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** Useful life mentioned is considering single shift working, however depreciation charged based on average number of shifts worked on an annual basis.

Any item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in income statement when asset is derecognized.

The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.

An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss. when the asset is derecognized.

The useful live of intangible assets are as follows:

The Company and its joint venture assess at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company and its joint venture estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash generating units (CGU)s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.

The Company and its joint venture base its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Company and its joint ventures CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Company and its joint venture extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the Company and its joint venture operates, or for the market in which the asset is used. Impairment losses including impairment on inventories, are recognized in the statement of profit and loss.

For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Company and its joint venture estimates the assets or CGUs recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.

Intangible assets with indefinite useful lives are tested for impairment annually at the end of the financial year at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired.

A Financial Instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial assets contractual cash flow characteristics and the Company and its joint ventures business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company and its joint venture has applied the practical expedient, the Company and its joint venture initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company and its joint venture

has applied the practical expedient are measured at the transaction price determined under Ind AS 115.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI) on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company and its joint venture commits to purchase or sell the asset.

For purposes of subsequent measurement, financial assets are classified in four categories:

• Financial assets at amortised cost (debt instruments)

• Financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and losses (debt instruments)

• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

• Financial assets at fair value through profit or loss

A ‘financial asset is measured at the amortised cost if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. The Company and its joint ventures financial assets at amortised cost includes trade receivables, security deposits and loan to employees.

A ‘financial asset is classified as at the FVTOCI if both of the following criteria are met:

• The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

• The assets contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. For debt instruments, at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals are recognised in the profit or loss and computed in the same manner as for financial assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value changes recognised in OCI is reclassified from the equity to profit or loss.

Upon initial recognition, the Company and its joint venture can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under Ind AS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument- by-instrument basis. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the statement of profit and loss when the right of payment has been established, except when the Company and its joint venture benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognised in the statement of profit and loss.

This category includes derivative instruments and listed equity investments which the Company and its joint venture had not irrevocably elected to classify at fair value through OCI. Dividends on listed equity investments are recognised in the statement of profit and loss when the right of payment has been established.

Investments in Mutual Funds are accounted for at Fair value through Profit or Loss Account.

A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

In accordance with Ind AS 109, the Company and its joint venture applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

• Financial assets that are debt instruments, and are measured at amortized cost e.g. loans, debt securities, deposits, trade receivables and bank balance

• Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115

• Financial assets that are measured at FVTOCI

The Company and its joint venture follow ‘simplified approach for recognition of impairment loss allowance on trade receivables.

The application of simplified approach do not require the Company and its joint venture to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company and its joint venture

determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the Company and its joint venture in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

• All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms

As a practical expedient, the Company and its joint venture uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head ‘other expenses in the statement of profit and loss.

The balance sheet presentation for various financial instruments is described below:

• Financial assets measured as at amortized cost, contractual revenue receivables and lease receivables:

ECL is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company and its joint venture does not reduce impairment allowance from the gross carrying amount.

• Debt instruments measured at FVTOCI:

Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as ‘accumulated impairment amount in the OCI.

For assessing increase in credit risk and impairment loss, the Company and its joint venture combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

The Company and its joint venture does not have any purchased or originated credit-impaired (POCI) financial assets, i.e. financial assets which are credit impaired on purchase/ origination.

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within one year and therefore are all classified as current. Where the settlement is due after one year, they are classified as non-current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are

recognized at fair value. The Company and its joint venture hold the trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method.

De-recognition of Financial Assets:

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e. removed from the Company and its joint ventures balance sheet) when:

• The right to receive cash flows from asset have expired, or.

• The Company and its joint venture have transferred its right to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement and either:

• The Company and its joint venture have transferred substantially all the risks and rewards of the asset, or

• The Company and its joint venture have neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company and its joint venture has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company and its joint venture continues to recognize the transferred asset to the extent of the Company and its joint ventures continuing involvement. In that case, the Company and its joint venture also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company and its joint venture has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company and its joint venture could be required to repay.

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company and its joint venture s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

For purposes of subsequent measurement, financial liabilities are classified in two categories:

• Financial liabilities at fair value through profit or loss

• Financial liabilities at amortised cost (loans and borrowings)

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. The Company and its joint

venture have not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement of Profit and Loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company and its joint venture that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company and its joint venture may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit and loss. The Company and its joint venture have not designated any financial liability as at fair value through profit or loss.

This is the category most relevant to the Company and its joint venture. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate (EIR) amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

Financial guarantee contracts issued by the Company and its joint venture are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.

De-recognition of Financial Liability.

A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

The Company and its joint venture determine classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company and its joint ventures senior management determines change in the business model as a result of external or internal changes which are significant to the Company and its joint ventures operations. Such changes are evident to external parties. A change in the business model occurs when the Company and its joint venture either begins or ceases to perform an activity that is significant to its operations. If the Company and its joint venture reclassifies

financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company and its joint venture do not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

The following table shows various reclassification and how they are accounted for:

Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

The Company and its joint venture use derivative financial instruments, such as forward currency contracts to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each reporting period. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the statement of profit and loss.

Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.

For the purpose of hedge accounting, at the inception of a hedge relationship, the Company and its joint venture formally designates and documents the hedge relationship to which the Company and its joint venture wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge.

The documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged, and how the Company and its joint venture will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined).

A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements:

• There is ‘an economic relationship between the hedged item and the hedging instrument.

• The effect of credit risk does not ‘dominate the value changes that result from that economic relationship.

• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Company and its joint venture actually hedges and the quantity of the hedging instrument that the Company and its joint venture actually uses to hedge that quantity of hedged item.

The Company and its joint venture designate designates certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign exchange exposure on highly probable forecast sales transactions, and thereafter, as a fair value hedge of the resulting receivables.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognized in OCI, e.g., cash flow hedging reserve and accumulated in the cash flow hedging reserve. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in the statement of profit and loss. The amount accumulated is retained in cash flow hedge reserve and reclassified to profit or loss in the same period or periods during which the hedged item affects the statement of profit or loss. Under fair value hedge, the change in the fair value of a hedging instrument is recognised in the statement of profit and loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the statement of profit and loss.

Contributions in respect of Employees are made to the Fund administered by the Regional Provident Fund Commissioner as per the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 and are charged to Statement of Profit and Loss as and when services are rendered by employees. Such benefits are classified as Defined Contribution Schemes as the Company and its joint venture do not carry any further obligations, apart from the contributions made on a monthly basis to the Regional Provident fund.

• Employees State Insurance

The Company and its joint venture maintain an insurance policy to fund a post-employment medical assistance scheme, which is a defined contribution plan. The Company and its joint ventures contribution to State Plans namely Employees State Insurance Fund and Employees Pension Scheme are charged to the statement of profit and loss every year.

If the contribution payable to the schemes for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

• Defined Benefit Plan:

The Company and its joint venture provide for gratuity, a defined benefit plan (the "Gratuity Plan") covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. The gratuity plan in Company and its joint venture is funded through annual contributions to Life Insurance Corporation of India (LIC) under its Company and its joint venture s Gratuity Scheme.

The Companys Liabilities on account of Gratuity on retirement of employees are determined at the end of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance

with the measurement procedure as per Indian Accounting Standard (Ind AS)-19 ‘Employee Benefits. The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company and its joint ventures liability is actuarially determined (using the Projected Unit Credit method) at the end of each year. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity through other comprehensive income in the period in which they arise. They are included in retained earnings through OCI in the statement of changes in equity and in the balance sheet. Past-service costs are recognised immediately in statement of profit and loss. Re-measurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognized in profit or loss on the earlier of:

1. The date of the plan amendment or curtailment, and
2. The date that the Company and its joint venture recognizes related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company and its joint venture recognize the following changes in the net defined benefit obligation as an expense in the consolidated statement of profit and loss:

1. Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
2. Net interest expense or income

• Compensated Absences

Accumulated compensated absences are either availed or encashed within 12 months from the end of the year end are treated as short term employee benefits. The Company and its joint venture measure the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company and its joint venture recognizes expected cost of short-term employee benefit as an expense, when an employee renders the related service.

The Company and its joint venture have a policy to encash the entire leaves balance outstanding as at the end of the year in the subsequent year.

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

Basic earnings per share is computed by dividing net profit or loss attributable to equity shareholders of the Company and its joint venture (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year.

Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity

shareholders of the Company and its joint venture and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. The Company and its joint venture did not have any potentially dilutive securities in any of the years presented.

The Company and its joint venture recognize a liability to pay dividend to equity holders when the distribution is authorized, and the distribution is no longer at the discretion of the Company and its joint venture. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company and its joint venture shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences, except:

• when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting nor taxable profit or loss.

• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized, except:

• when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent

that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured using tax rates (and laws) that have been enacted or substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Sales/ value added taxes paid on acquisition of assets or on incurring expenses

Expenses and assets are recognised net of the amount of sales/ value added taxes paid, except:

• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable

• When receivables and payables are stated with the amount of tax included

The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

Provisions are recognised when the Company and its joint venture has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company and its joint venture expect some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company and its joint venture or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Contingent liabilities are not recognised but are disclosed in notes.

Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.

The Cash flow statement has been prepared under the "Indirect Method" as set out in Indian Accounting Standard- 7, "Statement of Cash Flows" whereby profit for the period is adjusted for the effects of transactions of a non-cash

nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company and its joint venture are segregated.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

The Company and its joint venture classify non-current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale rather than through continuing use.

Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax expense.

The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or disposal group is available for immediate sale in its present condition. Actions required to complete the sale/ distribution should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the sale and the sale expected within one year from the date of classification.

For these purposes, sale transactions include exchanges of non-current assets for other non-current assets when the exchange has commercial substance. The criteria for held for sale classification is regarded met only when the assets or disposal group is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of such assets (or disposal groups), its sale is highly probable; and it will genuinely be sold, not abandoned. The Company and its joint venture treats sale of the asset or disposal group to be highly probable when:

• The appropriate level of management is committed to a plan to sell the asset (or disposal group),
• An active program to locate a buyer and complete the plan has been initiated (if applicable),
• The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value,
• The sale is expected to qualify for recognition as a completed sale within one year from the date of classification, and
• Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Property, plant and equipment and intangible are not depreciated, or amortised assets once classified as held for sale.

Assets and liabilities classified as held for sale are presented separately from other items in the balance sheet.

The Company and its joint venture measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company and its joint venture.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company and its joint venture use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the Restated Summary Statements on a recurring basis, the Company and its joint venture determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

The Company and its joint venture determine the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for distribution in discontinued operations.

External valuers are involved for valuation of significant assets and liabilities, if any. At each reporting date, the Company and its joint venture analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company and its joint ventures accounting policies.

For the purpose of fair value disclosures, the Company and its joint venture has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

The Company and its joint venture assess at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange of consideration is considered as lease.

The Company and its joint venture apply a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company and its joint venture recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

The Company and its joint venture recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of- use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. The right-of-use assets are also subject to impairment.

At the commencement date of the lease, the Company and its joint venture recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and its joint venture and payments of penalties for terminating the lease, if the lease term reflects the Company and its joint venture exercising the option to terminate.

Lease liabilities, which separately shown in the Restated Summary Statement are measured initially at the present value of the lease payments. Subsequent measurement of a lease liability includes the increase of the carrying amount to reflect interest on the lease liability and reducing (while affecting other comprehensive income) the carrying amount to reflect the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments.

The Company and its joint venture applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight- line basis over the lease term.

Lease income from operating leases where the Company and its joint venture is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate the lessor for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their respective nature.

There have been no changes in the accounting policies of the Company during the last three Fiscals.

In addition to our results determined in accordance with Ind AS, we believe the following Non-GAAP measures are useful to investors in evaluating our operating performance and liquidity. We use the following Non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Non-GAAP financial information, when taken collectively with financial measures disclosed in the financial statements prepared in accordance with Ind AS, may be helpful to investors because it provides an additional tool for investors to use in evaluating our ongoing operating results and trends and in comparing our

financial results with other companies in our industry because it provides consistency and comparability with past financial performance. However, our management does not consider these Non-GAAP measures in isolation or as an alternative to financial measures.

EBITDA, EBITDA Margin, Return on Capital Employed, PAT Margin, Return on Equity, Gross Fixed Assets Turnover Ratio, Gross Profit, Gross Margin and Net Debt to EBITDA ("Non-GAAP Measures") presented in this Draft Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or US GAAP. Further, EBITDA is not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS or US GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the years or any other measure of financial performance or as an indicator of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or US GAAP. In addition, Non-GAAP Measures are not standardised terms, hence a direct comparison of Non- GAAP Measures between companies may not be possible. Other companies may calculate the Non-GAAP Measure differently from us, limiting its usefulness as a comparative measure. Although Non-GAAP Measures is not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that it is useful to an investor in evaluating us because it is a widely used measure to evaluate a companys operating performance. See "Risk Factors – Other internal risks – Certain non-GAAP financial measures and certain other statistical information relating to our operations and financial performance like EBITDA, EBITDA Margin, Return on Capital Employed, PAT Margin, Return on Equity, Gross Fixed Assets Turnover Ratio, Gross Profit, Gross Margin and Net Debt to EBITDA have been included in this Draft Red Herring Prospectus. These non-GAAP financial measures are not measures of operating performance or liquidity defined by Ind AS and may not be comparable." on page 59.

The table below reconciles restated profit for the year to EBITDA. EBITDA is calculated as profit for the year minus other income and share of profits from joint venture plus finance costs, depreciation and amortisation and total income tax expenses, while EBITDA Margin is calculated as EBITDA divided by revenue from operations.

The table below reconciles total equity to capital employed. Capital employed is calculated as total equity plus total borrowing while EBIT is calculated as restated profit for the year plus total income tax expense plus finance costs. Return on Capital Employed is calculated as EBIT divided by capital employed.

The table below reconciles total equity to return on equity. Return on equity is calculated as restated profit for the year divided by total equity.

The table below reconciles revenue from operations to gross fixed assets turnover ratio.

The table below reconciles total borrowings to net debt and net debt to EBITDA. Net Debt is calculated as total of non-current borrowings and current borrowings minus total of cash and cash equivalents and bank balances.

The table below reconciles revenue from operations to gross profit and gross margin:

The table below reconciles restated profit for the year to PAT Margin:

Our total income comprises (i) revenue from operations and (ii) other income.

Revenue from operations comprise (i) sale of products, (ii) sale of services such as dye design and preparation charges and job work charge; and (ii) other operating revenue such as sale of manufacturing scrap, government grants and others.

Other income comprises (i) interest income from financial assets at amortised cost which includes interest income from financial assets at amortised cost on bank deposits, electricity deposits and income tax refund; (ii) gain on sale of investment; (iii) gain on foreign exchange variation (net); (iv) bad debts recovered; (v) fair value gain on financial instruments at fair value through profit or loss; (vi) gain from sale of property, plant and equipment (net); and (vii) miscellaneous income which includes insurance claim and rental income.

Our expenses comprise cost of raw materials and components consumed, increase/ decrease in inventories of finished goods, work-in-progress and scrap, employee benefits expense, finance costs, depreciation and amortization expense; and other expenses.

Cost of raw materials and components consumed consists of raw materials i.e., primarily steel. (Increase)/ decrease in inventories of finished goods, work-in-progress and scrap

(Increase)/ decrease in inventories of finished goods, work-in-progress and scrap denotes increase/ decrease in inventories of finished goods, work in progress and scrap between opening and closing dates of a reporting period.

Employee benefit expenses primarily include salaries, wages and bonus, contribution to provident fund and other funds, gratuity and staff welfare expenses.

Finance costs include interest expenses on borrowings and others, interest on bill discounting and other borrowing cost.

Depreciation and amortisation expense primarily include depreciation expenses on our property, plant and equipment and amortisation expenses on our intangibles assets.

Other expenses comprises: (i) consumption of stores and spares; (ii) power and fuel expenses; (iii) packing material;

(iv) job work charges; (v) rent expenses; (vi) rates and taxes; (vii) repairs and maintenance on (a) plant and machinery, (b) building, and (c) others; (viii) travelling and conveyance expenses; (ix) travelling and conveyance expenses; (x) advertisement and sales promotion expenses; (xi) freight and forwarding charges; (xii) directors sitting fees; (xiii) payment to auditors; (xiv) legal and professional fees; (xv) provisions for doubtful receivables and advance; (xv) CSR expenditure; (xvi) donation; (xvii) fair value loss on financial instruments at fair value through profit or loss; (xviii) property plant and equipment written off; (xix) insurance; and (xx) miscellaneous expenses.

The following table sets forth select financial data from our statement of restated standalone profit and loss for Fiscal 2021 and our statement of restated consolidated profit and loss for Fiscal 2022 and Fiscal 2023, the components of which are also expressed as a percentage of total income for such years.

Our total income increased by 38.81% from ?8,661.05 million in Fiscal 2022 to ?12,022.71 million in Fiscal 2023, primarily due to an increase in our revenue from operations and other income as discussed below:

Our revenue from operations increased by 39.12% from ?8,600.46 million in Fiscal 2022 to ?11,965.30 million in Fiscal 2023, primarily due to an increase in the revenue from sale of products by 35.82% from ?7,855.65 million in Fiscal 2022 to ?10,669.49 million in Fiscal 2023. The increase was primarily due to an increase in the volume of products sold, as well as an increase in average selling price of products on account of increase in prices of steel. Other operating revenue increased by 85.42% from ?663.44 million in Fiscal 2022 to ?1,230.15 million in Fiscal 2023 due to increase in sale of manufacturing scrap and recognition of certain government grants.

Our other income decreased by 5.25% from ?60.59 million in Fiscal 2022 to ?57.41 million in Fiscal 2023, primarily as a result of decrease in fair value gain on financial instruments at fair value through profit or loss from ?7.24 million in Fiscal 2022 to nil in Fiscal 2023, which was partially offset by recovery of bad debts of ?3.11 million in Fiscal 2023.

Our total expenses increased by 36.82% from ?6,740.58 million in Fiscal 2022 to ?9,222.47 million in Fiscal 2023.

Cost of raw materials and components consumed increased by 25.67% from ?4,358.47 million in Fiscal 2022 to

?5,477.24 million in Fiscal 2023 due to increase in business volume.

Changes in inventories of finished goods and work-in-progress was ?33.32 million in Fiscal 2023, as compared to

?(474.55) million in Fiscal 2022. This was primarily due a decrease in work-in-progress from ?591.49 million in Fiscal 2022 to ?463.40 million in Fiscal 2023, which is partially offset by increase in finished goods from ?450.60 million in Fiscal 2022 to ?541.37 million in Fiscal 2023.

Our employee benefits expense increased by 27.81% from ?686.78 million in Fiscal 2022 in ?877.76 million for Fiscal 2023 due to an increase in number of employees because of increased scale of operations and annual increments given to employees in Fiscal 2023.

Our finance costs increased by 74.25% from ?71.59 million in Fiscal 2022 to ?124.75 million in Fiscal 2023 primarily due to an increase in our interest expense on borrowings by 116.78% from ?44.52 million in Fiscal 2022 to ?96.50 million in Fiscal 2023. This was primarily attributable to an increase in interest on borrowings from banks.

Our depreciation and amortisation expenses increased by 43.57% from ?377.40 million in Fiscal 2022 to ?541.82 million in Fiscal 2023 primarily due to an addition in property, plant and equipment of ?2,777.96 million, primarily owing to purchase of plant and equipment.

Our other expenses increased by 25.96% from ?1,720.89 million in Fiscal 2022 to ?2,167.58 million in Fiscal 2023, in aggregate, primarily due to an increase in consumption of stores and spares by 29.41% from ?434.53 million in Fiscal 2022 to ?562.32 million in Fiscal 2023; increase in power and fuel expenses by 11.99% from ?676.54 million in Fiscal 2022 to ?757.64 million in Fiscal 2023; increase in cost towards repairs and maintenance of plant and machinery by 29.88% from ? 161.56 million in Fiscal 2022 to ?209.83 million in Fiscal 2023; and increase in freight and forwarding charges by 28.56% from ?201.15 million in Fiscal 2022 to ?258.59 million in Fiscal 2023.

Our total income tax expense increased by 43.34% from ?497.63 million in Fiscal 2022 to ?713.28 million in Fiscal 2023, primarily due a corresponding increase in the restated profit before tax. This primarily constituted an increase in current tax (net) by 46.10% from ?469.16 million in Fiscal 2022 to ?685.43 million in Fiscal 2023, and an increase in deferred tax charge by 7.66% from ?26.72 million in Fiscal 2022 to ?28.77 million in Fiscal 2023.

As a result of the foregoing factors, our restated profit for the year was ?1,422.89 million in Fiscal 2022 compared to ?2,087.01 million in Fiscal 2023.

EBITDA was ?2,308.87 million in Fiscal 2022 compared to EBITDA of ?3,409.40 million in Fiscal 2023, while EBITDA Margin was 26.85% in Fiscal 2022 compared to 28.49% in Fiscal 2023.

For reconciliation of EBITDA and EBITDA Margin, see "– Non-GAAP Measures – Reconciliation of Restated Profit for the Year to EBITDA and EBITDA Margin" on page 383.

Our total income increased by 46.60% from ?5,908.13 million in Fiscal 2021 to ?8,661.05 million in Fiscal 2022, primarily due to an increase in our revenue from operations and other income as discussed below:

Our revenue from operations increased by 47.03% from ?5,849.58 million in Fiscal 2021 to ?8,600.46 million in Fiscal 2022, primarily due to an increase in the revenue from sale of products by 43.42% from ?5,477.40 million in Fiscal 2021 to ?7,855.65 million in Fiscal 2022. The increase was primarily due to increase in the volume of products sold, as well as an increase in the average selling price of such products. Revenue from sale of services also increased by 779.57% from ?9.25 million in Fiscal 2021 to ?81.37 million in Fiscal 2022. In addition, other operating revenue increased by 82.80% from ?362.93 million in Fiscal 2021 to ?663.44 million in Fiscal 2022 primarily due to increase in sale of manufacturing scrap.

Our other income increased by 3.48% from ?58.55 million in Fiscal 2021 to ?60.59 million in Fiscal 2022, primarily as a result of an increase in gain on foreign exchange variation (net) by 353.56% from ?9.82 million in Fiscal 2021 to ?44.55 million in Fiscal 2022 which was partially offset by decrease in interest income from financial asset at amortised cost on term deposits with bank by 83.62% from ?25.21 million in Fiscal 2021 to ?4.13 million in Fiscal 2022 and decrease in interest income from financial asset at amortised cost on electricity deposit by 82.08% from

?17.38 million in Fiscal 2021 to ?3.11 million in Fiscal 2022.

Our total expenses increased by 42.28% from ?4,737.52 million in Fiscal 2021 to ?6,740.58 million in Fiscal 2022.

Cost of raw materials and components consumed increased by 69.42% from ?2,572.56 million in Fiscal 2021 to

?4,358.47 million in Fiscal 2023 due to increase in business volume.

(Increase)/ decrease in inventories of finished goods, work-in-progress and scrap

Changes in inventories of finished goods and work-in-progress was ?(474.55) million in Fiscal 2022, as compared to ?(56.53) million in Fiscal 2021. This was primarily due increase in work-in-progress from ?302.10 million in Fiscal 2021 to ?591.49 million in Fiscal 2022 and increase in finished goods from ?259.26 million in Fiscal 2021 to ?450.60 million in Fiscal 2022.

Our employee benefits expense increased by 40.16% from ?489.98 million in Fiscal 2021 to ?686.78 million in Fiscal 2022 due to an increase in number of employees because of increased scale of operations and annual increments given to employees in Fiscal 2022.

Our finance costs decreased by 39.25% from ?117.84 million in Fiscal 2021 to ?71.59 million in Fiscal 2022 primarily due to a decrease in our interest expense on borrowings by 55.94% from ?101.04 million in Fiscal 2021 to ?44.52 million in Fiscal 2022. This was primarily attributable to interest paid on restructuring of loan of ?31.02 million in Fiscal 2021.

Our depreciation and amortisation expenses increased by 5.55% from ?357.56 million in Fiscal 2021 to ?377.40 million in Fiscal 2022.

Our other expenses increased by 37.00% from ?1,256.11 million in Fiscal 2021 to ?1,720.89 million in Fiscal 2022, in aggregate, primarily due to an increase in consumption of stores and spares from by 34.85% from ?322.22 million in Fiscal 2021 to ?434.53 million in Fiscal 2023; increase in power and fuel expenses by 46.24% from ?462.63 million in Fiscal 2021 to ?676.54 million in Fiscal 2023; increase in cost towards repairs and maintenance of plant and machinery by 21.69% from ?132.77 million in Fiscal 2021 to ?161.56 million in Fiscal 2022 and increase in freight and forwarding charges by 96.13% from ?102.56 million in Fiscal 2021 to ?201.15 million in Fiscal 2022.

Our total income tax expense increased by 62.56% from ?306.13 million for Fiscal 2021 to ?497.63 million for Fiscal 2022, primarily due an increase in the restated profit before tax. This primarily constituted an increase in current tax (net) by 48.57% from ?315.78 million in Fiscal 2021 to ?469.16 million in Fiscal 2022 and increase in deferred tax from a credit of ? 9.67 million in Fiscal 2021 compared to a charge of ?26.72 million in Fiscal 2022.

As a result of the foregoing, our restated profit for the year was ?864.48 million in Fiscal 2021 compared to

?1,422.89 million in Fiscal 2022.

EBITDA was ?1,587.46 million in Fiscal 2021 compared to EBITDA of ?2,308.87 million in Fiscal 2022, while EBITDA Margin was 27.14% in Fiscal 2021 compared to 26.85% in Fiscal 2022.

For reconciliation of EBITDA and EBITDA Margin, see " – Non-GAAP Measures – Reconciliation of Restated Profit for the Year to EBITDA and EBITDA Margin" on page 383.

We have historically financed the expansion of our business and operations through a combination of internal accruals and external borrowings.

The following table sets forth certain information relating to our cash flows in the Fiscals indicated:

Cash flow from operating activities was ?2,094.58 million in Fiscal 2023. In Fiscal 2023, our profit before tax was

? 2,800.29 million. Primary adjustments consisted of depreciation and amortization expense of ?541.82 million and loss on financial instruments at fair value through profit and loss of ?25.67 million.

Operating profit before working capital changes was ?3,512.36 million in Fiscal 2023. The main working capital adjustments in Fiscal 2023 included increase in trade receivables of ?827.23 million, decreased in inventories of

?143.77 million and increase in other financial assets of ?223.25 million.

Cash flow from operating activities was ?802.94 million in Fiscal 2022. In Fiscal 2022, our profit before tax was

?1,920.52 million. Primary adjustments consisted of depreciation and amortization expense of ?377.40 million and unrealised foreign exchange gain (net) of ?33.15 million.

Operating profit before working capital changes was ?2,322.41 million in Fiscal 2022. The main working capital adjustments in Fiscal 2022 included increase in inventories of ?624.17 million and increase in trade receivables of

?561.04 million.

Cash flow from operating activities was ?498.53 million in Fiscal 2021. In Fiscal 2021, our profit before tax was

?1,170.61 million. Primary adjustments consisted of depreciation and amortization expense of ?357.56 million and interest income of ?(42.59) million.

Operating profit before working capital changes was ?1,662.20 million in Fiscal 2021. The main working capital adjustments in Fiscal 2021 included increase in inventories of ?459.17 million, increase in trade receivables of

?287.70 million and increase in other assets of ?125.38 million.

Net cash flow used in investing activities in Fiscal 2023 was ?1,724.54 million, primarily due to payments for acquisition of property, plant and equipment and intangible assets (including capital work in progress, intangible assets under development and capital advance) of ?1,745.87 million.

Net cash flow used in investing activities in Fiscal 2022 was ?1,656.80 million, primarily due to payments for acquisition of property, plant and equipment and intangible assets (including capital work in progress, intangible assets under development and capital advance) of ?1,908.42 million. This was largely offset by proceeds from term deposit of ?234.56 million and interest received (finance income) of ?21.18 million.

Net cash flow used in investing activities in Fiscal 2021 was ?586.85 million, primarily due to payments for acquisition of property, plant and equipment and intangible assets (including capital work in progress, intangible assets under development and capital advance) of ?916.64 million. This was partially offset by proceeds from term deposit of ?316.86 million and interest received (finance income) of ?41.35 million.

Net cash flow used in financing activities in Fiscal 2023 was ?370.10 million, primarily on account of repayment of long-term borrowings of ?148.02 million and repayment of short term borrowing (net) of ?252.99 million, which was partially offset by availment of long term borrowings of ?169.53 million.

Net cash flow from financing activities in Fiscal 2022 was ?825.20 million primarily on account of availment of long-term borrowings of ?512.97 million and availment of short-term borrowings (net) of ?426.03 million, which was partially offset by interest paid of ?67.91 million and repayment of long-term borrowings of ?36.52 million.

Net cash flow from financing activities in Fiscal 2021 was ?96.72 million primarily on account of availment of short-term borrowings (net) of ?663.21 million, which was largely offset by interest payment of ?253.97 million; repayment of long-term borrowings of ?292.39 million and repayment of loan from directors of ?40.70 million.

As of March 31, 2023, we had total borrowings of ?2,185.16 million. The following table sets forth certain information relating to maturity profile of our outstanding borrowings as of March 31, 2023:

For further information on our outstanding indebtedness, see "Financial Indebtedness" on page 397.

The following table below sets forth the principal components of our contingent liabilities as per Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets, as of March 31, 2023:

For further information of our contingent liabilities as at March 31, 2023 as per Ind AS 37, see "Restated Financial Information – Note 29. Contingent liabilities and commitments" on page 335.

The table below sets forth our capital commitments as of March 31, 2023:

The table below sets forth our EPCG commitment as of March 31, 2023:

We do not have any off-balance sheet arrangements, derivative instruments or other relationships with other entities that would have been established for the purpose of facilitating off-balance sheet arrangements.

We enter into various transactions with related parties in the ordinary course of business. Related parties with whom transactions have taken place during the year include sale of finished goods, purchase of raw materials, sale of scrap, loans taken from Directors and interest on such loans, short term employee benefits and directors sitting fees. The table below provides details of our aggregate related party transactions and the percentage of such related party transactions to our revenue from operations in the years indicated:

*Including debits, credits and balance sheet transactions without netting off.

There are no qualifications, reservations and adverse remarks by our Statutory Auditors in our Restated Financial Information.

As per the Statutory Auditors report on internal financial controls under Section 143(3)(i) of the Companies Act

issued on standalone financial statements of the Company for Fiscal 2021, the Statutory Auditor has provided a disclaimer of opinion. For further details, see "Risk Factors – Internal risks relating to financials - Our Statutory Auditors have included a disclaimer of opinion in the annexure to their report on the internal financial controls on the standalone financial statements of our Company for the year ended March 31, 2021. Further, our Statutory Auditors have included certain qualifications in the annexure to their audit reports on the Companies (Auditors Report) Order, 2016 / Companies (Auditors Report) Order, 2020, for the years ended March 31, 2023 and 2021".

We have exposure to the following risks: market risk, credit risk and liquidity risk. Our Board of Directors oversees the management of these risks and also ensures that financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with our policies and risk objectives.

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

Liquidity risk is the risk that our Company will encounter difficulty in meeting the obligations associated with our financial liabilities that are settled by delivering cash or another financial assets. Our approach to manage liquidity is to have sufficient liquidity to meet our liabilities when they are due, under both normal and stressed circumstances, without incurring unacceptable losses or risking damage to our reputation.

We manage the liquidity risk by monitoring cash flow forecasts on a periodic basis and maturity profiles of financial assets and liabilities. This monitoring takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities. We will continue to consider various borrowings options to maximize liquidity and supplement cash requirements as necessary. Our objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts, cash credit facilities and buyers credit facilities.

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. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities by way of direct imports/ exports and long term foreign currency borrowings. We evaluate the exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

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. Our Company is exposed to interest rate risk on short-term and long-term floating rate instruments. The borrowings of our Company are principally denominated in Indian Rupees with a mix of fixed and floating rates of interest. We have a policy of selectively using interest rate swaps and other derivative instruments to manage our exposure to interest rate movements. These exposures are reviewed by appropriate levels of management on a regular basis.

Our Company is affected by price volatility of certain commodities. The principal raw materials for the Company products are alloy and carbon steel in the form of rounds and billets which are purchased by the Company from the approved list of suppliers. Most of the input materials are procured from domestic vendors which is subject to price

negotiations. Due to significant volatility in prices of steel, we have agreed with our customers for pass through of increase/decrease of prices of steel. There may be a lag effect in case of such pass-through arrangements.

Our capital expenditure (i.e., payments for acquisition of property, plant and equipment and intangible assets (including capital work in progress, intangible assets under development and capital advance)) was ?1,745.87 million, ?1,908.42 million and ?916.64 million in Fiscal 2021, 2022 and 2023, respectively. The following table sets forth our fixed assets as at year end, as indicated:

To the knowledge of our management, there are no other significant economic changes that materially affect or are likely to affect income from continuing operations.

Except as described in this Draft Red Herring Prospectus, to our knowledge, there have been no "unusual" or "infrequent" events or transactions that have in the past or may in the future affect our business operations or future financial performance.

Our business has been affected and we expect will continue to be affected by the trends identified above in " - Significant Factors Affecting our Results of Operations and Financial Condition" and the uncertainties described in "Risk Factors" beginning on pages 361 and 35. To our knowledge, except as described or anticipated in this Draft Red Herring Prospectus, there are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations.

Other than as described in "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 35, 203 and 357, respectively, there are no known factors that might affect the future relationship between costs and revenues.

Except as set out in this Draft Red Herring Prospectus, we have not announced and do not expect to announce in the near future any new business segments other than in the normal course of business.

We operate in a competitive environment. See "Our Business", "Industry Overview" and "Risk Factors" on pages 203, 144 and 35, respectively, for further information on competitive conditions that we face.

Changes in revenue in the last three Fiscals are as described in "– Fiscal 2023 compared to Fiscal 2022", "– Fiscal 2022 compared to Fiscal 2021" above on pages 388 and 389, respectively.

Our Company operates in a single operating segment namely, forged and machined products. Since we operate in a single operating segment, separate segment reporting has not been made under Ind-AS 108.

Other than as disclosed in "Risk Factors – Internal risks relating to business, operations and industry – Our business largely depends upon our top 10 customers which contributed 70.08%, 74.64% and 79.22% in Fiscal 2023, 2022 and 2021. The loss of any of these customers could have a material adverse effect on our business, financial condition, results of operations and cash flows." on page 35, we are not dependent on a single or few customers.

Our Company business is not seasonable in nature.

Except as disclosed below, no circumstances have arisen after March 31, 2023 which materially and adversely affect or are likely to affect our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months:

The Company has declared dividend in its annual general meeting dated August 8, 2023. For further information, see "Dividend Policy" on page 279.

Our Company avails loans in the ordinary course of our business for, inter alia, meeting their working capital and business requirements. For details of the borrowing powers of our Board, see "Our Management – Borrowing Powers" on page 257.

We have obtained the necessary consents required under the relevant financing documentation for undertaking the activities in relation to the Offer, including, effecting a change in our capital structure, change in our shareholding pattern, change in our constitutional documents and change in the composition of our Board.

As of July 15, 2023, our outstanding borrowings aggregated to ?2,032.27 million. The details of the indebtedness of our Company as on July 15, 2023 is provided below:

The details provided below are indicative and there may be additional terms, conditions and requirements under the various financing documentation executed by our Company in relation to our indebtedness.

1. Interest: The applicable rate of interest for the various facilities in India availed by us are typically linked to the marginal cost of lending rate (MCLR) or London interbank offered rate (LIBOR) over a specific period of time and spread per annum and are subject to mutual discussions between the relevant lenders and our Company. In most of our facilities, a spread per annum is charged above these benchmark rates, and the spread ranges up to 3.00% per annum.
2. Tenor: The tenor of certain working capital facilities availed by us ranges from a period of up to 12 months, whereas the term loan facility availed by our Company typically has a tenor up to 96 months.
3. Penal Interest: The terms of certain financing facilities availed by us prescribe penalties for non- compliance of certain obligations by us. These include, inter alia, breach of financial covenants, non- renewal of insurance policy in a timely manner or inadequate insurance cover, diversion of facilities to inter-corporate deposits, debentures, stocks and shares, non-submission of annual financial statements and stock statements, etc. The terms of the borrowings availed by us prescribe a penalty interest rate that ranges up to 2.00% per annum over and above the applicable interest rate depending on the event of default or as may be mutually agreed between our Company and the respective lenders.
4. Pre-payment penalty: Our borrowings typically have pre-payment provisions which allow for pre-payment of the outstanding amount at any given point in time, subject to the conditions specified in the borrowing arrangements. The term loan facilities availed by us carry a pre-payment penalty of up to 1.00% on the pre-paid amount or as based on lenders extant guidelines or as may be mutually agreed between us and the respective lenders.
5. Security: Our borrowings are typically secured by, inter alia, way of mortgage of immoveable fixed assets and hypothecation of moveable assets including charge over entire current assets (both present and future) and receivables of our Company. There may be additional requirements for creation of security under the various borrowing arrangements entered into by us.
6. Repayment: The working capital or term loan facilities availed by us are payable on demand or on the due date or on the conditions as may be agreed between us and the respective lenders.
7. Key Covenants: The financing arrangements entered into by us entail various restrictive conditions and covenants restricting certain corporate actions, and we are required to take the prior approval of the lenders before carrying out such activities.

For instance, certain corporate actions for which we require the prior written consent of the lenders include:

1. effecting any change in our shareholding pattern or capital structure.
2. making any amendments to the constitutional documents of our Company.
3. effecting any change in the ownership, control or management of our Company.
4. undertaking any expansion/modernisation/diversification/renovation or acquiring any fixed assets.
5. declare or pay any dividend for any year except out of the profits of the relevant year.
6. permitting any transfer of the controlling interest or making any drastic change in the management set-up including without limitation any change in the senior management.
7. investing any funds by way of deposits, or loans or in share capital of any other concerns.
8. pre-paying our outstanding loans in whole or part.
8. Events of default: The borrowing facilities availed by us contain certain standard events of default, including:
1. default in payment / repayment of interest or instalment amount on relevant due dates.
2. non-compliance of financial covenants.
3. any default under any other facility from any bank or financial institution.
4. the occurrence of any cross default.
5. any change of ownership, control and/or management of the Company without the prior consent of the lenders.
6. breach of security arrangements.
7. cessation of all or substantial part of Companys business.
8. supply of misleading information by the Company.
9. occurrence of a material adverse effect (as defined in the relevant financing document).
10. initiation of insolvency, bankruptcy, winding-up or liquidation proceedings of the Company, and seizure of the Companys equipment/plant machinery under any process of law.
11. appointment of receiver with respect to whole or part of the property.
9. Consequences of occurrence of events of default: In terms of our borrowing arrangements, due to the occurrence of events of default, our lenders may:
1. declare all amounts outstanding in respect of facility due and immediately payable.
2. demand to furnish more security.
3. recall advance and take any recovery action.
4. enforce security or change any of the terms of sanction.
5. impose penal interest on the principal amount.
6. require the Company to reconstitute its Board.
7. appoint a nominee director on Board of our Company.

The above is an indicative list and there may be additional consequences of an event of default under the various borrowing arrangements entered into by us.

For risks in relation to the financial and other covenants required to be complied with in relation to our borrowings, see "Risk Factors – We have incurred indebtedness and an inability to comply with repayment and other covenants in our financing agreements could adversely affect our business, results of operations, cash flows and financial condition" on page 45.

1. Criminal proceedings

Except as disclosed below, as on the date of this Draft Red Herring Prospectus, there are no pending criminal proceedings involving our Company.

1. Litigation against our Company
1. State of Punjab through Assistant Director of Factories, Circle No. 1, Ludhiana ("Complainant") filed a complaint dated April 5, 2019 ("Complaint") against Paritosh Kumar, in his capacity as the occupier and manager of our Company ("Defendant") in the Court of Chief Judicial Magistrate, Ludhiana ("Ludhiana Court"), in connection with the industrial accident that occurred due to the blast of an argan (CO2) gas cylinder on November 21, 2018, in the factory premises of our Kanganwal Facility I, leading to the death of one of our workers. The Complainant alleged that such argan (CO2) gas cylinder was kept idle in an open area without any support and was not stacked and stored at a proper place which resulted in the accident, thereby violating the provisions of Section 7A(2) of the Factories Act, 1948 and Rule 66D of the Punjab Factory Rules, 1952.

Aggrieved by the Complaint, the Defendant filed a criminal miscellaneous petition dated February 10, 2022 ("Petition") in the High Court of Punjab and Haryana ("High Court") under Section 482 of the Code of Criminal Procedure, 1974 seeking to quash the Complaint on the grounds that the Complaint was beyond the jurisdiction of the Ludhiana Court as it was barred by law of limitation prescribed under Section 106 of the Factories Act, 1948. Through an order dated May 11, 2023, the High Court admitted the Petition and granted stay on any further proceedings. The matter is currently pending.

2. Litigation by our Company
1. Paritosh Kumar, in his capacity as the Chairman and Manging Director of our Company ("Complainant") filed a criminal complaint dated July 24, 2020 before the Commissioner of Police, Ludhiana against P. Sarvanan, in his capacity as the president of Saran Corporation Limited ("Respondent") alleging inter-alia commission of cheating and dishonestly inducing delivery of property under Sections 406 and 420, respectively of the Indian Penal Code, 1860 for defrauding our Company by avoiding delivery of 4,000 ton forging press machine pursuant to payment of an advance amount aggregating to 26 million Japanese Yen (aggregating to approximately ?16.70 million, assuming 1Yen to be equivalent to ?0.64 as on June 4, 2019, the date of transfer of advance payment by the Company) by our Company. Thereafter, a first information report dated June 28, 2021 ("FIR") was registered at Police Station, Sahnewal, Ludhiana. Aggrieved by the FIR, the Respondent filed a petition under Section 483 of Code of Criminal Procedure, 1974 in the High Court of Punjab and Haryana ("High Court") seeking inter-alia to quash the FIR and to grant a stay on any further proceedings. A written statement dated May 5, 2023, has been filed by the Complainant in the High Court. The matter is currently pending.
2. Actions by statutory or regulatory authorities

As on the date of this Draft Red Herring Prospectus, there are no pending actions initiated by statutory or regulatory authorities against our Company.

3. Claims related to direct and indirect taxes

Except as disclosed below, as on the date of this Draft Red Herring Prospectus, there are no pending claims related to direct and indirect taxes involving our Company:

S.No.	Nature of Proceedings	Number of cases	Amount involved (in ? million)*
1	Direct	3	17.38
2	Indirect	21	52.03
Total		24	69.41

*To the extent quantifiable.

4. Other material proceedings

As on the date of this Draft Red Herring Prospectus there are no other proceedings involving our Company, which have been considered material by our Company in accordance with the Materiality Policy.

1. Criminal proceedings

Except as disclosed below, as on the date of this Draft Red Herring Prospectus, there are no pending criminal proceedings involving our Directors.

1. Litigation against our Directors

State of Punjab through Assistant Director of Factories, Circle No. 1, Ludhiana filed a complaint against one of our Directors, Paritosh Kumar, alleging violation of provisions of Section 7A(2) of the Factories Act, 1948 and Rule 66D of the Punjab Factory Rules, 1952. For further details, see "– Litigation proceedings involving our Company – Criminal proceedings" on page 399. The matter is currently pending.

2. Litigation by our Directors

One of our Directors, Paritosh Kumar, in his capacity as the Chairman and Managing Director filed a criminal complaint against P. Sarvanan, in his capacity as the president of Saran Corporation Limited alleging violation of Sections 406 and 420 of the Indian Penal Code, 1860. For further details, see "– Litigation proceedings involving our Company – Criminal proceedings" on page 399. The matter is currently pending.

2. Actions by statutory or regulatory authorities

As on the date of this Draft Red Herring Prospectus, there are no pending actions initiated by statutory or regulatory authorities against our Directors.

3. Claims related to direct and indirect taxes

As on the date of this Draft Red Herring Prospectus, there are no pending claims related to direct or indirect taxes involving our Directors.

4. Other material proceedings

As on the date of this Draft Red Herring Prospectus there are no other pending proceedings involving any of our Directors, which have been considered material by our Company in accordance with the Materiality Policy.

1. Criminal proceedings

Except as disclosed below, as on the date of this Draft Red Herring Prospectus, there are no pending criminal proceedings involving any of our Promoters:

1. Litigation against our Promoters

State of Punjab through Assistant Director of Factories, Circle No. 1, Ludhiana filed a complaint against one of our Promoters, Paritosh Kumar, alleging violation of provisions of Section 7A(2) of the Factories Act, 1948 and Rule 66D of the Punjab Factory Rules, 1952. For further details, see "– Litigation proceedings involving our Company – Criminal proceedings" on page 399. The matter is currently pending.

2. Litigation by our Promoters

One of our Promoters, Paritosh Kumar filed a criminal complaint against P. Sarvanan, in his capacity as the president of Saran Corporation Limited alleging violation of Sections 406 and 420 of the Indian Penal Code, 1860. For further details, see "– Litigation proceedings involving our Company – Criminal proceedings on page 399. The matter is currently pending.

2. Actions by statutory or regulatory authorities

As on the date of this Draft Red Herring Prospectus, there are no pending actions initiated by statutory or regulatory authorities against our Promoters.

3. Claims related to direct and indirect taxes

As on the date of this Draft Red Herring Prospectus, there are no pending claims related to direct or indirect taxes involving our Promoters.

4. Other pending proceedings

As on the date of this Draft Red Herring Prospectus there are no other pending proceedings involving any of our Promoters, which have been considered material by our Company in accordance with the Materiality Policy.

5. Disciplinary action taken including penalty imposed against our Promoters in the five Fiscals preceding the date of this Draft Red Herring Prospectus by SEBI or any stock exchange

No disciplinary action, including any penalty has been taken or imposed against our Promoters in the five Fiscals preceding the date of this Draft Red Herring Prospectus either by SEBI or any stock exchange.

As on the date of this Draft Red Herring Prospectus, there are no pending litigation proceedings involving any Group Companies which will have a material impact on our Company.

As of March 31, 2023, our Company had 449 creditors, and the aggregate outstanding dues to these creditors by our Company are ?517.40 million. In terms of the Materiality Policy, such creditors are considered ‘material to whom the amount due exceeds five percent of the trade payables of our Company as on March 31, 2023. Based on this, our Company owed a total sum of ?251.19 to a total number of three material creditors as on March 31, 2023. The details of our outstanding dues to the ‘material creditors of our Company, micro and small enterprises, and other creditors, as on March 31, 2023, are as follows:

For complete details of outstanding overdues to material creditors, see https://happyforgingsltd.com/investors.

Except as stated in the section "Managements Discussion and Analysis of Financial Condition and Results of Operations" on page 357, there have not arisen, since the date of the last Restated Financial Information disclosed in this Draft Red Herring Prospectus, any circumstances which materially and adversely affect or are likely to affect our profitability taken as a whole or the value of our consolidated assets or our ability to pay our liabilities within the next 12 months.