04 Leases

(a) The Company as a lessee

The Company has lease contracts for various items of plant and equipment, vehicles, offices and leased land. Leases of plant and equipment generally have lease terms between 9 to 26 years, vehicles generally have lease terms upto 5 years, offices generally have lease terms between 12 months to 4 years and leases of land generally have lease terms between 30 years to 100 years. Generally, the Company is restricted from assigning or subleasing the leased assets. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased assets may be used as security for borrowing purposes.

The Company also has certain leases of offices with lease term of 12 months or less. The Company applies the 'short-term lease' recognition exemptions for these leases.

F Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of '10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The Company has issued 0.01% Non Convertible Redeemable Preference shares (NCRPS) during the financial year ended March 31, 2022 amounting to '12,700 crores having face value of '100 each. Considering the accounting principles to be followed in line with Indian Accounting Standards, the Company has computed the liability portion of NCRPS as the present value of the contractual obligations associated with the instrument and has presented it in Note 15 Borrowings. The difference between the issue amount of NCRPS and the liability so computed is Nil, accordingly 'Equity component of compound financial instruments' is Nil.

C Rights, preferences and restrictions attached to preference shares

The Company has issued preference shares having a par value of '100 per share. Preference shares carry voting rights as per the provisions of Section 47(2) of the Companies Act, 2013. The Company declares and pays dividend in Indian Rupees. The preference shares shall carry a preferential right vis-a-vis equity shares of the Company with respect to payment of dividend and repayment of capital. However, the holders of the preference shares shall be paid dividend on a non-cumulative basis. The preference shares shall be non-participating in the surplus funds and also in the surplus assets and profits which may remain after the entire capital has been repaid, on winding up of the Company. For terms of redemption, refer sub-note (ii) of Note 15-Borrowings."

(a) General reserves

Under the erstwhile Indian Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn though the Company may transfer such percentage of its profits for the financial year as it may consider appropriate. Declaration of dividend out of such reserve shall not be made except in accordance with rules prescribed in this behalf under the Act.

(b) Securities premium

Securities premium is used to record premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(d) Remeasurement gain / (loss) defined benefit plans

The Company recognises remeasurement gain / (loss) on defined benefit plans in Other Comprehensive Income. These changes are accumulated within the equity under "Remeasurement gain / (loss) on defined benefit plans" reserve within equity.

(e) Equity instruments through other comprehensive income

The Company has elected to recognise changes in the fair value of investments in equity instruments (Other body corporates) in Other Comprehensive Income. These changes are accumulated within the "Equity instruments through other comprehensive income" reserve within equity. The Company transfers amounts from this reserve to Retained Earnings when the relevant equity shares are derecognised.

(d) The term loan facility arrangements include financial covenants, which require compliance to certain debt-equity and debt coverage ratios. Additionally, certain negative covenants may limit the Company's ability to borrow additional funds or to incur additional liens, and/or provide for increased costs in case of breach. The Company has complied with these debt covenants.

(ii) During the financial year ended March 31, 2022, the Company has issued 0.01% Non-Convertible Redeemable Preference Shares ("NCRPS") to Tata Steel Limited on private placement basis. The NCRPS are mandatorily redeemable at the end of 20 years from the date of allotment at premium of ?574.63 per NCRPS. The NCRPS shall be redeemable at premium upon maturity or optional early redemption with accrued interest thereon computed on the basis of the effective yield of the instrument, at the option of the Company on a quarterly basis at 3-month intervals from the date of allotment.

The dividend payment to holders of NCRPS is discretionary (non-guaranteed) and non-cumulative in nature and accordingly these are accounted for as compound financial instruments.

30 Capital management (a) Risk management

The objective of the Company's capital management is to maximise shareholder value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding needs are met through equity, cash generated from operations, long-term and short-term bank borrowings.

The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Net debt includes interest bearing borrowings, lease liabilities and liability component of preference shares less cash and cash equivalents, other bank balances (including non-current earmarked balances) and current investments.

31 Disclosures on financial instruments (a) Financial risk management

The Company's activities expose it to credit risk, liquidity risk and market risk. In order to safeguard against any adverse effects on the financial performance of the Company, derivative financial instruments viz. foreign exchange forward contracts are entered where considered appropriate to hedge foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company's senior management oversees the management of above risks. The senior executives working to manage the financial risks are accountable to the Audit committee and the Board of Directors. This process provides assurance that the Company's financial risks-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and the Company's risk appetite.

This Note explains the sources of risk which the entity is exposed to and how the entity manages the risk. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(i) Credit risk management

Credit risk refers to the risk that a counterparty may default on its contractual obligations resulting in financial loss to the Company. The Company's exposure to credit risk primarily arises from trade receivables, investments in mutual funds and balances with banks.

Trade receivables and contract assets

Trade receivables are typically unsecured, considered good and are derived from revenue earned from customers. Customer credit risk is managed as per Company's policy and procedures which involve credit approvals, establishing credit limits and continually monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. Contract assets mainly relate to unbilled work in progress and have substantially the same characteristics as the trade receivables for the same type of contracts.

Outstanding customer receivables are regularly monitored and the shipments to customers are generally covered by letters of credit or other forms of credit assurance.

Other Financial Assets

Credit risk from balances with banks, term deposits, loans and investments is managed by Company's finance department. Investments of surplus funds are made only with approved counterparties who meet the minimum threshold requirements. The Company monitors ratings, credit spreads and financial strength of its counterparties.

The carrying value of financial assets represents the maximum credit risk as disclosed in 31 (b)(i). The credit risk relating to trade receivables is shown under Note 11.

(ii) Liquidity risk management

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 objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and maintain adequate source of financing. The Company has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Company has access to funds from debt markets through commercial paper programs. The Company invests its surplus funds in bank fixed deposits and in mutual funds, which carry no or low market risk.

a. Financing arrangement

The Company has unutilised fund based arrangement with banks for '878.25 crores (March 31, 2021: '695.51 crores). The Company has also Non-Fund based facilities with banks for '1,100.63 crores (March 31, 2021: '308.47 crores) which may be utilised at any time.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD exchange rates, with all other variables held constant. The impact on the Company's profit before tax and profit after tax is due to changes in the fair value of monetary assets and liabilities. The Company's exposure to foreign currency changes for all currencies other than US Dollars is not material.

The movement in the profit before tax and profit after tax is a result of a change in the fair value of derivative financial instruments not designated in a hedge relationship and monetary assets and liabilities denominated in INR, where the functional currency of the entity is a currency other than INR. Although the derivatives have not been designated in a hedge relationship, they act as an economic hedge and will offset the underlying transactions when they occur.

b. 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 changes in market interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company's profit before tax and profit after tax is affected through the impact on floating rate borrowings, as follows.

The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The year end balances are not necessarily representative of the average debt outstanding during the period.

(iv) Commodity Price risk

Exposure to market risk with respect to commodity prices primarily arises from the Company's purchase of imported coal for production of finished goods. Cost of raw materials forms the largest portion of the Company's cost of sales. Market forces generally determine prices for the coal purchased by the Company. These prices may be influenced by factors such as supply and demand, production costs and global and regional economic conditions and growth. Adverse changes in any of these factors may impact the results of the Company.

Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. The Company, as per its risk management policy, uses forward contract derivative instruments primarily to hedge foreign exchange fluctuations.

(b) Financial Instruments by Category

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

(ii) Fair value measurement

The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used in the previous year.

The following methods and assumptions were used to estimate the fair values:

(a) The management assessed that fair values of trade receivables, cash and cash equivalents, other bank balances, other financial assets (current), trade payables, and other financial liabilities (current), approximate to their carrying amounts due to the short-term maturities of these instruments.

(b) In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors. Accordingly, such net asset values are analogous to fair market value with respect to these investments, as transactions of these mutual funds are carried out at such prices between investors and the issuers of these units of mutual funds.

Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows below.

Quoted prices in an active market (Level 1): This level hierarchy includes financial instruments measured using quoted prices. This includes mutual funds. The mutual funds are valued using the closing Net Asset Value.

Valuation techniques with observable inputs (Level 2): The fair value of Financial instruments that are not traded in an active market (for example, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. This is the case for derivative instruments.

Valuation techniques with significant unobservable inputs (Level 3): If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.

The Company's policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There were no amount required to be transferred as at the end of the current year and as at the end of the previous year.

(c) Cross subsidy surcharge payable to power distribution companies

I n 2012-13, the Company injected power to State Grid due to denial of permission for open access by Orissa Power Transmission Corporation Limited (""OPTCL"") to supply power to the parent Company, Tata Steel Limited, beyond the period of invocation of section 11 of Electricity Act, 2003 by the Government of Odisha i.e., June, 2012. As a result, the Company could not meet the minimum stipulated criteria of 51% self-consumption of generated power as a captive power plant and the provisions of Cross Subsidy Surcharge under Electricity Act, 2003 became applicable. The Company filed a case before the Odisha Electricity Regulatory Commission (""OERC"") for relief which was denied and consequently the Company had filed a case before Appellate Tribunal of Electricity (""ATE""). Appeal filed by the Company before ATE was allowed and the matter stands remitted back to the OERC for reconsideration afresh. As a matter of prudence, pending finalisation of the matter, an amount of '6.01 crores provided in the year ended March 31, 2015, is being continued. In respect of above, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above.

(d) The Hon'ble Supreme Court of India vide its order dated September 24, 2014 had cancelled allocation of 214 coal blocks including the Radhikapur (East) Coal Block which was allotted to the Company on February 7, 2006. The carrying amount in books as at March 31, 2022 towards amounts incurred by the Company on the Radhikapur (East) Coal Block in earlier years aggregates '178.81 crores (March 31, 2021: '178.81 crores). Pursuant to the judgment of Hon'ble Supreme Court of India, the Government of India had promulgated the Coal Mines (Special Provision) Rules, 2014 and subsequent amendments ("Rules"), for allocation of the coal mines through auction and matters related thereto. In terms of the said Rules, the prior allottee (i.e. the Company) shall be compensated for the expenses incurred towards land and mine infrastructure. As part of 11th tranche of auction under The Coal Mines Act 2015, the Ministry of Coal (MoC) had carried out an auction of the coal block in November 2020 and EMIL Mines and Mineral Resources Limited (EMMRL) was declared as the successful bidder by the Nominated Authority on December 24, 2020. The MoC issued the vesting order dated March 3, 2021 in favour of EMMRL and directed the Company to hand over all the rights/ licenses/ approvals and documents to EMMRL. Accordingly, the Company submitted the documents in respect of title deeds of land and possession of buildings and other required details on April 6, 2021 to EMMRL. On April 28, 2021, the Company submitted a representation along with investment details to Odisha Industrial Infrastructure Development Corporation (IDCO) with a copy to the Joint Secretary to the Government of Odisha (Steel & Mines Department) for determination of valuation of leasehold land. On May 27, 2021, the Special Secretary to the Government of Odisha (Steel & Mines Department) directed IDCO to submit it's views against Company's representation. IDCO has submitted its views that the amount incurred by prior allottee shall be calculated as per the Order passed by Nominated Authority, Ministry of Coal, Government of India on July 28, 2021 in line with the decision taken in respect of New Patrapara Coal Block and to be paid by the new allottee EMMRL. The above referred views have also been communicated by IDCO to Additional Secretary to Government, Office of the Nominated Authority, Government of India, Ministry of Coal vide letter dated December 6, 2021.

Based on assessment of the matter by the Company including evidence supporting the expenditure and claim and external legal opinion obtained by the Company, the aforesaid amount is considered good and fully recoverable.

(e) MoC, in earlier years, issued notices to the Company for invocation of bank guarantee of '32.50 crores submitted towards performance of conditions for allocation of Radhikapur (East) Coal Block, which was contested by the Company in the Hon'ble High Court of Delhi. Further, in accordance with the directives from the Hon'ble High Court of Delhi, the Company had extended the validity of the bank guarantee up to April 15, 2021 and MoC vide its letter dated August 10, 2021 intimated the Company that based on the recommendations of the Inter-Ministerial Group, it has decided to release the bank guarantee. The aforesaid bank guarantee was returned back during the year ended March 31,2022, and accordingly, there is no financial impact on the Company in relation to the aforesaid bank guarantee matter.

34 Estimated amounts of contracts remaining to be executed on capital account (Property, plant and equipment) and not provided for is '77.12 crores (As at March 31, 2021: '60.43 crores) net of advances of '3.60 crores (As at March 31, 2021 '2.22 crores.)

35 Exceptional items Acquisition related expenditure

Acquisition related expenditure represents expenses incurred on stamp duty and registration fees for a portion of land parcels transferred in the name of the Company, which were part of the acquired business from Usha Martin Limited.

* Contribution towards provident fund for certain employees is made to the recognised state managed funds. Such provident fund benefit is classified as defined contribution scheme as the Company does not carry any further obligations, apart from the contributions made on a monthly basis which is recognised as expense in the Statement of Profit and Loss.

@ The Company has a superannuation plan for the benefit of its employees. This benefit is defined contribution scheme as the Company does not carry any further obligations apart from the contributions made which are recognised as expense under 'Contribution to Provident and Other Funds' in Note 26.

37.02 - Post employment defined benefit plans

(a) Description of plan characteristics

(i) Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. Gratuity liability arises on retirement, resignation, and death of an employee. The plan provides for a lump-sum payment to vested employees an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost are measured using the Projected Unit Credit method with actuarial valuations being carried out at each Balance Sheet date.

The Scheme is funded by way of a separate irrevocable Trust and the Company is expected to make regular contributions to the Trust. The fund is managed by an insurance Company and the assets are invested in their conventional group gratuity product. The fund provides a capital guarantee of the balance accumulated and declares interest periodically that is credited to the fund account. The Trust assets managed by the fund manager are highly liquid in nature and we do not expect any significant liquidity risks. The Trust is responsible for investment of assets of the Trust as well as day to day administration of the scheme.

(ii) Long term service award

Eligible employees of the Company rendering services for more than twenty years will receive long service award on all causes of exit as per the Company's policy. The cost of providing benefits under this plan is determined by actuarial valuation using the projected unit credit method by independent qualified actuaries at the year end.

(iii) Ex-MD Pension and Post Retirement Medical Benefit

The Board of Directors of the Company grants approval for provisions of special retirement benefits to Managing Directors. The retirement benefit induces indexed monthly pension which is reviewed in every three years and medical benefits. The benefits in short are called as Ex-MD pension and Post Retirement Medical Benefit (PRMB). Both the benefit schemes are available to the spouses of concern MDs.

The said benefits are not contractual obligation of the Company. The provisions of the above benefits can only be given after signing the agreement containing the no-compete clause. The liabilities are not funded by the Company and disclosed as defined benefit plan.

(b) Risk analysis

Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefit plans and management's estimation of the impact of these risks are as follows

(i) Interest risk

A decrease in the Indian government bond yield rate (discount rate) will increase the plan liability.

(ii) Salary risk

The present value of the defined benefit plan liability is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

(iii) Investment risk

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields. If the return on plan asset is below this rate, it will create a plan deficit.

(iv) Longevity risk

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

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. 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.

E. Provident fund

Eligible employees (except certain employees covered under Note 37.01) of the Company receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee's salary. The Company contributes a portion to the 'Tata Sponge Employees Provident Fund Trust'. The trust invests in specific designated instruments as prescribed by the Government. The remaining portion is contributed to the Government administered pension fund. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the Government. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate.

The Actuary has carried out year-end actuarial valuation of plan's liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, the Company has (reversed) / recognised interest rate guarantee shortfall amounting to '(5.03) crores (March 31, 2021: '15.39 crore) in the Statement of Profit and Loss. Further during the year, the Company's contribution of '4.49 crores (March 31, 2021: '4.37 crores) to the Provident Fund Trust has been expensed under the 'Contribution to Provident and Other Funds' in Note 26. Additionally, during the year the Company has contributed '1.95 crores to the trust, which has been expensed under the 'Contribution to Provident and Other Funds' in Note 26. (March 31, 2021: Nil).

37.03 - Other contributions

(i) Employees Pension Scheme - Total amount charged to the Statement of Profit and Loss for the year '3.45 crores (March 31, 2021: '3.25 crores).

(ii) Employees State Insurance - Total amount charged to the Statement of Profit and Loss for the year '0.07 crore (March 31,2021: '0.10 crore).

Contribution to these schemes are made by the company as required as per the statute.

(b) The Board of Directors of the Company approved the schemes for amalgamation of Tata Metaliks Limited and The Indian Steel and Wire Products Limited into the Company at its meeting held on November 13, 2020. The Board of Directors recommended exchange ratio of 12 fully paid-up equity shares of '10 each of the Company for every 10 fully paid-up equity shares of '10 each held in the Tata Metaliks Limited and 10 fully paid-up equity shares of '10 each of the Company for every 16 fully paid-up equity shares of '10 each held in The Indian Steel and Wire Products Limited. The Company submitted the schemes of amalgamation to Stock Exchanges on November 13, 2020 for approval.

In respect of the scheme for amalgamation of The Indian Steel and Wire Products Limited (ISWP) into the Company, the Company received letters dated June 29, 2021 from Stock Exchanges stating that the Securities and Exchange Board of India (SEBI) has returned the Scheme observing non-compliance with the securities law provisions. In respect of the scheme for amalgamation of Tata Metaliks Limited into the Company, the Stock Exchanges have requested the Company for additional information on the scheme and the Company is in the process of appropriately responding to the same.

(c) On January 31, 2022, the Company was identified as the winner of the bidding process to acquire a 93.71% equity stake in Neelachal Ispat Nigam Limited ('NINL') for total consideration of '12,100.00 crores, in accordance with the process run by Department of Disinvestment & Public Asset Management (DIPAM), Government of India. On February 2, 2022, DIPAM issued the Letter of Award to the Company for acquisition of 93.71% equity stake of NINL which was accepted by the Company on February 9, 2022. The total consideration of '12,100.00 crores shall be applied, interalia, for settling the existing debts/ liabilities and for acquisition of 93.71% equity shares in NINL.

On March 10, 2022, the Company has executed a Share Sale and Purchase Agreement (SPA) with MMTC Limited, NMDC Limited, MECON Limited, Bharat Heavy Electricals Limited, Industrial Promotion and Investment Corporation of Odisha Limited, Odisha Mining Corporation Limited, The President of India, The Government of Odisha, Tata Steel Limited and NINL for acquisition of 93.71% equity shares in NINL. Pursuant to execution of the SPA, the Company has deposited of '1,210.00 crores in the escrow account, representing 10% of the bid amount. The same has been presented as "Advance against equity investment" in the Balance Sheet considering that in future this advance will lead to a strategic nature of an investment.

The aforesaid acquisition will provide an inorganic growth opportunity for the Company to grow in the long products business and leverage the captive iron ore mines of NINL.

Further, during the year ended March 31, 2022, the Company has allotted (as below) 0.01% Non-Convertible Redeemable Preference Shares ("NCRPS") having face value of '100 each mandatorily redeemable at the end of 20 years from the date of allotment at premium of '574.63 per NCRPS to Tata Steel Limited on private placement basis as approved by the Board of Directors. The NCRPS shall be redeemable at premium upon maturity or optional early redemption with accrued interest thereon computed on the basis of the effective yield of the instrument, at the option of the Company on a quarterly basis at 3-month intervals from the date of allotment.

• On March 17, 2022, the Company allotted 100,000,000 (Ten crores) 0.01% NCRPS aggregating '1,000.00 crores.

• On March 30, 2022, the Company allotted 1,170,000,000 (One hundred seventeen crores) 0.01% NCRPS aggregating '11,700.00 crores.

Proceeds from the aforesaid allotment and accrued interest thereon have been presented under non current Borrowings (Refer Note 15 ) and the interest charge for the period on this instrument has been presented under " Finance Costs" (Refer Note 27).

Pending eventual utilisation, inter alia, for the acquisition of the aforesaid equity shares, the proceeds from the allotment have been used to repay the debt of '800 crores and invested '7,700 crores and '4,200 crores in Mutual Funds and Fixed Deposits respectively, which are in keeping with the purposes of utilisation approved by the shareholders in the Extra Ordinary General Meeting of March 7, 2022.

B. Impairment tests for goodwill

The Goodwill of '6.16 crores (March 31, 2021: '5.66 crores) represents the goodwill accounted on the acquisition of Steel Business (CGU) from Usha Martin Limited. The entire goodwill as mentioned above is attributable to the aforesaid acquired business CGU i.e. Integrated steel manufacturing plant. There were no impairment indicators as at the year end.

40 Assets classified as held for sale

(a) Pursuant to the Business Transfer Agreement with Usha Martin Limited (UML), the Company had acquired certain assets ('the Assets') at Chennai and Ranchi locations from UML. The Company acquired 'the Assets' with intention of subsequent sale and therefore, the Company recorded 'the Assets' as held for sale in accordance with Ind AS 105: Non-current Assets Held for Sale and Discontinued Operations.

During the current year, the Company has acquired Wire Mill business from Usha Martin (Refer Note 38(a)) through exchange of 'the Assets'. As at March 31, 2021, the Company measured 'the Assets' at lower of carrying value and fair value less costs to sell amounting to '8.39 crores.

(b) Certain items of property, plant and equipments (including capital work in progress) related to Radhikapur (East) coal block (Refer note 33(d)) amounting to ' Nil (March 31, 2021: '10.88 crores) had been classified as held for sale in accordance with Ind AS 105: Non-current Assets Held for Sale and Discontinued Operations.

41 Segment reporting

The Company is in the business of manufacture of steel and allied products (including the manufacture of sponge iron and generation of power) and accordingly, steel and allied products is the only reportable segment in accordance with Ind AS 108 - Segment Reporting.

Revenue expenditure charged to the Statement of Profit and Loss in respect of CSR activities undertaken during the year is '2.99 crores, (paid in cash) as compared to '0.56 crores for the year ended March 31, 2021 ('0.49 crores was paid in cash and '0.07 crore was unpaid).

c. CSR expenditure incurred through related parties of the Company for the year ended March 31, 2022 is '0.23 crores. (March 31, 2021: ' Nil.)

d. There are no ongoing CSR projects and no expenditure was incurred during the year on any ongoing project. The Company does not propose to carry forward any amount spent beyond the statutory requirement.

TSIL Energy Limited (TSIL Energy), a wholly owned subsidiary of the Company, was incorporated primarily for electric power generation, transmission, and its distribution. However, the aforesaid business activity could not be commenced. The members of TSIL Energy in its Annual General Meeting held on September 25, 2021, approved, by way of a special resolution, to initiate voluntary liquidation of TSIL Energy and appointed a Liquidator, authorising exercise of all powers as per the applicable provisions of the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016, to effectively discharge the process of voluntary liquidation of TSIL Energy.

In view of the above, with the loss of control of the Company in TSIL Energy upon passing of the aforesaid resolution / appointment of the Liquidator and having regard to the fact that the Company does not have any other subsidiary and TSIL Energy is not material (Indian Accounting Standards apply only to items that are material), the Company has considered not to present consolidated financial statement for financial year ended March 31, 2022.

The Company has received proceeds from the liquidator during the year ended March 31, 2022 and adjusted the same against the investments in TSIL Energy. During the year ended March 31, 2022, the Liquidator has filed application for dissolution of the TSIL Energy with National Company Law Tribunal Cuttack Bench. The Bench has directed the Registrar of Companies, Odisha, to file their report / representations.

(i) Current ratio has increased due to increase in cash and cash equivalents and investments in mutual funds. The proceeds from issue of NCRPS has been invested in short term deposits, which shall eventually be utilised for acquisition of Neelachal Ispat Nigam Limited.

(ii) Debt to equity ratio has increased due to issue of NCRPS during the current year.

(iii) Debt service coverage ratio has improved due to lower finance cost during the current year.

(iv) Trade receivables turnover ratio has primarily improved due to higher revenue from operations during the current year.

(v) FY'22 Working capital ratio has improved due to higher current investments and cash balances as at March 31, 2022.

*FY'21 Working capital is negative.

48 The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

49 The Company has long-term contracts as at March 31,2022 for which there were no material foreseeable losses. The Company did not have long term derivative contracts.

50 There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company except for amounts aggregating to '0.06 crores as at March 31, 2022 (March 31, 2021: '0.06 crores) which is held in abeyance due to pending legal cases.

51 The Company has not granted loans to its promoters, directors, key managerial personnel (KMP) and the other related parties (as defined under the Companies Act, 2013) which are repayable on demand or without specifying any terms or period of repayment or any other loans or advance in the nature of loans.

52 The Company has obtained borrowings from banks on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with the banks are in agreement with the books of accounts for year ended March 31, 2022 and March 31, 2021.

The returns for the quarter ended March 31, 2022, are not yet due, which would be appropriately filed by the Company within the due date.

Total amount of security (charge created), towards working capital facilities and term loan, as on March 31, 2022 is '1,585.00 crores (March 31, 2021: '1,297.00 crores) and '2,900.00 crores (March 31, 2021: '2,900.00 crores) respectively.

53 (a) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources

or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

54 The Company has not made any investments during the year other than investment in mutual funds. The Company has not granted secured/ unsecured loans/ advances in the nature of loans to any Company/Firm/Limited Liability Partnership/Other Party during the year other than loan to employees. The Company has not provided guarantee or security to any Company/ firm/Limited Liability Partnership/Other party during the year other than security provided against certain current assets in connection with working capital facilities from banks (Refer Note 44).

55 The Company has done an assessment to identify Core Investment Company (CIC) [including CIC's in the Group] as per the necessary guidelines of Reserve Bank of India [including Core Investment Companies (Reserve Bank) Directions, 2016]. The Companies identified as CIC's at Group level are Panatone Finvest Limited, TATA Capital Limited, TATA Industries Limited, TATA Sons Private Limited, TMF Holdings Limited and T S Investments.

56 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.

57 The Company has not been declared wilful defaulter by any bank or financial institutions or government or any government authority.

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

59 Figures for the previous year has been regrouped and reclassified to conform to classification of current year, wherever necessary.