Nature and purpose of reserves

a. Capital Redemption Reserve

Capital Redemption Reserve was created on redemption of preference share capital. The Company may issue fully paid-up bonus share to it's members out of the capital redemption reserve.

b. Capital Reserve

Capital reserve has been created on Business Combination on appointed date i.e.1st April 2016 Pursuant to the Scheme of Arrangement amongst company and its associate e-Surya Global Steel Tubes Limited as per order of NCLT dated 11th December 2017.

c. Securities premium

Securities premium is used to record the premium on issue of shares. The premium should be utilised in accordance with the provisions of the Companies Act.

d. Share Option Outstanding Account

The Share option outstanding account relates to share options granted by the Company to its employees under its employee share option plan. Further information about share-based payments to employees is set out in note 48.

e. Forfeiture reserve

Forfeiture Reserve represents the forfeiture of amount of consideration received on allotment of warrants of the cases where option to take equity shares were not exercised within the prescribed time in accordance with Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009

f. General reserve

The general reserve is created time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by transfer from one component of equity to another equity, hence items included in general reserve will not be reclassified subsequently to profit and loss.

g. Dividend

Final Dividend of ' 21.76 crores for the Year 2022-23 ( Dividend of ' 21.76 crores for the Year 2021-22) is accounted in the year of approval by the shareholders

Term Loans of ' NIL (' 60.67 crore as at 31st March, 2022) were secured by way of first pari-passu charge on all Property, plant and equipment including equitable mortgage of Land and Building and further secured by way of second pari-passu charge on Company's entire Current Assets both present and future.

a. Rupee Term Loan from one bank of ' Nil (' 35.67 crore as at 31st March, 2022) was payable in 21 quarterly instalments, with last repayment date 31st May, 2028, carrying floating interest rate of 6.25% p.a. Linked wiTH REPO RATE with periodical interest reset, which is fully pre-paid during the current year.

b. Rupee Term Loan from one financial institution aggregating ' NIL (' 25.00 crore as at 31st March, 2022) was payable in 29 quarterly instalments, with last repayment date 1st April, 2030, carrying fixed interest rate of 6.50% p.a. with periodical interest reset, which is fully pre-paid during the current year.

The above working Capital borrowings of ' 403.94 crore are secured against current assets both present and future and further secured by way of second charge on all Property, plant and equipment including equitable mortgage of Land and Building and personal guarantee of the Chairman of the Company. The Rupee Loans of ' 125.73 crore (EPC) linked with T Bill carrying interest rate of 4.75% ~ 5.08% (net of 2% Interest Subvention), ' 245.91 crore (wCDL) linked with T Bill carrying interest rate of 6.85 ~ 7.52 and ' 32.30 crore (Cash Credit) linked with 1 Year / 6 Month MCLR of respective banks plus spread (spread ranging from Nil ~ 75 bps)

III. Entry of Goods into Local Area Act, 2008 :

The Haryana Government levied Local Area Development Tax by (The LADT Act) w.e.f. 5th May, 2000, The said act was declared ultra vires by the hon'ble Punjab & haryana high Court on 14th March, 2007. Later on, the haryana government has repealed the LADT Act w.e.f. 8th April, 2008 and introduced in its place, ‘The haryana Tax on Entry of goods into local Areas Act, 2008' , which was also held ultra vires by the hon'ble high Court on 1st October, 2008 (Rules not yet notified). Both these Acts were declared unconstitutional on the ground of non-compensatory. but Subsequently, on the SLP of the haryana government, the hon'ble Supreme Court Constitutional Bench vide its judgment dated 11th November, 2016 held the applicability of entry tax valid on compensatory grounds. however, directed its Divisional bench for examining the provisions on the other issues of discrimination, local area etc. The divisional bench remanded back the matters to the hon'ble Punjab & haryana high Court on 21st March, 2017 with a direction to file fresh writ petitions in this regard for factual backgrounds and other constitutional statutory issues. The matter is still pending in the hon'ble Punjab & haryana high Court, hence no provision has been made.

IV. Income Tax Act

In respect of Income-tax assessments of the Company (for the year 2009-10,2010-11 & 2012-13) demands of ' 56.34 cr. were raised wherein, Company had appealed and the cases were decided in favour of the Company by CIT (A). however revenue has preferred an appeal before ITAT. Based on the decision in favour of the Company, interpretations and decisions of appellate authorities and Courts in similar cases and as per the consultations made, the Company is not liable for such demand and accordingly no provision has been made.

The Company gives warranties on certain products, which fail to perform satisfactorily during the warranty period. Provision made represents the amount of expected cost of meeting such obligation on account of repair/ replacement. It is expected that significant portion of these cost is to be incurred within a period of two years.

45 GOVERNMENT GRANTS (INVESTMENT PROMOTION ASSISTANCE)

The Company has made investments of ' 362.35 crore up to 31st March, 2023 in the State of Madhya Pradesh, Andhra Pradesh and Gujarat for establishing manufacturing facilities at Malanpur, Hindupur and Anjar respectively as per provisions of the Industrial Investment Promotion Assistance Schemes/ Policy of these states.The Company has been eligible for periodical Grants during the specified period by way of assistance/ reimbursement of VAT/ CST/ SGST/ Power Cost and recognised the same in revenue on satisfying the conditions mentioned under the respective schemes/ policies. These incentive claims are periodically evaluated and necessary adjustments /reversals have been made time to time for deductions made or expected in processing, verifications, clarifications or change in policies/guidelines. Accordingly, The Company has recognised grants of ' 98.59 crore up to 31st March, 2023 (' 105.58 crore up to 31st March, 2022 (Out of which ' 61.04 crore remained outstanding as on 31st March, 2023 and ' 70.11 crore as on 31st March, 2022).

46 PROJECT FOR SUPPLY, IMPLEMENTATION, OPERATION AND MAINTENANCE OF ORISSA GREENFIELD STREET LIGHTING SYSTEM THROUGH SPV COMPANY

The Company has been awarded project by Directorate of Municipal Administration(DMA), Orissa for designing, implementing, operating, maintaining the Greenfield Pubic Street Lighting System along with other infrastructure including CCMS and automation. The project is required to be executed through Special Purpose Vehicle Company (SPV) as per terms of LOA and accordingly Company has incorporated a wholly-owned subsidiary namely SuRYA ROSHNI LED Lighting PROJECTS LIMITED on 21st January, 2019. Further, Company has executed Supply Installation Operation and Maintenance (SIOM) Agreement on 29th December 2018 with the DMA and 21 urban Local Bodies. As per terms of SIOM, the Company had executed shareholder agreement with the SPV Company on 30th August, 2019 and novation agreement with the DMA and the SPV company . Company has committed the funding requirement of SPV for project completion including enhancement in the value of project. The Company has also committed to compensate the losses/ damages, if any.The required funding has been mandatory provided by the Company and project is being implemented efficiently.

47 EMPLOYEE BENEFITS

Disclosures pursuant to Ind AS -19 "Employee Benefits" (Specified under the section 133 of the Companies Act 2013 (the Act) read with Companies (Indian Accounting Standards) Rule 2015 ( as amended from time to time) and other relevant provision of the Act) are given below

a. Discount rate is based on the prevailing market yields of Indian Government securities as at the balances sheet date for the estimated term of obligations.

b. The assumption of future salary increase takes into account the inflation, seniority, promotion, business plan, HR Policy and other relevant factors such as supply and demand in employment market.

a. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

b. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

c. Their was no change in the method and assumptions used in preparing the sensitivity analysis from prior years.

A. Short-term benefits comprises the expenses recorded under the head employee benefit expenses (eg. Salary and wages, contribution to provident fund, NPS, Leave encashment payments, and taxable value of perquisities etc.

B. The liability for gratuity and compensated absences are provided on actuarial basis for the Company as a whole, amounts accrued pertaining to key managerial personnel are not included above.

C. The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

D. The Company has granted Stock Options to eligible employees, including Executive Directors and KMPs, under its Employee Stock Option Schemes [within the meaning of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014] as amended. However, in accordance with Ind AS -102, the Company has recorded employee benefits expense by way of share based payments to employees at ' 7.01 crore for the year ended 31st March, 2023 [2022 - ' 6.53 crore].

50 SEGMENT INFORMATION

Description of segments and principal activities

The Chief operational decision makers (CODM) monitor the operating results of its Business Segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Operating segments have been identified on the basis of the nature of products/ services and have been identified as per the quantitative criteria specified in the Ind AS.

Specifically, the Company's reportable segments under Ind AS are as follows:

1 Steel Pipe and Strips (comprises Steel pipes and cold rolled strips)

2 Lighting and consumer durables (comprises Lamps, fittings, street light, fans, electric appliances and allied items) Identification of Segments:

For financial statements presentation purposes, these individual operating segments have been aggregated into a singal operating segment after taking into consideration the similar nature of the products, production processes and other risk factors. For financial statements presentation purposes, these individual operating segment's have been aggregated into a single operating segment taking into account the following factors:

i. These operating segments have similar long-term gross profit margins;

ii. The nature of the products and production processes are similar; and

iii. The methods used to distribute the products to the customer are same

The additional factors taken into consideration for aggregation into a single operating segment are as follows:

i. Operating revenues and expenses related to both third party and inter-segment transactions are included in determining the segment results of each respective segment.

ii. Finance expense incurred are not allocated to individual segment and the same has been reflected at the Company level for segment reporting.

iii. Segment assets represent assets directly managed by each segment, and primarily include receivables, property, plant and equipment, intangibles, inventories, operating cash and bank balances, inter-segment assets and exclude derivative financial assets, deferred tax assets and income tax recoverable.

iv. Segment liabilities comprise operating liabilities and exclude external borrowings, provision for taxes, deferred tax liabilities and derivative financial liabilities.

v. Segment capital expenditure comprises additions to property, plant and equipment and intangible assets (net of rebates, where applicable).

vi. unallocated expenses/ results, assets and liabilities include expenses/ results, assets and liabilities (including inter-segment assets and liabilities) and other activities not allocated to the operating segments. These also include current taxes, deferred taxes and certain financial assets and liabilities not allocated to the operating segments.

The financial assets measured at fair value are derivative contracts outstanding as at 31st March, 2022.

The fair value hierarchy is based on inputs to valuation techniques that are use to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1: Quoted prices in active markets for identical assets and liabilities

Level 2: Directly or indirectly observable market inputs, other than Level 1 inputs. This includes the assets and liabilities carried at forward contract rates / prevailing exchange rate at year end and assets carried at present value using appropriate discounting rate

Level 3: Inputs which are not based on observable market data.

53 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

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 Risk Managemnet Committee oversees how management monitors compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Risk Management committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Risk Management Committee. The Company is exposed to financial market risk, credit risk and liquidity risk.

I Financial Market risk

Financial market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of financial instrument. The value of a financial instrument may change as a result of change in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency trade receivables, trade payables and borrowings.

a. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market interest rates. In order to optimise the Company's position with regards to interest and to manage the interest rate risk, finance department performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate with reset clause and floating rate financial instruments in its total portfolio. The borrowings of the Company are on floating interest rate along with periodical interest reset.

The Company is not exposed to significant interest rate risk at the respective reporting dates. With all other variables held constant, the following table demonstrates the impact of borrowing cost on floating rate portion of loans and borrowings are taken.

b. Foreign currency risk

The Company transacts business primarily in Indian Rupee, uSD and Pound sterling (GBP). The Company has taken foreign currency loans and has trade payables as well as receivables in foreign currency. The Company evaluates foreign currency exposure time to time and follows established risk management policies by taking foreign exchange forward contracts mostly with a maturity less than one year from the reporting date. The Company do not use derivate financial instrument for trading or speculation purpose to hedge exposure of foreign currency risk.The particulars of forward contract taken are given below :-

The net foreign currency exposure towards pending import / (export) orders in hand stands at (uSD 6.32 million) as at 31st March, 2023 (Previous year (uSD 14.35 million)).

II 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 cash and cash equivalents. To manage this, the Company periodically assesses the financial risk limits of the customers, taking into account the payment behaviour, aging of outstanding, credit ratings, current economic trends, and analysis of historical bad debts, Further the Company makes provision for bad and doubtful debts on trade receivables based on Expected Credit loss (ECL) method based on provision matrix.

Trade Receivable

The Company's exposure to credit risk is influenced by the individual characteristics of each customer, Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. The Company has a detailed review mechanism of overdue trade receivables at various levels in the organisation to ensure proper attention and focus on realisation.

Expected credit loss assessment

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Management believes that the unimpaired amounts that are past due are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk The movement in the allowances for impairment in respect of trade receivables during the year was as follows:

Cash and Cash Equivalents, Deposit in Banks and other Financial instruments

The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances as it has sufficient vacant cash credit limits with its bankers. For other financial assets the Company monitors ratings, credit spreads and financial strengths of its counterparties. Based on its ongoing assessment of the counter party's risk, the Company adjust its exposures to various counter parties. Based on the assessment there is no impairment in other financial assets.

Liquidity risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company's finance department manage the liquidity through verity of sources of borrowings, by ensuring sufficient liquidity to meet its liabilities when due, under all circumstances, without incurring unacceptable losses or risk to the Company's reputation. The current committed working capital facilities are used 50% to 60% and sufficient to meet its requirement. The Company monitor rolling forecast for its liquidity requirements.

Maturity profile of financial liabilities

The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date.

54 CAPITAL MANAGEMENT

For the purposes of the Company's capital management, capital includes issued capital and all other equity reserves. The primary objective of the Company's Capital Management is to maximise shareholder value. The Board of Directors monitors the return on capital, dividend to shareholders, maintain balance between capital and borrowing in the light of changes in economic environment and the business requirements. In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings

Reasons for change in the ratio by more than 25% as compared to the preceding year

a. Current Ratio improved due to substantial reduction in Current Liabilities in comparison to last year wheras no major change in Current assets.

b. Debt Equity Ratio improved due to substantial reduction in Debt and increased total equity with higher profitability of current year.

c. Debt Service Coverage Ratio improved due to substantial reduction in Interest cost and NIL Debt repayment obligation with higher earnings of current year.

d. Return on Equity Ratio increased due to substantial increase in Profit after tax of the current year in comparison to Average net worth.

e. Trade Payable turnover ratio increased due to substantial reduction in Trade Payables whereas no major changes in Cost of Goods Sold.

f. Net profit ratio increased due to substantial increase in Profit after Tax whereas no major changes in Turnover

g. Return on Capital employed incrased due to higher EBIDTA and no major change in average capital employed

h. Return on Investment is reduced due to major supply and installation part of business has already excuted in Wholly-owned Subsidiary Company and consequently Profit has been reduced.

ESOS- Loan to Employees Welfare Trust

The Company has introduced Employees Stock Option schemes for its employees and hold 6,03,687 Treasury equity shares as on 31st March, 2023 (10,81,930 Treasury equity shares as on 31st March, 2022) acquired by way of secondary acquisition through Surya Roshni Employees welfare Trust and for the same provided funds by way of interest free loan to the Trust in compliance of Provisions of The Companies Act, 2013 and SEBI (SBEB Regulations), 2014 as amended having outstanding balance of ' 25.22 crore as on 31st March, 2023 (' 36.50 crore as on 31st March, 2022)

55 The Company has made an assessment of the impact of the continuing Covid-19 pandemic on its current and future operations, liquidity position and cash flow giving due consideration to the internal and external factors. The Company is continuously monitoring the situation and does not foresee any significant impact on its operations and the financial position as at 31st March, 2023.

56 additional information

i. All title deeds of Immovable properties are held in name of the Company;

ii. The Company has no investment property hence disclosure of fair value of investment property is not applicable;

iii. The Company has not revalued its Property, Plant and Equipment ( including Right-of-use Assets), hence disclosure on the basis of its revaluation is not applicable;

iv. The Company has no intangible assets hence disclosure on the basis of its revaluation is not applicable;

v. No Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013) , either severally or jointly with any other person, that are:

a. Repayable on demand; or

b. Without specifying any terms or period of repayment,

vi. No proceeding has been initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder;

vii. The Company has borrowings from banks or financial institutions on the basis of security of current assets and quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts;

viii. The Company is not a declared wilful defaulter by any bank or financial institutions or other lender in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India;

ix. The Company has no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956;

x. No charges or satisfaction are yet to be registered with ROC beyond the statutory period;

xi. The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017;

xii. No Scheme of Arrangement has been approved by the Competent Authority in terms of Section 230 to 237 of the Companies Act, 2013 during the year;

xii. A. The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall

i. 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

ii. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

B. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall

i. 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

ii. provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

xiv. The Company has not traded or invested in Crypto currency or Virtual currency during the financial year, hence disclosure is not required;

xv. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken at the balance sheet date;

xvi. There are no transactions in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income-Tax Act, 1961, that has not been recorded in the books of account.

57 The Company has perpetual system of balance confirmation and reconciliation of Trade receivables and Trade payables,

however at year end some of the balances remain subject to confirmation and reconciliation.

58 Previous Period figures are regrouped /reclassified wherever necessary in line with requirement of Schedule III to the

Companies Act 2013.

59 Approval of financial statements

The financial statements were approved for issue by the Board of Directors on 27th April, 2023