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Company Information

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TATA STEEL LTD.

18 June 2024 | 04:10

Industry >> Steel

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ISIN No INE081A01020 BSE Code / NSE Code 500470 / TATASTEEL Book Value (Rs.) 82.60 Face Value 1.00
Bookclosure 21/06/2024 52Week High 185 EPS 0.00 P/E 0.00
Market Cap. 226101.72 Cr. 52Week Low 108 P/BV / Div Yield (%) 2.19 / 1.99 Market Lot 1.00
Security Type Other

NOTES TO ACCOUNTS

You can view the entire text of Notes to accounts of the company for the latest year
Year End :2023-03 

(iii) 1281.95 crore (2021-22: 1169.98 crore) of borrowing costs has been capitalised during the year against qualifying assets under construction using a capitalisation rate of 2.47% (2021-22: 2.88%).

(iv) Property, plant and equipment (including capital work-in-progress) were tested for impairment during the year where indicators of impairment existed. During the year ended March 31, 2023, the Company has recognised an impairment reversal of ?22.77 crore in respect of expenditure incurred at one of its mining sites. The impairment recognised/reversed is included within other expenses in the statement of profit and loss.

(v) Details of property, plant and equipment pledged against borrowings is presented in note 18, page F78.

(vi) Additions to capital work-in-progress during the year is ?8,708.97 crore (2021-22: ?6,497.86 crore).

Figures in italics represents comparative figures of previous year.

# In case of immovable properties acquired from Tata Steel BSL Limited which got merged with the Company in the preceding year pursuant to National Company Law Tribunal Order dated October 29, 2021, dates have been considered with effect from the date of merger.

(viii) With effect from April 1,2021, the Company has revised the terminal value of certain items of property, plant and equipment acquired consequent to the merger of Tata Steel BSL Limited with and into the Company. Had there been no change in terminal value of the assets acquired, depreciation for the year ended March 31, 2022 would have been lower by ?99.37 crore.

As part of its strategy to continue to grow in the Indian market, the Company acquired Tata Steel BSL Limited (TSBSL) with ~5 MTPA steel making capacity in May 2018, under a bid process triggered by TSBSL's insolvency. Post-acquisition, the Company's net debt at a consolidated level had increased considerably.

Given the Company's strategic priority to deleverage balance sheet consequent to increase in net debt levels ahead of incurring further planned investments in organic growth projects, capital expenditure during last few years have been lower than the original phasing of spend approved by the Board of Directors of the Company. This was further exacerbated by the onset of the COVID19 pandemic towards the close of financial year 2020, wherein business & supply chain disruptions, health and safety concerns across the globe coupled with travel restrictions globally impacted the pace of project execution over the last 2-3 years.

Following the rebalancing of capital structure post significant reduction in the debt levels and the Company attaining an investment grade credit rating, the capital allocation for organic growth projects has been increased and the Company expects to commission these facilities in line with their revised completion schedules.

(i) Vehicle cost used for in-house research and development included within right-of-use vehicles is ?2.36 crore (March 31, 2022: 10.71 crore).

(ii) The Company's significant leasing arrangements include assets dedicated for use under long-term arrangements, lease of land, office space, equipment, vehicles and some IT equipment.

Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to another party, the right-of-use asset can only be used by the Company. Extension and termination options are included in some property and equipment leases.

These are used to maximise operational flexibility in terms of managing the assets used in the Company's operations. Majority of the extension and termination options held are exercisable based on mutual agreement of the Company and the lessors.

With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right of- use asset and a lease liability. Payments made for short-term leases and leases of low value are expensed on a straight-line basis over the lease term.

Variable lease payments which do not depend on an index or a rate (such as lease payments based on a percentage of sales) are excluded from the initial measurement of the lease liability and asset.

For leases recognised under long-term arrangements involving use of a dedicated asset, non-lease components are excluded based on the underlying contractual terms and conditions. A change in the allocation assumptions may have an impact on the measurement of lease liabilities and the related right-of-use assets.

During the year ended March 31, 2023, the Company has recognised the following in the statement of profit and loss:

a) expense in respect of short-term leases and leases of low-value assets 120.16 crore (2021-22: ?4.18 crore) and Nil (2021-22: Nil) respectively.

b) expense in respect of variable lease payments not included in the measurement of lease liabilities 119.18 crore (2021-22: 16.89 crore).

c) income in respect of sub-leases of right-of-use assets 10.31 crore (2021-22: 10.35 crore).

During the year ended March 31, 2023, total cash outflow in respect of leases amounted to 11,004.19 crore (March 31, 2022: 11,008.91 crore).

As at March 31, 2023, commitments for leases not yet commenced was Nil (March 31, 2022: Nil).

(i) Mining assets represent expenditure incurred in relation to acquisition of mines, mine development expenditure post establishment of technical and commercial feasibility and restoration obligations as per applicable regulations.

(ii) Software costs related to in-house research and development included within software costs is 10.15 crore (2021-22: 10.13 crore).

* These investments are carried at a book value of 11.00

# As on March 31, 2023, Kumardhubi Fireclay and Silica Works Ltd., Kumardhubi Metal Casting and Engineering Ltd., Tata Construction and Projects Limited and Andal East Coal Company Private Limited are under liquidation and Tata Korf Engineering Services Ltd is non-operative.

@ Equity investment in TRF Limited includes 15.79 crore for 37,53,275 equity shares and deemed equity component of 1198.23 crore for 23,90,00,000 NCRPS.

$ Cost of unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

(i) The Company holds more than 50% of the equity share capital in TM International Logistics Limited. However, decisions in respect of activities which significantly affect the risks and rewards of these businesses, require unanimous consent of all the shareholders. This entity has therefore been considered as joint venture.

(ii) During the year ended March 31, 2023, the Company has transferred its investments held in NatSteel Asia Pte. Ltd. to T Steel Holdings Pte. Ltd., a wholly owned subsidiary of the Company against cash consideration. The gain on transfer of such shares has been recognised within exceptional items.

(iii) The Hon'ble National Company Law Tribunal (NCLT), Kolkata vide order dated April 5, 2019 has admitted the initiation of Corporate Insolvency Resolution Process (CIRP) in respect of Tayo Rolls Limited, a subsidiary of the Company.

(iv) During the year ended March 31, 2023, the Company considered indicators of impairment such as decline in operational performance, changes in outlook of future profitability among other potential indicators for investments held in steel, mining and other business operations either directly or indirectly.

The recoverable value of investments held in T Steel Holdings Pte. Ltd. (TSH), a wholly owned subsidiary of the Company is, inter alia, dependent on the operational and financial performance of Tata Steel Europe (TSE) and net assets of the other underlying businesses. The recoverable amount of TSE is higher of the value in use (VIU) of the underlying businesses and the fair value less cost to sell of those businesses which inter-alia considers impact of switching the heavy end and other relevant assets to a more green steel capex base. The VIU computation uses cash flow forecasts based on most recently approved financial budgets and strategic forecasts which cover a period of three years and future projections taking the analysis out into perpetuity based on a steady state, sustainable cash flow reflecting average steel industry conditions between successive peaks and troughs of profitability. Key assumptions for the value in use computations are those regarding the discount rates, exchange rates, market demand, sales volume and sales prices, cost to produce etc. The projections are based on both past performance and the expectations of future performance and assumptions therein. The Company estimates discount rates using post-tax rates that reflect the current market rates adjusted to reflect the way the European union steel market would assess the specific risk. The weighted average post-tax discount rates used for discounting the cash flows projections is in range of 7.90% - 8.80% (March 31, 2022: 6.30% to 7.00%). Beyond the specifically forecasted period, a growth rate of 1.70% - 2.00% (March 31, 2022: 1.80%) is used to extrapolate the cash flow projections. This rate does not exceed the average long-term growth rate for the relevant markets.

TSE is exposed to certain climate related risks which could affect the estimates of future cash flow projections. The cashflow projections include the impact of decarbonisation given that the Netherlands business in TSE has stated its plan to move away from the current production process and to transition to decarbonised production. Decarbonisation as a whole is likely to provide significant opportunities to TSE as it is likely to increase the demand for steel as it is crucial as an infrastructure enabler for all technological transition within the wider economy (e.g. wind power, hydrogen, electric vehicles, nuclear etc.) and compares favourably to other materials when considering the life cycle emissions of the material. The technology transition and investments will be dependent on national and international policy and will also be driven by government decisions in the country of operation. Management's assessment is that generally, these potential carbon-related costs would be borne by the society, either through higher steel prices or through public spending/subsidies.

The outcome of the impairment assessment as on March 31, 2023 resulted in recognition of an impairment loss of ?1,170.00 crore in respect investments in TSH which holds investments in TSE.

The Company has also conducted sensitivity analysis on the impairment tests including sensitivity in respect of discount rates. The management believes that no reasonably possible change in any of the key assumptions used in the assessment would cause the carrying value of investments to exceed its recoverable value after recording the aforesaid impairment loss.

The operational and financial performance of TSE, a wholly owned indirect subsidiary of TSH has assessed the potential impact of the economic downturn in Europe caused by external factors including higher inflation, higher interest rates and supply chain disruptions caused by the war in Ukraine on its future business outlook for UK and Mainland Europe (MLE) value chains.

The Board has considered reasonably possible scenarios to stress test the financial position of both the UK and MLE businesses, including the impact of lower steel margins against the Annual Plan and the mitigating actions the Group could take to limit any adverse consequences to liquidity in the annual impairment assessments.

Based on the assessment, the MLE business is expected to have adequate liquidity under all the reasonably possible scenarios considered. The outlook for Tata Steel UK Limited ("TSUK"), a wholly owned indirect subsidiary of TSE, however, is expected to be adversely impacted towards meeting its liquidity requirements and accordingly with respect to its ability to continue as a going concern. In response to the challenging market and business conditions, TSUK continues to implement various measures aimed at improving its business performance and conserving cash including but not limited to ensuring adequate liquidity, if required, through available financing options, management of working capital, implementation of cost reduction measures and discussions with the UK Government to seek adequate support for transition to Green Steel as part of its decarbonization strategy. The progress of discussions with the UK government is also being monitored closely given that

based on the initial and subsequent discussions it remains uncertain whether adequate support for the decarbonization strategy would be agreed. Given the risks and challenges associated with the underlying market and business conditions, the uncommitted nature of available financing options and the uncertainty with respect to whether adequate government support would be agreed, there exists a material uncertainty surrounding the impact of such adversities on the financial situation of TSUK.

The financial statements of TSE have been prepared on a going concern basis recognising the material uncertainty in relation to TSUK.

Whilst the Company's carrying amount of its equity investment in TSH after recognizing aforesaid impairment, which holds TSE, is considered recoverable, the associated uncertainties have been explained above.

(v) During the year ended March 31, 2022, the Company had invested 112,700.00 crore in 0.01% non-convertible redeemable preference shares (NCRPS) of Tata Steel Long Products Limited ("TSLP"), a subsidiary. As on March 31, 2023, the investment amount including interest accrued is 113,983.08 crore.

The Company through TSLP, has during the year ended March 31, 2023, acquired Neelachal Ispat Nigam Limited ("NINL") at a total consideration of 112,100.00 crore. The acquisition was completed on July 4, 2022 and consequently, NINL has become a subsidiary of TSLP and a step-down subsidiary of the Company.

The Company has also directly invested 1300.00 crore for subscription of equity shares of NINL and also acquired equity shares from erstwhile shareholders for 196.69 crore.

Assessment of carrying value of the investment exposure of the Company in TSLP and in NINL are to be looked inter alia from TSLP's exposure in NINL.

The recoverable value of equity investments held in TSLP and NINL has been assessed based on higher of fair value less costs to sell and value in use for the underlying businesses.

The fair value less costs to sell model uses cash flow forecasts based on the most recently approved financial plan for financial year 2023-24. Beyond financial year 2023-24, the cash flow forecasts is based on strategic forecasts which cover a period i.e. estimated time to extract the total usable mineral reserves for mining business and six years for steel business and future projections taking the analysis out to perpetuity which includes capital expenditure for capacity expansion of steel making facilities from the current 1.1 MTPA to 4.56 MTPA by financial year 2028-29 as well as estimated EBITDA changes due to implementation of the expansion strategy and operating the assets.

Key assumptions to the fair value less costs to sell model are changes to selling prices and raw material costs, steel demand, amount of capital expenditure needed for expansion of the existing facilities, EBITDA and post-tax discount rate of 10.10%. The estimates of capital expenditure for capacity expansion of steel making assets is based on management's internal estimates of implementing the expansion strategy.

For the fair value less costs to sell model, a 4.00 % growth rate is used to extrapolate the cash flows beyond the specifically forecasted period of six years in respect of which strategic forecasts have been prepared. The outcome of the impairment assessment as on March 31, 2023 for investments held in TSLP and NINL has not resulted in any impairment of investments.

The management has conducted sensitivity analysis including sensitivity in respect of discount rates, on the impairment assessment of the carrying value of investments held in TSLP and NINL. The management believes that no reasonably possible change in any of the key assumptions used in the model would cause the carrying value of investments to materially exceed its recoverable value.

(vi) During the year ended March 31, 2022, cumulative gain on de-recognition of investments which were carried at fair value through other comprehensive income amounted to ?9.99 crore. Fair value of such investments as on the date of derecognition was ?9.99 crore.

(vii) Tata Steel BSL Limited (TSBSL) (earlier known as Bhushan Steel Limited), an erstwhile subsidiary (acquired through the corporate insolvency resolution process) which amalgamated with the Company during the year ended March, 2022 was being identified as the promoter of Jawahar Credit & Holdings Private Limited (JCHPL) and Bhushan Capital & Credit Services Private Limited (BCCSPL). These entities were connected to the previous management of erstwhile TSBSL, before acquisition of TSBSL by the Company (through Bamnipal Steel Limited) in May 2018.

TSBSL had written to JCHPL, BCCSPL and the Registrar of Companies (National Capital Territory of Delhi & Haryana) intimating that TSBSL should not be identified as promoter of these two companies; accordingly, legally, neither erstwhile TSBSL nor the Company had any visibility or control over the operations of these two companies nor currently exercises any influence on these entities.

(viii) During the year ended March 31, 2022, Noamundi Steel Limited, Straight Mile Steel Limited, Sakchi Steel Limited, Jugsalai Steel Limited, Jamadoba Steel Limited, Dimna Steel Limited, Bistupur Steel Limited and T M Mining Company Limited have been struck off from Registrar of Companies (ROC).

(xi) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities (intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall, whether, directly or indirectly lend or invest in other persons / entities identified in any manner whatsoever by or on behalf of the company ('ultimate beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries other than investments of 1645.06 crore (March 31, 2022: Nil) invested in Tata Steel Mining Limited, ?10.00 crore (March 31,2022: Nil) in Tata Steel Downstream Products Limited, ?54.69 crore (March 31, 2022: Nil) in Tata Steel Advanced Materials Limited and ?68.00 crore (March 31, 2022: Nil) in Tata Steel Utilities and Infrastructure Services Limited made during the year ended on March 31, 2023 and as set out in note 7(iv), page F60 in the ordinary course of business and in keeping with the applicable regulatory requirements for onward funding to certain subsidiaries of the Company towards meeting their business requirements. Accordingly, no further disclosures, in this regard, are required.

(xii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(i) Non-current loans to related parties represents loan given to subsidiaries 132,775.29 crore (March 31, 2022: 130,750.72 crore), out of which Nil (March 31, 2022: I558.95 crore) is impaired.

(ii) Current loans to related parties represent loans/advances given to subsidiaries ?3,257.54 crore (March 31, 2022: ?2,433.04 crore) and associates Nil (March 31, 2022: I100.00 crore) out of which ?67.67 crore (2021-22: I67.67 crore) and Nil (March 31, 2022: I100.00 crore) is impaired respectively.

(iii) Other loans primarily represent loans given to employees.

(iv) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall, whether, directly or indirectly lend or invest in other persons / entities identified in any manner whatsoever by or on behalf of the company ('ultimate beneficiaries') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries other than loans aggregating Nil (March 31, 2022: 123,029.77 crore) and roll over of loan of ?1,643.45 crore (March 31, 2022: 11,515.60 crore) given during the year to T Steel Holdings Pte Ltd, a subsidiary and an investment company of the Company and as set out in note 6(xi), page F59 in the ordinary course of business and in keeping with the applicable regulatory requirements for onward funding to certain overseas subsidiaries of the Company towards meeting their business requirements and /or loan prepayments. Accordingly, no further disclosures, in this regard, are required.

(v) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vi) Disclosure as per Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 186(4) of the Companies Act, 2013.

(i) Security deposits are primarily in relation to public utility services and rental agreements. It includes deposit with a subsidiary 114.00 crore (March 31, 2022: 114.00 crore) and deposits with Tata Sons Private Limited 111.25 crore (March 31, 2022: 11.25 crore).

(ii) Non-current earmarked balances with banks represent deposits and balances in escrow account not due for realisation within 12 months from the balance sheet date. These are primarily placed as security with government bodies, margin money against issue of bank guarantees, etc.

(iii) Current other financial assets include amount receivable from post-employment benefit funds 1137.98 crore (March 31, 2022: 1171.30 crore) on account of retirement benefit obligations paid by the Company directly.

A. Income tax expense/(benefit)

The Company is subject to income tax in India on the basis of its financial statements. The Company can claim tax exemptions/ deductions under specific sections of the Income Tax Act, 1961 subject to fulfilment of prescribed conditions, as may be applicable. The Company during the year ended March 31, 2020 had opted for the new tax regime under Section 115BAA of the Act, which provides a domestic company with an option to pay tax at a rate of 22% (effective rate of 25.168%). The lower rate shall be applicable subject to certain conditions, including that the total income should be computed without claiming specific deduction or exemptions.

As per the tax laws, business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period.

(a) The Shareholders of the Company, at the 115th Annual General Meeting held on June 28, 2022, had approved the sub-division of one equity share of face value ?10 each (fully paid-up and partly paid-up) into 10 equity share of face value ?1 each. The record date for the said sub-division was set at July 29, 2022.

(b) During the year ended March 31, 2023, the Company has sent Reminder-cum-Forfeiture Notice to the holders of partly paid-up equity shares on which the first and final call money was unpaid. The Company has converted 3,16,580 partly paid-up shares of face value ?1 each into fully paid-up shares.

(c) The Board of Directors at its meeting held on March 27, 2023 approved the forfeiture of 19,16,300 partly paid-up shares of face value of ?1 each on which the call money of 10.7496 remains unpaid. (Considering 1,91,630 partly paid-up shares of face value of 110 each sub- divided into 19,16,300 partly paid-up shares of 11 each).

(iii) As at March 31, 2023, 29,27,850 Ordinary Shares of face value 11 each (March 31, 2022: 2,92,785 Ordinary Shares of face value of 110 each) are kept in abeyance in respect of Rights issue of 2007.

As at March 31, 2023, 11,99,650 fully paid-up Ordinary Shares of face value 11 each (March 31, 2022: 1,19,965 fully paid-up Ordinary Shares of face value of 110 each) are kept in abeyance in respect of Rights Issue of 2018.

As at March 31, 2023, 5,98,280 Ordinary Shares of face value 11 each (March 31, 2022: 59,828 partly paid-up Ordinary shares of face value of 110 each) are kept in abeyance in respect of Rights Issue of 2018.

(vii) 8,79,53,750 shares (March 31, 2022: 96,95,642 shares of face value ?10 each) of face value of ?1 per share represent the shares underlying GDRs which were issued during 1994 and 2009. Each GDR represents one underlying Ordinary Share.

(viii) The rights, powers and preferences relating to each class of share capital and the qualifications, limitations and restrictions thereof are contained in the Memorandum and Articles of Association of the Company. The principal rights are as follows:

A. Ordinary Shares of D1 each

(i) In respect of every Ordinary Share (whether fully paid or partly paid), voting right and dividend shall be in the same proportion as the capital paid-up on such Ordinary Share bears to the total paid-up Ordinary Capital of the Company.

(ii) The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

(iii) In the event of liquidation, the Shareholders of Ordinary Shares are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

B. 'A' Ordinary Shares of D10 each

(i) (a) The holders of 'A' Ordinary Shares shall be

entitled to such rights of voting and/or dividend and such other rights as per the terms of the issue of such shares, provided always that:

• in the case where a resolution is put to vote on a poll, such differential voting entitlement (excluding fractions, if any) will be applicable to holders of 'A' Ordinary Shares.

• in the case where a resolution is put to vote in the meeting and is to be decided on a show of hands, the holders of 'A' Ordinary Shares shall be entitled to the same number of votes as available to holders of Ordinary Shares.

(b) The holders of Ordinary Shares and the holders of 'A' Ordinary Shares shall vote as a single class with respect to all matters submitted for voting by shareholders of the Company and shall exercise such votes in proportion to the voting rights attached to such shares including in relation to any scheme under Sections 391 to 394 of the Companies Act, 1956.

(ii) The holders of 'A' Ordinary Shares shall be entitled to dividend on each 'A' Ordinary Share which may be equal to or higher than the amount per Ordinary Share declared by the Board for each Ordinary Share, and as may be specified at the time of the issue. Different series of 'A' Ordinary Shares may carry different entitlements to dividend to the extent permitted under applicable law and as prescribed under the terms applicable to such issue.

C. Preference Shares

The Company has two classes of preference shares i.e.

Cumulative Redeemable Preference Shares (CRPS) of ?100

per share and Cumulative Convertible Preference Shares

(CCPS) of ?100 per share.

(i) Such shares shall confer on the holders thereof, the right to a fixed preferential dividend from the date of allotment, at a rate as may be determined by the Board at the time of the issue, on the capital for the time being paid-up or credited as paid-up thereon.

(ii) Such shares shall rank for capital and dividend (including all dividend undeclared upto the commencement of winding up) and for repayment of capital in a winding up, pari passu inter se and in priority to the Ordinary Shares of the Company, but shall not confer any further or other right to participate either in profits or assets. However, in case of CCPS, such preferential rights shall automatically cease on conversion of these shares into Ordinary Shares.

(iii) The holders of such shares shall have the right to receive all notices of general meetings of the Company but shall not confer on the holders thereof the right to vote at any meetings of the Company save to the extent and in the manner provided in the Companies Act, 1956, or any re-enactment thereof.

(iv) CCPS shall be converted into Ordinary Shares as per the terms, determined by the Board at the time of issue; as and when converted, such Ordinary Shares shall rank pari passu with the then existing Ordinary Shares of the Company in all respects.

The Company had issued hybrid perpetual securities of 1775.00 crore in May 2011. These securities were perpetual in nature with no maturity or redemption and callable only at the option of the Company. The distribution on these securities were 11.50% p.a. with a step up provision if the securities were not called after 10 years. The distribution on the securities may have been deferred at the option of the Company if, in the six months preceding the relevant distribution payment date, the Company had not made payment on, or repurchased or redeemed, any securities ranking pari passu with, or junior to the instrument. As these securities were perpetual in nature and the Company did not have any redemption obligation, these were classified as equity.

During the year ended March 31, 2022, the Company had exercised its call option and redeemed the perpetual securities worth 1775.00 crore issued during May 2011.

(i) During the year ended March 31, 2022, distribution of 18.30 crore post exercise of the call option on hybrid perpetual securities had been recognised in the statement of profit & loss.

(ii) Represents gain/(loss) on sale of investments carried at fair value through other comprehensive income reclassified from investment revaluation reserve during the year ended March 31, 2022.

B. Items of other comprehensive income

(a) Cash flow hedge reserve

The cumulative effective portion of gains or losses arising from changes in fair value of hedging instruments designated as cash flow hedges are recognised in cash flow hedge reserve. Such changes recognised are reclassified to the statement of profit and loss when the hedged item affects the profit or loss or are included as an adjustment to the cost of the related non-financial hedged item.

The Company has designated certain foreign currency forward contracts, interest rate swaps and interest rate caps and collars as cash flow hedges in respect of foreign exchange and interest rate risks.

Cumulative gains and losses arising from fair value changes of equity investments measured at fair value through other comprehensive income are recognised in investment revaluation reserve. The reserve balance represents such changes recognised net of amounts reclassified to retained earnings on disposal of such investments.

The provisions of the Companies Act, 2013 read with the related rules required a company issuing debentures to create a Debenture Redemption Reserve (DRR) of 25% of the value of debentures issued, either through a public issue or on a private placement basis, out of the profits of the Company available for payment of dividend. The amounts credited to the DRR can be utilised by the company only to redeem debentures.

As per the recent amendment in the Companies (Share Capital and Debentures) Rules, 2014, a listed company issuing privately placed debentures on or after August 16, 2019, is not required to maintain additional amount in the DRR. Accordingly, the existing balance in the DRR shall be maintained to be utilised only for the redemption of existing debentures issued by the company before August 16, 2019.

(c) General reserve

Under the erstwhile Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn.

(d) Capital redemption reserve

The Companies Act, 2013 requires that when a Company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve. The reserve is utilised in accordance with the provisions of Section 69 of the Companies Act, 2013.

(i) As at March 31,2023, 13,754.62 crore (March 31,2022: 12,715.14 crore) of the total outstanding borrowings were secured by a charge on property, plant and equipment, inventories, receivables and other current assets.

(ii) The security details of major borrowings as at March 31, 2023 is as below:

Loan from Joint Plant Committee-Steel Development Fund

It is secured by mortgages on all present and future immovable properties wherever situated and hypothecation of movable assets, excluding land and building mortgaged in favour of Government of India under the deed of mortgage dated April 13, 1967 and in favour of Government of Bihar under two deeds of mortgage dated May 11, 1963, immovable properties and movable assets of the Tubes Division, Bearings Division, Ferro Alloys Division and Cold Rolling Complex (West) at Tarapur and all investments and book debts of the Company subject to the prior charges created and/or to be created in favour of the bankers for securing borrowing for the working capital requirement and charges created and/or to be created on specific items of machinery and equipment procured/to be procured under deferred payment schemes/bill re-discounting schemes/asset credit schemes.

The loan is repayable in 16 equal semi-annual instalments after completion of four years from the date of the tranche.

The Company filed a writ petition before the High Court at Calcutta in February 2006 claiming waiver of the outstanding loan and interest and refund of the balance lying with Steel Development Fund (SDF). The Writ Petition was decided by judgment dated August 3, 2022. By the judgment, the High Court declared that the corpus of SDF can only be utilised for the benefit of the main steel producers. However, the waiver of loan as sought by the Company was not allowed. Hence, against the judgment the Company filed an appeal in the High Court.

The appeal has been decided on January 3, 2023. By the final order, High Court has directed the Company to submit a fresh representation to Union of India and fixed a time of three months for Union of India to take a decision on the representation. The Company has submitted the representation on March 28, 2023.

The loan includes funded interest 11,111.84 crore (March 31, 2022: 11,074.96 crore).

It includes 11,639.33 crore (March 31,2022: 11,639.33 crore) representing repayments and interest on earlier loans for which applications of funding are awaiting sanction.

(iii) As at March 31, 2023, the register of charges of the Company as available in records of the Ministry of Corporate Affairs (MCA) includes charges that were created/modified since the inception of the Company. There are certain charges which are historic in nature and it involves practical challenges in obtaining no-objection certificates (NOCs) from the charge holders of such charges, despite repayment of the underlying loans. The Company is in the continuous process of filing the charge satisfaction e-form with MCA, within the timelines, as and when it receives NOCs from the respective charge holders.

(v) The details of major unsecured borrowings as at March 31, 2023 are as below:

(a) Non-Convertible Debentures

The details of debentures issued/redeemed by the Company are as below:

(i) 7.76% p.a. interest bearing 15,000 debentures of face value 110,00,000 each are redeemable at par on September 20, 2032.

(ii) 9.84% p.a. interest bearing 43,150 debentures of face value 110,00,000 each are redeemable at par in 4 equal annual instalments commencing from February 28, 2031.

(iii) 8.03% p.a. interest bearing 2,15,000 debentures of face value 11,00,000 each are redeemable at par on February 25, 2028.

(iv) 7.50% p.a. interest bearing 5,000 debentures of face value 110,00,000 each are redeemable at par on September 20, 2027.

(v) 8.15% p.a. interest bearing 10,000 debentures of face value 110,00,000 each are redeemable at par on October 1, 2026.

(vi) 7.70% p.a. interest bearing 6,700 debentures of face value 110,00,000 each are redeemable at par on March 13, 2025.

(vii) 7.95% p.a. interest bearing 5,000 debentures of face value 110,00,000 each are redeemable at par on October 30, 2023.

(viii) Repo rate plus 4.08% p.a. interest bearing 4,000 debentures of face value 110,00,000 each are redeemable at par on June 2, 2023.

(ix) 8.25% p.a. interest bearing 10,000 debentures of face value 110,00,000 each are redeemable at par on May 19, 2023.

(x) Repo rate plus 3.45% p.a. interest bearing 5,000 debentures of face value 110,00,000 each are redeemable at par on April 28, 2023.

(xi) Repo rate plus 3.30% p.a. interest bearing 10,000 debentures of face value 110,00,000 each are redeemable at par on April 27, 2023.

(xii) 7.85% p.a. interest bearing 5,100 debentures of face value 110,00,000 each are redeemable at par on April 21, 2023.

(xiii) 7.85% p.a. interest bearing 10,250 debentures of face value 110,00,000 each are redeemable at par on April 17, 2023.

(xiv) 2.00% p.a. interest bearing 15,000 debentures of face value 110,00,000 each has been redeemed at a premium of 85.03% of the face value during the year.

(b) Term loans from banks/financial institutions

The details of loans from banks and financial institutions availed/repaid by the Company are as below:

(i) Rupee loan amounting 11,320.00 crore (March 31,2022: 11,320.00 crore) is repayable in 3 semi-annual instalments, the next instalment is due on August 31, 2029.

(ii) Rupee loan amounting 11,000.00 crore (March 31, 2022: Nil) is repayable on August 30, 2029.

(iii) Rupee loan amounting 1500.00 crore (March 31, 2022: Nil) is repayable on December 11, 2027

(iv) Rupee loan amounting 1100.00 crore (March 31, 2022: Nil) is repayable on December 8, 2027.

(v) Rupee loan amounting 1400.00 crore (March 31, 2022: Nil) is repayable on September 14, 2027.

(vi) Rupee loan amounting 1595.00 crore (March 31, 2022: 1595.00 crore) is repayable in 4 semi-annual instalments, the next instalment is due on October 16, 2026.

(vii) Rupee loan amounting 1700.00 crore (March 31, 2022: Nil) is repayable in 8 annual instalments, the next instalment is due on August 11, 2025.

(viii) Rupee loan amounting 1520.00 crore (March 31, 2022: 1520.00 crore) is repayable in 5 semi-annual instalments, the next instalment is due on June 30, 2025.

(ix) Rupee loan amounting 1500.00 crore (March 31, 2022: Nil) is repayable on June 24, 2024.

(x) Rupee loan amounting 1500.00 crore (March 31, 2022: Nil) is repayable on June 22, 2024.

(xi) Rupee loan amounting 1500.00 crore (March 31, 2022: Nil) is repayable on June 17, 2024.

(xii) Rupee loan amounting 1926.24 crore (March 31, 2022: 1930.42 crore) is repayable in 14 semi-annual instalments, the

next instalment is due on November 15, 2023.

(xiii) Rupee loan amounting 1300.00 crore (March 31, 2022: Nil) is repayable in 5 annual instalments, the next instalment is due on September 30, 2023.

(xiv) Rupee loan amounting 1396.00 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on September 30, 2023.

(xv) Rupee loan amounting 1700.00 crore (March 31, 2022: Nil) is repayable in 5 annual instalments, the next instalment is due on September 30, 2023.

(xvi) Rupee loan amounting 1594.00 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on September 30, 2023.

(xvii) Rupee loan amounting 1495.00 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on September 30, 2023.

(xviii) Rupee loan amounting 1990.00 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on September 30, 2023

(xix) USD 440 million equivalent to 13,616.03 crore (March 31, 2022: USD 440.00 million equivalent to 13,335.09 crore) loan is repayable in 3 equal annual instalments commencing from September 11, 2023.

(xx) Rupee loan amounting 1495.00 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on September 7, 2023.

(xxi) Rupee loan amounting 1198.00 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on September 1, 2023.

(xxii) Rupee loan amounting 1544.50 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on September 1, 2023.

(xxiii) Rupee loan amounting 1990.00 crore (March 31, 2022: Nil) is repayable in 19 semi-annual instalments, the next instalment is due on June 30, 2023.

(xxiv) Rupee loan amounting 11,500.00 crore (March 31, 2022: Nil) is repayable in 20 semi-annual instalments, the next instalment is due on June 30, 2023.

(xxv) Rupee loan amounting 1500.00 crore (March 31, 2022: Nil) is repayable in 20 semi-annual instalments, the next instalment is due on June 30, 2023.

(xxvi) Rupee loan amounting 1500.00 crore (March 31, 2022: Nil) is repayable in 20 semi-annual instalments, the next instalment is due on June 30, 2023

(xxvii) Euro 9.55 million equivalent to 180.37 crore as on March 31, 2022 due for repayment on April 30, 2022, had been fully repaid during the year.

(c) Commercial papers raised by the Company are short-term in nature ranging between eleven days to six months.

(ii) As per the leave policy of the Company, an employee is entitled to be paid the accumulated leave balance on separation. The Company presents provision for leave salaries as current and non-current based on actuarial valuation considering estimates of availment of leave, separation of employee etc.

(iii) Non-current and current other provisions include:

(a) provision for compensatory afforestation, mine closure and rehabilitation obligations ?1,265.96 crore (March 31, 2022: ?1,229.47 crore). These amounts become payable upon closure of the mines and are expected to be incurred over a period of 1 to 44 years.

(b) provision for expected obligations in respect of a loss-making subsidiary ?47.33 crore (March 31, 2022: ?47.33 crore). The same is expected to be settled within one year from the reporting date.

(i) Non-current and current advance from customer includes an interest-bearing advance of ?3,811.90 crore (March 31, 2022: 14,972.83 crore) which would be adjusted over a period of 3 years against export of steel products. Amount of revenue recognised for the year ended March 31, 2023 in respect of such advances outstanding at the beginning of the year is 11,543.07 crore (2021-22: 11,528.92 crore). Out of the amount outstanding, 11,665.79 crore (March 31, 2023: 11,410.20 crore) is expected to be adjusted by March 31, 2024 and the balance thereafter.

(ii) Statutory dues primarily relate to payables in respect of GST, excise duty, service tax, sales tax, electricity duty, water tax, VAT, tax deducted at source and royalties.

(iii) Other credit balances includes GST compensation cess and interest thereon amounting to 11,678.33 crore (March 31,2022: 11,274.11 crore).

(iv) As per the Companies Act, 2013, amount required to be spent by the Company on Corporate Social Responsibility (CSR) activities during the year was 1456.92 crore (2021-22: 1266.57 crore).

During the year ended March 31, 2023 amount approved by the Board to be spent on CSR activities was 1481.60 crore (2021-22: 1526.00 crore).

During the year ended March 31, 2023, in respect of CSR activities revenue expenditure incurred by the Company amounted to 1480.62 crore [1476.39 crore has been paid in cash and 14.23 crore is yet to be paid]. The amount spent relates to purpose other than construction or acquisition of any asset and out of the above, 1316.41 crore was spent on ongoing projects during the year. There was no amount unspent for the year ended March 31, 2023 and the Company does not propose to carry forward any amount spent beyond the statutory requirement.

During the year ended March 31, 2022, revenue expenditure incurred by the Company amounted to 1405.97 crore [1398.11 crore has been paid in cash and 17.86 crore is yet to be paid], which included 1167.21 crore spent on ongoing projects. There was no amount unspent for year ended March 31, 2022.

During the year ended March 31, 2023, amount spent on CSR activities through related parties was 1435.16 crore (2021-22: 1309.42 crore).

(v) During the year ended March 31,2023, revenue expenditure charged to the statement of profit and loss in respect of research and development activities undertaken was 1270.65 crore (2021-22: 1212.44 crore) including depreciation of 18.97 crore (2021-22: 19.24 crore). Capital expenditure incurred in respect of research and development activities during the year was 14.27 crore (2021-22: 10.74 crore).

32. Exceptional items

[Item No. VI, Page F23]

Exceptional items are those which are considered for separate disclosure in the financial statements considering their size, nature or incidence. Such items included the statement of profit and loss are as below:

(a) Profit/(loss) on sale of non-current investments 1338.56 crore (2021-22: 1343.68 crore) relates to profit recognised on sale of investments in an erstwhile wholly owned subsidiary to a wholly owned subsidiary of the Company.

(b) Provision for impairment of investments/doubtful advances 11,056.39 crore (2021-22: 193.22 crore) relates to provision recognised for investment in a wholly owned subsidiary and an associate net of reversal of provision for loan given to an associate and investment in an erstwhile wholly owned subsidiary.

(c) Employee separation compensation 191.94 crore (2021-22: 1330.81 crore) relates to provisions recognised in respect of employee separation scheme of employees.

(d) During the year ended March 31,2022, restructuring and other provisions 1204.84 crore represents provision recognised under family protection scheme for dependents of employees who lost their lives due to COVID-19.

(e) Gain/(loss) on non-current investments classified as fair value through profit and loss 130.99 crore (2021-22: 149.74 crore) primarily represents gain on investments in preference shares held in an associate.

(i) On November 23, 2021, the Board of Directors of the Company approved allotment of 1,82,23,805 fully paid-up equity shares of the Company, of face value 10/- each, to eligible shareholders of Tata Steel BSL Limited (formerly Bhushan Steel Limited) ("TSBSL") consequent to the approval of the scheme of merger of Bamnipal Steel Limited and TSBSL into the Company by National Company Law Tribunal (NCLT) through its order dated October 29, 2021.

(ii) The basic and diluted EPS for the prior year have been restated considering the face value of 11/- each in accordance with Ind AS 33 - "Earnings per Share" on account of sub-division of the Ordinary (equity) Shares of face value ?10/- each into Ordinary (equity) Shares of face value of 11/- each (refer note 15(ii)(a), page F70).

34. Employee benefits

A. Defined contribution plans

The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognised in relation to these schemes represents the value of contributions payable during the period by the Company at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior months contributions that were not due to be paid until after the end of the reporting period.

The major defined contribution plans operated by the Company are as below:

(a) Provident fund and pension

The Company provides provident fund benefits for eligible employees as per applicable regulations wherein both employees and the Company make monthly contributions at a specified percentage of the eligible employee's salary. Contributions under such schemes are made either to a provident fund set up as an irrevocable trust by the Company to manage the investments and distribute the amounts entitled to employees or to state managed funds.

Benefits provided under plans wherein contributions are made to state managed funds and the Company does not have a future obligation to make good short fall if any, are treated as a defined contribution plan.

(b) Superannuation fund

The Company has a superannuation plan for the benefit of its employees. Employees who are members of the superannuation plan are entitled to benefits depending on the years of service and salary drawn.

Separate irrevocable trusts are maintained for employees covered and entitled to benefits. The Company contributes up to 15% of the eligible employees' salary or 11,50,000, whichever is lower, to the trust every year. Such contributions are recognised as an expense as and when incurred. The Company does not have any further obligation beyond this contribution.

The contributions recognised as an expense in the statement of profit and loss during the year on account of the above defined contribution plans amounted to 1184.31 crore (2021-22: 1169.61 crore).

B. Defined benefit plans

The defined benefit plans operated by the Company are as below:

(a) Provident fund and pension

Provident fund benefits provided under plans wherein contributions are made to an irrevocable trust set up by the Company to manage the investments and distribute the amounts entitled to employees are treated as a defined benefit plan as the Company is obligated to provide the members a rate of return which should, at the minimum, meet the interest rate declared by Government administered provident fund. A part of the Company's contribution is transferred to Government administered pension fund. The contributions made by the Company and the shortfall of interest, if any, are recognised as an expense in profit and loss under employee benefits expense.

In accordance with an actuarial valuation of provident fund liabilities based on guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

(b) Retiring gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees as per The Payment of Gratuity Act, 1972. The plan provides for a lump- sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity funds established as trusts or insurance companies. The Company accounts for the liability for gratuity benefits payable in the future based on a year-end actuarial valuation.

(c) Post-retirement medical benefits

Under this unfunded scheme, employees of the Company receive medical benefits subject to certain limits on amounts of benefits, periods after retirement and types of benefits, depending on their grade and location at the time of retirement. Employees separated from the Company under an early separation scheme, on medical grounds or due to permanent disablement are also covered under the scheme. The Company accounts for the liability for post-retirement medical scheme based on a year-end actuarial valuation.

(d) Other defined benefits

Other benefits provided under unfunded schemes include post-retirement lumpsum benefits, pension payable to directors of the Company on their retirement, farewell gifts and reimbursement of packing and transportation charges to the employees based on their last drawn salary.

The defined benefit plans expose the Company to a number of actuarial risks as below:

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

(ii) Interest risk: A decrease in the bond interest rate will increase the plan liability. However, this will be partially offset by an increase in the value of plan's debt investments.

(iii) Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in salary of the plan participants will increase the plan's liability.

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

35. Contingencies and commitments

A. Contingencies

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an on-going basis with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company's financial condition, results of operations or cash flows.

I t is not practicable for the Company to estimate the timings of the cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the same.

Litigations

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of a material nature, other than those described below:

Income tax

The Company has ongoing disputes with income tax authorities relating to tax treatment of certain items. These mainly include disallowance of expenses, tax treatment of certain expenses claimed by the Company as deduction and the computation of or eligibility of the Company's use of certain tax incentives or allowances.

Most of these disputes and/or disallowances, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years.

As at March 31, 2023, there are matters and/or disputes pending in appeal amounting to 13,552.39 crore (March 31, 2022: 13,544.68 crore).

The details of significant demands are as below:

(a) Interest expenditure on loans taken by the Company for acquisition of a subsidiary has been disallowed in assessments with tax demand raised for 11,641.64 crore (inclusive of interest) (March 31, 2022: 11,641.64 crore).

(b) Interest expenditure on "Hybrid Perpetual Securities" has been disallowed in assessments with tax demand raised for 1484.78 crore (inclusive of interest) (March 31, 2022: 1484.78 crore)

In respect of above demands, the Company has deposited an amount of 11,255.63 crore (March 31, 2022: 11,255.63 crore) as a precondition for obtaining stay. The Company expects to sustain its position on ultimate resolution of the said appeals.

Customs, excise duty, service tax and goods and service tax

As at March 31, 2023, there were pending litigations for various matters relating to customs, excise duty, service tax and GST involving demands of 1379.61 crore (March 31, 2022: 1310.63 crore).

Sales tax /VAT

The total sales tax demands that are being contested by the Company amounted to 1716.71 crore (March 31,2022: 1776.08 crore).

The detail of significant demand is as below:

(a) The Company stock transfers its goods manufactured at Jamshedpur works plant to its various depots/ branches located outside the state of Jharkhand across the country and these goods are then sold to various customers outside the states from depots/ branches. As per the erstwhile Central Sales Tax Act, 1956, these transfers of goods to depots/branches were made without payment of Central sales tax and F-Form was submitted in lieu of the stock-transfers made during the period of assessment. The value of these sales was also disclosed in the periodical returns filed as per the Jharkhand Vat Act, 2005. The Commercial Tax Department has raised demand of Central Sales tax by levying tax on the differences between value of sales outside the states and value of F-Form submitted for stock transfers. The tax amount involved for assessment years 2011-12, 2012-13, 2014-15, 2016-17 and 2017-18 as on March 31, 2023 is amounting to 1200.00 crore (March 31, 2022: 1142.00 crore).

Other taxes, dues and claims

Other amounts for which the Company may contingently

be liable aggregate to 118,184.13 crore (March 31, 2022:

115,790.08 crore).

The details of significant demands are as below:

(a) Claim by a party arising out of conversion arrangement Nil (March 31,2022: 1195.79 crore). As on March 31,2022, the Company had not acknowledged this claim and had instead filed a claim of 1141.23 crore (March 31, 2022: 1141.23 crore) on the party. The matter has been settled in accordance with the terms of Settlement Agreement dated 31 October 2022 wherein TSL agreed to pay a sum of 142.36 crore to Indian Metal & Ferro Alloys Limited.

(b) The State Government of Odisha introduced "Orissa Rural Infrastructure and Socio Economic Development Act, 2004" with effect from February 2005 levying tax on mineral bearing land computed on the basis of value of minerals produced from the mineral bearing land. The Company had filed a writ petition in the Odisha High Court challenging the validity of the Act. The High Court held in December 2005 that the State does not have authority to levy tax on minerals. The State of Odisha filed an appeal in the Supreme Court against the order of the High Court and the case is pending in Supreme Court. The potential liability, as at March 31, 2023 is 113,084.69 crore (March 31, 2022: 111,023.93 crore).

(c) The Company pays royalty on iron ore on the basis of quantity removed from the leased area at the rates based on notification issued by the Ministry of Mines, Government of India and the price published by Indian Bureau of Mines (IBM) on a monthly basis.

Demand of 1411.08 crore has been raised by Deputy Director of Mines, Joda, claiming royalty at sized ore rates on despatches of ore fines. The Company has filed a revision petition on November 14, 2013 before the Mines Tribunal, Government of India, Ministry of Mines, New Delhi, challenging the legality and validity of the demand raised and also to grant refund of royalty excess paid by the Company. Mines tribunal vide its order dated November 13, 2014 has stayed the demand of royalty on iron ore for Joda east of 1314.28 crore upto the period ending March 31, 2014. For the demand of 196.80 crore for April, 2014 to September, 2014, a separate revision application was filed before Mines Tribunal. The matter was heard by Mines Tribunal on July 14, 2015 and stay was granted on the total demand with directive to Government of Odisha not to take any coercive action for realisation of the demanded amount.

The Hon'ble High Court of Odisha in a similar matter held the circulars based on which demands were raised to be valid. The Company has challenged the judgment of the High Court by a separate petition in the Hon'ble Supreme Court on April 29, 2016.

On July 16, 2019, the Company has filed rejoinders to the reply filed by State of Odisha against the revision petition. The State pressed for rejection of revision applications citing the judgment of the High Court. The Company represented before the authorities and explained that the judgment was passed under a particular set of facts and circumstances which cannot have blanket application on the Company considering the case of the Company is factually different. On August 7, 2019, the Mines Tribunal decided to await the outcome of Special leave petition pending before the Hon'ble Supreme Court and adjourned the matter.

RAs of TSL was listed on June 10, 2020 for virtual hearing. Hearing was adjourned to November 24, 2020. On November 24, 2020 our Counsel submitted that the present issue is pending before the Hon'ble Supreme Court of India in SLP (C) No. 7206 of 2016, M/s Mideast Integrated Steel Pvt. Ltd. Vs. State of Odisha & Ors. and hence, sought adjournment. State Counsel also agreed for the same.

On October 26, 2022, assessment order (for the period April, 2022 to September, 2022) was served, confirming that royalty will be paid for Calibrated Lump Ore and Fines at their respective prices published by IBM w.e.f. April, 2022.

Likely demand of royalty on fines at sized ore rates as on March 31,2023 is 12,696.58 crore (March 31, 2022: 12,859.97 crore).

(d) Demand notices were originally issued by the Deputy Director of Mines, Odisha amounting to 13,827.29 crore for excess production over the quantity permitted under the mining plan, environment clearance or consent to operate, pertaining to 2000-01 to 2009-10. The demand notices have been raised under Section 21(5) of the Mines & Minerals (Development and Regulations) Act, 1957 (MMDR). The Company filed revision petitions before the Mines Tribunal against all such demand notices. Initially, a stay of demands was granted, later by order dated October 12, 2017, the issue has been remanded to the state for reconsideration of the demand in the light of Supreme Court judgement passed on August 2, 2017.

The Hon'ble Supreme Court pronounced its judgement in the Common Cause case on August 2, 2017 wherein it directed that compensation equivalent to the price of mineral extracted in excess of environment clearance or without forest clearance from the forest land be paid.

In pursuance to the Judgement of Hon'ble Supreme Court, demand/show cause notices amounting to 13,873.35 crore have been issued during 2017-18 by the Deputy Director of Mines, Odisha and the District Mining Office, Jharkhand.

In respect of the above demands:

• as directed by the Hon'ble Supreme Court, the Company has provided and paid for iron ore and manganese ore an amount of 1614.41 crore during 2017-18 for production in excess of environment clearance to the Deputy Director of Mines, Odisha.

• the Company has provided and paid under protest an amount of 156.97 crore during 2017-18 for production in excess of environment clearance to the District Mining Office, Jharkhand.

• the Company has challenged the demands amounting to H32.91 crore in 2017-18 for production in excess of lower of mining plan and consent to operate limits raised by the Deputy Director of Mines, Odisha before the Mines Tribunal and obtained a stay on the matter. Mines Tribunal, Delhi vide order dated November 26, 2018 disposed of all the revision applications with a direction to remand it to the State Government to hear all such cases afresh and pass detailed order. On September 14, 2022, the Dy. Director of Mines, Govt. of Odisha issued a fresh demand against the Company in view of order of the State (Dept. of Steel & Mines) in Proceedings, dated September 8, 2022 directing payment of compensation amount towards unlawful production in the mines in violation of mining plan/ consent to operate limits being a valid demand to be realised from the Revisionist i.e. the Company. Appeal has also been filed against the same on November 3, 2022 with the Ministry of Mines. Demand amount of 1132.91 crore (March 31, 2022: 1132.91 crore) is considered contingent.

• the Company has made a comprehensive submission before the Deputy Director of Mines, Odisha against show cause notices amounting to 1694.02 crore received during 2017-18 for production in violation of mining plan, Environment Protection Act, 1986 and Water (Prevention & Control of Pollution) Act, 1981. A demand amounting to 1234.74 crore has been received in April 2018 from the Deputy Director of Mines, Odisha for production in excess of

the Environmental Clearance. The Company had filed Revision Application before the Mines Tribunal, challenging the demand. In December 2021, Mines Tribunal upheld the revision petition and the matter was remanded back to the State Government for fresh consideration. The state has so far not initiated any action. Based on the evaluation of the facts and circumstances, the Company has assessed and concluded that the said show cause notice of 1694.02 crore and demand of 1234.74 crore has not been considered as contingent liability.

• the Company based on its internal assessment has provided an amount of 11,412.89 crore against demand notices amounting to 12,140.30 crore received from the District Mining Office, Jharkhand for producing more than environment clearance and the balance amount of 1727.41 crore (March 31, 2022: 1727.41 crore) is considered contingent. The Company has however been granted a stay by the Revisional Authority, Ministry of Coal, Government of India against such demand notices.

(e) An agreement was executed between the Government of Odisha (GoO) and the Company in December, 1992 for drawal of water from Kundra Nalla for industrial consumption. In December 1993, the Tahsildar, Barbil issued a show-cause notice alleging that the Company has lifted more quantity of water than the sanctioned limit under the agreement and has also not installed water meter. While the proceedings in this regard were in progress, the Company had applied for allocation of fresh limits.

Over the years, there has also been a steep increase in the water charges against which the Company filed writ petitions before Hon'ble High Court of Odisha. In this regard, the Company has received a demand of 1183.46 crore for the period starting January 1996 to November 2020.

The writ petition filed in August, 1997 was listed for hearing before the Full Bench of the Odisha High Court on May 17, 2019. SAIL, one of the petitioners, sought permission to withdraw its writ petition because the settlement was arrived with the State Government on the matter. The High Court allowed withdrawal of writ petition of SAIL and directed other parties to negotiate with the State Government. The Company has submitted its detailed representation to Principal Secretary, Water Resource Department, GoO on June 21, 2019, which is under consideration.

Later on February 6, 2023, Department of water resources, Odisha Government, issued an order, where the Company can opt for one time settlement scheme of long pending outstanding. Application under the scheme should be submitted to the Government within stipulated time i.e., within one month of issue of the order. Under this scheme, the Company should calculate outstanding demand as on March 2022 with 12% p.a. simple interest to be charged on arrear principal only. The payment made by the Company prior to March 31, 2022 shall be adjusted against the outstanding dues in the following order - interest, penalty and principal. In this regard, the Company has computed and provided amount of 137.00 crore as per the scheme in the books.

The potential exposure as on March 31, 2023 is Nil (March 31, 2022: 1262.13 crore) is considered as contingent.

B. Commitments

(a) The Company has entered into various contracts with suppliers and contractors for the acquisition of plant and machinery, equipment and various civil contracts of capital nature amounting to 111,955.56 crore (March 31, 2022: 18,699.11 crore).

Other commitments as at March 31, 2023 amount to 10.01 crore (March 31, 2022: 10.01 crore).

(b) The Company has given undertakings to:

(i) IDBI not to dispose of its investment in Wellman Incandescent India Ltd.

(ii) IDBI and ICICI Bank Ltd. (formerly ICICI) not to dispose of its investment in Standard Chrome Ltd

(c) The Company and Bluescope Steel Limited had given undertaking to State Bank of India not to reduce collective shareholding in Tata Bluescope Steel Private Limited (TBSPL), below 51% without prior consent of the lender. Further, the Company had given an undertaking to State Bank of India to intimate them before diluting its shareholding in TBSPL below 50%.

During the year ended March 31,2021, the Company after obtaining a 'no objection certificate' from the lenders of TBSPL, had transferred its stake of 50% in TBSPL to its 100% owned subsidiary Tata Steel Downstream Products Limited.

(d) The Company, as a promoter, has pledged Nil (March 31, 2022: 4,41,55,800) equity shares of Industrial Energy Limited ("IEL") with Infrastructure Development Finance Corporation Limited ("IDFC"). IEL has repaid the entire loan taken from IDFC in financial year 2020-21.

(e) The Company has given guarantees aggregating

110,848.37 crore (March 31, 2022: 19,866.85 crore)

details of which are as below:

(i) in favour of Commissioner Customs for 11.07 crore (March 31, 2022: 11.07 crore) given on behalf of Timken India Limited in respect of goods imported.

(ii) in favour of The President of India for 1167.55 crore (March 31, 2022: 1177.18 crore) against performance of export obligation under the various bonds executed by a joint venture Jamshedpur Continuous Annealing & Processing Company Private Limited.

(iii) in favour of State Bank of India and ICICI Bank for 1429.45 crore (March 31, 2022: 1429.66) guaranteeing the financial liability of a subsidiary Tata Steel Mining Limited, for the purpose of availing banking facility for the business operations including working capital & capital expenditure, performance contract and security for bidding for auctions with respect to mines.

(iv) in favour of the note holders against due and punctual repayment of the 100% amounts outstanding as on March 31, 2023 towards issued Guaranteed Notes by a subsidiary, ABJA Investment Co. Pte Ltd. for 18,218.25 crore (March 31, 2022: 17,579.75 crore) and 11,853.74 crore (March 31, 2022: 11,679.04 crore). The guarantee is capped at an amount equal to 125% of the outstanding principal amount of the Notes as detailed in "Terms and Conditions" of the Offering Memorandum.

(v) in favour of ICICI Bank for 10.16 crore (March 31, 2022: Nil) guaranteeing the financial liability of a subsidiary BPPL for the purpose of availing banking facility for BPPL's business operations including working capital and performance contract.

(vi) in favour of SBI Bank for 178.60 crore (March 31, 2022: Nil) guaranteeing the financial liability of a subsidiary TSDPL for the purpose of availing banking facility for TSDPL's business operations including working capital and performance contract.

(vii) in favour of ICICI Bank for 199.40 crore (March 31,2022: Nil) guaranteeing the financial liability of a subsidiary TCIL for the purpose of availing banking facility for TCIL's business operations including working capital and performance contract.

(viii) in favour of President of India for 10.15 crore (March 31, 2022: 10.15 crore) against advance license.

36. Other significant litigations

(a) Odisha Legislative Assembly issued an amendment to Indian Stamp Act, 1889, on May 9, 2013 and inserted a new provision (Section 3A) in respect of stamp duty payable on grant/renewal of mining leases. As per the amended provision, stamp duty is levied equal to 15% of the average royalty that would accrue out of the highest annual extraction of minerals under the approved mining plan multiplied by the period of such mining lease. The Company had filed a writ petition challenging the constitutionality of the Act on July 5, 2013. The Hon'ble High Court, Cuttack passed an order on July 9, 2013 granting interim stay on the operation of the Amendment Act, 2013. Because of the stay, as on date, the Act is not enforceable and any demand received by the Company is not liable to be proceeded with. Meanwhile, the Company received demand notices for the various mines at Odisha totalling to 15,579.00 crore (March 31, 2022: 15,579.00 crore). The Company has concluded that it is remote that the claim will sustain on ultimate resolution of the legal case by the court.

In April 2015, the Company has received an intimation from Government of Odisha, granting extension of validity period for leases under the MMDR Amendment Act, 2015 up to March 31,2030 in respect of eight mines and up to March 31, 2020 for two mines subject to execution of supplementary lease deed. Liability has been provided in the books of accounts as on March 31, 2020 as per the existing provisions of the Stamp Act 1899 and the Company had paid the stamp duty and registration charges totalling 1413.72 crore for supplementary deed execution in respect of eight mines out of the above mines.

(b) Noamundi Iron Ore Mine of the Company was due for its third renewal with effect from January 1, 2012. The application for renewal was submitted by the Company within the stipulated time, but it remained pending consideration with the State and the mining operations were continued in terms of the prevailing law.

By a judgement of April 2014 in the case of Goa mines, the Supreme Court took a view that second and subsequent renewal of mining lease can be effected once the State considers the application and decides to renew the mining lease by issuing an express order. State of Jharkhand issued renewal order to the Company on December 31, 2014. The State, however, took a view on interpretation of Goa Mines judgement that the mining carried out after

expiry of the period of second renewal was 'illegal' and hence, issued a demand notice of 13,568.31 crore being the price of iron ore extracted. The said demand has been challenged by the Company before the Jharkhand High Court.

The mining operations were suspended from August 1, 2014. Upon issuance of an express order, Company paid 1152.00 crore under protest, so that mining can be resumed.

The Mines and Minerals Development and Regulation (MMDR) Amendment Ordinance, 2015 promulgated on January 12, 2015 provides for extension of such mining leases whose applications for renewal have remained pending with the State(s). Based on the new Ordinance, Jharkhand Government revised the Express Order on February 12, 2015 for extending the period of lease up to March 31, 2030 with the following terms and conditions:

• value of iron ore produced by alleged unlawful mining during the period January 1, 2012 to April 20, 2014 for 12,994.49 crore to be decided on the basis of disposal of our writ petition before Hon'ble High Court of Jharkhand.

• value of iron ore produced from April 21, 2014 to July 17, 2014 amounting to 1421.83 crore to be paid in maximum 3 instalments.

• value of iron ore produced from July 18, 2014 to August 31, 2014 i.e. 1152.00 crore to be paid immediately.

District Mining Officer Chaibasa on March 16, 2015 issued a demand notice for payment of 1421.83 crore, in three monthly instalments. The Company on March 20, 2015 replied that since the lease had been extended by application of law till March 31, 2030, the above demand is not tenable. The Company, had paid 150.00 crore under protest on July 27, 2015, because the State had stopped issuance of transit permits.

The Company filed another writ petition before the Hon'ble High Court of Jharkhand which was heard on September 9, 2015. An interim order was given by the Hon'ble High Court of Jharkhand on September 17, 2015 wherein the Court had directed the Company to pay the amount of 1371.83 crore in 3 equal instalments, first instalment by October 15, 2015, second instalment by November 15, 2015 and third instalment by December 15, 2015.

In view of the interim order of the Hon'ble High Court of Jharkhand 1124.00 crore was paid on September 28, 2015, 1124.00 crore on November 12, 2015 and 1123.83 crore on December 14, 2015 under protest.

The case is pending before the Hon'ble High court for disposal. The State issued similar terms and conditions to other mining lessees in the State rendering the mining as illegal. Based on the Company's assessment of the Goa mines judgement read with the Ordinance issued in the year 2015, the Company believes that it is remote that the demand of the State would sustain.

(c) The Supreme Court of India vide its order dated September 24, 2014, cancelled the coal blocks allocated to various entities which includes one coal block allocated to the Tata Steel BSL Limited (entity

merged with the Company) which were under development. Subsequently, the Government of India had issued the Coal Mines (Special Provision) Act 2015 , which inter-alia deal with the payment of compensation to the affected parties in regard to investment in coal blocks. The receivable in respect of de-allocated coal block amounts to 1414.56 crore (net of provision of 1138.74 crore). The Company had filed its claim for compensation with the Government of India, Ministry of Coal. Pursuant to letter dated November 22, 2019, Ministry of Coal ('MoC') informed that all statutory license, consent approvals, permission required for undertaking of Coal mining operations in New Patrapara Coal Mine now vested to Singareni Collieries Company Ltd. MoC /Union of India, filed supplementary affidavit dated February 11,2020 before Delhi High Court vide which it had informed that payment of compensation can be paid to prior allottee after the mine is successfully allotted and compensation is deposited by successful allottee, following the sequence mentioned in section 9 of Coal Mine (Special Provisions) Act, 2015. It was informed that New Patrapara Coal Mine had been allocated to Singareni Collieris Company Ltd (SCCL, a state Government Undertaking) and compensation to the prior allottee to be released. MoC vide order dated May 17, 2021 had directed SCCL to pay aforesaid compensation to TSBSL (entity merged with the Company). Union of India filed affidavit dated March 6, 2023 before High Court vide which it had informed that the successful allottee i.e M/s SCCL has surrendered the New Patrapara Coal Block. High Court directed MoC and Odisha Industrial Infrastructure Development Corporation (IDCO) to file updated status report outlining the amount payable to the prior allottee and indicate the date by which amount could be disbursed.

37. Capital management

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

The Company determines the amount of capital required on the basis of annual business plan coupled with long-term and shortterm strategic investment and expansion plans. The funding needs are met through equity, cash generated from operations, long-term and short-term bank borrowings and issue of non-convertible debt securities.

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

Net debt includes interest bearing borrowings including lease obligations less cash and cash equivalents, other bank balances (including non-current earmarked balances) and current investments.

38. Business combinations

(i) On July 26, 2022, the Company completed the acquisition of itemised assets of Stork Ferro Alloys and Mineral Industries Private Limited ("SFML") to produce ferro alloys. The asset acquisition will provide an inorganic growth opportunity for Tata Steel Limited to augment its ferro alloys processing capacities. The asset acquisition was carried out for a purchase consideration of 1155.00 crore. The acquisition has been accounted for in accordance with Ind AS 103 - "Business Combinations".

(ii) Goodwill is attributable to the benefit of expected synergies, revenue growth and future market developments. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.

(iii) From the date of acquisition, SFML has contributed 128.42 crore to revenue from operations and a loss of 116.07 crore to profit before tax.

Had the acquisition been effected at April 1, 2022, the revenue of the Company would have been higher by 113.24 crore and profit would have been lower by 16.50 crore.

39. Disclosures on financial instruments

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

The details of significant accounting policies, including the criteria for recognition, basis of measurement and the basis on which income and expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2(n), page F34 to the financial statements.

(a) Financial assets and liabilities

The following tables presents the carrying value and fair value of each category of financial assets and liabilities as at March 31, 2023 and March 31, 2022.

(i) I nvestments in mutual funds and derivative instruments (other than those designated in a hedging relationship) are

mandatorily classified as fair value through profit and loss.

(b) Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares and mutual funds.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes the Company's over-the-counter (OTC) derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair value is determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. This Level includes investment in unquoted equity shares and preference shares.

(i) Current financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

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

(iii) Investments carried at fair value are generally based on market price quotations. Investments in equity and preference shares included in Level 3 of the fair value hierarchy have been valued using the cost approach to arrive at their fair value. Cost of unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

(iv) Fair value of borrowings which have a quoted market price in an active market is based on its market price which is categorised as Level 1. Fair value of borrowings which do not have an active market or are unquoted is estimated by discounting expected future cash flows using a discount rate equivalent to the risk-free rate of return adjusted for credit spread considered by lenders for instruments of similar maturities which is categorised as Level 2 in the fair value hierarchy.

(v) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date.

(c) Derivative financial instruments

Derivative instruments used by the Company include forward exchange contracts, interest rate swaps, currency swaps, options and interest rate caps and collars. These financial instruments are utilised to hedge future transactions and cash flows and are subject to hedge accounting under Ind AS 109 "Financial Instruments" wherever possible. The Company does not hold or issue derivative financial instruments for trading purposes. All transactions in derivative financial instruments are undertaken to manage risks arising from underlying business activities.

39. Disclosures on financial instruments (Contd.)

(d) Transfer of financial assets

The Company transfers certain trade receivables under discounting arrangements with banks/financial institutions. Some of such arrangements do not qualify for de-recognition due to recourse arrangements being in place. Consequently, the proceeds received from transfer are recorded as short-term borrowings from banks and financial institutions. As at March 31, 2023 and March 31, 2022, there has been no such transfer of trade receivables.

(e) Financial risk management

I n the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the Board of Directors. The risk management framework aims to:

(i) create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company's business plan.

(ii) achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk:

Market risk is the risk of any loss in future earnings, in realising fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(a) Market risk - Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have a potential impact on the statement of

profit and loss and equity, where any transaction references more than one currency or where assets/ liabilities are denominated in a currency other than the functional currency of the Company.

The Company, as per its risk management policy, uses foreign exchange forwards and other derivative instruments primarily to hedge foreign exchange and interest rate exposure. Any weakening of the functional currency may impact the Company's cost of imports and cost of borrowings and consequently may increase the cost of financing the Company's capital expenditures.

A 10% appreciation/depreciation of foreign currencies with respect to functional currency of the Company would result in an increase/decrease in the Company's net profit/equity before considering tax impacts by approximately ?3,380.99 crore for the year ended March 31, 2023 (March 31, 2022: ?3,103.46 crore).

The foreign exchange rate sensitivity is calculated by assuming a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the functional currency of the Company.

The sensitivity analysis has been based on the composition of the Company's financial assets and liabilities as at March 31, 2023 and March 31, 2022 excluding trade payables, trade receivables, other derivative and non-derivative financial instruments not forming part of debt and which do not present a material exposure. The period end balances are not necessarily representative of the average balance outstanding during the period.

(b) Market risk - Interest rate risk:

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company's cash flows as well as costs. The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company's interest rate exposure is mainly related to debt obligations.

Based on the composition of debt as at March 31, 2023 and March 31, 2022, a 100 basis points increase

in interest rates would increase the Company's finance costs (before considering interest eligible for capitalisation) and consequently reduce net profit/equity before considering tax impacts by approximately 1200.67 crore for the year ended March 31, 2023 (2021-22: 1127.94 crore).

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

(c) Market risk - Equity price risk:

Equity price risk is related to change in market reference price of investments in equity securities held by the Company.

The fair value of quoted investments held by the Company exposes the Company to equity price risks. In general, these investments are not held for trading purposes.

The fair value of quoted investments in equity, classified as fair value through other comprehensive income as at March 31, 2023 and March 31, 2022 was 1988.94 crore and 11,182.53 crore, respectively.

A 10% change in equity prices of such securities held as at March 31, 2023 and March 31, 2022, would result in an impact of 198.89 crore and 1118.25 crore respectively on equity before considering tax impact.

(ii) Credit risk:

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of credit worthiness as well as concentration risks.

The Company has a policy of dealing only with credit worthy counter parties and obtaining sufficient collateral, where appropriate as a means of mitigating the risk of financial loss from defaults.

Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, loans receivables, investments in debt securities and mutual funds, balances with bank, bank deposits, derivatives and financial guarantees provided by the Company. None of the financial instruments of the Company result in material concentration of credit risk except investment in preference shares made by the Company in its subsidiary companies and loans provided to a wholly owned subsidiary.

The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk was 159,976.59 crore and 153,622.75 crore, as at March 31, 2023 and March 31, 2022 respectively, being the total carrying value of trade receivables, balances with bank, bank deposits, investments in debt securities, mutual funds, loans, derivative assets and other financial assets.

The risk relating to trade receivables is presented in note 12, page F66.

The Company's exposure to customers is diversified and no single customer, other than a subsidiary contributes to more than 10% of outstanding trade receivables as at March 31, 2023 and March 31, 2022.

In respect of financial guarantees provided by the Company to banks/financial institutions, the maximum exposure which the Company is exposed to is the maximum amount which the Company would have to pay if the guarantee is called upon. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the guarantees provided.

(iii) Liquidity risk:

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

The Company has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Company have access to undrawn lines of committed and uncommitted borrowing/ facilities, funds from debt markets through commercial paper programs, non-

convertible debentures and other debt instruments. The Company invests its surplus funds in bank fixed deposits and in mutual funds, which carry no or low market risk.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

The Company's liquidity position remains strong at 119,968.92 crore as at March 31, 2023, comprising 13,202.92 crore in the form of current investments, cash and cash equivalents and other balances with banks (including non-current earmarked balances) and 116,766.00 crore in committed undrawn bank lines.

The following table shows a maturity analysis of the anticipated cash flows including interest obligations for the Company's derivative and non- derivative financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value. Floating rate interest is estimated using the prevailing interest rate at the end of the reporting period. Cash flows in foreign currencies are translated using the period end spot rates:

(i) The details of remuneration paid to key managerial personnel and payment to non-executive directors are provided in note 28, page F89 & note 31, page F90 respectively.

The Company has paid dividend of 11,73,298.00 (2021-22: 184,950.00) to key managerial personnel and 133,609.00 (2021-22: 116,475.00) to relatives of key managerial personnel during the year ended March 31, 2023.

(ii) During the year ended March 31, 2023, the Company has contributed 1548.76 crore (2021-22: 1308.89 crore) to post employment benefit plans.

As at March 31, 2023, amount receivable from post-employment benefit fund is 1137.98 crore (March 31,2022: 1171.30 crore) on account of retirement benefit obligations paid by the Company directly.

(iii) Details of investments made by the Company in preference shares of its subsidiaries and associates is disclosed in note 6, page F50.

(iv) Commitments with respect to subsidiaries, associates and joint ventures is disclosed in note 35B, page F104.

(v) Transactions with joint ventures have been disclosed at full value and not at their proportionate share.

(vi) Dividend paid includes 12,022.19 crore (2021-22: 1991.27 crore) paid to Tata Sons Private Limited.

43. The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India and subsequently on November 13, 2020 draft rules were published and invited for stakeholders' suggestions. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

44. The erstwhile Tata Steel BSL Limited was eligible under Package Scheme of Incentives, 1993, and accordingly as per the provisions of the Scheme it had obtained eligibility certificate from Directorate of Industries. As per the Scheme the Tata Steel BSL Limited has an option to defer the payment of sales tax for a period of fourteen years upto a specified limit (twenty-one years in case the specified limit is not availed in fourteen years). The said tax collected shall be paid after fourteen years in five annual equal instalments and has been recognised as deferred sales tax liability, which as at March 31, 2023 amounts to 124.85 crore (March 31, 2022: 122.33 crore). Post-introduction of GST, the Maharashtra government modified the scheme, whereby the Company needs to deposit the GST and claim refund of the same. During the year, the Company has recognised 162.75 crore (2021-22: 1201.21 crore) as an income on account of such scheme.

45. The Board of Directors of the Company had considered and approved amalgamation of Tata Steel Long Products Limited ("TSLP"), Tata Metaliks Limited ("TML"), The Tinplate Company of India Limited ("TCIL"), TRF Limited ("TRF"), The Indian Steel & Wire Products Limited ("ISWP"), Tata Steel Mining Limited ("TSML") and S & T Mining Company Limited ("S & T Mining") into and with the Company by way of separate schemes of amalgamation and had recommended a share exchange ratio /cash consideration. The equity shareholders of the entities will be entitled to fully paid-up equity shares of the Company or cash consideration in the ratio as set out in the scheme. As part of the scheme of amalgamations, equity shares and preference shares, if any, held by the Company in the above entities shall stand cancelled. No shares of the Company shall be issued, nor any cash payment shall be made whatsoever by the Company in lieu of cancellation of shares of TSML and S & T Mining (both being wholly owned subsidiary companies). The proposed amalgamations will enhance management efficiency, drive sharper strategic focus and improve agility across businesses based on the strong parental support from the Company's leadership. The amalgamations will also drive synergies through operational efficiencies, raw material security and better facility utilisation.

As part of defined regulatory process, the schemes of TSLP into and with the Company, TCIL into and with the Company, TML into and with the Company, TRF into and with the Company and ISWP into and with the Company have received approval(s) from stock exchanges and Security Exchange Board of India. Further the schemes, have been filed and are pending with the Hon'ble National Company Law Tribunal.

46. The Board of Directors of the Company had considered and approved the scheme of amalgamation of Angul Energy Limited ("AEL") into and with the Company by way of a scheme of amalgamation and had recommended a cash consideration for every fully paid-up equity share held by the shareholders (except the Company) in AEL as set out in the scheme. Upon the scheme coming into effect, the entire paid-up share capital of AEL shall stand cancelled in its entirety.

The amalgamation will ensure consolidation of all power assets under a single entity, which will increase system agility for power generation and allocation. It will help the Company to improve its plant reliability, ensuring steady source of power supply while optimising cost. Further, such restructuring will lead to simplification of group structure by eliminating multiple companies in similar operation, optimum use of infrastructure, rationalisation of cost in the areas of operations and administrative overheads, thereby maximising shareholder value of the Company post amalgamation.

The scheme is subject to defined regulatory approval process, which would require approval by stock exchanges and the Hon'ble National Company Law Tribunal.

49. Dividend

The dividend declared by the Company is based on profits available for distribution as reported in the standalone financial statements of the Company. On May 2, 2023 the Board of Directors of the Company had proposed a dividend of ?3.60 per Ordinary share of ?1 each in respect of the year ended March 31, 2023 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of approximately ?4,399.75 crore.