Equity Share Capital (continued)

(b) Terms / rights attached to equity shares

The Company has only one class of equity shares having a face value of 32/- per share with one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(d) Buy-back of equity shares:

The Board of Directors of the Company had approved the buy-back of fully paid-up equity shares of the Company at its meeting held during February 2021 for an amount not exceeding 315,000.00 lakhs, excluding taxes and transaction costs. The buy-back completed during the quarter ended 30 September 2021 and in accordance with the said plan, the Company bought back 18,369,362 equity shares as at 31 March 2022 for an aggregate price of 315,900.87 lakhs, including taxes and transaction costs.

These amounts have been adjusted against the balance of securities premium. Further, the number of equity shares considered for computation of Basic and Diluted EPES for the year ended 31 March 2022 has been adjusted for the effects of the equity shares bought back. Further, as required under the relevant provisions of the Act, required amounts were transferred to capital redemption reserve with a corresponding debit to balance in general reserves. Further, the Company had also bought back 2,358,462 equity shares during the year ended 31 March 2020. Accordingly, the Company has bought back in aggregate 20,727,824 shares in the preceeding 5 years.

Nature and purpose of reserves:

(a) Capital redemption reserve

Capital redemption reserve was created in earlier years for the purpose of redemption of preference shares and for buy-back of equity shares. The Company uses capital redemption reserve for transactions in accordance with the provisions of the Act.

(b) Securities premium

The amount received in excess of face value of the equity shares is recognised in securities premium. This reserve is utilised in accordance with the provisions of the Act.

(c) General reserve

General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. This reserve is freely available for use by the Company.

(d) Surplus in Statement of Profit and Loss

Surplus in Statement of Profit and Loss represents the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distribution to shareholders.

(e) Actuarial gain/(loss) on employment benefits

The reserve represents the remeasurement gains/(losses) arising from the actuarial valuation of the defined benefit obligations of the Company. The remeasurement gains/(losses) are recognized in other comprehensive income and accumulated under this reserve within equity. The amounts recognized under this reserve are not reclassified to Statement of Profit and Loss.

* Represents amounts distributed towards final dividend at the rate of 36.00 per equity share for the financial year 31 March 2022 (31 March 2022: 32.50 per equity share for the financial year ended 31 March 2021).

Details of security and other terms of borrowings:

(a) Term loan outstanding to the tune of 37,672.48 (31 March 2022: 310,229.98) is secured by the pari-passu first charge on fixed assets of the Company, both present and future excluding 38 acres of land at Paloncha and a second pari-passu charge on the present and future current assets of the Company. The loan is further secured by way of exclusive charge on the Debt Service Reserve Account of the Company. The loan is repayable in 32 unequal quarterly instalments from the date of first disbursement with final maturity date being 31 March 2026 and carries an interest rate of 8.10 to 8.85% per annum (31 March 2022: 8.10%).

(b) Term loan outstanding to the tune of 32,187.50 (31 March 2022: 32,937.50) is secured by the pari-passu second charge on fixed assets of the Company, both present and future excluding 38 acres of land at Paloncha and a second pari-passu charge on the present and future current assets of the Company. The loan is repayable in 48 structured monthly repayments of 362.50 each, commencing from March 2022 and carries an interest rate of 7.10 to 7.30% per annum (31 March 2022: 7.25%).

(c) Working capital loans outstanding represents cash credit facility availed from banks and carry an interest linked to the respective Bank's prime/base lending rates, ranging from 7.90% to 8.90% per annum (31 March 2022: 8.00% to 10.75% per annum). The said facility is secured by hypothecation of all chargeable current assets of the Company, including raw materials, work-in-progress, finished goods, stores and spares and receivables both present and future and rank pari-passu with the other lenders. The facility is further secured by a pari-passu second charge on all fixed assets of the Company both present and future.

(d) Suppliers credit outstanding as at 31 March 2023 was availed from banks and carried an interest rate linked to the USD libor ranging from 2.00% to 4.50% per annum (31 March 2022: 0.50% to 2.00% per annum). The said facility was secured by hypothecation of all chargeable current assets of the Company and ranked pari-passu with the other lenders. The facility was further secured by a pari-passu second charge on all fixed assets of the Company both present and future.

(e) Refer note 37(iii) for details of disclosure of maturity profile of the borrowings.

(a) Gratuity

The Company provides for gratuity for its employees as per the Payment of the Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is equivalent to employee's 15 days of last drawn basic salary for each completed years of service. The gratuity plan is partly funded as at 31 March 2023 and 31 March 2022.

The following table sets out the reconciliation of opening and closing balances of the present value and defined benefit obligation:

Reasons for Short fall: Not applicable

Nature of CSR Activities: Activities as mentioned under Schedule VII of Companies Act 2013 majorly on promoting health care including preventive health care and promoting education, including special education and employment enhancing vocation skills.

Details of Related Party Transactions in CSR activities: Nil

Where a provision is made with respect to a liability incurred by entering into a contractual obligation:

Not applicable

33. Fair Value measurements (continued)

include loans, trade and other receivables, cash and cash equivalents and other bank balances that derive directly from its operations. The Company also holds FVTPL (Fair value through profit and loss) investments FVTOCI (Fair value through other comprehensive income) investments, investments carried at amortised costs and investment in its subsidiaries.

(ii) The carrying amounts of trade receivables, trade payables and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature. Difference between carrying amounts and fair values of bank deposits, earmarked balances with banks, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented. For all other amortised cost instruments, carrying value represents the best estimate of fair value.

(iii) Valuation technique used to determine fair value:

The fair value of the financials assets and liabilities is reported at the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a. The fair values of the quoted shares are based on price quotations at the reporting dates.

b. The fair value of unquoted equity shares are based on the Net Assets Value, available for Equity Shareholders of the underlying Companies which was ascertained based on data available from the financial statements of the respective Companies.

c. The fair value of unquoted mutual funds, non-convertible debentures are based on the mutual fund statements received from the underlying funds or the depository agent.

d. Management has assessed the fair value of the borrowings, which approximate their current value largely since they are carried at floating rate of interest.

(iv) Fair Value hierarchy:

Financial assets and financial liabilities measured at fair value in the balance sheet are grouped into three Levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

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 or indirectly.

Level 3: Unobservable inputs for the asset or liability.

The following table shows the Levels within the hierarchy, of financial assets and liabilities measured at fair value on a recurring basis as at 31 March 2023 and 31 March 2022:

(b) Claims against the Company not acknowledged as debts:

(i) As of 31 March 2023, the Company is a party to an ongoing dispute in respect of cross-subsidy charges levied by the power utility authority of the State of Telangana, which is presently pending with the Honourable High Court of the State of Telangana. In respect of the claim of R1,486.00 (31 March 2022: R1,486.00) management has re-assessed, and it continues to believe a favourable outcome of the proceedings. Accordingly, no further adjustments were considered in the accompanying standalone financial statements. Further, as of 31 March 2022, the Company was a party to ongoing dispute in respect of cross-subsidy charges levied by the power utility authority of the State of Odisha for a sum of R2,532.78 which was settled during the current year.

(ii) During the previous year, the Northern Power Distribution Company of Telangana Limited (NPDCL) levied a Grid Support Charge (GSC) on the Company, the underlying grounds of which is duly and rightfully contested by way of an appeal with the Honourable High Court of Telangana. Having challenged the demand, management based on its internal assessment in consultation with in-house legal counsel, is of the opinion that the aforesaid litigation could result in a potential economic outflow towards the GSC, and out of abundant precaution provided a sum of R3,120.00 during the year ended 31 March 2022. Further, on consideration of stay order granted by the honourable High Court of Telangana, management is confident that the outcome of the proceedings is unlikely to result in payment of interest on GSC amounting to R8,689.60 as claimed by NPDCL, accordingly no further adjustments were considered necessary in the accompanying standalone financial statements. A similar claim was lodged by Eastern Power Distribution Company of Andhra Pradesh Limited for a sum of R163.09 which is also contested by the Company.

(iii) Pursuant to the income tax assessment for the years mentioned below, the Company had received

various demands from the income tax authorities in relation to the inadmissibility of certain expenditure in accordance with the provisions of the income tax law and compliances with the arm's length guidelines in relation to international transactions with associated enterprises. The management, on the basis of its internal assessment of the facts of the case, the underlying nature of transactions, the history of judgements made by the various appellate authorities and the necessary advise received from the independent expert engaged in this regard, is of the view that the probability of the case being settled against the Company is remote and accordingly do not foresee any adjustment to the financial statements in this regard. The details of the relevant financial year which is subject to the dispute and the amount of demand along with the interest and penalties demanded is as follows:

The matters referred above are pending with various authorities and courts in India and are various stages of discussions. However, there were no significant developments during the current year in respect of the pending matters/litigations.

In addition to the above, the Company is a petitioner to various litigation other matters relating to dues from statutory bodies, land encroachments and other matters, pending with civil courts or other appropriate authorities.

Other pending litigations - contingent assets:

(v) The Company, along with certain other petitioners, have filed a Special Leave Petition with the Honourable Supreme Court of India in relation to applicability of provisions of the Andhra Pradesh Electricity Duty Act, 1939 to the captive power generation facility of the Company situated at Samalkot, Andhra Pradesh for the period beginning 1 April 2003 until the 31 March 2013. The Company has already recognised liabilities aggregating to R345.38 (31 March 2022: R345.38) towards electricity duty on

the number of units of energy captively consumed. Pursuant to an interim order from the Honourable Supreme Court, the Company has also paid a sum of R137.28 (31 March 2022: R137.28) towards the said levy. However, based on its assessment of the facts, status of the case and the underlying regulations on applicability of the electricity duty, the management does not foresee any further adjustments to these financial statements in this regard.

(vi) The Company is a party to a dispute with the Grid Corporation of Odisha (GRIDCO) in relation to amounts involving R2,582.00 (31 March 2022: R2,582.00) relating to sale of power during the earlier periods.

While the Company has received substantial part of the payment against the original dues, however,

a sum of R189.93 is due as of 31 March 2023 (31 March 2022: R189.93). The matter is currently pending with the Honourable Supreme Court of India, the Company wrote off this amount in the earlier years. Basis management assessment, no further adjustment are considered necessary in the accompanying standalone financial statements.

(vii) The Company had filed an appeal against the demand aggregating to R668.00 (31 March 2022: R668.00) from the electricity regulatory authorities of the state of Telangana towards the payment of Voltage Surcharge and additional charges for the period 1 March 1983 to 30 June 1987. The matter was awarded in favour of the Company, however, bank guarantees furnished by the Company to the tune of R409.00 (31 March 2022: R409.00) against the said demands were encashed by the authorities, against which management has filed necessary appeals with the Honourable High Court of the State of Telangana. Pending final outcome of the said petitions, the management has recognised adequate provision in relation to the said dues.

(f) In accordance with the applicable provisions of the Income Tax Act, 1961, the Company is required to use certain specified methods in assessing that the transactions with certain designated related parties, are carried at an arm's length price and is also required to maintain prescribed information and documents to support such assessment. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors as prescribed. Based on certain internal analysis carried out, management believes that transactions entered into with the related parties were carried out at arms length prices. The Company is in the process of updating the transfer pricing documentation for the financial year ended 31 March 2023. In opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

37. Financial Risk Management objectives and policies:

The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include market risk, credit risk and liquidity risk. The Company's risk management policies are established to identify and analyse the risks faced by the Company and seek to, where appropriate, minimize potential impact of the risk and to control and monitor such risks. There has been no change to the Company's exposure to these financial risks or the manner in which it manages and measures the risks.

The following sections provide details regarding the Company's exposure to the financial risks associated with financial instruments held in the ordinary course of business and the objectives, policies and processes for management of these risks.

(i) Market risk

Market risk is the risk of loss of future earnings, fair value or future cash flows of a financial instrument will fluctuate because of changes in market rates and prices. The Company is exposed to market risk primarily related to interest rate risk, currency rate risk and other price risks, such as equity risk. Thus, the Company's exposure to market risk is a function of investing and borrowing activities and revenues generated and operating activities in foreign currencies.

(a) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of the Company and the Company's financial instruments will fluctuate because of changes in market interest rates. The Company's exposure to interest rate risk relates primarily to the floating interest rate borrowings.

The Company's investment in deposits with banks, deposits with others, investments in bonds and non convertible debentures with fixed interest rates and therefore do not expose the Company to significant interest rate risk. Further, the loans extended by the Company carries a fixed interest rate and therefore not subject to interest rate risk since neither the carrying value nor the future cash flows will fluctuate because of the change in market interest rates.

The Company's exposure to changes in interest rates relates primarily to the Company's outstanding floating rate debt. A major portion of foreign currency debt is linked to international interest rate benchmarks like LIBOR. The Company also hedges a portion of these risks by entering into derivative instruments like interest rate swaps and currency swaps.

* The Company has entered into interest rate swap arrangement against the variable rate borrowing amounting to R639.38 (31 March 2022: R3,196.88) and accordingly the impact of interest rate sensitivity as mentioned above is expected to be offset proportionately.

(b) Foreign Currency Risk:

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company's exposure to the risk of change in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in foreign currency) and financing activities (when borrowings are denominated in foreign currency).

The Company has transactional currency exposures arising from services provided or availed that are denominated in a currency other than the functional currency. The foreign currencies in which these transactions are denominated are mainly in US Dollars ($). The Company's trade receivable and trade payable balances at the end of the reporting period have similar exposures.

The Company does use financial derivatives such as foreign currency forward contracts and swaps.

(c) Other price risk

Other price risk is the risk that the fair value or future cash flows of the Company's financial instruments will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The Company based on working capital requirement keeps its liquid funds in current accounts. Excess funds are invested in long term instruments/current investments. The Company has listed and non-listed equity securities that are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and reports on the equity portfolio are submitted to the management on a regular basis.

The following table demonstrates the sensitivity to the impact of increase/(decrease) of the index on the Company's equity and profit for the period. The analysis is based on the assumption that index has increased or decreased by 10%, with all other variables held constant and that the Company's equity instruments moved in line with the index.

(ii) Credit risk:

Credit risk is the risk of loss that may arise on outstanding financial instruments when a counterparty defaults on its obligations. The Company's exposure to credit risk arises primarily from loans extended, security deposits, balances with bankers, investments in bonds, non-convertible debentures and fixed deposits other than banks and trade and other receivables. The Company minimises credit risk by dealing exclusively with high credit rating counterparties. The Company's objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Company trades only with recognised and creditworthy third parties. It is the Company's policy that all customers who wish to trade on credit terms are subject to credit verification procedures.

In addition, receivable balances are monitored on an ongoing basis with the result that the Company's exposure to bad debts is not significant.

(a) Exposure to credit risk:

At the end of the reporting period, the Company's maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. No other financial assets carry a significant exposure to credit risk.

(b) Credit risk concentration profile:

At the end of the reporting period, there were no significant concentrations of credit risk. The maximum exposures to credit risk in relation to each class of recognised financial assets is represented by the carrying amount of each financial assets as indicated in the balance sheet.

(c) Financial assets that are neither past due nor impaired:

None of the Company's cash equivalents, other bank balances, loans, security deposits and other receivables were past due or impaired as at 31 March 2023. Trade and other receivables including loans that are neither past due nor impaired are from creditworthy debtors with good payment record with the Company. Cash and short-term deposits investment securities that are neither past due nor impaired, are placed with or entered with reputable banks financial institutions or companies with high credit ratings and no history of default.

(d) Financial assets that are either past due or impaired:

The Company doesn't have any significant trade receivables or other financial assets which are impaired. The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, the Management also evaluates the factors that may influence the credit risk of its customer base, including the default risk and country in which the customers operate. The management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review includes external ratings, if available, financial statements, credit agency information, industry information and in some case bank references. The Company's receivables turnover is quick and historically, there was no significant default on account of trade and other receivables. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets.

(iii) Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, 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 risk to the Company's reputation.

Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.

The table below summarises the maturity profile of the Company's financial liabilities based on contractual undiscounted payments as of 31 March 2023:

38. Segment Information

In accordance with Indian Accounting Standard (Ind AS) 108 on "Operating Segments", segment information has been disclosed in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these standalone financial statements.

39. Capital management

Capital includes equity capital and all other reserves attributable to the equity holders of the parent. The primary objective of the capital management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder's value. The Company manages its capital structure and make adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

# Total Borrowings include long-term borrowing, current maturities of long-term borrowings and working capital loans like cash credit and buyer's credit.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets the financial covenants attached to interest bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call back loans and borrowings.

There have been no breaches in the financial covenants of any interest bearing loans and borrowings in the current period.

No changes were made in the objectives, policies or processes for managing the capital during the year ended 31 March 2023 and 31 March 2022.

i. Debt equity Ratio: Improvement in ratio was led by increased repayments of existing loan installments followed by increase in reserves and surplus owing to the profits generated for the year.

ii. Inventory turnover ratio: Decline in ratio is largely owing to the significant increase in inventory carrying levels at year end owing to inventories being procured for Odisha Ferro alloys unit wherein the management from December 2022 had shifted to manufacturing of silico manganese for self and had discontinued the ferro chrome conversion agreement with Tata Steel Mining Limited and thus impacting the ratio.

42. Discontinued operations

Pursuant to a resolution passed at their meeting held on 2 March 2020, the Board of Directors have resolved to cease the sugar operations of the Company at its sugar manufacturing facility located at Samalkot,

Andhra Pradesh, ('Sugar division') after completion of the crushing season during March 2020, owing to nonavailability of sugar cane and unviable sugar operations. The Board of Directors have also resolved to dispose the non-current assets of the said sugar division comprising of the underlying land available in Samalkot and the assets pertaining to the sugar manufacturing facility. Accordingly, these non-current assets have been classified as assets held for sale in these financial statements as at and for the years ended 31 March 2023 and 31 March 2022. Further, owing to the aforesaid resolution, the financial performance of the sugar division have been presented as discontinued operations in the Statement of Profit and Loss for the years ended 31 March 2023 and 31 March 2022 in accordance with the provisions of Ind AS 105 - Non-Current Assets Held for Sale and Discontinued Operations.

(d) Pursuant to the overall plan of disposal of the non-current assets of the sugar division at Samalkot,

management has already commenced necessary actions in this regard by assessing the realisable values of the underlying plant and equipment and certain buildings located in the said sugar manufacturing facility by engaging an independent valuer and by seeking necessary quotations from independent prospects. On the basis of the aforesaid exercise, management has recorded an impairment charge of R570.30 towards a diminution in the carrying values of these assets held for sale and is confident of being able to sell these assets by the financial year ending 31 March 2024. Further, in accordance with the aforesaid plan, management has also re-classified the carrying values of land and certain other buildings as Property, plant and equipment in these standalone financial statements in accordance with the accounting principles.

Note: Consortium of bankers led by State Bank of India have been considered as lenders for the purpose of this disclosure.

This is the summary of significant accounting policies and other explanatory information referred to in our report of even date.