Provisions and Contingent Liabilities

Provisions 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.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. However contingent liabilities are not considered. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

34. BUSINESS RE-ORGANISATION/RE-STRUCTURING PLAN

The Hon'ble Supreme Court vide its ex-parte order dated 17 January 2020 had stayed the NCLT order dated 8 July 2019 sanctioning the Scheme of Arrangement for transfer of the Company's Special Steel Business Undertaking to VISA Special Steel Limited. The NCLT order had been given effect to and the Scheme stood implemented by the Company prior to 17 January 2020. The aforesaid stay order dated 17 January 2020 stands vacated consequent to the Hon'ble Supreme Court order dated 16 May 2024, and the Scheme of Arrangement stands affi rmed.

35. The Company has incurred net loss during the year ended 31 March 2024 which has adversely affected the net worth of the Company. The Company's financial performance has been adversely affected due to non-availability of working capital for operations, and other external factors beyond the Company's control. It is expected that the overall financial health of the Company would improve after debt resolution and improvement in availability of working capital. Accordingly, the Company has prepared the financial statements on the basis of going concern assumption.

36. SEGMENT INFORMATION

The Company is in the business of manufacturing of Ferro Alloys and hence has only one reportable operating segment as per IND AS 108 "Operating Segments". There is no reportable geographical segment of the Company.

b) Fair Value Hierarchy

The table shown below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined below:

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Notes:

(i) Current financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

(ii) Non- current financial assets and liabilities measured at amortised cost have same fair value as at 31 March 2024 and 31 March 2023.

c) Valuation Techniques

The Following Methods And Assumptions Were Used To Estimate The Fair Values

Investment has been fair valued based on valuation carried out by independent valuer.

Changes in level 2 and level 3 fair values are analysed at each reporting period

40. FINANCIAL RISK MANAGEMENT

The Company's principal financial liabilities comprise loans and borrowings in domestic currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Company has exposure to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk

This note presents information about the Company's exposure to each of the above risks and how the Company is managing such risk.

The Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company's risk management is carried out by the CFO and his team.

(A) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and others. In addition, credit risk arises from financial guarantees.

The Company follows a credit risk management policy under which the Company transacts business only with counterparties that have a certain level of credit worthiness based on internal assessment of the parties, financial condition, historical experience, and other factors. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Company has established a credit policy under which each new customer is analysed individually for creditworthiness.

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The main components of this allowance are a specific loss component that relate to individually significant exposures, and a collective loss component that are expected to occur. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets. Debt securities are analysed individually, and an expected loss shall be directly deducted from debt securities.

Credit risk also arises from transactions with financial institutions, and such transactions include transactions of cash and cash equivalents, various deposits, and financial instruments such as derivative contracts. The Company manages its exposure to this credit risk by entering into transactions only with banks that have high ratings. The Company's treasury department authorizes, manages, and oversees new transactions with parties with whom the Company has no previous relationship.

Furthermore, the Company limits its exposure to credit risk of financial guarantee contracts by strictly evaluating their necessity based on internal decision making processes, such as the approval of the board of directors.

Credit risk exposure

The carrying amount of financial assets represents the Company's maximum exposure to credit risk. The maximum exposure to credit risk as of 31 March 2024 and 31 March 2023 are as follows:

(B) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.

However, in view of various unfavourable factors as set out in Note 35, the Company has been experiencing stressed liquidity condition. In order to overcome such situation, the Company has been taking measures to ensure that the Company's cash flow from business borrowing or financing is sufficient to meet the cash requirements for the Company's operations.

(C) Market Risk

Market risk means that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The goal of market risk management is optimization of profit and controlling the exposure to market risk within acceptable limits.

Interest Rate Risk

The Company manages the exposure to interest rate risk by monitoring interest rate risks regularly in order to avoid exposure to interest rate risk on borrowings at variable interest rate.

The exposure of the Company's borrowings to interest rate changes at the end of the reporting period are as follows:

a) Interest Rate Risk Exposure

The carrying amount of interest-bearing financial instruments as of 31 March 2024 and 31 March 2023 are as follows:

b) Sensitivity Analysis On The Fair Value Of Financial Instruments With Fixed Interest Rate

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Company does not designate derivatives (interest rate swaps) as hedging instruments under fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

c) Sensitivity Analysis On The Cash Flows Of Financial Instruments With Variable Interest Rate

As of 31 March 2024 and 31 March 2023, provided that other factors remain the same and the interest rate of borrowings with floating rates increases or decreases by 1%, the changes in interest expense for the years ended 31 March 2024 and 31 March 2023 were as follows:

(f) The weighted average incremental borrowing rate of 10.50% has been applied to lease liabilities recognised in the Balance Sheet.

Accounting Policies The Company As Lessor

Leases for which the Company is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as finance lease. All other leases are classified as operating leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

The Company As Lessee

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. Contingent and variable rentals are recognized as expense in the periods in which they are incurred.

Lease Liability

The lease payments that are not paid at the commencement date are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

42. CAPITAL MANAGEMENT

Risk Management

The fundamental goal of capital management is to:

• safeguard the Company's ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefits to other stakeholders, and

• maintain an optimal capital structure to reduce the cost of capital.

The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management of deployed funds and leveraging opportunities in domestic and international financial markets so as to maintain investor, creditor and market confidence and to sustain future development of the business.

For the purpose of company's capital management, capital includes issued capital and all other equity reserves. The company manages its capital structure in light of changes in the economic and regulatory environment and the requirements of the financial covenants.

However in view of certain adverse factors and challenges being faced by the Company over past few years as explained in Note 35, the net worth of the Company is eroded.

45. (i) Balances of certain debtors and creditors are subject to confirmation and reconciliation. In the opinion of the management,

current assets and advances will have value on realization in the ordinary course of business at least equal to the amount at which they are stated and also the current liabilities and advances will not have claims more than at which they are stated.

(ii) Based on the confirmation received from lenders and reconciliation thereof, an amount of H181.37 million has been reclassified & regrouped from other financial liabilities to borrowings.

(iii) Some winding up petitions filed against the Company are pending and the Company is contesting the same.

(iv) Balances of few banks/financial institutions are subject to confirmation.

(v) The Company was maintaining its books of account on SAP software which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the SAP software, except that audit trail feature was not enabled at the database level but was activated subsequent to balance sheet date. Further, there is no instance of audit trail feature being disabled during the year.

46. ADDITIONAL REGULATORY INFORMATION

(a) Title Deeds Of The Immovable Properties

The title deeds of immovable properties, other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee, disclosed in the standalone financial statements are held in the name of the Company.

(b) Loans And Advances (Repayable On Demand Or Without Specifying Any Terms Or Period Of Repayment) To Specified Person.

During the year ended 31 March 2024, the Company did not provide any loans or advances, which remain outstanding, repayable on demand or without specifying any terms or period of repayment, to specified persons (previous year : Nil).

(c) Relationship With Struck Off Companies

The Company does not have any transactions with Company's struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 during the year ended 31 March 2024 (Previous year : Nil).

(d) Disclosure In Relation To Undisclosed Income

The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year ended 31 March 2024 (Previous year : Nil) in the tax assessments under Income Tax Act, 1961.

(e) Details Of Benami Property Held

The Company does not hold any property under Benami transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder, and there are no proceedings against the Company for the year ended 31 March 2024 (Previous year : Nil).

(f) Registration Of Charges Or Satisfaction With Registrar Of Companies (ROC)

The Company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period, during the year ended 31 March 2024 (Previous year : Nil).

(g) Details Of Crypto Currency Or Virtual Currency

The Company has not traded or invested in crypto currency or virtual currency during the year ended 31 March 2024 (Previous year : Nil).

(h) Utilization Of Borrowed Fund And Share Premium

The Company has not advanced or loaned or invested funds to any other person(s) or entity (ies), including foreign entities (intermediaries) with the understanding that the intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or (b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

47. PREVIOUS YEAR FIGURES

The previous year figures are reclassified where considered necessary to conform to this year's classification.

For Singhi & Co. For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration Number - 302049E

Rahul Bothra Vishal Agarwal Manoj Kumar

Partner Vice Chairman & Managing Director Director (Kalinganagar)

Membership Number - 067330 DIN 00121539 DIN 06823891

Place: Kolkata Amisha Chaturvedi Khanna Surinder K. Singhal

Date: 30 May 2024 Company Secretary Chief Financial Officer