The total cash outflow for leases for the year ended 31 March 2022 was '2,870.65 Lakhs (31 March 2021 was 1,732.75 Lakhs)

(i) Variable lease payments

Some plant and equipment leases contain variable payment terms that are linked to production and consumption. Payments are on the basis of variable payment terms with payment depending majorly on the output from the leased asset.

(ii) Extension and termination options

Extension and termination options are included the company's lease contracts.These are used to maximise operational flexibility in terms of managing the assets used in the company's operations. The extension and termination options held are exercisable by mutual consent of both the lessor and the lessee.

(iii) Residual value guarantees

To optimise lease costs during the contract period, the company sometimes provides residual value guarantees in relation to its leases. The company has provided residual value guarantee for its lease against coke oven plant for '1376 Lakhs (March 31, 2021 - 1,415 Lakhs)

i) Proposed dividend on equity shares are subject to approval at the annual general meeting and are not recognised as a liability as at March 31, 2022.

The nature of reserves are as follows:

Capital reserve

Reserve includes '8,759.51 lakhs on account of Merger pursuant to the sanction of the Hon'ble High Court of Calcutta dated November 7, 2016 to the scheme of Amalgamation, where the assets and liabilities of the erstwhile Tata Metaliks DI Pipes Ltd (TMDIPL) has been merged with the company.

General reserve

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Act, 2013, the requirement to mandatory transfer a specified percentage of the net profit to general reserve has been withdrawn though the Company may transfer such percentage of its profits for the financial year as it may consider appropriate.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.

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

The Company had claimed a deduction u/s 80-IA of the Income Tax Act, 1961 amounting to '7,682 lakhs during the AY 2003-04 to AY 2008-09 on its Captive Power Plant. The entire claim amount was allowed by the CIT(Appeals) & ITAT. However, tax department preferred an appeal before the Hon'ble Calcutta High Court for AY 2003-04 & AY 2004-05 on the ground that no real profit existed in Captive Power generation since same is not sold outside i.e. Tata Metaliks has consumed the power.

The Hon'ble Calcutta High Court vide it's order dated August 3, 2016 allowed the deduction u/s 80-IA 'on the captive power unit' in favour of the Company, however remanded back to AO on account of transfer price with respect to rate on which such benefit was computed. The Company have filed an appeal in Hon'ble Supreme Court where vide it's order dated July 14, 2017, the case has been admitted and High Court order on re-computation of transfer price has been stayed. Final hearing is pending for disposal.

31. Segment Reporting

A. Description of Segments and Principal Activities

The Company's Managing Director examines the Company's performance on the basis of its business and has identified two reportable segments:

The segments are comprised of Pig Iron and Ductile Iron (DI) pipes.

Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the Financial Statements. Also, the Company's borrowings (including Finance costs), income taxes and investments are managed at head office and are not allocated to operating segments.

Sales between segments are carried out at realisation price of pig iron less appropriate discount and are eliminated on consolidation. The segment revenue is measured in the same way as in the Statement of Profit and Loss.

Segment assets and liabilities are measured in the same way as in the Financial Statements. These assets and liabilities are allocated based on the operations of the segment and the physical location of the assets.

Terms and conditions of transactions with related parties

Transactions related to dividend were on the same terms and conditions that applied to other shareholders. The transactions with related parties (including sale to and purchases from, Intercorporate loan given to related parties) are made in the ordinary course of business and these are following the principles of arms's length. Outstanding balances at the year end are unsecured and settlement occurs in cash. No provision are held against receivable from related parties.

The company has carrying amount of MAT credit of '5,162.01 lakhs (March '2021 '7,015.38 lakhs) based on assessment (including application of sensitivity analysis on key inputs) of future profitability where it is reasonably certain that the same would be utilised within the time period in keeping with the provisions of Income tax Act. The future profitability are based on assumptions (relevant economic/internal/external factors) such as expected increase in production out of Board approved projects, estimates on cost of inputs, estimates on sales price etc.

(a) Unrecognised deferred tax assets on minimum alternate tax credit:

There are no amounts of unrecognized minimum alternate tax credits on which no deferred tax assets has been recognized as at March 31, 2022 and March 31, 2021

36. Discontinued Operations:

Based on decision of the Board of Directors of the Company at its meeting held on November 19, 2012 the Company has filed an application with the appropriate authority for closure of the Redi Plant, located at Terekhol Road, District: Sindhudurg, Redi - 416 517, Maharashtra, in accordance with the provisions of the Industrial Disputes Act, 1947. The application was initially rejected by the authority and the company has filed a review petition before the same authority. In the mean time the Company has negotiated with the employees for settlement and an agreement was signed on March 25, 2013 with the employees' union. The Company and the employees' union have filed the settlement details with the Commissioner of Labour to facilitate the closure process. The carrying value of property, plant and equipment, current assets and current liabilities of the Redi Plant as at March 31, 2022, were 'NIL (March 31, 2021 '1,187.91 lakhs), 'NIL (March 31, 2021 '22.70 lakhs) and 'NIL lakhs (March 31, 2021 '18.48 lakhs) respectively.

37. Capital Management

The Company's capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and other long-term/short-term borrowings. The Company's policy is aimed at combination of short-term and long-term borrowings.

The company has no material financial covenants.

38. Financial risk management objectives and policies

The Company's principal financial liabilities, other than derivatives, comprise trade and other payables, security deposits and employee liabilities. The main purpose of these financial liabilities is to finance the Company's operations and to provide guarantees to support its operations. The Company's principal financial assets include trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks. The Company's senior management is supported by a Risk Management Compliance Board that advises on financial risks and the appropriate financial risk governance framework for the Company. The financial risk committee provides assurance to the Company's senior management that the Company's financial risk 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 risk objectives. All derivative activities for risk management purposes are carried out by specialist personnel's that have the appropriate skills, experience and supervision. It is the Company's policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, mutual fund investment and derivative financial instruments.

The sensitivity analysis in the following sections relate to the position as at March 31, 2022 and March 31, 2021.

The sensitivity analysis have been prepared on the basis of debt and derivatives.

The following assumptions have been made in calculating the sensitivity analysis:

• The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2022 and March 31, 2021.

• The sensitivity of equity is calculated by considering the effect of any associated derivatives at March 31, 2022 and March 31, 2021 for the effects of the assumed changes of the underlying risk

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 is subject to variable interest rates on some of its interest bearing liabilities. The Company's interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short term loans.

The risk estimates provided assume a parallel shift of 50 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.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company, as per its risk management policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange exposure. Any weakening of the functional currency may impact the Company's cost of imports and cost of borrowings and consequently may increase the cost of financing the Company's capital expenditures.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its risk management policies.

Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.

Customer credit risk is managed subject to the Company's established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

The companies maximum exposure to credit risk for the components of the Balance Sheet as of March 31, 2022 and March 31, 2021 is the carrying amounts as disclosed in Note 39

The risk relating to trade receivables is shown under Note 10

Other Financial Assets

Credit risk from balances with banks, term deposits, Intercorporate loan, investments and derivative instruments is managed by Company's finance department. Investment of surplus fund are made only with approved counterparties who meet the minimum threshold requirement. The Company monitors rating, credit spreads and financial strength of its counterparties.

Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital loans from various banks. The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, bank loans, buyer's credit and other means of borrowings. The company invests its surplus funds in liquid schemes of mutual funds, which carry no/low mark to market risk.

The Company assessed the concentration of risk with respect to refinancing its debt and concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within 12 months can be rolled over with existing lenders.

39. Financial Instruments

The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements

Fair value hierarchy:

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

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range

Notes

i The other financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

ii Derivatives are fair valued using market observable rates and published prices together with forecast cash flow information where applicable.

iii There have been no transfers between level 1 and level 2 for the years ended March 31, 2022 and March 31, 2021.

40. Employee benefits

i) Superannuation fund

The company has a superannuation plan. Separate irrevocable trusts are maintained for employees covered and entitled to benefits.

The company contributes 15% of basic salary of the eligible employees to the trust every year. Such contributions are recognized as an expense when incurred. The company has no further obligation beyond this contribution. Total amount charged to the Statement of Profit and Loss for the year '300.47 lakhs (Previous year '285.68 lakhs).

ii) Retiring gratuity

The company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The company make annual contributions to gratuity funds established as trusts . Tata Metaliks Limited account for the liability for gratuity benefits payable in the future based on an actuarial valuation. The Company is exposed to actuarial risk and investment risk with respect to this plan.

The above sensitivity analysis are based on change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligations to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit obligation recognised in the Balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

iii) Pension Plan - Ex- Managing Director (Mr. Harsh K Jha)

The Company accounts for post-retirement defined benefit arrangements using Ind AS 19 'Employee Benefits', with independent actuaries being used to calculate the costs, assets and liabilities to be recognised in relation to these schemes. The present value of the defined benefit obligation, the current service cost and past service costs are calculated by these actuaries using the projected unit credit method. However, the ongoing funding arrangements of each scheme, in place to meet their long term pension liabilities, are governed by the individual scheme documentation and national legislation. The accounting and disclosure requirements of Ind AS 19 do not affect these funding arrangements.

v) Provident Fund

Contributions towards provident funds are recognised as expense for the year. The Company has set up a Provident Fund Trust which is administered by Trustees. Both the employees and the Company make monthly contributions to the Fund at specified percentage of the employee's salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment.

The Trust invests funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trust is not lower than the rate of interest declared annually by the Government under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.

The Actuary has carried out 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, an amount of '357.79 lakhs (March 31, 2021 : '393.15 lakhs) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Disclosures given hereunder are restricted to the information available as per the Actuary's Report.

vi) Leave Obligation

The leave obligation cover the company's liability for privilege leave and sick leave to be availed by employees. These employees can carry forward a portion of the unutilised leave balances and utilise it in future periods or receive cash in lieu thereof (except in case of sick leave for certain category of employees) as per the Company's policy. The Company records a provision for leave obligations in the period in which the employees render the services that increases this entitlement.

vii) Others

Others consist of company and employee contribution to:

i. Employees Pension Scheme [Total amount charged to the Statement of Profit and Loss for the year '213.25 lakhs (Previous year 2020-21 '218.25 lakhs)]

ii. Employees State Insurance [Total amount charged to the Statement of Profit and Loss for the year '3.53 lakhs ( Previous year 2020-21 '4.13 lakhs)]

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

41. The Company has assessed the impact of the Supreme Court Judgment in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management (including considering a view from legal expert, inspections by PF authorities), the aforesaid matter is not likely to have a significant impact and accordingly, no provision has been made in these Financial Statements.

Notes:

1. * State Bank of India, HDFC Bank Limited, DBS Bank Limited, IndusInd Bank Limited and ICICI Bank Limited are represented as Working Capital Lenders 1

2. ** Kotak Bank Limited and Federal Bank Limited are represented as Working Capital Lenders 2

3. State Bank of India - Hypothecation first charge over inventory and receivables and other current assets on pari-passu basis with other working capital lenders of the Company under Multiple Banking Arrangement subject to sharing of pari-passu sharing letters by such Banks.

HDFC Bank Limited - Secured by way of hypothecation via creation of first charge on Raw Material, Stock-in-process, Finished Goods, spares, stores, consumables, receivables and other current assets of the Company both present and future on pari passu basis with other working capital lenders.

DBS Bank Limited - 1st Pari passu charge on the current assets of Kharagpur unit and 2nd Pari passu charge on moveable fixed assets of Kharagpur Unit.

Indusind Bank Limited - First hypothecation charge on the entire current assets of the company belonging to the Kharagpur unit on pari-passu with other banks. Second charge on the movable fixed assets pertaining to the Kharagpur unit of TML on pari-passu with other banks.

ICICI Bank Limited - First pari passu charge on book debts, stock and other current assets of the borrower. Second pari passu charge by way of hypothecation of movable plant and machinery of Kharagpur unit of the Borrower located at Samraipur, Gokulpur, Kharagpur, Pin- 721301, West Bengal.

Kotak Bank Limited - First Pari Passu charge on current assets both present and future of the company's kharagpur unit, along with other lenders in multiple banking arrangement and Second Pari Passu Charge on movable fixed assets of Kharagpur unit, along with other lenders in multiple banking arrangement.

Federal Bank Limited - Pari-passu 1st charge on current assets with 25% margin on stock and book debts (upto 180days). Documents of goods exported/ usance bills evidencing export against LC/ confirmed order. Margin- NIL Extension of charge on current assets. Cash Margin- NIL Bills backed by LCs.

4. The Company has filed the revised quarterly returns or statements with such banks for above instances, in April 2022, with the correct amounts, which are in agreement with the books of account.

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.

46. 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.

47a . 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.

47b. 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.

48. 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.

49. The Company has not made any investments during the year other than in a Company. 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 a Company. The Company did not stand guarantee or provided security to any Company/Firm/Limited Liability Partnership/Other party during the year other than security of certain current assets to eight banks against working capital facilities from banks

50. 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.

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

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

53. Company have not been declared wilful defaulter by any bank or government or any government authority as applicable.

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

55. Exceptional item represents profit on sale of land (at Redi), which was not in use pursuant to discontinued operation in earlier year.

56. The Board of Directors of the Company in its meeting of November 13, 2020 approved the Scheme of Amalgamation of the Company

with Tata Steel Long Products Limited (TSLPL) seeking to amalgamate and consolidate the business of the Company into and with TSLPL (the 'Scheme'). The Company has submitted the Scheme to Stock Exchanges on November 14, 2020. In respect of the scheme for amalgamation of the Company into Tata Steel Long Products Limited, 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.

57. The Company has assessed the possible impact of COVID-19 on its financial statements based on the internal and external information available up to the date of approval of these financial statements and concluded no adjustment is required in these financial statements. The Company continues to monitor the future economic conditions.

58. Previous year figures have been recasted/restated wherever necessary including those as required in line with amendments in Schedule III.