Notes to Accounts of Mishra Dhatu Nigam Ltd.

Mar 31, 2025

2.11 Provisions

Provisions are recognized when the Company has a
present obligation (legal or constructive) as a result of a
past event and it is probable that an outflow of economic
benefits will be required to settle the obligation, and
a reliable estimate can be made of the amount of the
obligation taking into account the risks and uncertainties
surrounding the obligation.

A provision for onerous contracts is recognized when the
expected benefits to be derived by the Company from a
contract are lower than the unavoidable cost of meeting
its obligations under the contract. The provision for an
onerous contract is measured at the present value of the
lower of the expected cost of terminating the contract and
the expected net cost of continuing with the contract. Before
such provision is made, the Company recognizes any
impairment loss on the assets associated with that contract.

Provisions are reviewed at the end of each reporting period
and adjusted to reflect the current best estimates. If it is no
longer probable that an outflow of resources embodying
economic benefits will be required to settle the obligation,
the provision is reversed.

2.12 Financial instruments

i. Financial assets

The Company initially recognizes loans and
receivables and deposits on the date that they are
originated. All other financial assets are recognized
initially on the trade date at which the Company
becomes a party to the contractual provisions of
the instrument.

assets that is created or retained by the Company is
recognized as a separate asset or liability. Financial
assets and liabilities are offset and the net amount
is presented in the balance sheet when, and only
when, the Company has a legally enforceable right
to offset the amounts and intends either to settle on a
net basis or to realize the asset and settle the liability
simultaneously.

A financial asset shall be measured at amortized cost
if both of the following conditions are met:

the financial asset is held within a business
model whose objective is to hold financial assets
in order to collect contractual cash flows and

the contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding.

They are presented as current assets, except
for those maturing later than 12 months after the
reporting date which are presented as non-current
assets. Except Trade Receivable, financial assets are
measured initially at fair value plus transaction costs
and subsequently carried at amortized cost using the
effective interest method, less any impairment loss.

The Companyâs financial assets include security
deposits, cash and cash equivalents, trade receivables
and eligible current and non-current assets.

Cash and cash equivalents comprise cash balances
and term deposits with original maturities of one
year or less. Bank overdrafts that are repayable on
demand and form an integral part of the Companyâs
cash management are included as a component of
cash and cash equivalents for the purpose of the
statement of cash flows.

ii. Financial liabilities

The Company initially recognizes debt securities
issued and subordinated liabilities on the date that
they are originated. All other financial liabilities
are recognized initially on the trade date at which
the Company becomes a party to the contractual
provisions of the instrument.

The Company de-recognizes a financial liability
when its contractual obligations are discharged or
cancelled or expired.

The Company has the following financial liabilities:
loans and borrowings and trade and other payables.

Such financial liabilities are recognized initially at
fair value through profit or loss and stated net off
transaction cost that are directly attributable to them.
Subsequent to initial recognition these financial
liabilities are measured at amortized cost using the
effective interest method.

2.13 Impairment

i. Financial assets

A financial asset not carried at fair value through
profit or loss is assessed at each reporting date to
determine whether there is objective evidence that it
is impaired. A financial asset is impaired if objective
evidence indicates that a loss event has occurred after
the initial recognition of the asset, and that the loss
event had a negative effect on the estimated future
cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired
can include default or delinquency by a debtor,
restructuring of an amount due to the Company
on terms that the Company would not consider
otherwise, indications that a debtor or issuer will enter
bankruptcy, or the disappearance of an active market
for a security.

ii. Non-financial assets

At the end of each reporting period, the Company
reviews the carrying amount of its tangible and
intangible assets to determine whether there is
any indication that those assets have suffered
an impairment loss. If such indication exists, the
recoverable amount of the asset is estimated in
order to determine the extent of the impairment
loss (if any). When it is not possible to estimate
the recoverable amount of an individual asset, the
Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
When a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated

to individual cash-generating units, or otherwise they
are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation
basis can be identified.

Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested
for impairment at least annually, and whenever there
is an indication that the asset may be impaired.

Recoverable amount is the higher of the fair value less
costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset
for which the estimates of future cash flows have
not been adjusted.

2.14 Borrowing costs

Borrowing costs incurred for obtaining assets which takes
substantial period to get ready for their intended use are
capitalized to the respective assets wherever the costs
are directly attributable to such assets and in other cases
by applying weighted average cost of borrowings to the
expenditure on such assets. Other borrowing costs are
treated as expense for the year.

Transaction costs in respect of long-term borrowings
are amortized over the tenure of respective loans using
effective interest method.

2.15 Finance income and costs

Finance income comprises interest income on funds
invested. Interest income is recognized as it accrues
in the statement of profit and loss, using the effective
interest method.

Finance costs comprise interest expense on borrowings,
unwinding of the discount on provisions, impairment losses
recognized on financial assets. Borrowing costs that are
not directly attributable to the acquisition, construction
or production of a qualifying asset are recognized in
the statement of profit and loss using the effective
interest method.

2.16 Earnings per share

The Company presents basic and diluted earnings per
share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to
ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during
the period, adjusted for own shares held. Diluted EPS is
determined by adjusting the profit or loss attributable to
ordinary shareholders and the weighted average number
of ordinary shares outstanding, adjusted for own shares
held, for the effects of all dilutive potential ordinary shares.

2.17 Segment reporting

Operating segments are identified in a manner consistent
with the internal reporting provided to the chief operating
decision maker.

The Company is in the business of manufacturing of super
alloys and other special metals. Considering the core
activities of the Company, management is of the view
that the Company operates a single business segment.
Therefore, there is no other reportable segment.

2.18 Claims by / against the Company:

Claims on underwriters/carriers towards loss / damage are
accounted when monetary claims are preferred.

Claims for refund of customs duty including project
imports/port trust charge/excise duty are accounted on
acceptance/receipt.

Liquidated Damages on suppliers are accounted on recovery.

Liquidated damages levied by the customers are netted-
off from revenue on recovery/advice by the customers.
A provision is created for the likely claims of Liquidated
Damages for shipments made where a reliable
estimation can be made.

Disputed/Time barred debts from Govt. Depts. & PSUs
are not treated as Doubtful Debts. However, on a review
appropriate provisions/write offs are made in the books of
accounts on a case to case basis.

Provision for Doubtful Debts is made on the amounts due
from other than Govt. Depts. & PSUs using expected credit
loss provisional matrix.

Provision for Contingencies & Warranty to take care of
rejected / returned material by customers is provided at an
average of percentages of rejections over turnover related
to manufactured products for the previous 5 years.

2.19 Research and development expenses:

Research expenditure is charged to the Statement of Profit
and Loss. Development costs of products are also charged
to the Statement of Profit and Loss unless a productâs
technical feasibility has been established, in which case
such expenditure is capitalized. Tangible assets used in
research and development are capitalized.

Expenditure incurred towards other development activity
where the research results or other knowledge is applied
for developing new or improved products or processes, are
recognised as an Intangible Asset if the recognition criteria
specified in Ind AS 38 are met and when the product or
process developed is expected to be technically and
commercially usable, the company has sufficient resources
to complete development and subsequently use or sell the
intangible asset, and the product or process is likely to
generate future economic benefits.

2.20 Physical verification of Fixed Assets and Inventory:

Fixed Assets under the heads Land & Development, Roads
& Bridges, Drainage, Sewerage and water system and
Buildings & Internal Services are verified once in 3 years. All
other Fixed Assets are verified once in the Financial Year.

Inventories of work-in-process, finished goods, raw
materials and consumables in the Company premises are
verified at the end of the financial year.

Inventories of raw materials, stores and spares in the Central
Stores are verified on perpetual basis as per norms fixed
from time to time and reconciled. Provisional adjustments
are made to revenue, in respect of discrepancies pending
reconciliation.

2.21 Cash Flow Statement:

Cash flow statement has been prepared in accordance
with the indirect method prescribed in Ind AS 7-
Statement of Cash Flows.

2.22 New standards and interpretations not yet effective:

i. A number of new standards, amendments to
standards and interpretations are not yet effective as
on the reporting date, and have not been applied in
preparing these financial statements. The effect of the
same is being evaluated by the Company.

2.23 Government Grants:

i. Grants from the Government are recognized at their
fair value where there is reasonable assurance that
grant will be received and the Company will comply
with all attached conditions.

ii. Government grants relating to income are deferred
and recognized in the profit and loss over the period
necessary to match them with the costs that they are
intended to compensate and presented within other
income. Alternatively, they are deducted in reporting
the related expense.

iii. Grants related to non-depreciable assets may also
require the fulfilment of certain obligations and would
then be recognized in profit or loss over the periods
that bear the cost of meeting the obligations.

iv. Government Grants received either as subsidy or
otherwise for acquisition of depreciable assets are
accounted as deferred income. If the grant/subsidy is
absolute, amount corresponding to the depreciation
is treated as income over the life of the asset. If the
grant/subsidy is attached with any conditions, such as
repayment, income is accounted as per the terms of
the grant/subsidy.

2.24 LEASES
Company as a lessee:

Contracts with third party, which give the company the right
of use in respect of an Asset, are accounted in line with
the provisions of Ind AS 116 - âLeasesâ if the recognition
criteria as specified in the Accounting standard are met.

Lease payments associated with short term lease (term of
twelve months or less) and lease in respect of low value
assets are charged off as expenses on straight line basis
over lease term or other systematic basis, as applicable.

At commencement date, the value of âright of useâ is
capitalised at the present value of outstanding lease
payments plus any initial direct cost and estimated cost, if
any, of dismantling and removing the underlying asset.

Liability for lease is created for an amount equivalent to the
present value of outstanding lease payments. Subsequent
measurement, if any, is made using cost model.

Each lease payment is allocated between the liability
created and finance cost. The finance cost is charged to
the statement of profit and loss over the lease period so
as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.

The right of use asset is depreciated over the shorter of the
assetâs useful life and the lease term on a straight line basis.

The lease payments are discounted using the interest rate
implicit in the lease, if that rate can be determined, or the
companyâs incremental borrowing rate.

Lease modifications, if any, are accounted as a
separate lease if the recognition criteria specified in the
standard are met.

Company as a Lessor:

Lease are classified as finance or operating lease based
on the recognition criteria specified in Ind AS 116 - Leases.

a) Finance Lease:

At commencement date, amount equivalent to the ânet
investment in the leaseâ is presented as a receivable.
The implicit interest rate is used to measure the value
of the ânet investment in Leaseâ.

Each lease payment is allocated between the
Receivable created and finance income. The finance
income is recognised in the statement of profit and
loss over the lease period so as to reflect a constant
periodic rate of return on the net investment in lease.

The asset is tested for de-recognition and impairment
requirements as per Ind AS 109- Financial Instruments.

Lease modifications, if any, are accounted as a
separate lease if the recognition criteria specified in
the standard are met.

b) Operating lease:

The company recognises lease payments from
operating leases as income on either a straight line
basis or another systematic basis, if required. Lease
modifications, if any, are accounted as a separate
lease if the recognition criteria specified in the
standard are met.

A lease is classified at the inception date as a finance
lease or operating lease.

1. Conveyance deeds for 275 acres and 35 guntas of Land acquired which are through various Allotment/Award Letters/GO''s are
yet bo executed in the name of the Company. Most of them are allotted/granted by the undivided Govt. of AP earilier.

Further, above land includes:

(a) Land leased to DRDO - 35 acres and 39 guntas (Operating Lease), (b)Land in the physical possession of Telanagana State
Govt. - 1 acre, (c) Land in the physical possession of BDL - 1 acre and (d) 1.5 Acres land is under dispute on account of
unauthorized ocupancy by third party.

2. Claims for reimbursement of cost for 70 acres and 23 guntas of Land transferred by DRDO not acknowledged, as no final
settlement has been reached.

3. Pending registration/receipt of claims, no Provision has been made towards stamp Duty on conveyance deeds/conversion of
Land use/property taxes/service charges (amount not ascertainable).

4 Plant and Machinery includes H5058.04 lakhs (31-Mar-2024 H5058.04 lakhs) for R&D capital cost.

5 Company considered the salvage value as 5% of the Cost of Assets.

6 Principal Asset costing ?100 lakhs and above only are identified for the purpose of componentization of assets.

7 During the year, the Company has not revalued Property, Plant and Equipment.

8 The Estimated useful life of various categories of assets are considered based on the Schedule II of the Companies Act, 2013,
where NESD rates are available. For the other assets, management has estimated the useful life after taking into consideration,
factors like expected usage of assets, risk of technical and commercial obsolescence etc. The estimated useful lives of various
categories of Tangible Assets is as follows.

Note : For the purpose of above abbreviations, FVPL - Fair value through profit and loss; FVOCI - Fair value through other
comprehensive income; Amortized cost - Fair value through amortized cost.

(1) Assets that are not financial assets (such as receivables from statutory authorities, export benefit receivables,
prepaid expenses, advances paid and certain other receivables) as of March 31,2025, March 31,2024 respectively,
are not included.

(2) Other liabilities that are not financial liabilities (such as statutory dues payable, deferred revenue, advances from
customers and certain other accruals) as of March 31,2025, March 31,2024 are not included.

(i) Fair value of financial asset and financial liabilities measured at amortized cost

The carrying amounts of trade receivables, trade payables, borrowings, cash and cash equivalents and other current
financial liabilities are considered to be the same as their fair values, due do their short-term nature.

The Company has a Board approved Risk Management Policy and the Risks involved at the various processes in the Company
are also being discussed in the internal Production Review Meetings and Corporate Management Committee Meetings. The
identification of the risk elements faced by the company is listed out in Management Discussion and Analysis and also listed out
in the form of SWOT analysis.

The Companyâs risk management policies are established to identify and analyze the risks faced by the Company, to set
appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company has put in place all
required internal controls and systems to meet all the canons of financial propriety. External Audit firms who were engaged
to carry out internal audit, continue their efforts to ensure adequacy of such systems, controls and report thereon which were
subject to periodical review by Audit Committee appointed by the Board.

The Board of Directors monitors the compliance with the Companyâs risk management policies and procedures, and reviews the
adequacy of the risk management framework in relation to the risks faced by the Company.

This note presents information about the Companyâs exposure to each of the above risks, the Companyâs objectives, policies and
processes for measuring and managing risk, and the Companyâs management of capital.

Further quantitative disclosures are included throughout these financial statements.

i. Credit risk

a) Credit risk management

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the demographics of the Companyâs customer base, including the default risk
of the industry and country in which customers operate, as these factors may have an influence on credit risk. Majority
of trade receivables of the Company, originate from Government owned entities, which are not exposed to high risk,
the Company is making specific provisions based on case to case reviews and approved by Board. Whereas, for other
customers risk is measured using the expected credit loss provisional matrix and provision is recognized accordingly.

Impairment

Majority of trade receivables originate from Government owned entities, which are not exposed to high risk, the
Company is making specific provisions based on case to case reviews and approve by Board. Whereas, for private
customers, provision is determined using expected credit loss provisional matrix.

Cash and cash equivalents

The Company held cash and cash equivalents of t 5,088.18 Lakh at March 31,2025 (March 31,2024: t 1,647.66 Lakh).

The Company is investing in Fixed Deposits with various banks empanelled by the Investment Committee which is approved
by the Board. All such deposits are made only with the approval of the Investment Committee. Further, management
believes that cash and cash equivalents are of low risk in nature and hence no impairment has been recognized.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Company ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing
of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted,
such as natural disasters. In addition, the Company maintains the following lines of credit.

Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows. Balance due within 12 months equal their
carrying balances as the impact of discounting is not significant.

iii. Market risk

(a) Foreign currency risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the
Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimizing the return.

Since majority of the company''s operations are being carried out in India and since all the material balances are
denominated in its functional currency, the company does not carry any material exposure to currency fluctuation risk.

(b) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk
is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates.
Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate
because of fluctuations in the interest rates.

The Companyâs external borrowings carries a fixed interest rate of 6.82 % per annum, hence, no interest rate risk has
been determined.

The Boardâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Board of Directors monitors the return on capital, which the Company
defines as result from operating activities divided by total shareholdersâ equity.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings
and the advantages and security afforded by a sound capital position. In comparison the weighted average interest expense
on interest-bearing borrowings (excluding liabilities with imputed interest) was 6.82 percent (2024: 7.02 percent).

39. Operating segments

The Company is in the business of manufacturing of super alloys and other special metals. As the Company is engaged in
defence production, exemption was granted from applicability of Accounting Standard on Segment reporting under sec 129 of
Companies Act, 2013 vide Notification dated 23^rd February, 2018 of Ministry of Corporate Affairs.

40. Related party transactions

The President of India has an ownership interest of 74.00 %. MIDHANI is thus a Government entity under the administrative
control of Ministry of Defence (MoD) and is exempt from detailed disclosures as required under Ind AS 24 with respect to related
party tansactions with Government and Government related entities.

46. As at 31^st March, 2025, the company does not have any outstanding Commercial Paper and therefore, the disclosure
requirements as per updated SEBI circular: SEBI/HO/DDHS/P/CIR/2021/613 dated 13^th April, 2022 on "Operational Circular for
issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and
Commercial Paper", information as required under regulation 52(4) of SEBI (Listing Obligations and Disclosures Requirements)
Regulations 2015 is not applicable.

47. The Company has leases for various assets referred to in Note 3 of financial statements. With the exception of short-term leases
and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.
The Company classifies its right-of-use assets in a consistent manner to its Property, plant and equipment (Refer Note 3)
The maturity analysis of Contractual Cash flows of Lease Liabilities is disclosed at Note 37(ii) of the financial statements."

48. Retention Sale

The value of Retention Sale (i.e., Goods retained with the Company at the customers'' request and at their risk) included in
Turnover during the year is H 8,629.74 Lakh. Out of the above, the value of Ex-work sale is H 7,839.04 Lakh.

49. The previous period figures have been regrouped/reclassified, wherever necessary to conform to the current presentation.

Subject to our report of even date for and on behalf of the Board of Directors

Sd/-

for ANJANEYULU & CO. Dr. S.V.S. Narayana Murty

Chartered Accountants Chairman & Managing Director

Firmâs registration no. 000180S DIN: 11065319

Sd/- Sd/-

CA K Narayana Murthy Shri. Gowri Sankara Rao Naramsetti

Partner Director (Finance)

Membership No.026012 DIN: 08925899

Sd/-

Shri Paul Antony

Place: Hyderabad Company Secretary

Date: 28-05-2025 Memb. No.A29037

Mar 31, 2024

2.12 Financial instruments

i. Financial assets

2.11 Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation taking into account the risks and uncertainties surrounding the obligation.

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before such provision is made, the Company recognizes any impairment loss on the assets associated with that contract.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

The Company initially recognizes loans and receivables and deposits on the date that they are originated. All other financial assets are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company de-recognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability. Financial assets and liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

A financial asset shall be measured at amortized cost if both of the following conditions are met:

â¢ the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and

â¢ the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

They are presented as current assets, except for those maturing later than 12 months after the reporting date which are presented as non-current assets. Except Trade Receivable, financial assets are measured initially at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest method, less any impairment loss.

The Companyâs financial assets include security deposits, cash and cash equivalents, trade receivables and eligible current and non-current assets.

Cash and cash equivalents comprise cash balances and term deposits with original maturities of one year or less. Bank overdrafts that are repayable on demand and form an integral part of the Companyâs cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

ii. Financial liabilities

The Company initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument.

The Company de-recognizes a financial liability when its contractual obligations are discharged or cancelled or expired.

The Company has the following financial liabilities: loans and borrowings and trade and other payables.

Such financial liabilities are recognized initially at fair value through profit or loss and stated net off transaction cost that are directly attributable to them. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method.

!.13 Impairment

i. Financial assets

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Company on terms that the Company would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security.

At the end of each reporting period, the Company reviews the carrying amount of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of the fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

2.14 Borrowing costs

Borrowing costs incurred for obtaining assets which takes substantial period to get ready for their intended use are capitalized to the respective assets wherever the costs are directly attributable to such assets and in other cases by applying weighted average cost of borrowings to the expenditure on such assets. Other borrowing costs are treated as expense for the year.

Transaction costs in respect of long-term borrowings are amortized over the tenure of respective loans using effective interest method.

2.15 Finance income and costs

Finance income comprises interest income on funds invested. Interest income is recognized as it accrues in the statement of profit and loss, using the effective interest method.

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, impairment losses recognized on financial assets. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognized in the statement of profit and loss using the effective interest method.

2.16 Earnings per share

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

2.17 Segment reporting

Operating segments are identified in a manner consistent with the internal reporting provided to the chief operating decision maker.

The Company is in the business of manufacturing of super alloys and other special metals. Considering the core activities of the Company, management is of the view that the Company operates a single business segment. Therefore, there is no other reportable segment.

2.18 Claims by / against the Company:

Claims on underwriters/carriers towards loss / damage are accounted when monetary claims are preferred.

Claims for refund of customs duty including project imports/port trust charge/excise duty are accounted on acceptance/receipt.

Liquidated Damages on suppliers are accounted on recovery.

Liquidated damages levied by the customers are netted-off from revenue on recovery/advice by the customers. A provision is created for the likely claims of Liquidated Damages for shipments made where a reliable estimation can be made.

Disputed/Time barred debts from Govt. Depts. & PSUs are not treated as Doubtful Debts. However, on a review appropriate provisions/write offs are made in the books of accounts on a case to case basis.

Provision for Doubtful Debts is made on the amounts due from other than Govt. Depts. & PSUs using expected credit loss provisional matrix.

Provision for Contingencies & Warranty to take care of rejected / returned material by customers is provided at an average of percentages of rejections over turnover related to manufactured products for the previous 5 years.

2.19 Research and development expenses:

Research expenditure is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a productâs technical feasibility has been established, in which case such expenditure is capitalized. Tangible assets used in research and development are capitalized.

Expenditure incurred towards other development activity where the research results or other knowledge is applied for developing new or improved products or processes, are recognised as an Intangible Asset if the recognition criteria specified in Ind AS 38 are met and when the product or process developed is expected to be technically and commercially usable, the company has sufficient resources to complete development and subsequently use or sell the intangible asset, and the product or process is likely to generate future economic benefits.

2.20 Physical verification of Fixed Assets and Inventory:

Fixed Assets under the heads Land & Development, Roads & Bridges, Drainage, Sewerage and water system and Buildings & Internal Services are verified once in 3 years. All other Fixed Assets are verified once in the Financial Year.

Inventories of work-in-process, finished goods, raw materials and consumables in the Company premises are verified at the end of the financial year.

Inventories of raw materials, stores and spares in the Central Stores are verified on perpetual basis as per norms fixed from time to time and reconciled. Provisional adjustments are made to revenue, in respect of discrepancies pending reconciliation.

2.21 Cash Flow Statement:

Cash flow statement has been prepared in accordance with the indirect method prescribed in Ind AS 7-Statement of Cash Flows.

2.22 New standards and interpretations not yet effective:

i. A number of new standards, amendments to standards and interpretations are not yet effective as on the reporting date, and have not been applied in preparing these financial statements. The effect of the same is being evaluated by the Company.

2.23 Government Grants:

i. Grants from the Government are recognized at their fair value where there is reasonable assurance that grant will be received and the Company will comply with all attached conditions.

ii. Government grants relating to income are deferred and recognized in the profit and loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income. Alternatively, they are deducted in reporting the related expense.

iii. Grants related to non-depreciable assets may also require the fulfilment of certain obligations and would then be recognized in profit or loss over the periods that bear the cost of meeting the obligations.

iv. Government Grants received either as subsidy or otherwise for acquisition of depreciable assets are accounted as deferred income. If the grant/subsidy is absolute, amount corresponding to the depreciation is treated as income over the life of the asset. If the grant/subsidy is attached with any conditions, such as repayment, income is accounted as per the terms of the grant/subsidy.

2.24 LEASES Company as a lessee:

Contracts with third party, which give the company the right of use in respect of an Asset, are accounted in line with the provisions of Ind AS 116 - âLeasesâ if the recognition criteria as specified in the Accounting standard are met.

Lease payments associated with short term lease (term of twelve months or less) and lease in respect of low value assets are charged off as expenses on straight line basis over lease term or other systematic basis, as applicable.

At commencement date, the value of âright of useâ is capitalised at the present value of outstanding lease payments plus any initial direct cost and estimated cost, if any, of dismantling and removing the underlying asset.

Liability for lease is created for an amount equivalent to the present value of outstanding lease payments. Subsequent measurement, if any, is made using cost model.

Each lease payment is allocated between the liability created and finance cost. The finance cost is charged to the statement of profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

The right of use asset is depreciated over the shorter of the assetâs useful life and the lease term on a straight line basis.

The lease payments are discounted using the interest rate implicit in the lease, if that rate can be determined, or the companyâs incremental borrowing rate.

Lease modifications, if any, are accounted as a separate lease if the recognition criteria specified in the standard are met.

Company as a Lessor:

Lease are classified as finance or operating lease based on the recognition criteria specified in Ind AS 116 - Leases.

a) Finance Lease:

At commencement date, amount equivalent to the ânet investment in the leaseâ is presented as a receivable. The implicit interest rate is used to measure the value of the ânet investment in Leaseâ.

Each lease payment is allocated between the Receivable created and finance income. The finance income is recognised in the statement of profit and loss over the lease period so as to reflect a constant periodic rate of return on the net investment in lease.

The asset is tested for de-recognition and impairment requirements as per Ind AS 109- Financial Instruments.

Lease modifications, if any, are accounted as a separate lease if the recognition criteria specified in the standard are met.

b) Operating lease:

The company recognises lease payments from operating leases as income on either a straight line basis or another systematic basis, if required. Lease modifications, if any, are accounted as a separate lease if the recognition criteria specified in the standard are met.

A lease is classified at the inception date as a finance lease or operating lease.

37. Financial risk management Risk management framework

The Company has a Board approved Risk Management Policy and the Risks involved at the various processes in the Company are also being discussed in the internal Production Review Meetings and Corporate Management Committee Meetings. The identification of the risk elements faced by the company is listed out in Management Discussion and Analysis and also listed out in the form of SWOT analysis.

The Companyâs risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company has put in place all required internal controls and systems to meet all the canons of financial propriety. External Audit firms who were engaged to carry out internal audit, continue their efforts to ensure adequacy of such systems, controls and report thereon which were subject to periodical review by Audit Committee appointed by the Board.

a) Credit risk management

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Companyâs customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. Majority of trade receivables of the Company, originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case reviews and approved by Board. Whereas, for other customers risk is measured using the expected credit loss provisional matrix and provision is recognized accordingly.

b) Provision for expected credit loss

The Company provides for expected credit loss based on the following :

Expected credit loss for loans, security deposits

The Company''s loans and security deposits are high quality assets having neglible credit risk, hence expected credit loss have not been computed

Impairment

Majority of trade receivables originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case reviews and approve by Board. Whereas, for private customers, provision is determined using expected credit loss provisional matrix.

Cash and cash equivalents

The Company held cash and cash equivalents of t 1,647.66 Lakh at March 31,2024 (March 31,2023: t 1,429.11 Lakh).

The Company is investing in Fixed Deposits with various banks empanelled by the Investment Committee which is approved by the Board. All such deposits are made only with the approval of the Investment Committee. Further, management believes that cash and cash equivalents are of low risk in nature and hence no impairment has been recognized.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Company ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains the following lines of credit.

(a) Foreign currency risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

Since majority of the company''s operations are being carried out in India and since all the material balances are denominated in its functional currency, the company does not carry any material exposure to currency fluctuation risk.

(b) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

The Companyâs external borrowings carries a fixed interest rate of 7.02% per annum, hence, no interest rate risk has been determined.

38. Capital Management (a) Risk management

The Boardâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Company defines as result from operating activities divided by total shareholdersâ equity.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. In comparison the weighted average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 7.02 percent (2023: 7.25 percent).

46. As at 31^st March, 2024, the company does not have any outstanding Commercial Paper and therefore, the disclosure requirements as per updated SEBI circular: SEBI/HO/DDHS/P/CIR/2021/613 dated 13^th April, 2022 on "Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper", information as required under regulation 52(4) of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 is not applicable.

47. The Company has leases for various assets referred to in Note 3 of financial statements. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Company classifies its right-of-use assets in a consistent manner to its Property, plant and equipment (Refer Note 3) The maturity analysis of Contractual Cash flows of Lease Liabilities is disclosed at Note 37(ii) of the financial statements."

48. The previous period figures have been regrouped/reclassified, wherever necessary to conform to the current presentation.

Subject to our report of even date for and on behalf of the Board of Directors

Sd/-

for GANDHI & GANDHI Dr. Sanjay Kumar Jha

Chartered Accountants Chairman & Managing Director

Firm''s registration no. 000849S DIN: 07533036

Sd/- Sd/-

CA Rama Mohan Giri Shri. Gowri Sankara Rao Naramsetti

Partner Director (Finance)

Membership No.29478 DIN: 08925899

Sd/-

Shri Paul Antony

Place: Hyderabad Company Secretary

Date: 29-05-2024 Memb. No.A29037

Mar 31, 2023

1. Conveyance deeds for 275 acres and 35 guntas of Land acquired which are through various Allotment/Award Letters/GO''s are yet be executed in the name of the Company. Most of them are allotted/granted by the undivided Govt. of AP earilier.

Further, above land includes:

(a) Land leased to DRDO - 35 acres and 39 guntas (Operating Lease), (b) Land in the physical possession of Telanagana State Govt. - 1 acre, (c) Land in the physical possession of BDL - 1 acre and (d) 1.5 Acres land is under dispute on account of unauthorized ocupancy by third party.

2. Claims for reimbursement of cost for 70 acres and 23 guntas of Land transferred by DRDO not acknowledged, as no final settlement has been reached.

3. Pending registration/receipt of claims, no Provision has been made towards stamp Duty on conveyance deeds/conversion of Land use/property taxes/service charges (amount not ascertainable)

4 Plant and Machinery includes ''5,066.35 lakhs (31-Mar-2022 ''4,984.60 lakhs) for R&D capital cost.

5 Company considered the salvage value as 5% of the Cost of Assets

6 Principal Asset costing ''100 lakhs and above only are identified for the purpose of componentization of assets.

7 During the year, the Company has not revalued Property, Plant and Equipment.

8 Useful life adopted by the Company for calculation of Depreciation in respect of the following assets are less than the useful life prescribed under Schedule II of the Companies Act, 2013.

Gratuity payable to eligible employees is administered by a separate Trust, which has taken a policy with LICGGF. The annual demand computed through actuarial valuation is charged to Statement of Profit and Loss and other comprehensive income.

The leave obligations cover the Companyâs liability for the earned leave. The retirement benefit relating to leave encashment is administered through a Group Leave Encashment Scheme with LIC of India. The annual demand computed through actuarial valuation is charged to Statement of Profit and Loss.

(iii) Pension

As per the Department of Defence Production, Ministry of Defence, GOI, Guidelines No.8(112)/2012/D(Coord/DDP) dt. 11.11.2013, the contribution to Pension Scheme has to be restricted to a maximum of 10% (7% with the approval of Board and 3% with the prior approval of the Ministry of Defence) of Basic DA in a financial year.

The Current year contribution to pension fund has been paid @ 7% of Basic DA in line with the MoD guidelines.

35. INCOME TAX EXPENSE

This note provides an analysis of the Company''s income tax expense, shows amounts that are recognised directly in the equity and how the tax expense is affected by non-assessable and non-deductible items. It also explains significant estimates made in relation to the Company''s tax positions.

(1) Assets that are not financial assets (such as receivables from statutory authorities, export benefit receivables, prepaid expenses, advances paid and certain other receivables) as of March 31, 2023, March 31, 2022 respectively, are not included.

(2) Other liabilities that are not financial liabilities (such as statutory dues payable, deferred revenue, advances from customers and certain other accruals) as of March 31, 2023, March 31, 2022 are not included.

(i) Fair value of financial asset and financial liabilities measured at amortized cost

The carrying amounts of trade receivables, trade payables, borrowings, cash and cash equivalents and other current financial liabilities are considered to be the same as their fair values, due do their short-term nature.

37. Financial risk management

Risk management framework

The Company has a Board approved Risk Management Policy and the Risks involved at the various processes in the Company are also being discussed in the internal Production Review Meetings and Corporate Management Committee Meetings. The identification of the risk elements faced by the company is listed out in Management Discussion and Analysis and also listed out in the form of SWOT analysis.

and systems to meet all the canons of financial propriety. External Audit firms who were engaged to carry out internal audit, continue their efforts to ensure adequacy of such systems, controls and report thereon which were subject to periodical review by Audit Committee appointed by the Board.

The Board of Directors monitors the compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

This note presents information about the Companyâs exposure to each of the above risks, the Companyâs objectives, policies and processes for measuring and managing risk, and the Companyâs management of capital.

Further quantitative disclosures are included throughout these financial statements.

i. Credit risk

a) Credit risk management

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Companyâs customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. Majority of trade receivables of the Company, originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case reviews and approved by Board. Whereas, for other customers risk is measured using the expected credit loss provisional matrix and provision is recognized accordingly.

b) Provision for expected credit loss

The Company provides for expected credit loss based on the following :

Expected credit loss for loans, security deposits

The Company''s loans and security deposits are high quality assets having neglible credit risk, hence expected credit loss have not been computed .

Expected credit loss for trade receivables

Expected credit loss on trade receivables has been disclosed in note 11

The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables.

Impairment

Majority of trade receivables originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case reviews and approve by Board. Whereas, for private customers, provision is determined using expected credit loss provisional matrix.

Cash and cash equivalents

The Company held cash and cash equivalents of '' 1,429.11 Lakh at March 31, 2023 (March 31, 2022: '' 6,247.72 Lakh).

The Company is investing in Fixed Deposits with various banks empanelled by the Investment Committee which is approved by the Board. All such deposits are made only with the approval of the Investment Committee. Further, management believes that cash and cash equivalents are of low risk in nature and hence no impairment has been recognized.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Company ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains the following lines of credit.

Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows. Balance due within 12 months equal their carrying balances as the impact of discounting is not significant.

iii. Market risk

(a) Foreign currency risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

Since majority of the company''s operations are being carried out in India and since all the material balances are denominated in its functional currency, the company does not carry any material exposure to currency fluctuation risk.

(b) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

The Companyâs external borrowings carries a fixed interest rate of 7.25% per annum, hence, no interest rate risk has been determined.

38. Capital Management (a) Risk management

The Boardâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Company defines as result from operating activities divided by total shareholdersâ equity.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. In comparison the weighted average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 7.25 percent (2022: 7.15 percent).

39. Operating segments

The Company is in the business of manufacturing of super alloys and other special metals. As the Company is engaged in defence production, exemption was granted from applicability of Accounting Standard on Segment reporting under sec 129 of Companies Act, 2013 vide Notification dated 23^rd February 2018 of Ministry of Corporate Affairs.

41. Contingent liabilities and commitments (to the extent not provided for)
Particulars	31^st March, 2023 ('' in Lakh)	31^st March, 2022 ('' in Lakh)
(i) Contingent liabilities
Claims against the company not acknowledged as debt	10,887.33	9,761.22
Bank Guarantees	2,710.14	3,045.51
Letter of credit outstanding	7,567.48	8,639.98
Provisional Liquidated Damages on unexecuted customer order where the delivery date has expired	3,624.00	5,526.00
	24,788.95	26,972.71

Particulars	31^st March, 2023 ('' in Lakh)	31^st March, 2022 ('' in Lakh)
(ii) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for (Capital commitments)	7,576.31	13,450.93
	7,576.31	13,450.93

(ii) During the year, the Company has not revalued its Property, Plant and Equiment and Intangible Assets.

(iii) The Company has not granted Loans or Advances in the nature of loans to Promoters, Directors, KMP, and the related parties as defined under Companies Act, 2013, either serverally or jointly with any other person.

(v) The quarterly returns or statements of current assets filed by the Company with banks where the Company has borrowings as on 31^st March, 2023 are in agreement with the books of accounts.

(vi) The Company has not made any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

(vii) The Company has created or modified the charges with Registrar of Companies (ROC) within the statutory period as specified in the Companies Act, 2013.

(viii) The Company has no subsidiary hence Section 2 (87) not applicable.

46. As at 31^st March, 2023, the company does not have any outstanding Commercial Paper and therefore, the disclosure requirements as per updated SEBI circular: SEBI/HO/DDHS/P/CIR/2021/613 dated 13^th April, 2022 on "Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper", information as required under regulation 52(4) of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 is not applicable.

The Company classifies its right-of-use assets in a consistent manner to its Property, plant and equipment (Refer Note 3) The maturity analysis of Contractual Cash flows of Lease Liabilities is disclosed at Note 37(ii) of the financial statements.

48. The previous period figures have been regrouped/reclassified, wherever necessary to conform to the current presentation.

Mar 31, 2021

Note : For the purpose of above abbreviations, FVPL - Fair value through profit and loss; FVOCI - Fair value through other comprehensive income; Amortized cost - Fair value through amortized cost

(1) Assets that are not financial assets (such as receivables from statutory authorities, export benefit receivables, prepaid expenses, advances paid and certain other receivables) as of March 31, 2021, March 31, 2020 respectively, are not included.

(2) Other liabilities that are not financial liabilities (such as statutory dues payable, deferred revenue, advances from customers and certain other accruals) as of March 31, 2021, March 31, 2020 are not included.

(i) Fair value of financial asset and financial liabilities measured at amortized cost

The carrying amounts of trade receivables, trade payables, borrowings, cash and cash equivalents and other current financial liabilities are considered to be the same as their fair values, due do their short-term nature.

The Company has a Board approved Risk Management Policy and the Risks involved at the various processes in the Company are also being discussed in the internal Production Review Meetings and Corporate Management Committee Meetings. The identification of the risk elements faced by the company is listed out in Management Discussion and Analysis and also listed out in the form of SWOT analysis.

The Company''s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company has put in place all required internal controls and systems to meet all the canons of financial propriety. External Audit firms who were engaged to carry out internal audit, continue their efforts to ensure adequacy of such systems, controls and report thereon which were subject to periodical review by Audit Committee appointed by the Board.

The Board of Directors monitors the compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

i. Credit riska) Credit risk management

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company''s customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk. Majority of trade receivables of the Company, originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case reviews and approved by Board. Whereas, for other customers risk is measured using the expected credit loss provisional matrix and provision is recognized accordingly.

b) Provision for expected credit loss

The Company provides for expected credit loss based on the following :

Expected credit loss for loans, security deposits

The Company''s loans and security deposits are high quality assets having neglible credit risk, hence expected credit loss have not been computed

Impairment

Majority of trade receivables originate from Government owned entities, which are not exposed to high risk, the Company is making specific provisions based on case to case reviews and approve by Board. Whereas, for private customers, provision is determined using expected credit loss provisional matrix.

Cash and cash equivalents

The Company held cash and cash equivalents of ? 9,387.01 Lakhs at March 31, 2021 (March 31, 2020: ? 7,271.03 Lakhs).

The Company is investing in Fixed Deposits with various banks empanelled by the Investment Committee which is approved by the Board. All such deposits are made only with the approval of the Investment Committee. Further, management believes that cash and cash equivalents are of low risk in nature and hence no impairment has been recognized.

ii. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

Company ensures that it has sufficient cash on demand to meet expected operational expenses, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition, the Company maintains the following lines of credit.

Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows. Balance due within 12 months equal their carrying balances as the impact of discounting is not significant.

(a) Foreign currency risk

Market risk isthe risk that changes in market prices, such asforeign exchange rates and interest rates will affect the Company''s income or the value of its holdings of financial instruments.The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. Since majority of the company''s operations are being carried out in India and since all the material balances are denominated in its functional currency, the company does not carry any material exposure to currency fluctuation risk.

(b) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

The Company''s external borrowings carries a fixed interest rate of 7.15% per annum, hence, no interest rate risk has been determined.

38. Capital Management(a) Risk management

The Board''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders'' equity.

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. In comparison the weighted average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 7.15 percent (2020: 8.70 percent).

43. Impact analysis of new corporate tax rates

Taxation Laws (Amendment) Ordinance, 2019 has been promulgated by the President of India. The Ordinance has amended the Income-tax Act, 1961 and the Finance (No. 2) Act, 2019. In order to provide relief to certain domestic companies, a new section 115BAA has been inserted in the I-T Act with effect from Assessment Year 2020-21 to provide an option to domestic companies to pay tax at the rate of 22% plus applicable surcharge and cess. However, the option to avail the benefit of section 115BAA shall be available only when total income of the company is computed without providing for specified deductions or exemptions. After analyzing the impact analysis, company adopted New Provision 115BAA: 22% 10% Surcharge 4% Cess. i.e., 25.168% from the financial year 2019-20 (Assessment Year 2020-21).

Accordingly, there was a favorable impact on Tax Expenses and Deferred Tax to the extent of ?1737.00 lakhs and ? 1213.24 lakhs respectively during the previous financial year 2019-20.

Thus, when compared with the previous financial year (which includes the Deferred Tax Benefit of ?1213.24 lakhs), there was a dip in the Profit after tax of the current financial even though there is an increase in the Profit Before Tax.

44. Impact of COVID-19:

(i) Impact on Operations and Revenue:

(a) Company was not operational for 45 days due to lockdown during the 1^st quarter of the financial year 2020-21.

(b) During the 1^st quarter, company was not able to operate upto its full capacity due to lockdown, flexible timings and restrictions in night shift operation.

(d) Despite, Q1 of FY 2020-21 adversely impacted by lockdown, with cumulative efforts of workforce, Company achieved highest ever turnover and profit before tax.

(ii) Liquidity Risk:

(a) The Customer base of the Company is majorly in the Government Sectors like Defence, Space Atomic Energy, Ordnance Factories and Public Sector Undertakings. Since many of the customers operating with skeleton staff and with their revised budgets, Company faced certain challenges in arranging the adequate liquidity, however, Company has taken all steps and controlled the situation.

(b) The Company has assessed the possible impact of COVID-19 on its financial statements based on the internal and external information available upto the date of approval of these financial results including but not limited to its assessment of company''s liquidity, recoverable values of property, plant and equipment, intangible assets and the net realisable values of other assets. The Company continues to monitor changes in future economic conditions while taking steps to improve operational efficiencies and the financial outcome.

45. Disclosure in respect of Commercial Paper

Pursuant to SEBI circular SEBI/HO/DDHS/CIP/P/2019/115 dated October 22, 2019, on ""Framework for listing of Commercial Paper"", information as required under regulation 52(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 for the year ended March 31, 2021 is as mentioned below:

a) The Commercial Papers (listed) of the Company as on 31^st March 2021 are ? 5000.00 lakhs. The Company has retained "CRISIL A1 " rating by CRISIL Ratings.

46. The previous period figures have been regrouped/reclassified, wherever necessary to conform to the current presentation.

Mar 31, 2018

1. Capital Management

(a) Risk management

The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. In comparison the weighted average interest expense on interest-bearing borrowings (excluding liabilities with imputed interest) was 8.35 percent (2017: 9.60 percent).

2. Operating segments

The Company is in the business of manufacturing of super alloys and other special metals. Considering the core activities of the Company, management is of the view that the Company operates a single business segment. Therefore, there is no other reportable segment.

3. Earnings per share (EPS)

Basic earnings per share amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

#Approval of share holders for sub-division of shares accorded at the extraordinary general meeting of the Company held on 26^th October 2017 from face value of '' 1000 per share to '' 10 per share.

Accordingly, for computation of EPS, previous year shares (31.03.2017) 18,73,400 shares of face value '' 1000 have been restated as 18,73,40,000 of face value ''10 per share

4. The previous period figures have been regrouped/reclassified, wherever necessary to conform to the current presentation.

5. Impact of implementation of Goods and Service Tax (GST) on the financial statements

In accordance with Ind AS 18 on "Revenue" and Schedule III to the Companies Act, 2013, Sale for the previous year ended 31^st March 2017 and for the period from 1St April 2017 to 30^th June 2017 were reported gross of Excise Duty and net of Value Added Tax (VAT) / Sales Tax. Excise Duty was reported as a separate expense line item. Consequent to the introduction of Goods and Service Tax (GST) with effect from 1^st July 2017, VAT/Sales Tax, Excise Duty etc. have been subsumed into GST. Further, GST is not recognized as part of sales as per the requirements of Ind AS 18. This has resulted in lower reported sales in the current year in comparison to the sales reported under the pre-GST structure of indirect taxes corresponding to the excise component subsumed in GST.

47. Ind AS-115 Revenue from Contracts with Customers:

The Ministry of Corporate Affairs (MCA), on 28 March 2018, notified Ind AS 115, Revenue from Contracts with Customers as part of the Companies (Indian Accounting Standards) Amendment Rules, 2018. The new standard is effective for accounting period beginning on or after 1^st April 2018. The new standard replaces existing revenue recognition standards Ind AS 11 Construction Contracts and Ind AS 18 Revenue and revised guidance note of the Institute of Chartered Accountants of India (ICAI) on Accounting for Real Estate Transactions for Ind AS entities issued in 2016 and also incorporating the consequential changes in some other Indian Accounting Standards. The objective of this Standard is to establish the principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from a contract with a customer. The core principle of this Standard is that revenue should be recognized when an entity transfers control of goods or services to a customer at the amount to which the entity expects to be entitled.

The effect of the Ind AS 115 and consequential changes in other Indian Accounting Standards are being evaluated.

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