(i) The Company has entered into various lease contract for land with lease terms between 30-99 years. The Company has option to renew at various time interval. The Company's obligation under its lease are secured by the lessor's title to the leased assets.

(ii) The Company also has certain leases of factories, office premises and equipment with lease term of 12 months or less and also has certain leases with low values. The Company applies the 'Short term leases' and 'Leases of low value assets' recognition exemption for these leases.

e. Rights, preferences and restrictions attached to shares :

The company has one class of equity shares having a face value of ' 1 each ranking pari pasu in all respect including voting rights and entitlement to dividend. Each holder of equity shares is entitled to one vote per share. Dividend proposed by the board of directors and approved by the shareholders in the annual general meeting is paid to the shareholders.

General reserve: The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under Companies Act, 2013 and the Company can optionally transfer any amount from the surplus of profit or loss to the General Reserve.

Capital reserve: The Company recognise profit or loss on purchase, sale, issue or cancellation of its own equity instruments to capital reserve. The reserves is utilised in accordance with the provisions of section 69 of the Companies Act, 2013. Retained earnings: Retained earnings are the profits that the Company has earned till date, less transfers to general reserve, dividends or other distributions paid to shareholders.

Remeasurement of defined benefit plans: The Company has recognised remeasurement gains/(loss) on defined benefit plans in OCI. These changes are accumalated within the OCI reserve within other equity. The Company transfers amount from this reserve to retained earning when the relevant obligations are derecognized.

1) Working capital finance from banks is secured by first charge on all current assets of the Company, both present and future, including hypothication of raw materials, semi finished goods and finished goods including goods in transit, books debts and further secured by equitable mortgage of certain immovable properties of the Company.

2) Working capital term loans from financial institutions is secured by mortgage of certain immovable properties of the Company, a wholly-owned subsidiary company and an associate company, including hypothication of all property, plant and equipment of a wholly-owned subsidiary company and further secured by corporate guarantee of a wholly-owned subsidiary company and an associate company.

*The Company has received certain demand towards custom duty on account of mis-classification on import of coal, although the Company has availed the benefit of exemption notification and paid custom duty at a lower rate. Matter is in appeal but the Company has decided to make provision for the same of ? 37.68 lacs.

**The Company has made provision towards mines closure obligations based on estimated outflow of resources based on past experience.

The Board provides guiding principles for overall risk management as well as policies covering specific areas such as foreign exchange risk, credit risk and investment of surplus liquidity.

A. Credit risk

Credit risk refers to the risk of a counter party default on its contractual obligation resulting into a financial loss to the Company. The maximum exposure of the financial assets represents trade receivables, work in progress and receivables from group companies and others.

Customer credit risk is managed by the Company through established policy and procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying upto 90 days credit terms. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation. Trade receivables are consisting of a large number of customers. Export receivables are backed by forward contract. In respect of trade receivables, the Company uses a provision matrix to compute the expected credit loss allowances for trade recivables in accordance with the excepcted credit loss (ECL) policy of the Company.

B. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet its commitments associated with financial instruments. Liquidity risk may result from an inability to sell a fianncial aseets quickly at close to its fair value.

The Company manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forcast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

Contractual maturities of significant financial liabilities are as follows:

C. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in foreign currency exchange rates, interest rates, credit, liquidity and other market changes.

The Company has several balances in foreign currency and consequently, the Company is exposed to foreign exchange risk. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.

b) Interest rate sensitivity:

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

c) Exposure in foreign currency:

The Company deals with foreign currency loan given, trade payables, trade receivables etc. and is therefore exposed to foreign exchange risk associated with exchange rate movement.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas and purchases from overseas suppliers in various foreign currencies.

Exposure in foreign currency -Hedged The Company has no hedged foreign currecy exposure at the end of the relavant period.

d) Foreign currency sensitivity

The Company is mainly exposed to changes in USD and EURO. The below table demostrates the sentivity to a 5% increase or decrease in the USD and EURO against INR, with all other variables held constant. The sentivity analysis is prepared on the net unhedged exposure of the Company as at reporting date. 5% represents management's assessment of reasonably possible change in foreign exchange rate.

Note 33

Capital management

The Company's capital management objective is to maximise the total shareholders' returns by optimising cost of capital through flexible capital structure that supports growth. Further, the Company ensures optimal credit risk profile to maintain/enhance credit rating.

The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the company.

Note 39

Segment reporting

For management purposes, the Company is organised into business units based on its products and services and has two reportable segments, as follows:

a) Alumina Refactories & Monolithics products & bauxite ores: Alumina Refactories & Monolithics products manufactures calcined bauxite, fused aluminium oxide abrasive grains and low cement castables which are mainly consumed in steel plants. Plant grade bauxite ores are captively consumed at the plant and Non plant grade bauxite ores are sold in the market.

b) Power generation: The Company has a thermal power plant, furnace oil based power plant and windmills. Power generated from thermal power plant and furnace oil based power plant is captively consumed at the plant and power generated from windmills is sold to the respective state power distribution companies.

No operating segments have been aggregated to form the above reportable operating segments.

The Executive Management Committee monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. The Company’s financing (including finance costs and finance income) and income taxes are managed on a Company basis and are not allocated to operating segments.

Note 40

Additional Regulatory Information

Additional Regulatory Information pursuant to clause 6L of General Instructions for preparation of Balance Sheet as given in Part I of Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere in any other notes to the financial Statement.

b. The title deeds of all immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee), disclosed in the financial statements included under Property, Plant and Equipment are held in the name of the Company as at the balance sheet date.

c. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

d. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

e. The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when the financial statements are approved.

f. Based on the information furnished to us, the Company does not have any transactions with struck-off companies.

g. The Company has compiled with the number of layers prescribed under clause (87) of section 2 of the Companies Act 2013 read with Companies (Restrictions on number of Layers) Rules, 2017.

h. The company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities(intermediaries), with the understanding that the intermediary shall;

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries), or

ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

i. The Company has not received any funds 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;

i. 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

ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

j. The Company does not have any transactions which is not recorded in the books of accounts but has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 ( such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

k. Quarterly returns or statements of current assets filed by the Company with banks are generally in agreement with the books of accounts.

l. The Company has used the borrowings from banks for the specific purpose for which it was obtained.

m. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

n. The Company is operating under SAP environment which is fully integrated financial accounting and reporting system. The management confirms that the accounting software used by the Company for maintaining books of account has a feature of recording audit trail (edit log) facility which has been operated throughout the year for all transactions recorded in the software and the audit trail feature is not being tampered with.

41. Balances with sundry creditors, sundry debtors and for loans and advances in few cases are subject to confirmations from the respective parties and reconciliations, if any. In absence of such confirmations, the balances as per books are relied upon by the auditors.

42. In the opinion of the Directors, the current assets, loans and advances are approximately of the value as stated in the balance sheet, if realized in the ordinary course of the business. The provision of all known liabilities is adequate and not in excess of the amount reasonably required.

43. All the amounts have been stated in Indian Rupees in lacs, unless otherwise stated.

44. Previous year’s figures have been regrouped and rearranged, wherever necessary.

1

In view of decision already in favour of Parent Company by the District Court (Civil Court, Senior Division, Porbandar) and based on discussion with the solicitors, the management believes that the Parent Company has a strong chance and hence no provision there against is considered necessary.

2

Demand raised by Income tax authorities (during the assessment process for A.Y.2009-10, 2011-12, 201213, 2014-15, 2015-16 and 2017-18) substantially pertains to dispute on determination of inter segment price for claiming tax holiday benefits on sale of power which are disallowed/disputed by such authorities. Further, dispute on account of allowance of 80-IA benefit due to late filing of return of income pertianing to A.Y.2015-16. The Management believes that its position is likely to be upheld in the appellate process.

3

Demand of differential custom duty is raised by the Office of Joint Commissioner Customs against few import shipment of coal. In some cases many parties are involved. Few matters are pending with larger bench of Supreme Court and few matters are pending with CESTAT.

4

Demand raised by the Office of District Mineral Foundation and the Geology and Mining Department (District Mineral Foundation (Cell)) against DMF, NMET and interest on unpaid DMF and NMET. The petition is filed by the Company against such demand which is pending in the Honorable Gujarat High Court and the management believes that the decision will come in favor of the Company.

5

In view of large number of cases, it is not practicable to disclose individual details of all the cases. On the basis of current status of individual case and as per legal advice obtained by the Company, wherever applicable, the Parent Company is of view that no provision is required in respect of these cases.