Nature of reserves

Retained earnings represent the undistributed profits of the Company.

Other comprehensive income (OCI) reserve represent the balance in equity for items to be accounted in other comprehensive income. OCI is classified into (i) Items that will not be reclassified to profit and loss (ii) Items that will be reclassified to profit and loss.

Debenture Redemption Reserve represents the statutory reserve for non-convertible debentures issued by the Company. This is in accordance with Companies Act, 2013 wherein a portion of the profits are apportioned each year until the aggregate amount equals 25% of the face value of the debentures issued and outstanding. The reserve will be released on redemption of the debentures. As per Rule-18 (7)(b)(iii) of the Companies (Shares Capital and Debentures) Rules, 2014, the Company is not required to create Debenture Redemption Reserve for new issues of listed debentures.

General Reserve represents free reserve, created in accordance with requirements of Companies Act, 1956/Companies Act, 2013. Securities Premium represents the amount received in excess of par value of securities (equity shares, preference shares and debentures). Treasury Shares Reserve represents purchase value of own shares of the Company through JSAW Employee Welfare Trust. Also refer Note 3.23

Secured non-convertible debentures include:

(i) Term Loans of ' Nil [March 31, 2022 ' 15,763.68 lakhs including ' 15,763.68 lakhs shown in current maturity, interest ranging from 7.5% to 8.25%) were secured by first pari-passu charge by way of equitable mortgage on Company's immovable properties and hypothecation of movable fixed assets both present and future. These loans have been fully paid in FY 2022-23.

(ii) Term Loan of ' 3,192.64 lakhs [rate of interest 9.20% p.a.) (March 31, 2022 8.30% p.a.] (Including ' 3,192.64 lakhs shown in current maturity) (March 31, 2022'6,393.79 lakhs, including ' 3,200 lakhs shown in current maturity ) is secured by first pari-passu charge by way of equitable mortgage on Company's immovable properties and hypothecation of movable fixed assets both present and future. The loan is repayable in quarterly instalments in FY 2023-24 of ' 3,192.64 lakhs.

(iii) Term Loan of ' 12,000 lakhs (rate of interest 8.70% p.a.) (March 31, 2022 8.00% p.a.)(Including ' 6,000 lakhs shown in current maturity) (March 31, 2022 ' 16,500, Including ' 4,500 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is to be secured by first pari-passu charge by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of ' 6,000 lakhs and ' 6,000 lakhs in financial year 2023-24 and 2024-25 respectively.

(iv) Term Loan of ' 4,000.00 lakhs (rate of interest 9.10% p.a.) (March 31, 2022 8.10% p.a.) (Including ' 2,000 lakhs shown in current maturity) (March 31, 2022 ' 5,500 lakhs, including ' 1,500 lakhs shown in current maturity ) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of ' 2,000 lakhs and ' 2,000 lakhs in financial year 2023-24 and 2024-25 respectively.

(v) Term Loan of ' 7,989.35 lakhs (rate of interest 8.70% p.a.) (March 31,2022 8.00% p.a.) (Including ' 4,000 lakhs shown in current maturity) (March 31, 2022'10,989.70 lakhs, including ' 3,000 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of ' 4,000 lakhs and ' 3,989.35 lakhs in financial year 2023-24 and 2024-25 respectively.

(vi) Term Loan of ' 3,989.17 lakhs (rate of interest 8.25% p.a.) (March 31, 2022 8.25% p.a.) (Including ' 2,000 lakhs shown in current maturity) (March 31, 2022'5,489.17 lakhs, including ' 1,500 lakhs shown in current maturity ) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in half yearly instalments with annual payments of ' 2,000 lakhs and ' 1,989.17 lakhs in financial year 2023-24 and 2024-25 respectively.

(vii) Term Loan of ' 3,888.88 lakhs (rate of interest 9.00% p.a.) (March 31, 2022 7.40% p.a.) (Including ' 2,222.22 lakhs shown in current maturity) (March 31, 2022'6,111.10 lakhs, including ' 2,222.22 lakhs shown in current maturity ) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first

pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in quarterly instalments with annual payments of ' 2,222.22 lakhs and ' 1,666.66 lakhs in financial year 2023-24 and 2024-25 respectively.

(viii) Term Loan of ' 4,444.44 lakhs (rate of interest 9.25% p.a.) (March 31, 2022 7.60% p.a. ) (Including ' 2,222.22 lakhs shown in current maturity) (March 31, 2021'6,666.66 lakhs, including ' 2,222.22 lakhs shown in current maturity ) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in two years in quarterly instalments with annual payments of ' 2,222.22 lakhs and ' 2,222.22 lakhs in financial year 2023-24 and 2024-25 respectively.

(ix) Term Loan of ' 3,098.59 lakhs (rate of interest 8.95% p.a.) (March 31, 2022 8.25% p.a. ) (Including ' 845.07 lakhs shown in current maturity) (March 31, 2022'3,943.65 lakhs, including ' 845.07 lakhs shown in current maturity ) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in three years in half yearly instalments with annual payments of ' 845.07 lakhs, ' 1,126.76 and ' 1,126.76 lakhs in financial year 2023-24, 2024-25 and 2025-26 respectively.

(x) Term Loan from NBFC of ' 4,647.89 lakhs (rate of interest 9.00% p.a.) (March 31, 2022 8.50% p.a.) (Including ' 1,267.61 lakhs shown in current maturity) (March 31, 2022'4,647.89 lakhs, including ' Nil in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in three years in half yearly instalments with annual payments of ' 1,267.61 lakhs, ' 1,690.14 lakhs and ' 1,690.14 lakhs in financial year 2023-24, 2024-25 and 2025-26 respectively.

(xi) Term Loan of ' 1,628.00 lakhs (rate of interest 8.05%) (March 31, 2022 8.10% p.a.) (including ' 444 lakhs shown in current maturity) (March 31, 2022 ' 2,072.00 lakhs including ' 444 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in three years in half yearly instalments with annual payments of ' 444 lakhs, ' 592 lakhs and ' 592 lakhs in financial year 2023-24, 202425 and 2025-26 respectively.

(xii) Term Loan of ' 1,625.52 lakhs (rate of interest 8.05%) (March 31, 2022 8.10% p.a.) (Including ' 443.32 lakhs shown in current maturity) (March 31, 2022'2,068.84 lakhs including ' 443.32 lakhs shown in current maturity) is secured by first pari-passu charge by way of hypothecation of movable fixed assets both present and future and is secured by first pari-passu charges by way of equitable mortgage on Company's immovable properties. The loan is repayable in three years in half yearly instalments with annual payments of ' 443.32 lakhs, ' 591.10 lakhs and ' 591.10 lakhs in financial year 2023-24, 2024-25 and 2025-26 respectively.

(xiii) Term Loans include Vehicle Loans of ' Nil (March 31, 2022'17.67 lakhs, including ' 17.67 lakhs shown in current maturity ) which was secured by way of hypothecation of Vehicles. The loan has been fully paid in FY 2022-23.

(xiv) Interest free loan from state financial institution, for working capital financing secured by bank guarantee for seven years from the date of disbursement. Loan disbursed ' 4,060.07 lakhs (discounted value including interest outstanding ' 3,385.37 lakhs) (March 31, 2022'4,060.07 lakhs (Discounted value including interest outstanding ' 3,064.48 lakhs)). Discount rate taken 10% p.a. repayable after seven years from the date of disbursement i.e.' 520.58 lakhs in financial year 2023-24, ' 2,009.82 lakhs in financial year 2024-25 and ' 1,529.67 lakhs in financial year 2025-26.

(xv) Interest accrued but not due on non-current borrowings of ' 143.44 lakhs (March 31, 2022'263.36 lakhs) is included under other current financial liabilities, refer Note 30.

The figures for borrowings are net of processing fee. There is no default in repayment of principal and interest thereon.

[i] Lease of ' 15,28.65 lakhs [including ' 28.41 lakhs shown in current maturity] [March 31, 2022'1,554.37 lakhs, including ' 25.72 lakhs shown incurrent lease liabilities] for seamless pipe manufacturing facility for 25 years are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 10% p.a. [March 31, 2022 10% p.a.]

[ii] Lease of ' 525.70 lakhs [including ' 12.64 lakhs shown in current maturity] [March 31, 2022'515.36lakhs, including ' 11.35 lakhs shown in current lease liabilities] for installation and maintenance of Solar Power panels for 18 years are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 16.12% p.a.

[iii] Lease of ' 902.08 lakhs [including ' 29.06 lakhs shown in current maturity] [March 31, 2022 ' 927.84 lakhs, including ' 26.13lakhs shown in current lease liabilities] for Installation and maintenance of Solar Power panels for 18 years are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 15.08% p.a.

[iv] Lease of ' 267.92 lakhs [including ' 7.49 lakhs shown in current maturity] [March 31, 2022'272.31 lakhs, including ' 6.74 lakhs shown in current lease liabilities] for Installation and maintenance of Solar Power panels for 18 years are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 15.76% p.a.

[v] Lease of ' 4026.13 lakhs [including ' 2468.49 lakhs shown in current maturity] [March 31, 2022'6,260.65 lakhs, including ' 2,234.50 lakhs shown in current lease liabilities] for stainless steel manufacturing facility leaser from related party on 60 months lease is effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 10% p.a.

[vi] Lease of ' 5788.07 lakhs [including ' 1196.09 lakhs shown in current maturity] [March 31, 2022 '6,992.14 lakhs, including ' 1,209.07 shown in current lease liabilities] for DI Fittings manufacturing facility lease from related party on 99 months lease is effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 10% p.a.

[vii] Leases of ' 529.14 lakhs [including ' 174.08 lakhs shown in current maturity] [March 31, 2022 '561.99 lakhs, including ' 185.93lakhs shown in current lease liabilities] for premises/office premises lease/warehouse facility/plant are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. The discount rate considered for discounting minimum lease payments is 10% p.a.

The lease liabilities are repayable on monthly basis. Repayment period is from financial year 2023-24 to 2043-44.

[viii] Expense relating to short-term leases and low value leases that are not considered as ROU is ' 282.46 lakhs [March 31, 2022'82.66 lakhs]. Refer note 3.9

40 Financial risk management40.1 Financial risk factors

The Company's principal financial liabilities, other than derivatives, comprise borrowings, leases, trade and other payables and financial guarantee contracts. The main purpose of these financial liabilities is to manage finances for the Company's operations. The Company has loans, trade and other receivables, cash and short-term deposits that arise directly from its operations. The Company also enters into derivative transactions. The Company's activities expose it to a variety of financial risks detailed below:

i) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This is based on the financial assets and financial liabilities held as at March 31, 2023 and March 31, 2022.

ii) Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.

iii) Liquidity risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge certain risk exposures. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes.

Risk management is carried out by the treasury department under policies approved by the board of directors. The treasury team identifies, evaluates and hedges financial risks in close co-operation with the Company's operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, liquidity risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

Market Risk

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. The Company's activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative financial instruments such as foreign exchange forward contracts of varying maturity depending upon the underlying contract and risk management strategy to manage its exposures to foreign exchange fluctuations and interest rate.

(a) Foreign exchange risk and sensitivity

The Company transacts business primarily in USD, Euro, OMR and other currencies. The Company has obtained foreign currency loans and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk assessment of the management. Foreign exchange hedging contracts are carried at fair value.

(c) Commodity price risk and sensitivity

The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. For procurement of material, majority of transactions have short term fixed price contract. Further to minimise the risk of import, the Company enters into foreign exchange forward contracts, when considered appropriate.

(d) Credit risk

Credit risk arises from cash and cash equivalents, contractual cash flows of debt investments carried at amortised cost, deposited with banks, credit exposures from customers including outstanding receivables and other financial instruments.

Trade receivables and contract assets

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The Company has obtained advances and security deposits from its customers & distributors, which mitigate the credit risk to an extent.

Provision for expected credit losses (ECL)

The Company extends credit to customers as per the internal credit policy. Any deviation are approved by appropriate authorities, after due consideration of the customers credentials and financial capacity, trade practices and prevailing business and economic conditions. The Company's historical experience of collecting receivables and the level of default indicate that credit risk is low and generally uniform across markets; consequently, trade receivables and contract assets are considered to be a single class of financial assets. All overdue customer balances are evaluated taking into account the age of the dues, specific credit circumstances, the track record of the customers etc. Loss allowances and impairment is recognised as per the Company policy.

Others

All of the entity's debt investments ( preference shares, government securities, loan to related parties and others and security deposits) at amortised cost are considered to have low credit risk, when they have a low risk of default and the issuer/holder has a strong capacity to meet its contractual cash flow obligations in the near term. For cash and cash equivalents and deposit held with banks, 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 other than those required for its day to day operations. The company invests in liquid schemes of mutual fund which have a very short maturity. These schemes are readily convertible and have insignificant changes in value and are held as means for settling liabilities or for working capital limits from banks. The loss allowance recognised during the period was therefore limited upto 12 months expected losses.

There are no receivables which have significant increase in credit risk or credit impaired.

(e) Liquidity risk

The Company's objective is to maintain optimum levels of liquidity to meet its cash and collateral requirements at all times. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The table below provides undiscounted cash flows towards non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

The Company is required to maintain ratios as per loan agreements. In the event of failure to meet any of these ratios these loans become callable at the option of lenders, except where exemption is provided by lender. The Company aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches of the financial covenants of any interest bearing loans and borrowing for reported periods.

40.2 Competition risk

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

40.3 Capital risk management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Company's capital management is to maximize the shareholder value. The Company's primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company's ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2023 and year ended March 31, 2022. The Company monitors capital using gearing ratio, which is net debt divided by sum of capital and net debt.

For the purpose of the Company's capital management, capital includes equity share capital and other equity as per the balance sheet. Net debt includes, interest bearing loans and borrowings less cash and cash equivalents.

Fair Value hierarchy

The following table provides the fair value measurement hierarchy of Company's asset and liabilities, grouped into Level 1 to Level 3 as described below:

Level 1: It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date like mutual funds. The mutual funds are valued using the closing net assets value (NAV) as at the balance sheet date.

Level 2: It includes fair value of the financial instruments that are not traded in an active market like over-the-counter derivatives, which is valued by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value if instrument are observable then instrument is included in level 2.

Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

47. Borrowing cost and currency fluctuations capitalised

The Company has capitalised ' 18.37 lakhs [March 31, 2022 nil] borrowing cost and nil [March 31, 2022 nil] foreign exchange fluctuations during the year ended March 31, 2023 and March 31, 2022 respectively.

48. Employee Benefit Obligations

The Company has certain defined contribution plans. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. Refer table below for the expense recognised during the period towards defined contribution plan:

OCI presentation of defined benefit plan

Gratuity is in the nature of defined benefit plan, Accordingly, re-measurement gains and losses on gratuity is presented under OCI as an Item that will not be reclassified to profit and loss along with income tax effect on the same..

Presentation in Statement of Profit & Loss and Balance Sheet

Expense for service cost, net interest cost and expected return on plan assets is charged to Statement of Profit & Loss.

Actuarial liability for gratuity is shown as current and non-current provision in balance sheet.The entire amount of the provision for leave encashment of ' 7,241.74 lakhs [March 31, 2022 - ' 7,093.51 lakhs] is presented as current, since the company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the company does not expect all employees to avail the full amount of accrued leave or require payment for such leave within the next 12 months.

The Company has taken policy from an insurance company for managing gratuity fund. The major categories of plan assets for the year ended March 31, 2023 and March 31, 2022 has not been provided by the insurance company. Accordingly, the disclosure for major categories of plan assets has not been provided.

Risk exposure

The Company has taken gratuity policies from an insurance company. Contribution towards policies are done annually basis demand from the insurance company.

The insurance policy is non participating variable insurance plan and will not participate in the profits of the insurance company.

These policies provide for minimum floor rate [MFR], i.e. a guaranteed interest rate that the policy account will earn during the entire policy term. In addition to MFR the insurance company shall also declare a non-zero positive additional interest rate [AIR] at the beginning of every financial quarter on the policy account and AIR shall remain guaranteed for that financial quarter. In addition to this, the policy also earns residual addition.

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility

This may arise from volatility in asset values due to market fluctuations. Most of the plan asset investments are in fixed income securities.

Changes in government bond yields

The plan liabilities are calculated using a discount rate set with reference to government bond yields. A decrease in government bond yields will increase plan liabilities and vice-versa, although this will be partially offset by an increase in the value of the plans' holdings in such bonds.

Salary Cost Inflation Risk

The present value of the Defined Benefit Plan liability is calculated with reference to the future salaries of participants under the Plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.

(b) Details of benami property held

No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(c) Borrowing secured against current assets

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

(d) Wilful defaulter

The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(f) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(g) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

Formulae for computation of ratios are as follows :

(i) Current Ratio: Current assets/ Current liabilities

(ii) Debt Equity Ratio: Total debt (excluding lease liability)/ Net Worth

Total Debt: Secured Loans Unsecured Loans- Liquid Investments and fixed deposits with original maturity of less than 3 months

Net Worth: Equity Share Capital Reserves

(iii) Debt Service Coverage Ratio: Profit after tax Depreciation and amortisation Interest on long term debt / (Interst on long term debt Lease payments Principal repayment of long term debt during the period)

(iv) ROE (%) = Net Income/Shareholder's equity

(v) Inventory turnover ratio: (Cost of material consumed Purchase of stock-in-trade Changes in inventories of finished goods, Stock-in-trade and work-in- progress) / (average of opening and closing inventory of RM, SFG, FG and Scrap)

(vi) Trade Receivables turnover ratio: Sale of Goods and Services e Average Accounts Receivables

(vii) Trade payables turnover ratio: (Cost of material consumed Purchases stock in trade changes in inventory) e Average Accounts Payables

(viii) Net Capital Turnover Ratio: Total income / Shareholder's Equity

(ix) Net Profit ratio (%) : Net Profit/Total income*100

(x) Return on Capital employed (%) : EBIT/ Total Assets- Current Liablities

(xi) Return on investment (%) : Earnings before interest and tax/ Closing total assets

(i) Utilisation of borrowings

The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were was taken.

(j) Compliance with approved scheme(s) of arrangements

The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(k) Utilisation of Borrowed funds and share premium:

I) The company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

During the previous year, the company had invested ' 3,620.11 lakhs (USD 4,894,486 - AED 1,79,75,000) in its wholly owned subsidiary Jindal Saw Holding FZE. The subsidiary had used ' 3,550.22 lakhs ( AED 17,628 ) for purchase of 25% stake in its step down subsidiary, Jindal Saw Middle East FZE, earlier held by a minority shareholder. The balance amount was used by subsidiary for its working capital needs.

(II). 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 group shall:

a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(l) Undisclosed income

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

(m) Details of crypto currency or virtual currency

The company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(n) During the current year, the Company has made investments in a joint venture company amounting to ' 1,530 lakhs, granted unsecured loan to one subsidiary company amounting to ' 1,380 lakhs and 314 employees amounting to ' 658.49 lakhs, stood guarantee to a subsidiary company and joint venture amounting to ' 23,053.50 lakhs and ' 14,500 lakhs respectively and provided security to one bank amounting to ' 137,500 lakhs.

During the previous year, The Company has made investments in four group companies amounting to ' 35,619 lakhs, one mutual fund scheme amounting to ' 33,300 lakhs, granted unsecured loan to one subsidiary company amounting to ' 980 lakhs and 354 employees amounting to ' 507.31 lakhs , stood guarantee to a subsidiary company amounting to ' 73,845.82 lakhs and provided security to one bank amounting to ' 25,000 lakhs..

(o) During the current year, the Company has granted additional loan aggregating to ' 1,380.00 lakhs toJindal ITF Limited. This additional loan amount has been repaid during year. The loan is covered under Section 2(76) which is repayable on demand.

During the previous year, the Company has granted additional loan aggregating to ' 980.00 lakhs toJindal ITF Limited. This additional loan amount has been repaid during year. The loan is covered under Section 2(76) which is repayable on demand.

[iv] Hon'ble Supreme Court Judgment dated February 28, 2019 relating to the provident fund, has been evaluated and assessed based on legal opinion, the Company has arrived at the conclusion that there is no significant impact of this matter and accordingly no provision is made in the books of accounts.

(v) During the year and after the balance sheet date, Assessment orders for financial Years (FYs) 2014-15 to 2018-19 have been issued by the Assessing Officer, under reassessment proceedings which were initiated during FY 2021-22 in respect of FYs 2014-15 to 2019-20. In these Assessment Orders, certain additions have been made by the assessing officer without substantiating the same and without following the principles of natural justice. Also, the said orders have some procedural deficiencies. The Company, after considering all the information available and legal opinion obtained, believes that the resulting Income Tax demand amounting to ' 8,969.05 lakhs is not sustainable and as such no adjustment to financial statements is required.

It is not possible to predict the outcome of the pending litigations with accuracy, the Company believes, based on legal opinions received, that it has meritorious defences to the claims. The management believe the pending actions will not require outflow of resources embodying economic benefits and will not have a material adverse effect upon the results of the operations, cash flows or financial condition of the Company.

The Company's manufacturing facility at Bhilwara has been granted “Customized Package” by Government of Rajasthan and therefore is eligible for Investment Promotion Subsidy (IPS) under Rajasthan Investment Promotion Scheme-2010 (RIPS-2010). The purpose of the Customize Package Scheme of RIPS-2010 is to promote investment in the State of Rajasthan and to further generate employment opportunities through such investment. Modalities of payment of IPS consists of the following:

a) 50% exemption from payment of electricity duty for a period of 10 years from the date of issuance of entitlement certificate- from December 09, 2015 to December 08, 2025.

b) Investment subsidy equivalent to 70% of state tax due and deposited by Company into the Government exchequer, for a period of 07 years from the date of issuance of entitlement certificate- from December 09, 2015 to December 08, 2022.

c) Employment generation subsidy- for general category: '15,000/- per employee & for women/SC/ST/PwD: ' 18,000/- per employee per completed year of service, subject to maximum, 5% of state tax due and deposited by Company into the Government exchequer, for a period of 7 years from the date of issuance of entitlement certificate- from December 09, 2015 to December 08, 2022.

d) 50% exemption from payment of stamp duty & conversion charges for change of land use.

There are no unfulfilled conditions or other contingencies attaching to these grants.

iv. Bellary Unit

The Company's manufacturing facility at Bellary has been granted, “Subsidy for setting up of ETP Plant” by Government of Karnataka. As per operational guidelines of Karnataka Industrial Policy 2009-2014 and package of incentive and concession scheme offered for investment, Bellary unit is eligible for subsidy for setting up of ETP Plant (Effluent treatment plant).

As per the scheme, one time capital subsidy up to 50% of the cost of Effluent Treatment Plants (ETPs) is available to Manufacturing Micro, Small and Medium Enterprises and Service Enterprises, Manufacturing SEZ Enterprises, Large and Mega industries both for establishment of new enterprises or for expansion, diversification, and modernization of existing industries, subject to a ceiling of ' 100 lakhs per manufacturing enterprises in zone-1, 2 and 3 and a ceiling of ' 50 lakhs in zone-4. The Company being eligible under the scheme, got sanctioned a capital subsidy of ' 31.50 lakhs from District Industries Centre, Bellary and Directorate of Industries and Commerce, Bengaluru.

There are no unfulfilled conditions or other contingencies attaching to these grants.

v. Indore Unit

The Government of Madhya Pradesh implemented an Industrial Promotion Policy, 2014 for promoting industrialization, employment generation. Company has an Industrial unit at Indore became eligible as a large scale industrial unit for capital subsidy which will be disbursed over the years.

iii. Kosi Unit

The Government of Uttar Pradesh implemented an Industrial Investment Promotion Scheme, 2003 for the purpose of providing interest free loan under the scheme by way of working capital assistance during the initial years of production to promote setting up of a mega unit. Company has an Industrial unit having investment exceeding ' 2,500 lakhs at Kosi Kalan as per above mentioned scheme and became eligible for sanction of interest free loan as a mega unit. Pradeshiya Industrial & Investment Corporation of Uttar Pradesh Limited (PICUP), on behalf of the state Government has given interest free loan. There are no unfulfilled conditions or other contingencies attached to this grant.

The Company avails export promotion capital goods licenses. The objective of the EPCG scheme is to facilitate import of capital goods for producing quality goods and services and enhance manufacturing competitiveness.

EPCG scheme

EPCG Scheme allows import of capital goods and their spare parts without payment of custom duty including cess and IGST under the Foreign Trade Policy 2015-20. Scheme covers manufacturer exporter, supporting manufacturer and service provider. EPCG authorisation shall be valid for import for 18 months from the date of issue of authorisation. Imported capital goods shall be subject to actual user condition till export obligation is completed and export obligation discharge certificate (EODC) is granted.

Import under EPCG scheme shall be subject to export obligation which are manufactured by manufacturer exporter or its supporting manufacturer equivalent to 6 times of duties, taxes and cess saved on capital goods to be fulfilled in 6 years reckoned from the date of issue of authorisation. Export obligation (EO) under the scheme shall be over and above, the average level of exports achieved by the applicant in the preceding three licensing years for the same and EO shipment under advance authorisation, duty free import authorisation scheme (DFIA), drawback scheme or reward schemes would also be considered for fulfilment of EO.

As on the reporting date there is no outstanding export obligation against the EPCG licenses. There are no other contingencies relating to these grants.

57 Impairment review

Assets are tested for impairment annually or whenever there are any indicators for impairment. Impairment test is performed at the level of each Cash Generating Unit ('CGU') or group of CGUs within the Company at which assets are monitored for internal management purpose. The impairment assessment is based on higher of value in use and fair value less cost of disposal.

The expected outflow of provisions for asset retirement obligation is 40 to 44 years.

Refer Note 3.10 for nature and brief of employee benefit provision and refer Note 3.22 for nature and brief of restoration obligation. 59 Share Based Payments

The establishment of the Jindal Saw Stock Appreciation Right Scheme, 2018, was approved by shareholders at 33rd Annual General Meeting held on September 27, 2018. The employee stock appreciation right plan is designed to provide incentives to employees for the senior management in the Company. All vice presidents and above besides the functional heads and unit heads and above would be eligible for stocks appreciation rights.

The Company has set up a trust to administer the ESOP scheme under which Stock Appreciation Rights (SAR) have been granted to employees. The scheme only provides for cash settled grants to employees. The employee can excercise their right to monetise SAR's anytime within 5 years of the vesting date or cumpulsorily at the end of the employment, whichever is earlier.

60 a. J indal ITF Limited, subsidiary of the company, had won an arbitral award allowing various claims to the tune of ' 1,89,108 lakhs plus interest and applicable taxes. During the financial year 2019-20, the subsidiary had filed enforcement application under section 36 of Arbitration and Conciliation Act, 1996, for the execution of arbitral award being pronounced in favour of the subsidiary whereas the customer had preferred appeal under Section 34 of Arbitration and Conciliation Act, 1996, challenging the said arbitral award. Both the aforesaid cases are presently sub-judice before Hon'ble High Court of Delhi. As per interim relief granted by Hon'ble High Court, the subsidiary received ' 85,631 lakhs on submission of bank guarantees.

Based on the current status and the expert legal advice received, the company is expecting a favourable outcome which would cover all the investments, loans and advances in Jindal ITF and consequently no adjustments have been made to the carrying values of loans and investments in the books of the company.

b. The Company had invested in ' 20,100 lakhs redeemable preference shares (RPS) of Jindal ITF Limited, subsidiary, on December 07, 2015, redeemable at the end of seven years which was accounted for at fair value as a compound financial instrument. During the year, the terms of the RPS were modified extending the redemption date by 5 years and introducing a redemption premium of 11% at monthly rest, payable on maturity, with retrospective effect from its date of issue. Based on opinions taken by the Company, the modification has resulted into extinguishment of old debt component of RPS and recognition of same on its new fair value. On this account, a gain of ' 19,783.01 lakhs has been recognized in the financial statements as other income.

61. The Company had given an interest free loan of ' 1,500 lakhs (March 31, 2022'1,500 lakhs) to Employee Welfare Trust during the year ended March 31, 2023 for the purpose of employee benefits scheme. The trust had utilised ' 1,372.26 lakhs (March 31, 2022'1,401.65 lakhs) for purchase of the Company's own shares and ' 3.82 lakhs (March 31, 2022'142.73 lakhs) lying in its bank account and ' 200 lakhs (March 31, 2022 Nil) lying in fixed deposits. The company considers the Trust as an extension of the entity and hence has incorporated the assets and liabilities of the Trust in the standalone financial statements of the company. The shares of the company held by the trust are shown under ‘Treasury share' in ‘Other equity'.

62. Exceptional item

During the previous year, based on continued profits and improved business prospects, Company had reversed the provision of ' 1,399.68 lakhs in relation to carrying value of investment in Jindal Fittings Limited, an associate. Further due to the decline in business of Jindal Tubular (India) Limited, a subsidiary and erosion of its net worth, Company has recognised the provision of ' 2,105.00 lakhs towards the carrying value of investment in the subsidiary.

63 Events after the Balance Sheet Date

a. The Board of directors have recommended dividend for the financial year 2022-23, which is subject to the approval of the shareholders in the ensuing annual general meeting. For details of dividend, refer Note 40.4.

b. The Hon'ble Hyderabad bench of NCLT vide its order dated March 31, 2023, approved the resolution plan submitted by the Company for Sathavahana Ispat Limited. The conditions precedents as per the said Plan were achieved on April 26, 2023, the closing date. Accordingly, Sathavahana Ispat Limited stands merged with the Company on the said date.

c. The second motion application for approval of composite scheme of amalgamation of Jindal Quality Tubular Limited, Jindal Fittings Limited and Jindal Tubular India Limited with the Company has been filed with Hon'ble Allahabad Bench of NCLT. On April 19, 2023 NCLT has issued the notices to all the statutory authorities and the petition is listed for hearing on June 7, 2023.

d. The second motion application for approval of merger of Sulog Transshipments Limited (step down subsidiary) with Jindal ITF Limited (subsidiary) is pending with Hon'ble Allahabad Bench of NCLT and listed for hearing on May 24, 2023.

64. These financial statements were approved and adopted by board of directors of the Company in their meeting dated May

17, 2023.