2.05.01 Investments measured at fair value through Other Comprehensive Income (FVTOCI) reflect investments in unquoted and quoted equity securities except investment in the shares of Gujarat State Financial Corporation which is measured at cost and provision for impairment is made for the same as above. Refer Note 2.45 for determination of their fair values.

2.05.02 As per the Memorandum of Understanding (MOU) dated 30th March, 1995 entered into with the Gujarat Industrial Investment Corporation Ltd (GIIC), the said company had to repurchase 16 lakh number of shares of Gujarat Alkalies & Chemicals Limited (GACL) purchased by the Company from GIIC by 30th March, 1998 at an agreed price consisting of cost plus interest @ 14% per annum and service charge @ 0.25% per annum less dividend, bonus and rights, etc. received thereon. GIIC has proposed to enter into a Supplementary MOU by virtue of which GIIC will not be required to repurchase the above shares and the Company shall hold these shares as investment. The Board of Directors of the Company and GIIC have agreed to enter into Supplementary MOU for which proposal has been sent to the Govt. of Gujarat for its approval. The remaining 25.45 lakh shares of GACL as shown in above note have been purchased by the Company from the open market.

2.06.01 Naini Coal Company Ltd. is a 50:50 joint venture of the Company and Pondicherry Industrial Promotion Development Investment Corp Ltd. (PIPDIC). Naini Coal Company Ltd had given Bank Guarantee of ' 6,500 lakh to Coal Ministry, Govt of India for allocation of Naini Coal block in the State of Odisha. The said bank guarantee was secured by Corporate Guarantee of the Company for an amount of ' 3,250 lakh and another ' 3,250 lakh was secured by Bank Guarantee of UCO Bank, arranged by PIPDIC. Ministry of Coal, Govt of India has invoked 50% of Bank Guarantee i.e. ' 3,250 lakh given by the Naini Coal Company Ltd. vide their letter dated 27th December, 2012 due to non-compliance of some terms and conditions of Naini Coal block allocation. The Company had discharged its liability of ' 1,625 lakh towards invoked Bank Guarantee and has accounted for the same as advance to Naini Coal Company Ltd. Total provision for impairment made for advances to Naini Coal Company Ltd. amounts to ' 1,625 lakh (2021-22: ' 1,625 lakh).

The Company filed special civil application before the Hon'ble High Court of Gujarat against arbitrary cancellation of coal block as well as invocation of Bank Guarantee. During the pendency of petition before the Hon'ble High Court of Gujarat, the Hon'ble Supreme Court has cancelled all the coal blocks. Therefore, the petition with the Hon'ble High Court of Gujarat was pending in respect of invocation of Bank Guarantee of ' 1,625 lakh only. The Hon'ble High Court of Gujarat vide its judgement and order dated 31st July, 2019 has rejected the relief sought by the Company for seeking refund of Bank Guarantee.

In view thereof the company has preferred civil suit before Ld. Small Cause Court, Ahmedabad for recovery of ' 1,625 lakh given as Bank Guarantee. After filing the Suit before the civil court it was necessary to conduct mediation under section 89 of the Civil Procedure Code, 1908. Accordingly, the Court issued notice to all the parties to the suit to remain present for mediation process on 27th January, 2021. However, none other than GMDC attended the said proceeding therefore the mediation proceedings have been declared failed and the suit has been transferred to regular board of Small Cause Court, Ahmedabad for hearing on merits. Now the matter is pending for adjudication.

2.07.02 As per the Mine Closure Guidelines (MCG), the amount is required to be deposited in Escrow Account with a scheduled bank. The Company has opened the Escrow accounts for its all six lignite mines and deposited the amount.

Panandhro Mine is having lease area of 1,151 hectares and 568 hectares. In respect of lease area of 1,151 hectares, the company has deposited an amount of ' 9,600 lakh in escrow account as per calculation accepted by the Office of the Coal Controller of India as against provision of ' 11,399.20 lakh as per draft mine closure plan. Necessary effect in the provision for mine closure will be given in the books of account after the acceptance of mine closure plan of the said mine by the Ministry of Coal, Government of India.

In respect of lease area of 568 hectares, the life of mine was over in March 2007. As lignite was exhausted, the last production of lignite was done therein in March 2007. It was last done more than two years before the Mine Closure Guidelines, 2009 which came into force w.e.f. 27th August, 2009. Mine closure activities are also almost over in the said lease area.

In the MCG there was a clause for deposition of funds for mine closure in the escrow account at the prescribed rates. However, there was no provision in the MCG to apply them with retrospective date. Therefore, the MCG are not applicable in respect of 568 hectares lease area. Hence, the same has not been provided and deposited.

2.07.03 As per the technical certificate the company has carried out mine closure activities and incurred expenses during the year as per mine plan in respect of all the metallic-ferrous(non-lignite) mines either departmentally or through outside agencies and compliances are verified periodically by IBM authorities mandated by the Government of India.

2.11.01 Other bank balances include restricted bank balances on account of Unpaid dividend, Fixed deposits for Security against borrowings (overdraft facility), Security against guarantees and Security against other commitments as stated above.

Pending clearance of the title of the land, sale deed in respect of the land of the cement plant at Hadad sold earlier, was not executed and an amount of ' 24.92 lakh (31st March, 2022: ' 24.92 lakh) was recoverable from the buyer on execution of sale deed. The said amount has been deposited by the party before the Danta Court and in turn the Court has directed to the Company to depoit the said amount with a nationalised bank in the form of FDR with a lien marked in favour of Danta Court. Accordingly, the Company has placed the same with Union Bank of India, Vastrapur Branch, Ahmedabad.

2.13.01 The company has paid in May 2015 an amount of ' 37.50 lakh for 3.75 lakh shares of ' 10 each to Stone Research Foundation to subscribe its shares which is included under the head "Others" above. However, no shares have been allotted by the said company so far and it has been decided to close the Stone Research Foundation. Necessary adjustments in accounts will be made after receiving share application money and other receivables, if any.

2.13.02 In order to expand the area of operations and exploring mineral resources in mangnese in the allotted areas of operations a Memorandum of Understanding has been executed between the company and MOIL Ltd. on 1st October, 2019.

The work of geo hydrological, geo technical and other related scientific studies are under progress. If project is feasible for both the entities, a Joint Venture Company (JVC) will be formed between GMDC and MOIL with shareholding of 49% and 51% respectively. If JVC is formed, expenditure incurred before JVC formation by both the companies shall be considered as their investment in JVC. Pending such conversion, expenditure incurred so far will be shared by MOIL and GMDC in equal proportion. The company’s share therein has been shown above under the head “Advance to others".

2.15.01 Assets classified as held for sale during the reporting period were measured at the carrying value on the date of such classification which approximates fair value less cost to sell. Consequently, no impairment loss was identified on these assets. There has been no material change in the value of such assets after the date of initial classification as assets classified as held for sale.

2.16.02 Rights, preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a face value of ' 2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

In respect of the Financial Year 2021-22 dividend of ' 4.30 per share was proposed and approved. The same was recognised as distributions to equity shareholders during the year ended 31st March, 2023 (31st March 2022: ' 0.20 per share).

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

2.19.02 As per the guidelines for preparation of Mines Closure Plan issued by the Ministry of Coal, Government of India the Company has made a provision for mine closure expenses to the tune of ' 58,292.99 lakh (31st March, 2022: ' 60,380.42 lakh) after considering the approved, submitted, prepared mine closure plans and has incurred progressive mine closure expenses of ' 10,943.35 lakh (31st March, 2022: ' 15,022.46 lakh) so far. During the year, expenses reversed on reimbursement by Coal Controller of India from Esrow accounts amounting to ' 5,897.56 lakh.

2.23.01 Vide Government Resolution dated 19th November, 2009, the Company has been given permission to lift Manganese Ore from dumps of Shivrajpur areas and dispose of the same for which the Company will be entitled to retain 20% of the sale price. The Company has to keep remaining 80% of the sale price of Manganese Ore dump in a separate account of Gujarat Mineral Research & Development Society (GMRDS) for mineral survey and exploration. Accordingly, ' 578.99 lakh (31st March, 2022: ' 565.12 lakh) (i.e. 80% of the basic sale price) has been transferred during the year to GMRDS and included under the head "Other Financial Liabilities".

2.25.01 The Government of Gujarat (GoG) has provided funds amounting to ' 4,547.66 lakh (31st March, 2022: ' 4,357.66 lakh) which are in the nature of deposits for Construction and other expenses for Stone Park and Laboratory on behalf of Commissioner of Geology & Mining (CGM), GoG. Out of the said deposits, the Company has utilised ' 4,428.44 lakh (31st March, 2022: ' 4,185.84 lakh) till 31st March, 2023. Net balance of unutilised funds amounting to ' 119.22 lakh (31st March, 2022:' 171.82 lakh) is shown under the head "Other Current Liabilities".

2.26.01 The Company is selling lignite/power to Gujarat State Electricity Corporation Limited (GSECL) / Gujarat Urja Vikas Nigam Limited (GUVNL). For arriving at the rate of lignite to be charged in the invoice for the sale of such lignite/power by charging rate of interest of 13% on the fixed assets of the respective project for deciding the cost of lignite as per the agreed formula up to 31st March, 2022. Accordingly, the company has recognised the revenue on such sale. However, w.e.f. 1st July, 2017, while making the payment GSECL/GUVNL are allowing the rate of interest of 8.50% only instead of 13%.Amount receivable thereagainst is ' 1,027.02 lakh (31st March, 2022: ' 1,027.02 lakh). The matter is under correspondence with the said companies. Necessary adjustment entries, if any, will be passed after the matter is finally decided.

During the year the Government of Gujarat (GoG) has changed the formula (including rate of interest on fixed assets) for arriving at the rate of lignite to be charged in the invoice for the sale of such lignite/power to GSECL/ GUVNL acceptable to all parties effective from 1st April, 2022. The company has raised debit notes aggregating to ' 4,584.22 lakh for the same.

2.27.01 During the year, the company earned an interest of ' 4,178.73 lakh (2021-22: ' 3,680.30 lakh) on the fixed deposits of ' 76,595.09 lakh (31st March, 2022: ' 76,988.30 lakh) held in the escrow accounts for mine closure expenses and recognised such interest as income in the Statement of Profit and Loss. The interest income so earned is a part of escrow account over which the company has no hold until the provisions of mine closure plan are complied.

As per prevailing guidelines of Ministry of Coal, Govt of India, up to 50% of the total deposited amount including interest accrued in the escrow account would be released to the company after every five years in proportion to the expenditure incurred on mine closure and the balance will be released at the end of final mine closure on compliance of all the provisions of mine closure plan, provided that restoration of mine is completed within the specified period, failing which the amount in the escrow account is liable to be forfeited.

2.27.02 Interest Income from Others includes Interest on Income Tax amounting ' 18,147.02 lakh (2021-22: ' Nil).

2.32.01 During the year, royalty on account of sale of Bauxite had been accounted for ' 2,535.26 lakh (2021-22: ' 1,423.89 lakh) on ad hoc basis as intimated by the Commissioner of Geology and Mining. Necessary adjustment shall be made in the accounts after final outcome ofthe matter.

2.32.02 In view of the Supreme Court’s decision in respect of mining activities, applications made by the Company for renewal of leases covering 2,040 (2021-22: 2,040) hectares of land at Panandhro lignite mine for extracting lignite are pending since 1993-94. Necessary adjustment in respect of liability for any charges, taxes, duties etc. will be provided in accounts on finalisation of renewal applications.

2.32.03 During the year, the Company has written off ' 1.12 lakh (2021-22: ' 3.68 lakh) and written back ' 1.33 lakh (2021-22: ' 4.15 lakh) in the books of account. In the opinion of the management, such amounts are no longer receivable / payable. Net effect thereof is written off/(back) to the Statement of Profit and Loss amounting to '(0.21) lakh (2021-22: ' (0.47) lakh).

2.32.04 In compliance with Section 135(5) of the amended Companies Act, 2013, the Company has spent ' 1,200.00 lakh (2021-22: ' 785.00 lakh) against the minimum statutory requirement of spending ' 696.42 lakh (2021-22: ' 609.05 lakh) (based on average net profits of last 3 years) during the year towards Corporate Social Responsibility (CSR) Expense.

2.33.01 Short Provision for Tax of Earlier years : During the year, the company has written back/(off) the difference between the provision for income tax as per books of account and income tax payable on taxable income as per income tax returns filed for earlier years amounting to ' 1,663.99 lakh (2021-22: ' 675.96 lakh) and the same has been disclosed in the Statement of Profit and Loss Account as Short Provision for Tax of Earlier years.

2.36 LEASES (Ind AS 116)

The Company has adopted Ind AS 116 ‘Leases', effective from 1st April, 2019, using modified retrospective approach.

The Company as a lessee

The Company used a number of practical expedients summarised here below:

1) Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.

2) Applied the exemption not to recognise right-of-use assets and liabilities for leases of low value assets.

2.37.01 The company is a sole merchant seller of Lignite in the State of Gujarat. Lignite was exhausted in the Panandhro mines in April 2018. Prior to that production from Panandhro mines was inadequate to meet the needs of the power plants of the company and GSECL as well as demand of the customers of Kutch region.

Apart from power plants, the company has also to cater to the fuel needs of Micro, Small, Medium and Large enterprises, therefore, it was inevitable in the larger public interest to increase lignite production in Kutch Region i.e. from Mata No Madh and Umarsar mines above its specified annual lignite production capacity for which the concurrence of Board has been accorded and the Government of Gujarat has been intimated to enhance the Annual Lignite Production Capacity. Liability in this regard, if any, cannot be ascertained at this stage. Necessary adjustment entries, if any, will be passed after the final outcome of the matter.

B Other Commitments

The company had participated in the auction of coal and lignite blocks announced by the Ministry of Coal, Govt of India, vide the auction under 16th tranche of CM (SP) Act, 2015 and 6th tranche of MMDR Act, 1957. The company has been declared as the preferred bidder for two nos. of Coal mines named as Burapahar and Baitarani West both are located in the state of Odisha in the month of March 2023. Agreement with Ministry of Coal, Govt of India has been signed on 29th March 2023 and the Company has given an irrevocable and unconditional bank guarantees amounting to ' 1,63,693.73 lakh for the performance of its obligations. In addition to this, the company has committed to pay ' 79,925.75 lakh and ' 7,179.97 lakh as upfront fee and fixed fee respectively in respect of the above mentioned two coal mines.

2.39 EVENTS OCCURRING AFTER THE REPORTING PERIOD

The board has recommended dividend of ' 11.45 per share which is subject to approval of shareholders in the ensuing general meeting.

2.40 In the opinion of Management, any of the assets other than items of property, plant and equipment, investment properties, intangible assets and Non-Current Investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, unless otherwise stated.

2.41 Balances of trade payables, trade receivables, loans & advances, advances from customers, other non-current/current liabilities, etc. are subject to confirmation and adjustments, if any, in the accounts.

2.42 On periodical basis and as and when required, the company reviews the carrying amounts of its assets. During the year 2020-21, the company had booked an impairment loss of ' 39,659.49 lakh for Akrimota Thermal Power Station (ATPS).Considering the Plant Load Factor (PLF) of only around 27% and 38% in the year 2021-22 and 2022-23 respectively as against around 19.87% in the year 2020-21, review for possible reversal of impairment in ATPS has not been considered in the current year. However, such review for possible reversal of impairment will be considered after perusal of the financial implication of Power Purchase Agreement (PPA) between the company and GUVNL which is under approval of Gujarat Electricity Regulatory Commission (GERC).

2.43 SEGMENT INFORMATION

(a) Description of segment and principal activities

The Chief Operational Decision Maker (CODM) monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment, and accordingly, the Company has identified two reportable operating segments viz. Mining and Power. Operating segments have been identified and reported in a manner consistent with the internal reporting provided to the CODM.

(b) Segment revenue and expenses

Revenue and expenses have been identified to a segment on the basis of relationship to operating of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on a reasonable basis have been disclosed as "Unallocated".

(c) Segment assets and liabilities

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on a reasonable basis have been disclosed as "Unallocated".

(d) Secondary segment reporting

The Company does not have geographical distribution of revenue as the operations of the Company are carried out within the country and hence secondary segmental reporting based on geographical locations of its customers is not applicable to the Company.

(e) Information about major customers

Revenue from power segment (which exceeds 10% of total segment revenue) amounting to ' 34,644.85 lakh (2021-22: ' 27,704.46 lakh) is derived from a single customer and revenue from mining segment (which exceeds 10% of total segment revenue) amounting to ' 27,069.63 lakh (2021-22: ' 13,406.64 lakh) (inclusive of tax) is derived from a single customer.

(f) Information about product and services

The Company's revenue from external customers for each product is the same as disclosed below under "segment revenue".

1. The above compensation has been paid to Directors, Chief General Manager & Chief Financial Officer and Company Secretary as Key Managerial Personnel.

2. In the last year, the figures of Post-employment benefits and Long-term employee benefits shown in the financial statements were cumulative up to FY 2021-22, instead of respective financial years, therefore, the same have been modified during the year to make them comparable with figures of FY 2022-23.

3. Directors' sitting Fees includes taxes, wherever applicable. Further, directors' sitting fees in respect of Government nominated directors are deposited directly into Government Treasury.

2.44.05 Other transactions with Government related entities

Apart from the above transactions, the Company has also entered into other transactions in ordinary course of business with Government related entities. These are transacted at arm's-length prices based on the agreed contractual terms.

2.44.06 Further, the Company has entered into various long-term material supply and Power Purchase Agreements with the related parties (including Government related entities) where goods/services are to be provided at prices determined based on the contractual terms agreed. Some of the contracts are in the process of being finalised pending the necessary approvals.

Types of inputs are as under:

Input Level I (Directly Observable) which includes quoted prices in active markets for identical assets such as quoted price for an

equity security on Security Exchanges

Input Level II (Indirectly Observable) which includes prices in active markets for similar assets such as quoted price for similar assets in active markets, valuation multiple derived from prices in observed transactions involving similar businesses etc.

Input Level III (Unobservable) which includes management's own assumptions for arriving at a fair value such as projected cash flows used to value a business etc.

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

As per the accounting policy of the company on Equity Instruments, all equity instruments in the scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at Fair Value Through Profit or Loss (FVTPL). For all other equity instruments, the company has the option to make an irrevocable election on initial recognition, on an instrument-byinstrument basis, to present changes in fair value through Other Comprehensive Income (OCI) rather than through profit or loss. The option to present changes in Fair Value Through Other Comprehensive Income (FVTOCI) is available only at the time of initial recognition. Accordingly, the company has elected to measure its equity instruments through FVTOCI.

B. Measurement offair values

i) Valuation techniques and significant unobservable inputs

The following are the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Financial instruments measured at fair value FVTOCI in unquoted equity shares:

Gujarat State Petroleum Corporation Limited

1. Market Approach: This approach uses information generated by market transactions of the Company being valued or the transactions of comparable companies. The following market-linked information may be used for determining valuation under this approach.

- Quoted price of the company being valued,

- Past transaction value of the company being valued,

- Listed comparable companies' trading multiples like price to earning ratio, enterprise value to earning before interest, tax, depreciation and amortisation, enterprise value to sales etc.

- Transactions multiples for investment / M & A transaction of comparable companies.

The valuation arrived at based on the market approach reflects the current value of the Company perceived in the active market. However, as the valuation arrived at using market multiples is based on the past/current transaction or traded values of comparable companies/businesses, it may not reflect the possible changes in future trend of cash flows being generated by a business.

2. Income Approach : The income approach reflects present value of future cash flows. For valuing a business, the discounted cash flow (DCF) methodology is used under this approach. This methodology works on the premise that the value of a business is measured in terms of future cash flow streams, discounted to the present time at an appropriate discount rate. This method is used to determine the present value of business on a going concern assumption. The DCF technique recognises the time value of money.

The value of the firm is arrived at by estimating the Free Cash Flow to Firm (FCFF) and discounting the same at the Weighted Average Cost of Capital (WACC). FCFF is estimated by forecasting free cash flows available to the Arm (which are derived on the basis of the likely future earnings of the company).

3. Cost Approach: The cost approach essentially estimates the cost of replacing the tangible assets of the business. The replacement cost takes into account the market value of various assets or the expenditure required to create the infrastructure exactly similar to that of a company being valued.

Significant unobservable inputs

Highest priority is given to unadjusted quoted price of listed entities and lowest priority to non-market linked inputs such as future cash flows used in income approach.

Inter-relationship between significant unobservable inputs and fair value measurement

The estimated fair value would increase (decrease) if there is a change in significant unobservable inputs used in determination of fair value.

Considering the diverse asset and investment base of the Company with differing risk/return profiles, a sum of the parts approach has been adopted for the valuation. Under this method, the value of each distinct business/asset/investment has been arrived at separately and total value estimate for the Company presented as the sum of all its business/assets/investments.

Gujarat Guardian Limited

Fair value is determined using the ratio of enterprise value to EBIDTA adjusted for the industry average. The industry average has been computed using peer companies. Further, in the absence of latest valuation report of Gujarat Guardian Limited, the fair value is determined based on valuation report as on 31st December, 2022. Once the latest valuation report is available, appropriate changes would be made in the subsequent periods.

Gujarat Industrial And Technical Consultancy Organisation Limited (GITCO) and Gujarat Informatics Limited

In the absence of sufficient information for determination of fair value, the Company has determined the same using net worth as reflected in the financial statements as at the each reporting date. Management is of the view that the value so determined are reflective ofthe fair values.

Further, in the absence of the audited financial statements of GITCO and Gujarat Informatics Limited, the fair value is determined based on unaudited financial statements for the year ended 31st March, 2023 and 31st March, 2022 respectively. Once the audited financials are available, appropriate changes would be made in the subsequent periods.

ii) Transfers between Levels 1 and 2

There have been no transfers between Level 1 and Level 2 during the reporting periods

Sensitivity analysis - Investments in unquoted equity instruments

On account of lack of sufficient information as at the end of reporting period and nature of investments, the management is of the view that it is impracticable to determine the sensitivity of the fair values to changes in the underlying assumptions.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk.

Risk management framework

The Company has a well-defined risk management framework. The Board of Directors of the Company has adopted a Risk Management Policy. Company has also set up a Risk Management Committee.

Looking to the profile of the Company, i.e., Mining and Power Operations, the Company has inbuilt risk management practices to address various operational risks. The Company has standard operating processes for various mining operations in order to mitigate procedures and prevent risk arising out of various operations. The Company has no external borrowings. Hence, there is no financial risk that can impact the Company’s Financial Position. The Company primarily deals with natural resources. Hence, Policy of Government may impact the Company’s operational strategy. The Company’s risk management process revolves around following parameters:

1. Risk Identification and Impact Assessment

2. Risk Evaluation

3. Risk Reporting and Disclosure

4. Risk Mitigation

(i) 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.

Other financial assets

The Company maintains its Cash and cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their creditworthiness on an ongoing basis.

Trade and other receivables

Trade receivables of the Company are typically unsecured, except to the extent of advance received against sales for sale of lignite. Credit risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. Significant portion of trade receivables at the respective reporting date comprise State Governments' PSUs. Management does not expect any credit risk on the same. The allowance for impairment of trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables.

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings if they are available.

Management estimates that there are no instances of past due or impaired trade and other receivables.

(ii) 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 have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

(iii) Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Company’s income or the value of its holdings of financial instruments.

Currency risk

The functional currency of the Company is Indian Rupees.

The Company do not use derivative financial instruments for trading or speculative purposes. As the Company does not engage in foreign exchange transaction, it is not exposed to currency risk.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company does not have any undrawn or outstanding borrowings and hence does not possess any interest rate risk.

Price risk

The Company's exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through other comprehensive income (FVTOCI). Some of the equity investments are publicly traded and are included in the NSE Nifty 50 Index.

Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company's equity and other comprehensive income for the period. The analysis is based on the assumption that the index had increased by 20% or decreased by 20% with all other variables held constant, and that the Company's quoted equity instruments moved in line with the index. The % have been determined considering average of the actual movements in quoted prices of equity shares held as investments as at 31st March, 2023.

2.46 CAPITAL MANAGEMENT

The Company's objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

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

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘adjusted equity’. For this purpose, adjusted net debt is defined as total non-current liabilities, less cash and bank balances. Adjusted equity comprises all components of equity.

2.48: PRIOR PERIOD ITEMS, ERRORS AND CHANGES IN ACCOUNTING POLICIES & ACCOUNTING ESTIMATES

(a) The Company has accounted for material prior period errors discovered during the current period, retrospectively by restating the comparative amounts to which the same relate. Since certain periods were prior to comparative period presented, the impact has been considered in opening balance sheet of comparative period presented.

(b) During the year, the company has made changes in the following accounting policies:

(I) Till FY 2021-22 in respect of Employee benefits of Provident Fund, it was stated in the accounting policy that ‘The Company pays provident fund contributions to GMDC Employees Provident Fund Trust. The Company has no further payment obligations once the contributions have been paid.’ It was also stated that ‘Reimbursement of losses and other related expenses to Provident Fund Trust are charged to the Statement of Profit and Loss as and when crystallised’ Thus the company reimburses the loss and other related expenses also to the Trust in addition to the provident fund contributions. Further during the year, the Trust informed the company that the finalisation of its accounts for FY 2022-23 is in progress and it is going to provide for the principal and interest on its stressed investments and requested the company to reimburse the above loss in addition to any other loss that the Trust may incur on the finalisation of accounts for FY 2022-23. The change is made in the policy with a view to remove the anomaly as stated above and also to provide for the known loss to the Trust on the stressed investments in FY 2022-23. On account of the change in the accounting policy profit for the year is decreased by ' 1,587.13 lakh (Previous Year ' Nil) and Provisions / Other current liabilities under the head Current Liabilities has increased by the like amount.

(II) In the Accounting policy of Revenue Recognition, it is added that in respect of Insurance claims, they are recognised as and when received, as the final amount of such claims to be settled cannot be measured reliably. The company is consistently following the above policy from year to year. But this fact was not disclosed in the accounting policy. For the sake of proper disclosure the change in policy has been made. However, the above change has not resulted in any change in profit or loss and/or asset or liability.

(III) Earlier the Company revised its Accounting Policy in respect of Leases in FY 2019-20 wherein ‘Adoption of Ind AS 116 and Transition’ was referred to. The mention of its accounting treatment on adoption of Ind AS 116 during transition was also made therein. As the Company has already adopted Ind AS 116 since 01st April,2019, reference of ‘transition’ in Significant Accounting policies is redundant. accordingly, the policy on leases is revised deleting the reference pertaining to transition therein. For the sake of proper disclosure the change in policy has been made. However, the above change has not resulted in any change in profit or loss and/or asset or liability.