive income."

Securities Premium: This reserve represents the premium on issue of shares and can be utilised in accordance with the provision of the Companies Act 2013.

Surplus in Profit & Loss; This Reserve represents the cumulative profits of the Company. This reserve can be utilised for the payment of dividend and other purposes in accordance with the provisions of the Companies Act 2013.

Other Comprehensive Income :

Investment Revaluation Reserve: This Reserve represent the cumulative gain or loss arising on Revaluation of Equity Instruments measured at Fair value through Other Comprehensive Income, net of amounts reclassified,if any,to retained earnings when those investments are disposed of.

Acturial Gain/Loss Reserve: This Reserve represents the cumulative acturial gains/losses on account of remeasurement of defined benefit plans, net of amounts reclassified,if any , to retained earnings.

NOTE:

1) The amount that can be distributed by the company as dividends to equity shareholders is determined based on separate financial statements and as per the requirements of companies Act 2013.

2) The Board of Directors, at their meeting held on 11th August, 2021, recommended for the sub-division of equity shares of the Company from existing face value of Rs. 10/- each to face value of Rs.2/- each (i.e. Split of 1 equity share of Rs.10/- each into 5 equity shares of Rs.2/- each), and same has been approved by the shareholders in the Annual General Meeting of the Company held on 23rd September, 2021. The Board of Directors, at their meeting held on 13th November, 2021 fixed 31st December 2021 as the record date. Accordingly, 1 Equity Share of the Company of Rs. 10/- each has been sub-divided into 5 equity shares of Rs. 2/- each on the record date 31st December 2021, and Earnings Per Equity Share has been restated for all the periods presented.

3) For the year ended March 31,2022, the Board of Directors proposed a dividend of Rs.4/- per share of Rs.2/- each face Value is subject to the approval of Shareholders in the ensuing Annual General Meeting.

a) Cash Credit is Secured by Hypothecation of inventories and receivables and collaterally secured by a First charge on the fixed assets of the company except those at the COP division and Wind power divisions in Tamilnadu and Ramagiri,3 MW Solar Plant at Kovvur, and ISRO Plant assets, ranking pari passu among the members of the consortium of working capital lending banks.

b) There is no Foreign Currency Exposure hedged by derivative Instruments in the current and previous years.

As per the enterprise's accounting policy acturial gains and losses are recognized immediately during the same year itself. The above information is Certified by the Actuary.

Risk exposure and asset-liability matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future benefit payments.

1) Liability risks

a) Asset-liability mismatch risk

Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements.

b) Discount rate risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice can have a significant impact on the defined benefit liabilities.

c) Future salary escalation and inflation risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at management’s discretion may lead to uncertainties in estimating this increasing risk.

2) Asset risks

All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India and other insurance companies. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.

Financial Instruments a) Management of Credit Risk

Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primary trade receivables) and from its investing activities, including deposits with banks and other financial instruments. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom credit has been granted after obtaining necessary approvals for credit. The collection from the trade receivables are monitored on a continuous basis by the receivables team.

Credit risk arising from trade receivables is managed in accordance with the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on a detailed study of credit worthiness and accordingly individual credit limits are defined/modified.

(c) Under the provisions of "The Levy Sugar Price Equalization Fund Act, 1976" the excess amount collected over the notified levy sale price pursuant to the interim stay granted by the Courts vests in the fund. In a writ petition No: 1534/76 filed by the Company against these provisions, the High Court of Andhra Pradesh has held that provisions of the said Act are not applicable to the excess collections made prior to 15-6-1972, against which the Union Government filed a civil appeal No: 274/79 before the Supreme Court, which is pending.

While admitting the appeal, the Supreme Court granted stay of operation of Judgment of A.P High Court in W.P.No: 1534/76 and directed the Company to furnish a Bank Guarantee for Rs.9.60 lakhs being the difference in levy Sugar price for the Sugar Season 1969-70. The Bank Guarantee was furnished on 7-12-1979 in favour of Registrar, High Court of Andhra Pradesh. Interest, if any, payable under the said Act, estimated at Rs. 64.39 lakhs (Rs 62.66 lakhs) has not been provided for in the accounts pending final legal decision in the matter. However, an amount of Rs.66.80 lakhs was appropriated during the financial year 2008-2009 by Govt India, New Delhi, against payment of buffer stock subsidy dues, which was protested by the company.

40. Consequent to the judgement given by the Hon'ble Supreme Court of India vide its order dated 29th November 2019, upholding the power of Andhra Pradesh Electricity Regulatory Commission (APERC)to determine the levy of wheeling charges, the company has received demands from Andhra Pradesh Eastern Power Distribution Company Limited (APEPDCL), for an amount of Rs. 3092.18 lakhs in respect of four service numbers situated at Kovvuru, Taduvai, Tanuku and Gutala. The company has not received any demand in respect of one service situated at Saggonda from APEPDCL, which is not ascertainable on account of various pending cases at Hon'ble High Court of Andhra Pradesh and Telangana and Hon'ble Supreme Court of India, pertaining to wheeling charges and Allocation of Surplus power generated and transmitted by Andhra Pradesh Gas Power Corporation Limited (APGPCL) to its participating industries. Considering the revised wheeling charges as determined by APERC, in service situated at Saggonda, the company has to get refund of wheeling charges.

In this regard, the company has made liability towards differential wheeling charges and on account of allocation of surplus power based on the bills raised by APEPDCL for an amount of Rs. 8177.56 lakhs. Further, the differential payments made to APGPCL were shown as advance to the extent of Rs. 3764.71 lakhs (including back up bank guarantees en cashed to the extent of Rs. 520.01 lakhs by APGPCL due to invocation of bank guarantees by AP Transco., consequent to the judgement of Hon'ble Supreme Court of India on wheeling charges).

Pending disposal of cases on account of Allocation of Surplus power before Hon'ble Supreme Court of India, the liability towards wheeling charges as per APERC and energy charges payable to APEPDCL is unascertainable. Hence, the demands issued by APEPDCL need further revision and the company has contended for the demands raised by APEPDCL.

Further, APEPDCL is raising monthly electricity bills without considering the power wheeled from APGPCL and continue to disclose this unadjusted amount as arrears in the monthly bills. However, monthly Electricity payments made by the Company as per the Directions of Honourable Courts are being acknowledged by APEPDCL.