Notes to Accounts of Steel Authority of India (SAIL) Ltd.

Mar 31, 2025

3.15 Provisions, Contingent Liabilities and
Contingent Assets

Provisions and Contingent Liabilities

A Provision is recognised when the Company has
present obligation (legal or constructive) as a result
of a past event and it is probable that an outflow of
resources will be required to settle the obligation
and in respect of which a reliable estimate can be
made. Provisions are discounted to their present
value, where the time value of money is material. All
provisions are reviewed at each reporting date and
adjusted to reflect the current best estimate.

When some or all of the economic benefits required to
settle a provision are expected to be recovered from a
third party, the receivable is recognised as a separate
asset if it is virtually certain that reimbursement will
be received and the amount of the receivable can be
measured reliably.

Contingent liability is a possible obligation arising
from past events and the existence of which will be
confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly
within the control of the Company or a present
obligation that arises from past events but is not
recognised because it is not possible that an outflow
of resources embodying economic benefit will be
required to settle the obligations or reliable estimate
of the amount of the obligations cannot be made.

In cases where the possible outflow of economic
resources as a result of present obligation is
considered improbable or remote, no Provision is
recognised or disclosure is made.

Contingent Assets

Contingent assets usually arise from unplanned
or other unexpected events that give rise to the
possibility of an inflow of economic benefits.
Contingent Assets are not recognised and are
disclosed only where an inflow of economic benefits
is probable.

3.16 Income Taxes

Tax expense recognised in Statement of Profit
and Loss comprises the sum of deferred tax and
current tax except to the extent that the tax relates
to the items that are recognised directly in Other
Comprehensive Income (OCI) or in equity in which
case the related tax is recognised either directly in
OCI or equity accordingly.

Current income tax is measured at the amount
expected to be paid to the tax authorities in
accordance with the Indian Income-tax Act.

The Company offsets current tax assets and current
tax liabilities when the legally enforceable right to
offset exists and they are intended to be settled net
or realised simultaneously.

Deferred income taxes are calculated using the
balance sheet liability method/approach. Deferred
tax liabilities are generally recognised in full for all
taxable temporary differences. Deferred tax assets are
recognised to the extent that it is probable that the
underlying tax loss, unused tax credits or deductible
temporary difference will be utilised against future
taxable income. The carrying amount of deferred tax
assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

The Company offsets deferred income tax assets and
liabilities when the legally enforceable right to offset
current tax assets and liabilities exists and they are
intended to be settled or realised simultaneously.

3.17 Financial Instruments

Recognition, initial measurement and de¬
recognition

Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instrument and are measured at fair
value on initial recognition. Transaction costs that
are directly attributable to the acquisition or issue
of financial assets and financial liabilities, except for
those which are classified at Fair Value through Profit
& Loss (FVTPL) at inception, are adjusted with the fair
value on initial recognition.

Financial assets are derecognised when the
contractual rights to the cash flows from the
financial asset expires, or has been transferred, and
the Company has transferred all substantial risks
and rewards of ownership. A financial liability (or a
part of financial liability) is derecognised when the
obligation specified in the contract is extinguished or
discharged or cancelled or expires.

Classification and subsequent measurement of
financial assets

For the purpose of subsequent measurement,
financial assets are classified into the following
categories upon initial recognition:

• amortised cost

• financial assets at fair value through profit or loss
(FVTPL)

• financial assets at fair value through other
comprehensive income (FVOCI)

All financial assets except for those at FVTPL are
subject to review for impairment at least at each
reporting date.

Amortised cost

A financial asset is measured at amortised cost using
effective interest rates if the following conditions are
met:

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

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

The Company''s cash and cash equivalents, trade
receivables and most of other receivables fall into this
category of financial instruments.

Financial assets at FVTPL

Financial assets at FVTPL include financial assets
that either do not meet the criteria for amortised
cost classification or that are equity instruments
held for trading or that meet certain conditions and
are designated at FVTPL upon initial recognition.
All derivative financial instruments also fall into this
category. Assets in this category are measured at fair
value with gains or losses recognised in Statement of
Profit and Loss. The fair values of financial assets in
this category are determined by reference to active
market transactions or using a valuation technique
where no active market exists.

Financial assets at FVOCI

FVTOCI financial assets are either debt instruments
that are managed under hold to collect and sell
business model or are non-trading equity instruments
that are irrevocable designated to this category.

FVTOCI financial assets are measured at fair
value. Gains and losses are recognized in other
comprehensive income, except for interest and
dividend income, impairment losses and foreign
exchange differences on monetary assets, which are
recognized in Statement of Profit and Loss.

Classification and subsequent measurement of
financial liabilities

Financial liabilities are measured subsequently at
amortized cost using the effective interest method,
except for financial liabilities held for trading or
designated at FVTPL, that are carried subsequently at
fair value with gains or losses recognized in Statement
of Profit and Loss. All derivative financial instruments
are accounted for at FVTPL.

Embedded Derivatives

Some hybrid financial liability contracts contain
both derivative and a non-derivative component.
In such cases, the derivative component is termed
as embedded derivative, with a non-derivative
component representing the host financial liability
contract. If the economic characteristics and risks
of embedded derivatives are not closely related to
those of the host contract and the contract itself is
not measured at FVTPL, the embedded derivative is

bifurcated and reported at fair value, with gains and
losses recognised in net gains (losses) on financial
assets/liabilities at fair value through profit or loss
(FVTPL). The host financial liability is accounted for in
accordance with the appropriate Ind AS.

Fair value measurement

The Company classifies the fair value of its financial
instruments in the following hierarchy, based on the
inputs used in their valuation:

i) Level 1: The fair value of financial instruments
quoted in active markets is based on their quoted
closing price at the Balance Sheet date.

ii) Level 2: The fair value of financial instruments that
are not traded in an active market is determined
by using valuation techniques using observable
market data. Such valuation techniques include
discounted cash flows, standard valuation
models based on market parameters for interest
rates, yield curves or foreign exchange rates,
dealer quotes for similar instruments and use of
comparable arm''s length transactions.

iii) Level 3: The fair value of financial instruments
that are measured on the basis of entity specific
valuations using inputs that are not based on
observable market data (unobservable inputs).

Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies
Expected Credit Loss (ECL) model for measurement
and recognition of impairment loss for financial
assets measured at amortised cost or at fair value
through other comprehensive income.

ECL is the weighted average difference between all
contractual cash flows that are due to the Company
in accordance with the contract and all the cash flows
that the Company expects to receive.

Trade Receivables

Trade receivables are recognised initially at fair value
based on amounts exchanged and subsequently at
amortised cost less any impairment as per Ind AS 109.

Offsetting of financial instruments

Financial assets and liabilities are offset, with net
amount reported in the balance sheet, only when
there is a legally enforceable right to offset the
recognised amounts and there is an intention to
settle on a net basis or realise the asset and settle the
liability simultaneously. The legally enforceable right
must not be contingent on future events and must
be enforceable both in the normal course of business
and in the event of default, insolvency or bankruptcy
of the counterparty.

3.18 Investments in subsidiaries, joint ventures,
associates and equity Instruments

Investment in subsidiaries, associate and joint
ventures are carried at cost less accumulated
impairment, if any in the Company''s standalone
financial statements in accordance with Ind AS- 27,
''Separate Financial Statements''.

Investments in equity instruments, where the
Company has opted to classify such instruments
at fair value through other comprehensive income
(FVTOCI) are measured at fair value through other
comprehensive income. There is no recycling of the
amounts from OCI to P&L, even on sale of investment.
However, the Company may transfer the cumulative
gain or loss within equity. Dividends on such
investments are recognised in profit or loss unless the
dividend clearly represents a recovery of part of the
cost of the investment.

3.19 Segment reporting

Segments are identified based on the manner in
which the Chief Operating Decision Maker (''CODM'')
decides about resource allocation and reviews
performance. Segment results that are reported to
the CODM include items directly attributable to a
segment as well as those that can be allocated on
a reasonable basis. Segment capital expenditure is
the total cost incurred during the period to acquire
property and equipment and intangible assets.

The Company has eight operating segments: five
integrated steel plants and three alloy steel plants,
being separate manufacturing units, have been
considered reportable operating segments. In
identifying these operating segments, management
generally considers the Company''s separately
identifiable manufacturing operations representing
its main operations.

Each of these operating segments is managed
separately as each has different requirements in terms
of technology, raw material and other resources.
All inter-segment transfers are carried out at arm''s
length prices based on prices charged to unrelated
customers in standalone sales of identical goods or
services.

In addition, corporate assets which are not directly
attributable to the business activities of any operating
segment are not allocated to a segment. This primarily
applies to the Company''s administrative head office
and mining operations.

There have been no changes from prior periods in the
measurement methods used to determine reported
segment profit or loss.

3.20 Earnings per share

Basic earnings per share is computed by dividing
profit or loss for the year attributable to equity
holders by the weighted average number of shares
outstanding during the year. Partly paid-up shares are
included as fully paid equivalents according to the
fraction paid-up.

Diluted earnings per share is computed using the
weighted average number of shares and dilutive
potential shares except where the result would be
anti-dilutive

3.21 Significant Judgements, Assumptions and
Estimations in applying Accounting Policies

3.21.1 Leases

The Company evaluates if an arrangement qualifies
to be a lease as per the requirements of Ind AS 116.
Identification of a lease requires significant judgment.
The Company uses significant judgement in assessing
the lease term (including anticipated renewals) and
the applicable discount rate.

3.21.2 Close-down and Restoration Obligations

Close-down and restoration costs are normal
consequence of mining or production, and majority
of close-down and restoration expenditure are
incurred in the years following the closure of
mine. Although the ultimate cost to be incurred is
uncertain, the Company estimate their costs based
on current interpretation of scientific and legal data
and existing technology, in addition to assumptions
about probability and future costs.

3.21.3 Recognition of Deferred Tax Assets

The extent to which deferred tax assets can be
recognized is based on an assessment of the
probability of the Company''s future taxable income
against which the deferred tax assets can be utilized.
In addition, significant judgement is required in
assessing the impact of any legal or economic limits.

3.21.4 Inventories

The Company estimates the cost of inventories taking
into account the most reliable evidence, such as cost
of materials and overheads considered attributable
to the production of such inventories including actual
cost of production, etc. Management also estimates
the net realisable values of inventories, taking into
account the most reliable evidence available at each
reporting date. Significant technical and commercial
judgements are required to determine the Company''s
quality and quantity of inventories. The future
realisation of these inventories may be affected by
future technology or other market-driven changes
that may reduce future selling prices.

3.21.5 Defined Benefit Obligation (DBO)

Employee benefit obligations are measured on
the basis of actuarial assumptions which include
mortality and withdrawal rates as well as assumptions
concerning future developments in discount rates,
medical cost trends, anticipation of future salary
increases and the inflation rate. The Company
considers that the assumptions used to measure its
obligations are appropriate. However, any changes in
these assumptions may have a material impact on the
resulting calculations.

3.21.6 Fair Value Measurements

The Company applies valuation techniques to
determine the fair value of financial instruments
(where active market quotes are not available)
and non-financial assets. This involves developing
estimates and assumptions consistent with the market
participants to price the instrument. The Company''s

assumptions are based on observable data as far as
possible, otherwise on the best information available.
Estimated fair values may vary from the actual prices
that would be achieved in an arm''s length transaction
at the reporting date.

3.21.7 Provisions and Contingencies

The assessments undertaken in recognising
provisions and contingencies have been made
in accordance with Indian Accounting Standards
(Ind AS) 37, ''Provisions, Contingent Liabilities and
Contingent Assets''. The evaluation of the likelihood of
the contingent events is applied best judgement by
management regarding the probability of exposure
to potential loss.

3.21.8 Mine Closure and Restoration Obligations

Environmental liabilities and Asset Retirement
Obligation (ARO): Estimation of environmental
liabilities and ARO require interpretation of scientific
and legal data, in addition to assumptions about
probability and future costs.

3.21.9 Useful lives of depreciable/ amortisable
assets (tangible and intangible)

Management reviews its estimate of the useful lives
of depreciable/ amortisable assets at each reporting
date, based on the expected utility of the assets.
Uncertainties in these estimates relate to actual
normal wear and tear that may change the utility of
plant and equipment.

3.22 Recent Accounting Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new
standard or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. MCA amended
the Companies (Indian Accounting Standards) Rules,
2015 by issuing the Companies (Indian Accounting
Standards) Amendment Rules, 2024, dtd 12^th August,
2024 applicable from April 1, 2024, and Companies
(Indian Accounting Standards) Second Amendment
Rules, 2024, dtd 9^th September, 2024 applicable from
April 1, 2024 as below:

3.22.1 Ind AS 117 - Insurance Contracts

The amendments introduces a new Accounting
Standard, Ind AS 117 in place of existing Ind AS 104
(Insurance Contracts). This amendment is applicable
mainly to issuers of Insurance contracts and re¬
insurance contracts. The Company does not expect
this amendment to have any significant impact in its
financial statements. This standard was subsequently
withdrawn.

3.22.2 Ind AS 116 - Leases

The amendments related to sale and leaseback
transactions related to right-of-use assets. The
Company does not expect this amendment to have
any significant impact in its financial statements.

(i) Contractual obligations

Refer note 48.1 (A) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(ii) Land:

(a) Includes 54931.15 acres (61235.48 acres as on 31^st March, 2024) owned/possessed/taken on lease by the Company, in respect of which title/lease
deeds are pending for registration.

(b) Includes 31363.70 acres (32082.45 acres as on 31^st March, 2024) in respect of which title is under dispute.

(c) 5052.34 acres (5052.34 acres as on 31^st March, 2024) transferred/agreed to be transferred or made available for settlement to various Joint
Ventures/Central/ State/ Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(d) 5963.61 acres (6062.72 acres as on 31^st March, 2024) given on lease to various agencies/employees/ex-employees.

(e) Includes 5030.71 acres (4896.70 acres as on 31^st March, 2024) under unauthorised occupation.

(f) 8516.45 acres (8870.84 acres as on 31^st March, 2024) of land which is not in the actual possession, shown as deemed possession.

(g) ''63.33 crore is lying under deposits, in respect of land already acquired (''59.23 crores as on 31^st March, 2024) with the District & Sessions Judge,
Bokaro during the year 2007 towards compensation payable to land losers.

(h) Vide Notification of acquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484E dated
13.10.2012, National Highway Authority of India Ltd. (NHAI) had acquired 34.471 acres freehold land. Also notified for acquisition by Government
of Jharkhand vide Gazette notification no. 42 & 43 dated 26^th August, 2009. Matter is subjudice regarding valuation of the said land.

(i) 525.43 acres land includes 500 acres land granted by Government of Maharashtra under occupancy rights subject to restrictions agreed upon
by the company towards payment of unearned increment on the property transfer as per agreed terms.

(j) Includes 5.51 acres freehold land out of 21.13 acres land notified for acquisition by Government of Jharkhand vide Gazette notification no. 42 &
43 dated 26^th August, 2009, are under dispute for which no compensation was fixed in favour of RDCIS-SAIL. The compensation for the balance
freehold land of 15.62 acres amounting to ''13.07 crore has been considered in the accounts for the Financial Year ended 31^st March, 2020. Out
of ''13.07, provision @50% amounting to ''6.53 crore has been created for the year ended 31^st March, 2023 and for balance amount provision has
been created in current year.

(k) ''0.06 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Salem during the year 2013 towards
compensation payable to land losers.

(iii) Other Assets:

(a) Includes 6967 (6536 as on 31^st March, 2024), residential quarters/houses under unauthorised occupation.

(iv) Refer note 48.1 (B) for title deeds not held in the name of Company.

Capital reserve

Capital reserve is created out of the capital profit, it is created out of the profit earned from some specific transactions of capital nature. Capital reserve is
not available for distribution to the shareholders.

Securities premium

Securities premium represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
Bond redemption reserve

The Company is required to create bond redemption reserve as per the provisions of Companies Act, 2013 out of the profits which are available for
distribution of dividends. The reserve is maintained till the redemption of bonds.

Other Comprehensive Income (OCI) reserve

The Company has opted to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes
are accumulated within the FVOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when
the relevant equity securities are derecognised.

Borrowings are secured, in respect of respective facilities by way of :

a) Secured by charges ranking pari-passu inter-se, on all the present and future immovable property at Mouje-Wadej of City taluka, District Ahmedabad,
Gujarat and Company''s Plant & Machinery, including the land on which it stands, pertaining to IISCO Steel Plant (ISP).

b) Redeemable in 12 equal yearly instalments of ''14 crore each starting w.e.f 26^th October, 2014. Instalment payable on 26^th October, 2025 has been
shown in current borrowings under the line item ''current maturities of long term debt''.

c) The soft basis of the loan was drawn in 3 tranches stated as 1(a), 1(b) and 1(c) at an interest rate of 8.75% p.a. The Interest on 1(a) is 0.75% p.a and
balance 8% is towards meeting exchange fluctuation (4%) and pollution control schemes (4%). In case of 1 (b) the Interest 0.75% p.a and balance
8.0% p.a is towards periphery development. Tranche 1(c) has been fully repaid. The principal and interest amount is repayable half yearly. The loan is
guaranteed by Government of India.

d) The loan is repayable by 2030. The principal and interest is paid half yearly, guaranteed by Government of India.

e) Terms of repayment is to be decided by SDF Management Committee.

(f) Secured by charges ranking pari-pasu on the present and future movable plant and machinery of RSP to the extent of loan. The interest rate as on

31.03.2025 is Repo rate 1.00% p.a. i.e. 7.25% (6.25% 1.0%) on the outstanding loan amount. The tenor of the loan is 10 years having moratorium
period of 4 years and repayment period of 6 Years. The loan is payable in 12 half yearly equal instalments after moratorium of 4 years starting from
5^th year onwards upto 10 years. The first instalment is due in April, 2025.

(g) Secured by charges ranking pari-pasu on the present and future movable plant and machinery of BSL to the extent of loan. The interest rate as on

31.03.2025 is Repo rate 0.90% p.a. i.e. 7.15% (6.25% 0.90%) on the outstanding loan amount. The tenor of the loan is 4 years having moratorium
period of 2 and half years and repayment period of 1 and a half years. The loan is repayable in 6 quarterly equal instalments after moratorium of 2
and half years. The first instalment is due on 01.05.2026.

(h) Secured by charges ranking pari-pasu on the present and future movable plant and machinery of BSL to the extent of loan. The interest rate is linked
to 3M T-bill 0.75%, which is reset at the last working day of every quarter. As on 31.03.2025, the rate is 7.09% p.a. (i.e 3M T-bill 6.34% 0.75%). The
tenor of the loan is 4 years having moratorium period of 2 and a half years and repayment period of 1 and a half years. The loan is payable in 6
quarterly equal instalments after moratorium of 2.5 Years . The first instalment is due on 01.05.2026.

(i,j,k,l,m,n) Secured by charges ranking pari-pasu on the present and future movable plant and machinery of BSP to the extent of loan. The interest
rate is linked to1 Year G-Sec {Par-Yield (annualised) spread of 0.59%)}, which is reset at every 3 months from the date of availment of loan. As on
31.03.2025, the rate is 7.13% p.a. {i.e 1 Year G-Sec Par-Yield (annualised) 6.54% 0.59%}. The tenor of the loan is 4 years having moratorium period of
2 and a half years and repayment period of 1 and a half years. The loan is payable in 6 quarterly equal instalments after moratorium of 2.5 Years . The
first instalment is due on 30.06.2027.

(o) Long term borrowings transferred to current borrowings under the line item ''current maturities of long term debts'' are shown in the table given
below.

(iv) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Fair value of interest swap is determined based on dealer or counterparty quotes for similar instruments

(b) Fair value of forward foreign exchange contract and principal swap is determined using forward rate at balance sheet date.

(c) The carrying value of borrowings bearing variable interest rate are considered to be representative of their fair value.

(d) The carrying value of financial assets and liabilities with maturities less than 12 months are considered to be representative of their fair value.

(e) Fair value of fixed interest rate financial assets and liabilities carried at amortised cost (including lease obligations) is determined by discounting the
cash flows using a discount rate equivalent to market interest rate applicable to similar assets and liabilities as at the balance sheet date.

(v) Unquoted investments:

Fair value estimates of unquoted equity investments are included in level-3 and are based on latest available financial statements of investee Company.
The Company expects no sensitivity in the fair value of investments. For investments in co-operative societies, the Company has determined that
cost is appropriate estimate of fair value, therefore, there have been no changes on account of fair values.

43. FINANCIAL RISK MANAGEMENT (Contd...)

ii) Risk Management

The Company is exposed to various risks in relation to financial instruments. The Company''s financial asset and liabilities by category, are summarised
in note 43 (i). The main types of risks are market risk, credit risk and liquidity risk. The Company''s risk management is co-ordinated at its headquarters,
in close cooperation with the Board of Directors, and focuses on actively securing the Company''s short to medium-term cash flows by minimising
the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns. The Company does not actively
engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company
is exposed are described below.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial
instruments, for example by granting loans and receivables to customers, placing deposits, etc. The Company''s maximum exposure to credit risk is
limited to the carrying amount of following types financial assets.

- Cash and cash equivalents

- Derivative financial instruments

- Trade receivables

- Other financial assets measured at amortized cost

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and
incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and
other counterparties are obtained and used. The Company''s policy is to deal only with creditworthy counterparties.

a) Credit risk management
Cash and cash equivalent

Credit risk related to cash and cash equivalents is managed by only accepting highly rated banks and diversifying bank deposits and accounts in
different banks across the country.

Derivative financial instruments

Credit risk related to derivative financial instruments is also managed by only entering into such arrangement with highly rated banks or financial
institutions as counterparties. The company diversifies its holdings with multiple counterparties.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees from customers where credit risk is high. The Company closely
monitors the credit-worthiness of the debtors and only sells goods to credit-worthy parties. The Company''s internal systems are configured to define
credit limits of customers, thereby limiting the credit risk to pre-calculated amounts.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees and others. Credit risk related to these other financial
assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the
amounts are within defined limits.

b) Expected credit losses

Company provides expected credit losses based on the following;

Trade receivables

The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach and uses historical information to arrive at
loss percentage relevant to each category of trade receivables. For descriptive note on trade receivables ageing, refer note 48.4 (B)

Other financial assets measured at amortized cost

Company provides for expected credit losses on "loan advances and other than trade receivables" by assessing individual financial instruments
for expectation of any credit losses. Since, this category includes loans and receivables of varied natures and purpose, there is no trend that the
Company can draw to apply consistently to entire population. For such financial assets, the Company''s policy is to provide for 12 month expected
credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. The Company does not
have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss allowances are
disclosed under each sub-category of such financial assets.

Notes to the Standalone Financial Statements

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate
amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding
by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash
equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition,
the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary
to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyse the company''s financial liabilities into relevant maturity companying based on their contractual maturities for all non¬
derivative financial liabilities and the amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months
equal their carrying balances as the impact of discounting is not significant.

C) Market Risk
a) Foreign currency risk

Most of the Company''s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company''s overseas borrowing
arrangements, which are primarily denominated in US dollars (USD).

To mitigate the Company''s exposure to foreign currency risk, non-INR cash flows are monitored and forward exchange contracts are entered into in
accordance with the Company''s risk management policies. Generally, the Company''s risk management procedures distinguish short-term foreign
currency cash flows (due within 6 months) from longer-term cash flows (due after 6 months). Where the amounts to be paid and received in a specific
currency are expected to largely offset one another, no further hedging activity is undertaken. Forward exchange contracts are mainly entered into
for significant long-term foreign currency exposures that are not expected to be offset by other same-currency transactions.

Sensitivity

The following table illustrates the sensitivity of profit and equity in regards to the Company''s financial assets and financial liabilities and the USD/INR
exchange rate and EUR/INR exchange rate ''all other things being equal''. It assumes a /- 2.44% change of the INR/USD exchange rate for the year
ended at 31 March, 2025 (2024: 2.02%). A /- 6.52% change is considered for the INR/EUR exchange rate (2024: 5.77%). Both of these percentages
have been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis is based on the
Company''s foreign currency financial instruments held at each reporting date and also takes into account forward exchange contracts that offset
effects from changes in currency exchange rates.

b) Interest rate risk

The Company''s policy is to minimise interest rate cash flow risk exposures on long-term financing. Long term borrowings are therefore usually at
fixed rates. At 31^st March, 2025, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.
Other borrowings are at fixed interest rates. The Company''s investments in bonds all pay fixed interest rates. The exposure to interest rates for the
Company''s money market funds is considered immaterial. The following table illustrates the sensitivity of profit and equity to a reasonably possible
change in interest rates of /- 1% (2024: /- 1%). These changes are considered to be reasonably possible based on observation of current market
conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each
reporting date that are sensitive to changes in interest rates. All other variables are held constant.

i) Liabilities

The Company''s policy is to minimise interest rate cash flow risk exposures on long-term financing. As at 31^st March, 2025, the Company is exposed
to changes in market interest rates through bank borrowings at variable interest rates.

Interest rate risk exposure

Below is the overall exposure of the company to interest rate risk:

44. Capital Management

The Company''s capital management objectives are

- to ensure the Company''s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance
sheet.

Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive
leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and
makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or
adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares,
or sell assets to reduce debt.

47.2 a) The Nine Judge Bench of the Hon''ble Supreme court, vide its order dated 11^th November, 2016, upheld the
Constitutional validity of the Entry tax legislations passed by the various States. However, the Bench directed that
certain other matters raised by the Petitioner, such as matter relating to Entry tax on account of discriminatory
rates resulting in entry tax liability amounting to '' 762.91 crore on iron Ore and Coking Coal in Bhilai-Durg area @
6% as compared to lower rate of 1% on Coking Coal and 3% on Iron ore in rest of the areas of Chhattisgarh, Entry
tax amounting to ''105.13 crore on goods entering into the local area of Jharkhand from other State etc. may be
determined by regular benches hearing the matters. In the State of Chhattisgarh, applications filed under settlement
scheme (Chhattisgarh Settlement of Arrears of Tax, Interest and Penalty Act, 2023) for settlement of Entry Tax dispute
of '' 762.91crore pertaining to rate discrimination has been settled in full and final on payment of ''137.72 crore as
per scheme. However, in respect of Jharkhand, pending decision by the Courts, the disputed Entry Tax liabilities of
''105.13 crore have been treated by the Company as Contingent Liability as on 31^st March, 2025 (As at 31^st March,
2024 - ''98.83 crore) and included in Note No. 47.1 (i) (g) above.

b) Hon''ble Supreme Court dismissed the SLP by the Company (pertaining to Bokaro Steel Plant) in respect of dispute
with Damodar Valley Corporation (DVC) related to provisional tariff petition of electricity charges for 2009-2014
vide order dated 18^th January, 2017, keeping the question of law open. The Order of Central Electricity Regulatory
Commission (CERC) dt. 7/8/2013 related to Tariff of 2009-2014 against Petition No. 275/GT/2012 has been challenged
before Appellate Tribunal for Electricity (APTEL) (Appeal No.18 of 2014) in which the Company has also intervened
and the order of APTEL is pending. Further, in respect of the civil appeal filed by Damodar Valley Corporation (DVC)
pertaining to tariff of Financial Year 2004-05 to 2008-09 against the order of the Appellate Tribunal for Electricity
(APTEL), the Hon''ble Supreme Court of India dismissed the appeal vide its Order dated 3^rd December, 2018, which
could also have an effect on future tariff orders in view of consideration of certain parameters for fixation of tariff.
Accordingly, State Electricity Regulatory Commission (SERC) will finalise the retail tariff as directed by APTEL, the
financial implication of which can only be ascertained after the Tariff fixation by SERC. For the State of Jharkhand
where the dispute of ''587.72 crore arises, DVC has filed its Retail Tariff Application in November, 2020 along with
application for Annual Revenue Requirement before the Jharkhand State Electricity Regulatory Commission (JSERC)
for the period of 2006-07 to 2011-12 and also seeking adjustment of Revenue Gap/Surplus in the period of 2012-13
to 2014-15. The Company has also filed their objections on 28^th December, 2020 to the aforesaid Application of DVC.

JSERC finalised the Category-wise Retail Supply Tariff of DVC for the period from FY 2006-07 to FY 2011-12 vide order
dated 31^st October, 2023.

DVC preferred an appeal before Hon''ble APTEL against the order of the JSERC regarding the consideration of non¬
tariff income in totality in the tariff order. APTEL vide it''s order dated 5^th February 2024 in Appeal No. 845 of 2023 & IA
No. 2377 of 2023 allowed the appeal of DVC with request to the commission to undertake the exercise with utmost
expedition, and pass an order afresh at the earliest. The Commission in light of the Order of Hon''ble APTEL, passed
the remand Order dated 23.07.2024. M/s DVC being aggrieved by the remand Order dated 23.07.2024 in the matter
of determination of ARR and category-wise tariff for the period FY 2006-07 to FY 2011-12 challenged it in Appeal
No. 332 of 2024 & IA No. 1282 of 2024 before the Hon''ble APTEL. The ground raised by petitioner was limited to the
incorrect treatment of non-tariff income by JSERC in its tariff order. Hon''ble APTEL vide its interim order dated 15^th
Oct 2024 in IA No.- 1282 of 2024 stayed the impugned tariff order to the extent that it considers entire balance Non¬
Tariff Income, other than Delayed Payment Surcharge, as Non-Tariff Income for distribution business and JSERC was
directed, to calculate category wise tariff for the period under consideration. Steel Authority of India Limited (SAIL)
filed Civil Appeals before the Supreme Court, vide Civil Appeal Diary No(s). 60807/2024 against this interim order of
Hon''ble APTEL in I.A No.- 1282 of 2024, however Supreme Court vide its order dated 27^th Jan. 2025 stated that it was
not inclined to interfere with the impugned judgment passed by the Appellate Tribunal.

In line with direction of Hon''ble APTEL, the JSERC has re-computed the ARR and category-wise tariff for the period
FY 2006-07 to FY 2011-12 and issued the tariff order dated 10^th Dec. 2024. JSERC has mentioned in this order that
re-computed ARR and category wise tariff are subject to final outcome of Appeal No 332 of 2024. The JSERC under
the heading directive in its tariff order dated 10^th Dec. 2024 has mentioned that " in accordance with Hon''ble APTEL
judgement dated10.05.2010, which has been upheld by the Hon''ble Supreme Court vide its Order dated 03.12.2018
hereby directs petitioner-DVC to report the principal amount to be refunded or to be recovered post implementation
of the instant Tariff Order within 30 days.

On the basis of Interim order of JSERC dated 10^th Dec 2024, for the period FY 2006 to 2012, DVC vide it''s letter No
Coml/Arrear/JH/2006-12/330058 dated 01^st Feb 2025 and letter dated 30^th April 2025 has agreed for refund of total
amount of ''344.75 Crore after adjustment of old dues, delayed payment surcharge, excess payment (if any) shortfall
in SD (if any) and carrying cost to the Company. M/s DVC has started to refund the amount of ''344.75 crore through
making adjustment in the power bill from January 2025 onward in 24 months equal instalments.

The amount of '' 587.72 crores paid to DVC retained as advance in the books of accounts has now been adjusted
for the refundable amount of '' 344.75 Crores. The monthly instalment of '' 12.82 crores received for the period Jan
2025 to Mar 2025 has been accounted as deduction to the total receivable amount. Further, '' 50 crore advance, and
liability of '' 76.10 crore kept in books of accounts related to that period has also been adjusted with the total advance
amount of ''587.72 crore. After consideration of the above amounts, the net advance with M/s DVC is ''216.87 crore
(up to March 2024, '' 587.72 ) and same has treated as contingent liability and included in Note No. 47.1.(i) (f). In
addition, the claims receivable from M/s DVC is ''306.29 crore (up to March, 2024, '' NIL) as on 31.03.2025.

For the period from 1^st April, 2017 onwards, full invoice value is being paid to M/s DVC and considered accordingly in
the Profit & Loss account of the company.

47.3 Under the Jharkhand Mineral Area Development Authority (Amendment) Act, 2015, the State Government of Jharkhand
has made a demand of ''5742.23 crore upto 31^st March, 2025 (upto 31^st March, 2024 ''5387.70 crore) towards "Market
Fee" on transaction value of coal, iron and steel items. As the matter is sub-judice, the amount has been disclosed as
Contingent Liability in Note No. 47.1(i)(e) above.

The Mineral (Mining by Government Company) Rules 2015 (the "MMGC Rules") were notified by GOI on 03.12.2015.
Although no provision was made for realization of any money for extension of the leases in the said Rules, demands
for payment under the MMGC Rules 2015 in respect of Duargaiburu lease of Gua, Amalgamated leases of Kiriburu-
Meghahatuburu and Dhobil lease of Chiria were raised by the District Mining Officer (DMO), Chaibasa, Jharkhand. The
collective demand for payment against the notices was about ''2980.00 Crore. SAIL challenged the demand notices
through the filing of Writ Petitions in Hon''ble High Court of Jharkhand in March 2019. Hon''ble High Court vide order dated
18.12.2019/20.12.2019 stayed the operation of such demand notices. In the meantime, the Government of Jharkhand
sought clarification in respect of right/claim to raising of demand under Rule 5 of Mineral (Mining by Government
Company) Rule, 2015(MMGC) from the Ministry of Mines, Govt. of India. The Ministry of Mines, GOI vide letter dated
29.01.2021 clarified MMGC Rule, 2015 do not provide for payment of the additional amount for extension of mining
leases granted to a Government Company. Pending disposal of the matter by the Hon''ble High Court of Jharkhand, an
amount of ''6673.44 crores (''5959.14 crore as on 31^st March, 2024) has been disclosed as contingent liability in Note No.
47.1(i)(h) above.

47.4 Writ Petition No. 3427 of 2011 was filed by the company for quashing the Notification no. 272 & 275 dated 1^st April,
2011 under which the water rates for the industrial use from Tenu Ghat dam was enhanced unilaterally from '' 4.50 per
thousand gallons to '' 26.40 per thousand gallons. The Single Member Bench of Hon''ble Jharkhand High Court vide its
order dated 18^th October, 2011, restrained the government of Jharkhand from disrupting water supply of the petitioner
as well as adopts any coercive measures in lieu of realization of the amount at the escalated rate of '' 26.40 per thousand
gallons provided the petitioner continues to deposit the water charges on the old rate. However, writ Petition No. 3427
of 2011 was disposed of by the Single Member Bench of Hon''ble Jharkhand High Court, Ranchi, on 28^th June, 2024.
Moreover, challenge to the Notification No.2/PMC/ Jalapurti-175/2007-272 & 275 dated 1^st April, 2011 was dismissed by
the Single Member Bench of Hon''ble Jharkhand High Court. The company had filed an appeal vide LPA No. 540/2024
against the aforementioned judgement of single member bench which is pending for acceptance before the Divisional
Bench of Hon''ble Jharkhand High Court.

SAIL/BSL have preferred to appeal against the said judgement vide LPA No.540/2024. In the meantime, WRD Department,
Government of Jharkhand issued a fresh notification no. 2/PMC/Jalpurti-175/2007-30 dated 17.01.2023 revising the rate
of water charges. The Company has challenged the said notification vide WPC No. 5966/2024 and the said writ has been
tagged with the LPA No. 540/2024 vide order dated 18.11.2024 for subsequent hearings.

As the matter is sub judice before the Division Bench of Hon''ble High Court of Jharkhand, the amount of ''1905.52
crore demanded by the water resources department (including interest/penalty) has been treated by the company as
contingent liability as on 31^st March, 2025 (''1749.22 crore as on 31^st March, 2024) (and included in Note No. 47.1 (i) (f)
above).

47.5 (i) The Ministry of Environment & Forest and Climate Change (MoEF& CC) vide their letter No.- 11-599/ 2014-FC

dated 1^st April 2015 issued revised Guidelines for diversion of Forest Land for non-forest purpose under the Forest
(Conservation) Act, 1980 (FC Act). These revised Guidelines stipulated that in case of existing mining leases having
Forest Land (partially or fully), where approval for only a part of forest land has been obtained under the FC Act, the
Central Government accorded general approval under Section-2(iii) of the FC Act for the remaining area also to be
Forest Land, subject to certain conditions, which includes realising Net Present Value (NPV) for the entire forest land
falling in the mining lease, in case NPV of such forest land has not already been realised.

In this matter, as per legal opinion obtained by the Company, Section 2 (iii) of FC Act, 1980 will not apply to
Government Corporation and NPV is required to be paid only for that limited area, which has been approved by
MoEF& CC and in which mining activities are proposed to be done and not for the entire forest area. The matter of
applicability of NPV for total forest land has been challenged by the Company in Hon''ble High Court of Jharkhand.
The Hon''ble Court, in its order, has directed to place the matter before Division Bench of this Court.

A writ petition has also been filed in the Hon''ble high Court of Chhattisgarh against the demand of ''96.28 crores
received during 2017-18 from the Office of Principal Chief Conservator of Forest, Chhattisgarh, in which the Hon''ble
High Court of Chhattisgarh awarded judgement in favour of Chhattisgarh Government.

The Company has deposited ''96.28 crores with Principal Chief Conservator of Forest, Chhattisgarh and a Special
Leave Petition has been filed in Hon''ble Supreme Court of India against the order of Hon''ble High Court of
Chhattisgarh. The disputed amount of ''96.28 crore (previous year: ''96.28 crore) crore has been disclosed under
contingent liability in Note no.47.1.(i)(e).

(ii) Chhattisgarh State enacted Chhattisgarh (Adhosanrachna Vikas ewam Paryaawaran) Upkar Adhiniyam, 2005 and
levied Cess on the mineral extracted in the State of Chhattisgarh. BSP has filed a writ petition in the High Court of
Chhattisgarh challenging the enactment as ultra vires. However, BSP has deposited ''256.47 crore under protest
till 31^st March, 2025 and shown as deposit with Government Department. Total disputed amount of ''256.47 crore
(previous year ''235.71 crore) is disclosed under contingent liability in Note no.47. 1.(i) (e).

47.6 Pursuant to the Hon''ble Supreme Court Judgment dated 2^nd August, 2017 in the Common Cause matter regarding
illegal mining, demand/Show cause notices have been issued for recovery of the price of minerals produced without
and beyond the environmental clearances under Section 21(5) of Mines and Mineral Development Regulation Act, 1957,
forest clearance under the Forest Conservation Act 1980, and towards excess production beyond consent to operate.
The Company has challenged the purported demand before the High Court of Jharkhand and Odisha and obtained stay
on demand.

(a) As the matter is pending for final determination and considering the implication of existing litigation, the Company:

(i) In respect of Iron Ore, by the Government of Odisha and Government of Jharkhand amounting to ''453.11
crore and ''3396.49 crore (''419.68 crore and ''3122.00 crore as on 31^st March, 2024) respectively (including

interest). Based on internal assessment, the Company has provided an amount of ''329.67 crore (''329.67
crore as on 31^st March, 2024) on estimated basis. Balance amount of ''3519.93 crore (''3212.01 crore as on
31^st March, 2024) (including interest) has been treated as contingent liability in Note No. 47.1(i)(e)/(h) above.

(ii) In respect of Flux, by the Government of Jharkhand & Odisha amounting to ''72.83 crore (''66.15 crore
as on 31^st March 2024) (including interest). Based on internal assessment, the Company has provided an
amount of ''6.86 crore (''6.86 crore as on 31^st March 2024) on estimated basis. Balance amount of ''65.97
crore (''59.29 crore as on 31^st March 2024) (including interest) has been treated as contingent liability in
Note No. 47.1(i)(e)/(h) above.

47.7 Land measuring 5.545 acres was allotted to DVC for 30 year w.e.f. 12.07.1966 on long term lease basis. The Land was
given to DVC for setting up of Electrical sub-station for ensuring supply of power for the benefit of ASP. There was no
lease agreement for the subsequent period, i.e., w.e.f. 13/07/1996. In absence of any agreement, the dues receivables
for the said period, could not be ascertained with reasonable certainty. The same will be accounted for in the year of
settlement.

47.8 (a) Consequent to the order of Hon''ble Odisha High Court, Company''s claim towards renewal of lease [total area of

2599.54 acre disclosed under Note No. 4.(ii) (b) ], of land at Horomoto stands rejected, except surface area of 222.54
acre for which State Govt has been directed to consider as per provisions of Law.

(b) Contract being No. RMD/K/PROJ/CA/GOM/14-15/060 dtd 02.04.2015 was awarded by SAIL-GUA Ore Mines to the
consortium comprising M/s Larsen and Toubro Limited (L&T) and M/s Outotec GmbH & Co. KG, Germany for the jobs
of setting up of crushing, beneficiation and Pellet plant (Package 001) for 10MT Expansion of Gua Ore Mines, SAIL for
a time period of 40 months starting from the effective date of the contract which was 03.05.2014 [Contract Value, ''
2742.84 Crore]. Time for completion of contract was extended twice by SAIL till 02.10.2018. There was unprecedented
delay in grant of Stage II Forest Clearance for 361.295 ha mining lease subsequently resulting in delay of execution of
work by L&T Consortium. Thereafter vide letter dtd 05.08.2019 SAIL communicated to the consortium headed by M/s
L&T that the aforesaid Contract has already come to an end by efflux of time on 02.10.2018 since no time extension
had been granted on 02.10.2018.

L&T and Outotec claimed compensation for the alleged illegal termination of the Contract, amounting to '' 900
crore. The matter was taken to the International Court of Arbitration (ICA), where the tribunal ruled in favor of the
claimants, awarding approximately ''228 crore and interest to L&T and EUR 15.7 million and interest to Outotec for
breach of contract and associated costs (totalling to '' 370 Crores approx).

SAIL has filed an application under Section 34 of the Arbitration and Conciliation Act, 1996

---

Mar 31, 2024

3.15 Provisions, Contingent Liabilities and

Contingent Assets

Provisions and Contingent Liabilities

A Provision is recognised when the Company has present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are discounted to their present value, where the time value of money is material. An provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as a separate asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Contingent liability is a possible obligation arising from past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events but is not recognised because it is not possible that an outflow of resources embodying economic benefit will be required to settle the obligations or reliable estimate of the amount of the obligations cannot be made.

in cases where the possible outflow of economic resources as a result of present obligation is considered improbable or remote, no Provision is recognised or disclosure is made.

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognised and are disclosed only where an inflow of economic benefits is probable.

3.16 Income Taxes

Tax expense recognised in Statement of Profit and Loss comprises the sum of deferred tax and current tax except to the extent that the tax relates to the items that are recognised directly in other Comprehensive Income (oCI) or in equity in which case the related tax is recognised either directly in oCI or equity accordingly.

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income-tax Act. The Company offsets current tax assets and current tax liabilities when the legally enforceable right to offset exists and they are intended to be settled net or realised simultaneously.

Deferred income taxes are calculated using the balance sheet liability method/approach. deferred tax liabilities are generally recognised in full for all taxable temporary differences. deferred tax assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits or deductible temporary difference will be utilised against future taxable income. the carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

the Company offsets deferred income tax assets and liabilities when the legally enforceable right to offset current tax assets and liabilities exists and they are intended to be settled or realised simultaneously.

3.17 Financial Instruments

Recognition, initial measurement and derecognition

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument and are measured at fair value on initial recognition. transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, except for those which are classified at Fair Value through Profit & Loss (FVtPL) at inception, are adjusted with the fair value on initial recognition.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expires, or has been transferred, and the Company has transferred all substantial risks and rewards of ownership. A financial liability (or a part of financial liability) is derecognised when the obligation specified in the contract is extinguished or discharged or cancelled or expires.

Classification and subsequent measurement of financial assets

For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition:

• amortised cost

• financial assets at fair value through profit or loss (FVTPL)

• financial assets at fair value through other comprehensive income (FVoCI)

An financial assets except for those at FVTPL are subject to review for impairment at least at each reporting date.

Amortised cost

A financial asset is measured at amortised cost using effective interest rates if the following conditions are met:

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

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

the Company''s cash and cash equivalents, trade receivables and most of other receivables fall into this category of financial instruments.

Financial assets at FVTPL

Financial assets at FVTPL include financial assets that either do not meet the criteria for amortised cost classification or that are equity instruments held for trading or that meet certain conditions and are designated at FVTPL upon initial recognition. All derivative financial instruments also fall into this category. assets in this category are measured at fair value with gains or losses recognised in Statement of Profit and Loss. The fair values of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.

financial assets at FVOCI

FVToCI financial assets are either debt instruments that are managed under hold to collect and sell business model or are non-trading equity instruments that are irrevocable designated to this category.

FVToCI financial assets are measured at fair value. Gains and losses are recognized in other comprehensive income, except for interest and

dividend income, impairment losses and foreign exchange differences on monetary assets, which are recognized in Statement of Profit and Loss.

Classification and subsequent measurement of financial liabilities

Financial liabilities are measured subsequently at amortized cost using the effective interest method, except for financial liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognized in Statement of Profit and Loss. All derivative financial instruments are accounted for at FVTPL.

Embedded Derivatives

Some hybrid financial liability contracts contain both derivative and a non-derivative component. in such cases, the derivative component is termed as embedded derivative, with a non-derivative component representing the host financial liability contract. if the economic characteristics and risks of embedded derivatives are not closely related to those of the host contract and the contract itself is not measured at FVTPL, the embedded derivative is bifurcated and reported at fair value, with gains and losses recognised in net gains (losses) on financial assets/liabilities at fair value through profit or loss (FVTPL). the host financial liability is accounted for in accordance with the appropriate ind As.

Fair value measurement

the Company classifies the fair value of its financial instruments in the following hierarchy, based on the inputs used in their valuation:

i) Level 1: the fair value of financial instruments quoted in active markets is based on their quoted closing price at the Balance Sheet date.

ii) Level 2: the fair value of financial instruments that are not traded in an active market is determined by using valuation techniques using observable market data. Such valuation techniques include discounted cash flows, standard valuation models based on market parameters for interest rates, yield curves or foreign exchange rates, dealer quotes for similar instruments and use of comparable arm''s length transactions.

iii) Level 3: the fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs).

Impairment of financial Assets

in accordance with ind As 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss for financial assets measured at amortised cost or at fair value through other comprehensive income.

ECL is the weighted average difference between all contractual cash flows that are due to the Company

in accordance with the contract and all the cash flows that the Company expects to receive.

Trade Receivables

trade receivables are recognised initially at fair value based on amounts exchanged and subsequently at amortised cost less any impairment as per ind As 109.

Offsetting of financial instruments

Financial assets and liabilities are offset, with net amount reported in the balance sheet, only when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. the legally enforceable right must not be contingent on future events and must be enforceable both in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

3.18 Investments in subsidiaries, joint ventures, associates and equity Instruments

investment in subsidiaries, associate and joint ventures are carried at cost less accumulated impairment, if any in the Company''s standalone financial statements in accordance with ind AS-27, ''Separate Financial Statements''.

investments in equity instruments, where the Company has opted to classify such instruments at fair value through other comprehensive income (FVTOCI) are measured at fair value through other comprehensive income. there is no recycling of the amounts from OCi to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.

3.19 Segment reporting

Segments are identified based on the manner in which the Chief Operating Decision Maker (''CODM'') decides about resource allocation and reviews performance. Segment results that are reported to the CODM include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property and equipment and intangible assets.

the Company has eight operating segments: five integrated steel plants and three alloy steel plants, being separate manufacturing units, have been considered reportable operating segments. in identifying these operating segments, management generally considers the Company''s separately identifiable manufacturing operations representing its main operations.

Each of these operating segments is managed separately as each has different requirements in terms of technology, raw material and other resources. All inter-segment transfers are carried out at arm''s

length prices based on prices charged to unrelated customers in standalone sales of identical goods or services.

in addition, corporate assets which are not directly attributable to the business activities of any operating segment are not allocated to a segment. This primarily applies to the Company''s administrative head office and mining operations.

there have been no changes from prior periods in the measurement methods used to determine reported segment profit or loss.

3.20 Earnings per share

Basic earnings per share is computed by dividing profit or loss for the year attributable to equity holders by the weighted average number of shares outstanding during the year. Partly paid-up shares are included as fully paid equivalents according to the fraction paid-up.

Diluted earnings per share is computed using the weighted average number of shares and dilutive potential shares except where the result would be anti-dilutive

3.21 Significant Judgements, Assumptions and Estimations in applying accounting Policies

3.21.1 Leases

the Company evaluates if an arrangement qualifies to be a lease as per the requirements of ind AS 116. identification of a lease requires significant judgment. the Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

3.21.2 Close-down and Restoration Obligations

Close-down and restoration costs are normal consequence of mining or production, and majority of close-down and restoration expenditure are incurred in the years following the closure of mine. Although the ultimate cost to be incurred is uncertain, the Company estimate their costs based on current interpretation of scientific and legal data and existing technology, in addition to assumptions about probability and future costs.

3.21.3 recognition of Deferred Tax assets

the extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized. in addition, significant judgement is required in assessing the impact of any legal or economic limits.

3.21.4 Inventories

the Company estimates the cost of inventories taking into account the most reliable evidence, such as cost of materials and overheads considered attributable to the production of such inventories including actual

cost of production, etc. Management also estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. Significant technical and commercial judgements are required to determine the Company''s quality and quantity of inventories. the future realisation of these inventories may be affected by future technology or other market-driven changes that may reduce future selling prices.

3.21.5 Defined Benefit Obligation (DBO)

Employee benefit obligations are measured on the basis of actuarial assumptions which include mortality and withdrawal rates as well as assumptions concerning future developments in discount rates, medical cost trends, anticipation of future salary increases and the inflation rate. the Company considers that the assumptions used to measure its obligations are appropriate. However, any changes in these assumptions may have a material impact on the resulting calculations.

3.21.6 Fair Value Measurements

the Company applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. this involves developing estimates and assumptions consistent with the market participants to price the instrument. the Company''s assumptions are based on observable data as far as possible, otherwise on the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

3.21.7 Provisions and Contingencies

the assessments undertaken in recognising provisions and contingencies have been made in accordance with indian Accounting Standards (ind As) 37, ''Provisions, Contingent Liabilities and Contingent Assets'' the evaluation of the likelihood of the contingent events is applied best judgement by management regarding the probability of exposure to potential loss.

3.21.8 Mine Closure and restoration Obligations

Environmental liabilities and Asset Retirement Obligation (ARO): Estimation of environmental liabilities and ARO require interpretation of scientific and legal data, in addition to assumptions about probability and future costs.

3.21.9 useful lives of depreciable/ amortisable assets (tangible and intangible)

Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to actual normal wear and tear that may change the utility of plant and equipment.

ii) Risk Management

"The Company is exposed to various risks in relation to financial instruments. The Company''s financial asset and liabilities by category, are summarised in note 43 (i). the main types of risks are market risk, credit risk and liquidity risk. the Company''s risk management is co-ordinated at its headquarters, in close cooperation with the Board of Directors, and focuses on actively securing the Company''s short to medium-term cash flows by minimising the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns. the Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. the most significant financial risks to which the Company is exposed are described below.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Comapny. The Company is exposed to this risk for various financial instruments, for example by granting loans and receivables to customers, placing deposits, etc. the Company''s maximum exposure to credit risk is limited to the carrying amount of following types financial assets.

- Cash and cash equivalents

- Derivative financial instruments

- trade receivables

- other financial assets measured at amortized cost

the Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. the Company''s policy is to deal only with creditworthy counterparties.

a) Credit risk management Cash and cash equivalent

Credit risk related to cash and cash equivalents is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Derivative financial instruments

Credit risk related to derivative financial instruments is also managed by only entering into such arrangement with highly rated banks or financial institutions as counterparties. the company diversifies its holdings with multiple counterparties.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees from customers where credit risk is high. the Company closely monitors the credit-worthiness of the debtors and only sells goods to credit-worthy parties. the Company''s internal systems are configured to define credit limits of customers, thereby limiting the credit risk to pre-calculated amounts.

Other financial assets measured at amortized cost

other financial assets measured at amortized cost includes loans and advances to employees and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

Company provides expected credit losses based on the following;

Trade receivables

the Company recognizes lifetime expected credit losses on trade receivables using a simplified approach and uses historical information to arrive at loss percentage relevant to each category of trade receivables.

For descriptive note on trade receivables ageing, refer note 48.4 (B)

Other financial assets measured at amortized cost

Company provides for expected credit losses on "loan advances and other than trade receivables" by assessing individual financial instruments for expectation of any credit losses. Since, this category includes loans and receivables of varied natures and purpose, there is no trend that the Company can draw to apply consistently to entire population. For such financial assets, the Company''s policy is to provide for 12 month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. the Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss allowances are disclosed under each sub-category of such financial assets.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyse the company''s financial liabilities into relevant maturity companying based on their contractual maturities for all nonderivative financial liabilities and the amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

C) Market Risk a) Foreign currency risk

Most of the Company''s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company''s overseas borrowing arrangements, which are primarily denominated in uS dollars (uSD).

To mitigate the Company''s exposure to foreign currency risk, non-Wr cash flows are monitored and forward exchange contracts are entered into in accordance with the Company''s risk management policies. Generally, the Company''s risk management procedures distinguish short-term foreign currency cash flows (due within 6 months) from longer-term cash flows (due after 6 months). Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no further hedging activity is undertaken. Forward exchange contracts are mainly entered into for significant long-term foreign currency exposures that are not expected to be offset by other same-currency transactions.

b) Interest rate risk

The Company''s policy is to minimise interest rate cash flow risk exposures on long-term financing. Long term borrowings are therefore usually at fixed rates. At 31^st March, 2024, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates. other borrowings are at fixed interest rates. the Company''s investments in bonds all pay fixed interest rates. the exposure to interest rates for the Company''s money market funds is considered immaterial. The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of /- 1% (2023: /- 1%). these changes are considered to be reasonably possible based on observation of current market conditions. the calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

47.2 a) (i) The Nine Judge Bench of the Hon''ble Supreme court, vide its order dated 11^th November, 2016, upheld the Constitutional validity of the Entry tax legislations passed by the various States. However, the Bench directed that certain other matters raised by the Petitioner, such as matter relating to Entry tax on account of discriminatory rates resulting in entry tax liability amounting to ? 1092.28 crore wherein a rate of 6% was applied on iron Ore and Coking Coal in Bhilai-Durg area as compared to lower rate of 1% on Coking Coal and 3% on iron ore in rest of the areas of Chhattisgarh and matter relating to Entry tax amounting to ? 98.83 crore on goods entering into the local area of Jharkhand from other State etc. may be determined by regular benches hearing the matters. During the year, Chhattisgarh Government notified a settlement scheme (Chhattisgarh Settlement of Arrears of Tax, interest and Penalty Act, 2023) for settlement of old cases of VAT, Entry Tax & CST etc. under which applications were filed assessment year-wise for settlement of Entry Tax dispute pertaining to rate discrimination. Out of nine applications filed, four applications settled by the Commercial Tax Department. The disputed amount for balance five applications are ? 762.91 Crore. The settlement amount for balance five applications as per scheme works out to ? 137.72 crore for which firm liability has been provided as on 31^st March, 2024. Balance amount of ? 625.19 crore has been treated as contingent liability. As on 31^st March, 2024, the matters are pending before Regular Benches of Hon''ble Supreme Court/ Jurisdictional High Courts/ assigned authorities/ Commercial Tax Department in this regard. Pending decision by the other Courts, disputed

Entry Tax liabilities of ? 724.02 crore have been treated by the Company as Contingent Liability (As at 31^st March, 2023 - ? 1184.81 crore) and included in Note No. 47.1 (i) (g) above.

(ii) in respect of levy of Entry Tax in industrial township of Rourkela Steel Plant, Hon''ble Supreme Court, vide its judgment dated 4^th November, 2022 had decided that Entry Tax is leviable in areas covered under Rourkela Steel Plant industrial township. However, by virtue of a judgement dated 01.12.2021 pronounced by Orissa High Court and subsequently upheld by the Supreme Court vide its order dated 13.07.2022, the reassessed demands raised under Section10 of Orissa Entry Tax Act, 1999 in absence of original assessment are liable to be rejected. Pending such adjudication as on 31^st March, 2024, these demands amounting to ?138.48 crores (31^st March 2023 ? 213.00 crores) have been treated as Contingent Liability and included in Note No. 47.1 (i) (g) above.

b) Hon''ble Supreme Court dismissed the SLP by the Company in respect of dispute with Damodar Valley Corporation(DVC) related to provisional tariff petition of electricity charges for 2009-2014 vide order dated 18^th January, 2017, keeping the question of law open. The Order of Central Electricity Regulatory Commission (CERC) dt. 7-8-2013 related to Tariff of 2009-2014 against Petition No.275/GT/2012 has been challenged before Appellate Tribunal for Electricity (APTEL) (Appeal No.18 of 2014) in which the Company has also intervened and the order of APTEL is pending. Further, in respect of the civil appeal filed by Damodar Valley Corporation (DVC) pertaining to tariff of Financial Year 2004-05 to 2008-09

against the order of the Appellate Tribunal for Electricity (APTEL), the Hon''ble Supreme Court of india dismissed the appeal vide its order dated 3^rd December, 2018, which could also have an effect on future tariff orders in view of consideration of certain parameters for fixation of tariff. accordingly, State electricity Regulatory Commission (SERC) will finalise the retail tariff as directed by APTEL, the financial implication of which can only be ascertained after the Tariff fixation by SERC. For the State of Jharkhand where the dispute of ? 587.72 crore arises, DVC has filed its Retail Tariff Application in November, 2020 along with application for Annual Revenue Requirement before the Jharkhand State Electricity Regulatory Commission (JSERC) for the period of 2006-07 to 2011-12 and also seeking adjustment of Revenue Gap/Surplus in the period of 2012-13 to 2014-15. The Company has also filed their objections on 28^th December, 2020 to the aforesaid Application of DVC. JSERC finalised the Category-wise Retail Supply Tariff of DVC for the period from FY 200607 to FY 2011-12 vide order dated 31^st October, 2023. However, DVC has preferred an appeal before Hon''ble APTEL against the order of the JSERC regarding the consideration of non-tariff income in totality in the tariff order. APTEL vide it''s order dated 5^th February, 2024 allowed the appeal of DVC with request to the commission to pass an order afresh at the earliest. Pending fixation of such Electricity Tariffs, disputed demands of DVC of ? 587.72 crore upto 31^st March 2024, (upto 31^st March, 2023, ? 587.72 crore) has been treated as Contingent Liability. Against the said claims, the entire amount has been paid to DVC and retained as advance. Further from 1^st April, 2017 onwards full invoice value is being paid and charged to revenue.

47.3 Under the Jharkhand Mineral Area Development Authority (Amendment) Act, 2015, the State Government of Jharkhand has made a demand of '' 5387.70 crore upto 31^st March, 2024 (upto 31^st March, 2023 '' 5037.29 crore) towards "Market Fee” on transaction value of coal, iron and steel items. As the matter is sub-judice, the amount has been disclosed as Contingent Liability in Note No. 47.1(i)(e) above.

The Mineral (Mining by Government Company) Rules 2015 (the "MMGC Rules”) were notified by GOi on 03.12.2015. Although no provision was made for realization of any money for extension of the leases in the said Rules, demands for payment under the MMGC Rules 2015 in respect of Duargaiburu lease of Gua, Amalgamated leases of Kiriburu-Meghahatuburu and Dhobil lease of Chiria were raised by the District Mining Officer (DMO), Chaibasa, Jharkhand. The collective demand for payment against the notices was about '' 2980.00 Crore. SAiL challenged the demand notices through the filing of Writ Petitions in Hon''ble High Court of Jharkhand in March 2019. Hon''ble High Court vide order dated 18.12.2019/20.12.2019 stayed the operation of such demand notices. in the meantime, the Government of Jharkhand sought clarification in respect of right/claim to raising of demand under Rule 5 of Mineral (Mining by Government Company)

Rule, 2015 (MMGC) from the Ministry of Mines, Govt. of india. The Ministry of Mines, GOi vide letter dated 29.01.2021 clarified MMGC Rule, 2015 do not provide for payment of the additional amount for extension of mining leases granted to a Government Company. Pending disposal of the matter by the Hon''ble High Court of Jharkhand, an amount of '' 5959.14 crores ('' 5241.88 crore as on 31^st March, 2023) has been disclosed as contingent liability in Note No. 47.1(i)(h) above.

47.4 in its judgement, the Central Administrative Tribunal (CAT), Kolkata has directed that Ministry of Steel shall consider the aspect of payment of arrears of revised perks and allowances and take appropriate decision for payment of revised perks and allowances amounting to '' 309.34.crore (previous year: '' 309.34 crore) to the executives for the period from 26.11.2008 to 4.10.2009. Ministry of Steel intimated the matter to the Company on 7.12.2016. A petition in the matter was filed on 22.12.2016 before the Hon''ble Calcutta High Court and is disposed off during the year. Pending administrative decision on the matter, the amount has been disclosed as Contingent Liability in Note No. 47.1(ii)(d) above.

47.5 (i) The Ministry of Environment & Forest and Climate

Change (MoEF & CC) vide their letter No.-11-599/2014-FC dated 1^st April 2015 issued revised Guidelines for diversion of Forest Land for nonforest purpose under the Forest (Conservation) Act, 1980 (FC Act). These revised Guidelines stipulated that in case of existing mining leases having Forest Land (partially or fully), where approval for only a part of forest land has been obtained under the FC Act, the Central Government accorded general approval under Section-2(iii) of the FC Act for the remaining area also to be Forest Land, subject to certain conditions, which includes realising Net Present Value (NPV) for the entire forest land falling in the mining lease, in case NPV of such forest land has not already been realised.

in this matter, as per legal opinion obtained by the Company, Section 2 (iii) of FC Act, 1980 will not apply to Government Corporation and NPV is required to be paid only for that limited area, which has been approved by MoEF & CC and in which mining activities are proposed to be done and not for the entire forest area. The matter of applicability of NPV for total forest land has been challenged by the Company in Hon''ble High Court of Jharkhand. The Hon''ble Court, in its order, has directed to place the matter before Division Bench of this Court.

A writ petition has also been filed in the Hon''ble high Court of Chhattisgarh against the demand of '' 96.28 crores received during 2017-18 from the Office of Principal Chief Conservator of Forest, Chhattisgarh, in which the Hon''ble High Court of Chhattisgarh awarded judgement in favour of Chhattisgarh Government.

The Company has deposited '' 96.28 crores with Principal Chief Conservator of Forest, Chhattisgarh and a Special Leave Petition has been filed in Hon''ble Supreme Court of india against the order of Hon''ble High Court of Chhattisgarh. The disputed amount of '' 96.28 crore (previous year: '' 96.28 crore) crore has been disclosed under contingent liability in Note no.47.1.(i)(e).

(ii) Chhattisgarh State enacted Chhattisgarh (Adhosanrachna Vikas ewam Paryaawaran) upkar Adhiniyam, 2005 and levied Cess on the mineral extracted in the State of Chhattisgarh. BSP has filed a writ petition in the high Court of Chhattisgarh challenging the enactment as ultra vires. however, BSP has deposited '' 235.71 crore under protest till March, 2024 and shown as deposit with Government Department. total disputed amount of '' 235.71 crore (previous year '' 212.96 crore) is disclosed under contingent liability in note no. 47. 1.(i) (e).

47.6 Pursuant to the hon''ble Supreme Court Judgment dated 2^nd august, 2017 in the Common Cause matter regarding illegal mining, demand/Show cause notices have been issued for recovery of the price of minerals produced without and beyond the environmental clearances under Section 21(5) of Mines and Mineral development Regulation act, 1957, forest clearance under the Forest Conservation act 1980, and towards excess production beyond consent to operate. The Company has challenged the purported demand before the high Court of Jharkhand and odisha and obtained stay on demand.

(a) As the matter is pending for final determination and considering the implication of existing litigation, the Company:

(i) in respect of iron ore, by the Government of odisha and Government of Jharkhand amounting to ''419.68 crore and ''3122.00 crore (''386.33 crore and ''2847.52 crore as on 31^st March, 2023) respectively (including interest). Based on internal assessment, the Company has provided an amount of '' 329.67 crore ('' 329.67 crore as on 31^st March, 2023) on estimated basis. Balance amount of '' 3212.01 crore ('' 2904.18 crore as on 31^st March, 2023) (including interest) has been treated as contingent liability in note No. 47.1(i)(h).

(ii) in respect of Flux, by the Government of Jharkhand & odisha amounting to ''66.15 crore (''59.03 crore as on 31^st March 2023) (including interest). Based on internal assessment, the Company has provided an amount of ''6.86 crore (''6.86 crore as on 31^st March 2023) on estimated basis. Balance amount of ''59.29 crore (''52.17 crore as on 31^st March 2023) (including interest) has been treated as contingent liability in note No. 47.1(i)(h) above.

(iii) in respect of Coal, by the Government of Jharkhand amounting to ''nil crore (''755.90 crore as on 31^st March 2023) (including interest), revision application has been filed under rule 55 (5) of Mineral Concessions rule, 1960 read with Section 30 of Mines and Minerals (development and regulation) act, 1957 (MMDR). the revisional authority, Ministry of Coal, has granted Stay to the Company. accordingly pending disposal, the amount of ''nil crore (''755.90 crore as on 31^st March 2023) (including interest) has been treated as Contingent Liability in note No. 47.1(i)(h) above.

47.7 M/s JSC Cryogenmash have filed a case before arbitral tribunal in international Chamber of Commerce against SaiL/Bhilai Steel Plant for resolution of dispute arising out of contract. arbitral tribunal has awarded a sum of ''106.92 crores on 20.07.2018 against SAI L/ Bhilai Steel plant.

against the award, the management has filed an appeal before hon''ble high Court at Delhi which has been admitted. Pending disposal of appeal, the sum of ''171.22 crore (previous year: ''160.37 crore) (including interest) has been disclosed under contingent liability in note no 47.1(ii) (d) above.

47.8 Land measuring 5.545 acres was allotted to DVC for 30 year w.e.f. 12.07.1966 on long term lease basis. the Land was given to DVC for setting up of Electrical sub-station for ensuring supply of power for the benefit of Asp. there was no lease agreement for the subsequent period, i.e., w.e.f. 13/07/1996. in absence of any agreement, the dues receivables for the said period, could not be ascertained with reasonable certainty. the same will be accounted for in the year of settlement.

47.9 Consequent to the order of hon''ble odisha high Court, Company''s claim towards renewal of lease [total area of 2599.54 acre disclosed under note No. 4.(ii) (b)], of land at horomoto stands rejected, except surface area of 222.54 acre for which State Govt has been directed to consider as per provisions of Law.

47.10 An award arising out of the Arbitration between M/S. Goyal Mg Gases Pvt. Ltd. (Claimant) and SAIL/Alloy Steels Plant, Durgapur (respondent) seeking claim of ''116.86 crore, has been received on 22.05.2020, vide SCoPE, New Delhi letter dated 18.05.2020.

By the aforesaid award, tribunal allowed claim no. 1 and 2 of the Claimant w.r.t. differential amount pertaining to transportation charges of Argon from DSP Boo Plant to ASP based upon market rate claimed by the Claimant and refund of withheld/ deducted amount by ASP from the bills of the Claimant on account of merchant market sale of oxygen, Nitrogen and Argon respectively along with applicable interest thereon, out of the total claimed amount.

SAIL ASP had challenged the award for claims no. 1 & 2 before ld. Commercial Court in Misc. Arb. Case No.8( re-registered under new rules as Misc. Arb. Comm. Case no 12 of 2024. oral arguments of both parties were heard and Written notes of Arguments were also filed by both parties whereafter order was reserved by ld. Commercial Court on 06.03.2024 fixing the case for pronouncement 16.04.2024. however due to filing of additional written notes on Limitation by M/s. Goyal MG Gases, judgement was not pronounced and is now fixed for pronouncement on 07.05.2024. the Ld. Court on the said date set aside the award by arbitration tribunal on the above claims.

in view of above and based on the amount quantified by the tribunal, the net disputed liability of ''7.54 crore as on 31^st March, 2024 (previous year: ''6.56 crore) including interest, has been shown under Contingent Liability in Note No. 47.1(i)(b) above.

49.3 As per the Department of Public Enterprises (DPE) guideline, the Company is required to contribute up to 30% of Salary (Basic Pay plus dearness allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund, Gratuity, Pension and Post-Superannuation Benefits. accordingly the Company has made provision for pension benefit for executive employees @ 9% of Salary w.e.f. 1^st January, 2007 and @3% of Salary w.e.f. 1^st April, 2015. Further, pension benefit for non-executive employees has been provided @ 6% of Salary w.e.f. 1^st January, 2012 and @2% of Salary w.e.f. 1^st April, 2015. Subsequent to wage revision, the pension benefit for non-executive employees has been provided @ 9% of Salary w.e.f. 1^st November, 2021.

Pension Scheme was approved in the Meeting of the Board of directors held on 9^th February, 2017 with modification that from the Financial Year 2015-16 and onwards, the contribution towards Pension shall be measured, as a percentage of Profit Before Tax (PBT) to average net-worth. if the percentage of PBT to average net-worth is 8% or above, amount of Pension contribution shall be limited to 9% of Basic Pay plus Da for executives and 6% of Basic Pay plus Da for non-executive (@9% w.e.f. 1^st november, 2021), else the amount of contribution towards Pension will be reduced proportionately. However, a minimum Pension contribution shall be kept at the rate of 3% and 2% (@3% w.e.f. 1^st november, 2021) of Basic Pay plus Da for executive and non-executive employees respectively even in case of loss during a Financial Year. During the Year ended 31^st March, 2024 provision for pension has been made @ 9% for all employees.

The cumulative liability towards pension for Executive and non-executive employees, amounting to ?714.00 crore (?597.12 crore during the Year) and ?61.03 crore (?3.50 crore during the Year) has been charged to ''Employee Benefits Expense'' and ''Expenditure during Construction'' respectively. An amount of ?630.99 crore has been transferred to Pension Fund during the Year. Further, an amount of ?77.82 crore has been paid to retired employees during the Year and an amount of ^il crore deposited by the employees for being eligible for pension.

49.4 The research and development expenditure charged to Statement of Profit and Loss and allocated to Fixed Assets/Capital work-in-progress (net), during the Year, amount to ?239.47 crore (?397.60 crore during the previous Year) and ?67.61 crore (?32.88 crore during the previous Year) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

49.5 The Company considers the assets of one entire plant as Cash Generating Unit (CGU). The Company internally reviews whether there are any indicators that the carrying amount of assets of CGUs may be impaired on each balance sheet date. if any such indicators exist, the asset recoverable amount is estimated as higher of the net selling price and the value in use. Value in use is based on present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss is recognised whenever the carrying amounts of assets of a CGU exceed the asset recoverable amount. Further to the internal assessment, the Company also determines net selling price of the assets of CGU, in which any such indication exists, by an independent expert.

As on the reporting date, based on the internal assessment done by the Company at its different CGUs, no impairment loss is required to be provided.

49.8 information on leases as per indian Accounting Standards (ind AS) 116 on Leases'':

(I) The Company has leases for Land, office building, Plant & Equipment, warehouses & related facilities and vehicles. 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. Variable lease payments which do not depend on an index or a rate are excluded from the initial measurement of the lease liability and right of use assets. the Company classifies its right-of-use assets in a consistent manner to its Property, plant and equipment.

each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used by the Company. Some leases contain an option to extend the lease for a further term. the Company is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and other premises the Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Company is required to pay maintenance fees in accordance with the lease contracts.

Right of Use assets

Set out below are the carrying amounts of right-of-use assets (Refer note 4a) recognised and the movements during the period:

(II) Description of major leasing arrangements Power Plant

The Company has accounted for certain power plants as finance lease under Appendix-C of Ind AS 17 by virtue of the power purchase agreement with the supplier. under the terms of the power purchase agreement, the Company shall continue to purchase power until the parties decide to terminate the agreement, which has been determined to be an un-economic proposition considering the specialised nature and location of the asset. For any new lease treatment treatement has been done in accordance with Ind AS 116 - Leases.

Oxygen Plant

The Company has accounted for certain oxygen plants as finance lease (or operating lease) under Appendix-C of Ind AS 17 by virtue of the oxygen purchase agreement with the supplier. The agreement to purchase oxygen is a 15 year fixed term agreement. There is no change in treatment under Ind AS 116 - Leases.

Mining land

The Company has accounted for leasehold lands for mining as finance leases by virtue of its rights under the lease agreement after considering the right/economic compulsion for renewal. There is no change in treatment under Ind AS 116 - Leases.

49.9 Contributions made in cash and kind for the period from the Financial Year 2006-07 to 2021-22 to Railway authorities for laying out railway line from Rajhara to Rowghat would be recovered in cash at the rate of 7% per annum for 37 year on total contribution towards redemption of SAIL''s contribution after commencement and fulfilment of assured traffic from Rowghat mines. Management is of view that the criteria laid out in Memorandum of Understanding will be met and interest accrues from the date of investment. The refund amount comprises principal and interest elements. Accordingly, the interest element has been computed and recognised as income during the Year amounting to '' 61.90 crore (till date '' 311.82 crore). As per the opinion of Expert Advisory Committee of The Institute of Chartered Accountants of India, such treatment of recognition on time proportion basis is in order as in view of the Management, no significant uncertainty exists regarding collectability and measurability of revenue.

49.10 The inventory of sub-grade iron ore fines generated at the captive mines of the Company were not assigned any value in the books of accounts of the Company till the financial year ended 31^st March 2019, since, the Government of India Notification dated 19^th September 2012 prohibited all captive miners from selling such sub-grade fines.

Following the Government of India Order no.F.No.16/30/2019-M.VI dated 16^th September 2019 allowing sale of subgrade iron ore fines, the inventories of sub-grade fines held by the Company gained economic value. in this regard, the Company also obtained opinions from the Additional Solicitor General of india as well as the Expert Advisory Committee (EAC) of institute of Chartered accountants of india (ICAI). Based on the aforesaid opinions, the Company recognized these inventories as by-product inventory as at 31^st March 2020. Since, these inventories were generated over many year, making it impracticable to ascertain the actual valuation, the Company assigned a valuation to such inventories basis average selling price of similar sub-grade fines over the last 36 months as declared by indian Bureau of Mines (iBM), a Government of india organisation and as adjusted for royalty and other selling costs.

The Company has obtained all clearances including environmental clearance and clearance from Director General of Mines Safety, Government of india. Further, procedural clearances have been obtained from the State Government of odisha. With respect to the State of Jharkhand, evacuation of dumped fines from Duarguiburu lease have started in FY 2023-24 for captive use. With respect sale, the delay is procedural and the management expects to receive the clearances in due course.

the management has been able to sell off such inventories in certain locations. While, on an overall basis during the current and the previous year, there has been movement of 2.10 million tonnes in the volume of such inventories, there is significant market demand for sub-grade fines and the recent sales price trends are indicative of considerable margins over and above the carrying value of such inventories. the management also has plans to set up beneficiation plant and pellet making facilities in future that will consume significant volume of sub-grade fines annually. accordingly, in view of the management, there is no adjustment required in the carrying value of these inventories at this stage.

Considering the substantial volume of inventories, the quantity estimated to be sold/consumed within the next one year has been recognized as current and the balance has been classified as non-current inventory.

As at 31^st March 2024, the Company is carrying sub-grade iron-ore fines inventory of 40.88 MT (as at 31^st March 2023: 41.55 MT) valuing ?3932.35 crores (as at 31^st March 2023 valuing ?3995.75 crores) which includes 38.73 Mt valued at ?3749.00 crores classified as non-current inventory at its various mines.

Likewise, the Company

- at its Barsua and Dalli Mines is carrying inventory of tailings of 10.84 MT valuing ?513.57 crores (as at 31^st March 2023: 10.27 MT valuing ?491.98 crores) which includes 9.34 Mt valued at ?434.21 crores classified as non-current inventory.

- at its Bhilai, and Rourkela Steel Plants is carrying inventory of extractable iron and steel scrap embedded in BF Slag and LD Slag of 0.45 MT valuing ? 449.84 crores (as at 31^st March 2023: 0.47 MT valuing ?460.35 crores) which includes 0.41 Mt valued at ?406.42 crores classified as non-current inventory.

- at its Chandrapur Ferro Alloys Plant is carrying inventory of Granulated high manganese ore (HMnO) slag and slag fines of 0.59 MT valuing ?42.35 crores (as at 31^st March 2023: 0.52 valuing ?41.56 crores) which includes 0.53 Mt valued at ?35.66 crores classified as non-current inventory.

The Company is formulating a detailed plan for disposal/consumption of these inventories.

Considering the market volatility, steel market dynamics, possibility of future additions to steel and pellet making capacity in the country which may augment the demand of these materials, the carrying value of the non-current inventories need not be adjusted for any unforeseeable changes in the future prices. Accordingly, in view of the management, the carrying values of the aforementioned inventories are the best estimates basis the information available at this stage.

19.11 The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 27^th October, 2016 had accorded ''in-principle'' approval for Strategic Disinvestment of three units of Steel Authority of india Limited (SAiL) viz. Visvesvaraya iron & Steel Plant (ViSP), Bhadravati, Karnataka, Salem Steel Plant (SSP), Tamil Nadu and Alloy Steel Plant (ASP), West Bengal. Subsequently, in line with the "in-principle" approval of Government of india, SAiL Board in its meeting held on 9^th February, 2017, approved the Strategic Disinvestment of ASP, ViSP and SSP. The Company appointed various Advisors to carry out the process. The entire process of Strategic Disinvestment is being overseen by an inter-Ministerial Group (iMG). The iMG is chaired by Secretary, Department of Public Assets Management (DiPAM) and co-chaired by Secretary (Steel).

Preliminary information Memorandum (PiM)/Expression of interest (Eoi), Requests of ASP, SSP and ViSP were issued on 4^th July 2019 and EOi bids were opened on 10^th September 2019. EOis were received only for Salem Steel Plant (SSP) and Visveswaraya iron & Steel Plant (ViSP), Bhadravati. The existing Expression of interest of ViSP and SSP has been annulled due to lack of interest of the shortlisted bidders in proceeding further with the transaction and Alternative Mechanism has approved.

In view of the current status and the various disinvestment processes which are underway, no adjustment in these financial statements is considered necessary at this stage.

49.12 The net of unreconciled balances in iuCA (inter-unit current accounts) at the end of the year are transferred to iuCA Reserve under head other Equity (Note. No. 23). the sum of IuCA Reserve for all units of Sail is Nil.

49.13 other income includes profit on sale of obsolete Plant and Machinery (SMS-1) at one of the plant location amounting to ? 278.82 crore in the quarter ended 30^th June, 2023.

49.14 Exceptional Items includes :

(I) For the Year ended 31^st March 2024:

a. Provision for settlement of contractual disputes amounting to ? 394.39 crore under Vivad se Vishwas Scheme II.

b. Provision towards Settlement of Entry Tax dispute amounting to ? 446.45 Crore under Chhattisgarh Settlement of Arrears of Tax, Interest and Penalty Act 2023.

(II) For the year ended 31^st March, 2023:

(i) Profit on sale of fixed assets amounting to ? 301.34 crore on account of sale of a portion of land to Dedicated Freight Corridor Corporation of India Limited (DFCCIL).

(ii) An amount of ? 38.91 crore towards settlement of a long pending demand of electricity duty on Transmission & Transformation loss under One Time Settlement Scheme and an amount of ? 4.44 crore towards a dispute arising out of a contract finalized during 2000-01.

49.15 Ministry of Steel, Government of India, vide its letters dated 19^th January 2024 in exercise of the powers conferred by sub-rule (1) of Rule 20 of the Conduct, Discipline and Appeal Rules, 1977 of the Company has placed certain employees and two directors of the Company on suspension with immediate effect, on the basis of a preliminary enquiry done by the Central Vigilance Officer on allegations received with respect to certain policy/pricing decisions of the Company. While the matter is currently under investigation by external investigative agencies as per directions of the Lokpal of India vide its order dated 10^th January 2024, in view of the management, on the basis of their internal assessment, the matter is not likely to have a material impact on the operations of the Company and/or these financial results.

49.16 The Company declared interim dividends @ 10% of the paid-up equity share capital (i.e. ? 1.00 per equity share of ? 10/-each) during the Financial Year 2023-24. The Board of Directors has recommended final dividend @ ? 1/- per equity share of ? 10 each i.e.10% on the paid up share capital of the Company for the Financial Year 2023-24, subject to approval of shareholders in the ensuing Annual General Meeting of the Company.

49.17 Pursuant to SEBI Circular No. SEBI/HO/DDHS-RACPODI/P/CIR/2023/172 dated October 19, 2023, and pursuant to email communication received from NSE and BSE, details of Outstanding Qualified Borrowings and Incremental Qualified Borrowings for the financial year ended March 31,2024 are provided below:

51.7 (a) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any

other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee

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Mar 31, 2022

(i) Contractual obligations

Refer note 48.1 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(ii) Land:

(a) 6105.95 acres (6013.78 acres as on 31^st March, 2021) given on lease to various agencies/employees/ex-employees.

(b) Includes 4148.80 acres (4542.94 acres as on 31^st March, 2021) under unauthorised occupation.

(c) 1770.89 acres (1770.89 acres as on 31^st March, 2021) of land which is not in the actual possession, shown as deemed possession.

(d) ^55.03 crore is lying under deposits, in respect of land already acquired (^53.45 crores as on 31^st March, 2021) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(e) Vide Notification of acquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484E dated 13.10.2012, National Highway Authority of India Ltd. (NHAI) had acquired 34.471 acres freehold land. Also notified for acquisition by Government of Jharkhand vide Gazette notification no. 42 & 43 dated 26^th August, 2009. Matter is subjudice regarding valuation of the said land.

(f) 525.43 acres land includes 500 acres land granted by Govternment of Maharashtra under occupancy rights subject to restrictions agreed upon by the company towards payment of unearned increment on the property transfer as per agreed terms.

(g) Includes 5.51 acres freehold land out of 21.13 acres land notified for acquisition by Government of Jharkhand vide Gazette notification no. 42 & 43 dated 26^th August, 2009, are under dispute for which no compensation was fixed in favour of RDCIS-SAIL. The compensation for the balance freehold land of 15.62 acres amounting to ^13.07 crore has been considered in the accounts for the Financial Year ended 31^st March, 2020.

(h) ^0.06 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Salem during the year 2013 towards compensation payable to land losers.

(iii) Other Assets:

(a) Includes 5693 (7906 as on 31^st March, 2021), residential quarters/houses under unauthorised occupation.

(iv) Fair value

Fair value of investment properties as on 31^st March, 2022 is ^27.66 crore (^26.71 crore as on 31^st March, 2021).

(v) Estimation of fair value

The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the company considers information from a variety of sources including:

a) current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.

b) Discounted cash flow projections based on reliable estimates of future cash flows.

c) circle rate of the property as provided by State Government.

(i) On floatation of tender for sale of items of Property, Plant and Equipment, it is considered highly likely that such assets will be sold within next 12 months and such assets are treated as ''Assets classified as held for sale''

(ii) Plant & Machinery classified as held for sale during the reporting period was measured at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification. The fair value of the plant & machinery was determined using the comparable value approach. This is a level 3 measurement as per the fair value hierarchy set out in fair value measurement disclosures. The key inputs under this approach is the metal price in the market.

Nature and purpose of other reserves Capital reserve

Capital reserve is created out of the capital profit, it is created out of the profit earned from some specific transactions of capital nature. Capital reserve is not available for the distribution to the shareholders.

Securities premium reserve

Securities premium reserve represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Bond redemption reserve

the company is required to create bond redemption reserve as per the provisions of companies AcC 2013 out of the profits which are available for distribution of dividends. The reserve is maintained till the redemption of bonds.

Other Comprehensive income (OCi) reserve

the company has opted to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. these changes are accumulated within the FVoci equity investments reserve within equity. the company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

No loans have been guaranteed by the directors and others.

There is no default as on the balance sheet date in repayment of borrowings and interest thereon.

All bonds are repayable on the maturity date unless otherwise stated.

Bonds are secured, in respect of respective facilities by way of :

a) Secured by charges ranking pari-passu inter-se, on all the present and future immovable property at Mouje-Wadej of city taluka, DistrictAhmedabad, Gujarat and company''s plant & Machinery, including the land on which it stands, pertaining to IISco Steel plant (ISP).

b) Redeemable in 12 equal yearly instalments of ?14 crore each starting w.e.f 26^th October, 2014. Instalment payable on 26^th Oct, 2022 has been shown in current borrowings.

c) Redeemable on 15^th September of 2024.

d) The soft basis of the loan was drawn in 3 tranches stated as 1(a), 1(b) and 1( c) at an interest rate of 8.75% p.a. The Interest on 1(a) is 0.75% p.a and balance 8% is towards meeting Exchange fluctuation (4%) and pollution control schemes (4%). In case of 1 (b) the Interest is 0.75% p.a and balance 8.0% p.a is towards periphery development. Tranche 1(c) has been fully repaid. The principal and interest amount isrepayable half yearly. The loan is guaranteed by Government of India.

e) The loan is repayable by 2030. The principal and interest is paid half yearly, guaranteed by Government of India.

f) Terms of Repayment is to be decided by SDF management Committee.

g) Secured by charges ranking pari-pasu on the present and future movable plant and machinery of RSp to the extent of loan.

h) Redeemable in 5 equal yearly instalments starting w.e.f 25^th May, 2018. Installment payable on 25^th May, 2022 has been shown in current borrowings.

(a) Award conferred by the Prime Minister of India to the Bhilai Steel Plant as best integrated steel plant in India and the earnings from the fund are utilised for the welfare of the employees in Bhilai.

(b) Central Government grant of ^294.82 crore for the purpose of upgradation of Ispat General Hospital, Rourkela to Super Speciality Hospital. Out of ^294.82 crore, the amount equivalent to ^3.52 crore has been recognised under the head ''other income'' The Company has complied with all the conditions for such grants in line with Ind AS 20.

(iv) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Fair value of interest swap is determined based on dealer or counterparty quotes for similar instruments.

(b) fair value of forward foreign exchange contract and principal swap is determined using forward rate at balance sheet date.

(c) The carrying value of borrowings bearing variable interest rate are considered to be representative of their fair value.

(d) the carrying value of financial assets and liabilities with maturities less than 12 months are considered to be representative of their fair value.

(e) fair value of fixed interest rate financial assets and liabilities carried at amortised cost (including lease obligations) is determined by discounting the cash flows using a discount rate equivalent to market interest rate applicable to similar assets and liabilities as at the balance sheet date.

(v) unquoted investments:

fair value estimates of unquoted equity investments are included in level-3 and are based on information relating to value of investee company''s net assets. for investments in co-operative societies, the company has determined that cost is appropriate estimate of fair value, therefore, there have been no changes on account of fair values.

ii) Risk Management

the company is exposed to various risks in relation to financial instruments. the company''s financial asset and liabilities by category, are summarised in note 43 (i). the main types of risks are market risk, credit risk and liquidity risk. the company''s risk management is co-ordinated at its headquarters, in close cooperation with the Board of Directors, and focuses on actively securing the company''s short to medium-term cash flows by minimising the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns. the company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. the most significant financial risks to which the company is exposed are described below.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Comapny. The Company is exposed to this risk for various financial instruments, for example by granting loans and receivables to customers, placing deposits, etc. the company''s maximum exposure to credit risk is limited to the carrying amount of following types financial assets.

- Cash and cash equivalents

- Derivative financial instruments

- trade receivables

- other financial assets measured at amortized cost

the Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. the Company''s policy is to deal only with creditworthy counterparties.

a) Credit risk management Cash and cash equivalent

Credit risk related to cash and cash equivalents is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Derivative financial instruments

Credit risk related to derivative financial instruments is also managed by only entering into such arrangement with highly rated banks or financial institutions as counterparties. the company diversifies its holdings with multiple counterparties.

Trade receivables

credit risk related to trade receivables are mitigated by taking bank guarantees from customers where credit risk is high. the Group, its Joint Ventures & Associate closely monitors the credit-worthiness of the debtors and only sells goods to credit-worthy parties. the group''s its Joint Venture''s & Associate''s internal systems are configured to define credit limits of customers, thereby limiting the credit risk to pre-calculated amounts. other financial assets measured at amortized cost

other financial assets measured at amortized cost includes loans and advances to employees and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

Company provides expected credit losses based on the following;

Trade receivables

the company recognizes lifetime expected credit losses on trade receivables using a simplified approach and uses historical information to arrive at loss percentage relevant to each category of trade receivables.

For descriptive note on trade receivables ageing, refer note 48.4 (B) other financial assets measured at amortized cost

company provides for expected credit losses on "loan advances and other than trade receivables" by assessing individual financial instruments for expectation of any credit losses. Since, this category includes loans and receivables of varied natures and purpose, there is no trend that the company can draw to apply consistently to entire population. For such financial assets, the company''s policy is to provide for 12 month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. the company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss allowances are disclosed under each sub-category of such financial assets.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. the company takes into account the liquidity of the market in which the entity operates. In addition, the company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

C) Market Risk a) Foreign currency risk

Most of the Company''s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company''s overseas borrowing arrangements, which are primarily denominated in uS dollars (uSD).

To mitigate the company''s exposure to foreign currency risk, non-INR cash flows are monitored and forward exchange contracts are entered into in accordance with the company''s risk management policies. Generally, the company''s risk management procedures distinguish short-term foreign currency cash flows (due within 6 months) from longer-term cash flows (due after 6 months). Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no further hedging activity is undertaken. Forward exchange contracts are mainly entered into for significant long-term foreign currency exposures that are not expected to be offset by other same-currency transactions.

Sensitivity

the following table illustrates the sensitivity of profit and equity in regards to the company''s financial assets and financial liabilities and the uSD/INR exchange rate and EuR/INR exchange rate ''all other things being equal'', it assumes a /- 4.65% change of the INR/uSD exchange rate for the year ended at 31^st March, 2022 (2021: 4.69%). A /- 5.63% change is considered for the INR/EUR exchange rate (2021: 6.78%). Both of these percentages have been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis is based on the company''s foreign currency financial instruments held at each reporting date and also takes into account forward exchange contracts that offset

b) interest rate risk

The company''s policy is to minimise interest rate cash flow risk exposures on long-term financing. Long term borrowings are therefore usually at fixed rates. At 31^st March, 2022, the company is exposed to changes in market interest rates through bank borrowings at variable interest rates. Other borrowings are at fixed interest rates. The company''s investments in bonds all pay fixed interest rates. The exposure to interest rates for the company''s money market funds is considered immaterial. The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of /- 1% (2021: /- 1%). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

i) Liabilities

The Company''s policy is to minimise interest rate cash flow risk exposures on long-term financing. At 31⁵¹ March, 2022, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates.

c) Price risk Exposure

The Company is exposed to other price risk in respect of its investment shares of other Companies (see Note 8). The Company does not consider changes in value of its investments in shares as significant, therefore is not exposed to price risks on exposures outstanding on the balance sheet date.

44. Capital management

The Company''s capital management objectives are

- to ensure the Company''s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

47.2 a) The Nine Judges Constitutional Bench of Hon''ble Supreme Court, vide its judgment dated 11.11.2016, has upheld the constitutional validity of levy of Entry tax Acts enacted by various States and has laid down principles/tests for consideration for deciding the specific issues related to levy of entry tax. As on 31^st March, 2022, the matters are pending before Regular Benches of hon''ble Supreme court/Jurisdictional high courts/assigned authorities in this regard. pending decisions by the regular Benches of other courts on levy of entry tax in the States of chhattisgarh, odisha and Jharkhand, the entry tax demands under dispute of ''1092.28 crore, ''241.00 crore and ''86.23 crore respectively upto 31^st March, 2022 aggregating to ''1419.51 crore (previous year 1092.28 crore, ''241.00 crore and ''40.14 crore respectively upto 31^st March, 2021 aggregating to ''1373.42) have been treated as contingent liabilities and included in Note No. 47.1 (i) (g) above.

b) hon''ble Supreme court dismissed the SLp by the company (pertaining to Bokaro Steel plant) in respect of dispute with Damodar Valley corporation (DVc) related to provisional tariff petition of electricity charges for 200914 vide order dated 18^th January, 2017, keeping the question of law open. the order of central electricity Regulatory commission (ceRc) dt.7/8/2013 related to tariff of 2009-14 against petition No.275/GT/201 2 has been challenged before Appellate tribunal for electricity (ApteL) (appeal No.18 of 2014) in which the company has also intervened and the order of ApTEL is pending. Further, in respect of the civil appeal filed by damodar Valley corporation (DVc) pertaining to tariff of Financial Year 2004-05 to 2008-09 against the order of the Appellate tribunal for electricity (ApTEL), the hon''ble Supreme court of india dismissed the appeal vide its order dated 3^rd December, 2018 which can also have effect on future tariff orders in view of consideration of certain parameters for fixation of tariff. accordingly, State electricity regulatory commission (SERc) will finalise the retail tariff as directed by ApTEL, the financial implication of which can only be ascertained after the Tariff fixation by SERc. for the State of Jharkhand where the dispute of ''587.72 crore arises, DVc filed its retail Tariff Application in November, 2020 along with application for Annual revenue requirement before the Jharkhand State Electricity regulatory commission for the period 2006-07 to 2011-12 and also seeking adjustment of revenue Gap/ Surplus in the period of 2012-13 to 2014-15. The company has also filed their objections on 28.12.2020 to the aforesaid Application of DVc. pending fixation of such Electricity Tariffs, disputed claims of DVc of ''587.72 crore upto 31^st March, 2022 (upto 31^st March, 2021, ''587.72 crore) has been treated as contingent Liability and included in note No. 47.1(i)(f) above. Against the said claims, the entire amount has been paid to DVc and retained as advance. further from 1^st April, 2017 onwards full invoice value is being paid and charged to revenue.

47.3 under the Jharkhand Mineral Area Development Authority (Amendment) Act, 2015, the State Government of Jharkhand has made a demand of ''4690.37 crore upto 31^st March, 2022 (upto 31^st March, 2021 ''4356.65 crore) towards "Market fee" on transaction value of coal, iron and steel items. As the matter is sub-judice, the amount has been disclosed as contingent Liability in Note No. 47.1(i)(e) above.

The Mineral (Mining by Government company) rules 2015 (the "MMGc rules") were notified by GOi on 03.12.2015. Although no provision was made for realization of any money for extension of the leases in the said rules, demands for payment under the MMGc rules 2015 in respect of Duargaiburu lease of Gua, Amalgamated leases of Kiriburu-Meghahatuburu and Dhobil lease of chiria were raised by the District Mining Officer (DMO), chaibasa, Jharkhand. The collective demand for payment against the notices was about ''2980 crore. SAiL challenged the demand notices through the filing of Writ petitions in hon. high court of Jharkhand in December 2019. hon. high court vide order dated 18.12.2019/20.12.2019 stayed the operation of such demand notices. in the meantime, the Government of Jharkhand sought clarification in respect of right/claim to raising of demand under rule 5 of Mineral(Mining by Government company) rule, 2015(MMGc) from the Ministry of Mines, Govt. of india. The Ministry of Mines, GOi vide letter dated 29.01.2021 clarified MMGc rule, 2015 do not provide for payment of the additional amount for extension of mining leases granted to a Government company. pending disposal of the matter by the hon. high court of Jharkhand, an amount of ''4526.00 crores (''3810.71 crore as on 31^st March, 2021) has been disclosed as contingent liability in Note No. 47.1(i)(h) above.

47.4 in its judgement, the central Administrative Tribunal (cAT), Kolkata has directed that Ministry of Steel shall consider the aspect of payment of arrears of revised perks and allowances and take appropriate decision for payment of revised perks and allowances amounting to ''309.34 crore to the executives for the period from 26.11.2008 to 4.10.2009. Ministry of Steel intimated the matter to the company on 7.12.2016. A stay petition in the matter has been filed on 22.12.2016 and is pending before the hon''ble calcutta high court. As the matter is sub-judice, the amount has been disclosed as contingent Liability in Note No. 47.1(v) above.

47.5 indigenous washed coking coal supplies, have been claimed by central coalfields Limited (ccL) at unilaterally notified price w.e.f. 14^th January, 2017, which is in deviation from the mutually agreed price with the company for the year 2016-17. The company has accounted for the supplies based on agreed prices as per jointly signed Memorandum of Understanding, valid for supplies w.e.f. 1^st April, 2016 to 31^st March, 2017, between SAIL and CCL. The differential claim of ccL, amounting to ''137.56 crore at unilaterally notified higher rates over and above Mou rates, have been disclosed as contingent liability in Note No. 47.1(ii)(d) above.

47.6 (i) the Ministry of Environment & Forest and climate

change (MoEF& cc) vide their letter No.- 11-599/ 2014-Fc dated 1^st April 2015 issued revised Guidelines for diversion of forest Land for nonforest purpose under the Forest (conservation) Act, 1980 (Fc act). these revised guidelines stipulated that in case of existing mining leases having Forest Land (partially or fully), where approval for only a part of forest land has been obtained under the Fc Act, the central government accorded general approval under Section-2(iii) of the Fc Act for the remaining area also to be Forest Land, subject to certain conditions, which includes realising net present Value (NpV) for the entire forest land falling in the mining lease, in case NpV of such forest land has not already been realised.

in this matter, as per legal opinion obtained by the company, Section 2 (iii) of Fc act, 1980 will not apply to government corporation and NpV is required to be paid only for that limited area, which has been approved by MoEF& cc and in which mining activities are proposed to be done and not for the entire forest area. the matter of applicability of NpV for total forest land has been challenged by the company in Hon''ble High court of Jharkhand. the hon''ble court, in its order, has directed to place the matter before Division Bench of this court.

a writ petition has also been filed in the hon''ble high court of chhattisgarh against the demand of ''96.28 crore received during 2017-18 from the office of principal chief conservator of forest, chhattisgarh.

the company has deposited ''96.28 crore with principal chief conservator of Forest, chhattisgarh and a Special Leave petition has been filed in hon''ble Supreme court of india against the order of hon''ble high court of chhattisgarh. the disputed amount of ''96.28 crore has been disclosed under contingent liability in Note no.47.1.(i)(e).

(ii) chhattisgarh State enacted chhattisgarh (Adhosanrachna Vikas ewam paryaawaran) upkar Adhiniyam, 2005 and levied cess on the mineral extracted in the State of chhattisgarh. BSp has filed a writ petition in the high court of

chhattisgarh challenging the enactment as ultra vires. however, BSp has deposited of ''190.80 crore under protest till 2021-22 and shown as deposit with government Department. total disputed amount of ''190.80 crore (previous year ''168.23 crore) is disclosed under contingent liability in Note no.47. 1.(i) (e).

47.7 pursuant to the hon''ble Supreme court Judgment dated 2^nd August, 2017 in the common cause matter regarding illegal mining, demand/Show cause notices have been issued for recovery of the price of minerals produced without and beyond the environmental clearances under Section 21(5) of Mines and Mineral development Regulation Act, 1957, forest clearance under the forest conservation Act 1980, and towards excess production beyond consent to operate. the company has challenged the purported demand before the high court of Jharkhand and odisha and obtained stay on demand.

(a) As the matter is pending for final determination and considering the implication of existing litigation, the company has provided as detailed below:

(i) in respect of iron ore, by the government of odisha and government of Jharkhand amounting to ''345.03 crore and ''2573.03 crore (''311.99 crore and ''2347.52 crore as on 31^st March, 2021) respectively (including interest). Based on internal assessment, the company has provided an amount of ''329.67 crore (''378.65 crore as on 31^st March, 2021) on estimated basis. Balance amount of ''2588.39 crore (''2280.86 crore as on 31^st March, 2021) (including interest) has been treated as contingent liability in Note No. 47.1(i)(h).

(ii) in respect of FIux, by the government of Jharkhand amounting to ''52.35 crore (''51.01 crore as on 31^st March 2021) (including interest). Based on internal assessment, the company has provided an amount of ''6.86 crore (''12.20 crore as on 31^st March 2021) on estimated basis. Balance amount of ''45.49 crore (''38.81 crore as on 31^st March 2021) (including interest) has been treated as contingent liability in Note No. 47.1 (i)(h) above.

(iii) in respect of coal, by the government of Jharkhand amounting to ''675.62 crore (''595.35 crore as on 31^st March 2021) (including interest), Revision Application has been filed under Rule 55 (5) of Mineral concessions rule, 1960 read with Section 30 of Mines and Minerals (development and regulation) Act, 1957 (MMDR). the revisional Authority, Ministry of coal, has granted Stay to the Company. Accordingly pending disposal, the amount of ''675.62 crore (''595.35 crore as on 31^st March 2021) (including interest) has been treated as contingent Liability in Note No. 47.1(i)(h) above.

47.8 (a) in relation to a case pending before the Hon''ble

Delhi high court in respect of an award by arbitral Tribunal, the company is now contemplating out of court settlement. accordingly an amount of ''353.41 crore has been charged under exceptional item in the Statement of Profit and Loss for the Year ended 31^st March, 2022.

b) M/s JSC Cryogenmash have filed a case before Arbitral Tribunal in international Chamber of Commerce against SAiL/Bhilai Steel Plant for resolution of dispute arising out of contract. Arbitral Tribunal has awarded a sum of ''106.92 crores on 20.07.2018 against SAiL/Bhilai Steel plant.

Against the award, the management has filed an appeal before Hon''ble High Court at Delhi which has been admitted. Pending disposal of appeal, the sum of ''133.65 crore (including interest) has been disclosed under contingent liability in Note no 47.1(ii) (d) above.

47.9 Land measuring 5.545 acres was allotted to DVC for 30 years w.e.f. 12.07.1966 on long term lease basis. The Land was given to DVC for setting up of Electrical sub-station for ensuring supply of power for the benefit of ASP. There was no lease agreement for the subsequent period, i.e., w.e.f. 13/07/1996. in absence of any agreement, the dues receivables for the said period, could not be ascertained with reasonable certainty. The same will be accounted for in the year of settlement.

47.10 Consequent to the order of Hon''ble Odisha High Court, Company''s claim towards renewal of lease [total area of 2599.54 acre disclosed under Note No. 4.(ii) (b) ], of land at Horomoto stands rejected, except surface area of 222.54 acre for which State Govt has been directed to consider as per provisions of Law.

47.11 An award arising out of the Arbitration between M/S. Goyal Mg Gases Pvt. Ltd. (Claimant) And SAi L/Alloy Steels Plant, Durgapur (Respondent) seeking claim of ''116.86 crore, has been received on 22.05.2020, vide SCOPE, New Delhi letter dated 18.05.2020.

By the aforesaid award, Tribunal allowed claim no. 1 and 2 of the Claimant w.r.t. differential amount pertaining to transportation charges of Argon from DSP BOO Plant to ASP based upon market rate claimed by the Claimant and refund of withheld/ deducted amount by ASP from the bills of the Claimant on account of merchant market sale of Oxygen, Nitrogen and Argon respectively along with applicable interest thereon, out of the total claimed amount.

SAiL ASP is in process of taking further steps for filing a petition for setting aside the award under Section 34 of the Arbitration and Conciliation Act 1996 (the Act) before the District Court/ Commercial Court, as the issues pertain to patent illegality committed by the Tribunal while giving the award.

in view of above and based on the amount quantified by the tribunal, the net disputed liability of ''10.92 crore as on 31^st March, 2022, including interest, has been shown under Contingent Liability in Note No. 47.1(i)(b) above.

48.5 Balances of some of the Trade Receivables, Other Assets, Trade and Other Payables are subject to confirmations/ reconciliations and consequential adjustment, if any. reconciliations are carried out on on-going basis. provisions, wherever considered necessary, have been made. However, Management does not expect to have any material financial impact of such pending confirmations/reconciliations.

48.6 pursuant to the introduction of Section 115BAA under the taxation Laws (amendment) act, 2019, the company has, during the quarter ended 31^st December, 2020, opted for lower tax regime under the said Section for the financial year ended 31^st March, 2020 and onwards. consequently, the company has charged off the deferred tax assets arising due to Mat credit and restated the deferred tax assets, based on the revised effective tax rate, resulting in one time charge of ''1288.22 crore in the Statement of Profit and Loss, for the year ended 31^st March, 2021.

49.1 in accordance with ind AS 115- Revenue from Contracts with Customers'', GST amount of ''16589.94 crore (Previous Year: ''10579.84 crore) is not included in Revenue from Operations.

49.3 During the year ended 31^st March, 2022, the Company has implemented the Salaries & wages revision effective from 1^st April, 2020 after the expiry of long term wage agreement on 31^st December, 2016. Accordingly, Employees Benefit Expenses charged to Statement of Profit and Loss and Expenditure during Construction (net off of provision for wage revision) for the Year ended 31^st March, 2022 are ''837.25 crore and ''4.24 crore respectively. Further, an amount of ''567.66 Crore has been charged to the statement of profit and loss on account of revised actuarial valuation of employees related liabilities owing to implementation of wage revision.

49.4 As per the Department of Public Enterprises (DPE) guideline, the Company is required to contribute up to 30% of Salary (Basic Pay plus Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund, Gratuity, Pension and Post-Superannuation Benefits. Accordingly the Company has made provision for pension benefit for executive employees @ 9% of Salary w.e.f. 1^st January, 2007 and @3% of Salary w.e.f. 1^st April, 2015. Further, pension benefit for non-executive employees has been provided @ 6% of Salary w.e.f. 1^st January, 2012 and @2% of Salary w.e.f. 1^st April, 2015. Subsequent to wage revision, the pension benefit for non-executive employees has been provided @ 9% of Salary w.e.f. 1^st November, 2021.

Pension Scheme was approved in the Meeting of the Board of Directors held on 9^th February, 2017 with modification that from the Financial Year 2015-16 and onwards, the contribution towards Pension shall be measured, as a percentage of Profit Before Tax(PBT) to average Net-worth. if the percentage of PBT to average Net-worth is 8% or above, amount of Pension contribution shall be limited to 9% of Basic Pay plus DA for Executives and 6% of Basic Pay plus DA for Non-executive (@9% w.e.f. 1^st November, 2021), else the amount of contribution towards Pension will be reduced proportionately. However, a minimum Pension contribution shall be kept at the rate of 3% and 2 % (@3% w.e.f. 1^st November, 2021) of Basic Pay plus DA for Executive and Non-Executive employees respectively even in case of loss during a Financial Year. During the Financial Year ended 31^st March, 2022provision for Other Benefits (pension) has been made @ 9% for executives and 6% for non-executives upto to 31^st October, 2021 and @ 9% thereafter on implementation of wage revision.

The cumulative liability towards Other Benefits (including pension) for Executive and Non-executive employees, amounting to ''1076.39 crore (''577.67 crore during the Year) and ''55.77 crore (''3.45 crore during the Year) has been charged to ''Employee Benefits Expense'' and ''Expenditure during Construction'' respectively. An amount of ''1716.68 crore has been transferred to Pension Fund during the Year. Further, an amount of ''118.35 crore has been paid to retired employees during the Year and an amount of ''1.53 crore deposited by the employees for being eligible for pension.

49.5 The research and development expenditure charged to Statement of Profit and Loss and allocated to Fixed Assets/Capital work-in-progress (Net), during the Year, amount to ''742.90 crore (''340.28 crore during the previous Year) and ''71.91 crore (''23.03 crore during the previous Year) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

49.6 The Company considers the assets of one entire plant as Cash Generating Unit (CGU). The Company internally reviews whether there are any indicators that the carrying amount of assets of cgus may be impaired on each balance sheet date. if any such indicators exist, the asset recoverable amount is estimated as higher of the net selling price and the value in use. Value in use is based on present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss is recognised whenever the carrying amounts of assets of a cGu exceed the asset recoverable amount. Further to the internal assessment, the company also determines net selling price of the assets of cGu, in which any such indication exists, once every three years by an independent expert.

As on the reporting date, based on the internal assessment done by the company at its different cGus, no impairment loss is required to be provided.

49.7 (A) As per Section 135 of the companies act, 2013, the company is required to spend, in every financial year, at least

2% of the average net profits of the company made during the three immediately preceding financial years in accordance with it''s corporate Social Responsibility (cSR) policy. Based on the above, the cSR amount has been budgeted at ''80.47 crore for the year 2021-22 (previous year : ''39.44 crore). the company has spent an amount of ''94.24 crore on cSR activities during the Year (''47.18 crore during the previous Year) under the following heads:-

(B) the company has spent an amount of ''7.95 crore on construction/acquisition of asset during the year ('' Nil crore during the previous year).

(C) Excess amount spent on cSR activities to be carried forward to succeeding three financial years are ''13.77 crore (previous Year : ''7.74 crore).

(D) unspent amount transferred to ''unspent cSR account'' for the current year are '' ML crore (previous year- '' ML crore)

49.9 Information on leases as per Indian Accounting Standards (Ind AS) 116 on ''Leases'':

(I) The company has leases for Land, office building, plant & Equipment, warehouses & related facilities and vehicles. 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. Variable lease payments which do not depend on an index or a rate are excluded from the initial measurement of the lease liability and right of use assets. the company classifies its right-of-use assets in a consistent manner to its property, plant and equipment. each lease generally imposes a restriction that, unless there is a contractual right for the company to sublease the asset to another party, the right-of-use asset can only be used by the company. Some leases contain an option to extend the lease for a further term. the company is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and other premises the company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. further, the company is required to pay maintenance fees in accordance with the lease contracts.

g. The total future cash outflows as at 31^st March, 2022 for leases that had not yet commenced is of ''NIL (previous year ''NIL crore) (office premises).

Company as a lessorOperating lease as a lessor

the company has entered into lease agreements for spaces such as banks, housing societies, hospitals, mobile towers land plots and employee quarters/flats spaces, etc.

the period for such leases ranges from 11 months to 50 years depending upon terms and conditions of each lease arrangements.

(ii) Description of major leasing arrangements Power Plant

The Company has accounted for certain power plants as finance lease under Appendix C of Ind AS 17 by virtue of the power purchase agreement with the supplier. under the terms of the power purchase agreement, the company shall continue to purchase power until the parties decide to terminate the agreement, which has been determined to be an un-economic proposition considering the specialised nature and location of the asset. For any new lease treatment, treatement has been done in accordance with Ind AS 116 - Leases.

Oxygen Plant

The Company has accounted for certain oxygen plants as finance lease (or operating lease) under Appendix C of Ind AS 17 by virtue of the oxygen purchase agreement with the supplier. The agreement to purchase oxygen is a 15 year fixed term agreement. There is no change in treatment under Ind AS 116 - Leases.

Mining land

The Company has accounted for leasehold lands for mining as finance leases by virtue of its rights under the lease agreement after considering the right/ economic compulsion for renewal. There is no change in treatment under Ind AS 116 - Leases.

49.10 Contributions made in cash and kind for the period from the Financial Year 2006-07 to 2017-18 to Railway authorities for laying out railway line from Rajhara to Rowghat would be recovered in cash at the rate of 7% per annum for 37 years on total contribution towards redemption of SAIL''s contribution after commencement and fulfilment of assured traffic from Rowghat mines. Management is of view that the criteria laid out in Memorandum of Understanding will be met and interest accrues from the date of investment. The refund amount comprises principal and interest elements. Accordingly, the interest element has been computed and recognised as income during the Year amounting to ''58.07 crore (till date ''198.33 crore). As per the opinion of Expert Advisory Committee of The Institute of Chartered Accountants of India, such treatment of recognition on time proportion basis is in order as in view of the Management, no significant uncertainty exists regarding collectability and measurability of revenue.

49.11 The inventory of sub-grade iron ore fines generated at the captive mines of the Company were not assigned any value in the books of accounts of the Company till the financial year ended 31^st March 2019, since, the Government of India Notification dated 19 September 2012 prohibited all captive miners from selling such sub-grade fines.

Following the Government of India Order no. F.No.16/30/2019-M.VI dated 16^th September 2019 allowing sale of subgrade iron ore fines, the inventories of sub-grade fines held by the Company gained economic value. In this regard, the Company also obtained opinions from the Additional Solicitor General of India as well as the Expert Advisory Committee (EAC) of Institute of Chartered Accountants of India (ICAI). Based on the aforesaid opinions, the Company recognized these inventories as by-product inventory as at 31^st March 2020. Since, these inventories were generated over many years, hence, making it impracticable to ascertain the actual valuation, the Company assigned a valuation to such inventories basis average selling price of similar sub-grade fines over the last 36 months as declared by Indian Bureau of Mines (IBM), a Government of India organisation and as adjusted for royalty and other selling costs.

The Company has obtained all clearances including environmental clearance and clearance from Director General of Mines Safety, Government of India. Further, procedural clearances have been obtained from the State Government of Odisha. With respect to the State of Jharkhand, the delay in the clearances is procedural and the management expects to receive the clearances soon. This is also supported by the legal opinion taken by the Company in this regard.

As a result, the management has been able to sell off such inventories in certain locations. While, on an overall basis during the current and the previous year, there has been insignificant movement (1.04 million tonnes) in the volume of such inventories, there is significant market demand for sub-grade fines and the recent sales price trends are indicative of considerable margins over and above the carrying value of such inventories. The management also has plans to set up a beatification plant in future that will consume significant volume of sub-grade fines annually. accordingly, in view of the management, there is no adjustment required in the carrying value of these inventories at this stage.

considering the substantial volume of inventories, the quantity estimated to be sold / consumed within the next one year has been recognized as current and the balance has been classified as non-current inventory (refer notes 7a and 15).

As at 31^st March2022, the company is carrying sub-grade iron-ore fines inventory of 41.94 Mt (as at 31^st march 2021: 42.60 Mt) valuing ?4034.95 crores (as at 31^st march 2021 valuing ?4089.03 crores) which includes 39.24 Mt valued at ?3786.62 crores classified as non-current inventory at its various mines.

Likewise, the Company at its Barsua and Dalli Mines is also carrying inventory of tailings of 7.44 Mt (as at 31^st March 2021: 8.68 Mt) valuing ?382.66 crores (as at 31^st March 2021 valuing ?492.41 crores) which includes 6.41 Mt valued at ?331.25 crores classified as non-current inventory as at 31^st march 2022. Further, the Company at its Bhilai, Bokaro, Rourkela and Durgapur Steel Plants is also carrying inventory of extractable iron and steel scrap embedded in BF Slag and LD Slag of 0.49 Mt (as at 31^st March 2021 : 0.57 Mt) valuing ? 507.10 crores (as at 31^st March 2021 valuing ?438.63 crores) which includes 0.44 Mt valued at ?441.29 crores classified as non-current inventory as at 31^st march 2022. The Company is formulating a detailed plan for disposal / consumption of these inventories.

Considering the market volatility, steel market dynamics, possibility of future additions to steel and pellet making capacity in the country which may augment the demand of these materials, the carrying value of the non-current inventories cannot be adjusted for any unforeseeable changes in the future prices. Accordingly, in view of the management, the carrying values of the aforementioned inventories are the best estimates basis the information available at this stage.

49.12 The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 27^th October, 2016 had accorded ''in-principle'' approval for Strategic Disinvestment of three units of Steel Authority of India Limited (SAIL) viz. Visvesvaraya Iron & Steel Plant (VISP), Bhadravati, Karnataka, Salem Steel Plant (SSP), Tamil Nadu and Alloy Steel Plant (ASP), West Bengal. Subsequently, in line with the "in-principle" approval of Government of India, SAIL Board in its meeting held on 9^th February, 2017, approved the Strategic Disinvestment of ASP, VISP and SSP. The Company appointed various Advisors to carry out the process. The entire process of Strategic Disinvestment is being overseen by an Inter-Ministerial Group (IMG). The IMG is chaired by Secretary, Department of Public Assets Management (DIPAM) and co-chaired by Secretary (Steel).

Preliminary Information Memorandum (PIM) / Expression of Interest (EoI), Requests of ASP, SSP and VISP were issued on 4^th July, 2019. The Transaction Advisor, M/s SBICAPs has informed that, in case of ASP, no EOIs were received from prospective bidders upto the scheduled date. The EOIs of SSP and VISP were opened on 10^th September, 2019. The Request for Proposal (RFP), Confidential Information Memorandum (CIM) and Business Transfer Agreement (BTA) have been issued to the short-listed bidders and due diligence is ongoing by the short-listed bidders.

49.13 The Company has proposed final dividend @22.5% of the paid-up equity share capital (i.e. ''2.25 per equity share of ''10/-each) for the Financial Year 2021-22 subject to approval of the Shareholders in the ensuing Annual General Meeting of the Company.

49.14 The Company disintegrated its Raw Materials Division (''the Division'') on 1^st July, 2021 and accordingly, the balances as at 30^th June 2021 were merged with the Rourkela Steel Plant, Bokaro Steel Plant and Bhilai Steel Plant of the Company.

These standalone financial statements include the financial information of the aforesaid Division which reflect total revenues of ?374.07 crores (excluding intra-company stock transfers of ?1443.41 crores), total expenses of ?1702.92 crores, total net profit after tax of ?114.56 crores and total comprehensive income of ?110.68 crores for the quarter ended 30^th June 2021 which were subjected to a limited review by the erstwhile auditors of the Division and have now been audited by the joint statutory auditors/ auditors of the plants for the purpose of reporting on the complete set of standalone financial statements of the Company. Further, the total assets of ?7448.85 crores and total liabilities of ?4034.45 crores as at 30^th June 2021 were transferred to the aforesaid plants and are included in the balances of these plants as at 31^st March 2022, which have been audited by the auditors of the respective plants.

However, the Company is in the process of referring the matter to the Comptroller and Auditor General of India for the appointment of auditors of the Division as required under Section 139 (5) of the Companies Act, 2013.

49.15 The COVID-19 pandemic outbreak and measures to curtail it had caused significant disturbances and slow down of economic activities. Following the gradual normalization of economic activities, and positive economic environment seen across sectors, the management is of the belief that the trend is likely to continue in subsequent periods as well and the impact of COVID-19, if any, is not likely to be material.

49.16 The company is in the process of reconciliation of Goods Receipt/invoice Receipt (GR/IR) accounts (grouped under "Trade payables/payable for capital Works", Note No. 30/31) at one of the plant locations. the balance outstanding as on 31^st March 2022 is ?101.54 crore (31^st March 2021 - ? 304.08 crore). As part of the reconciliation process, the Plant has written back an amount of ?186.16 crore and credited the same to the Statement of Profit and Loss under the head "Write back of Other liabilities" (Note No. 36).

51.7 (a) No funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any

other sources or kind of funds) by the company to or in any person(s) or entity(ies), including foreign entities (''the intermediaries''), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (''the Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries.

(b) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (''the Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (''Ultimate Beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.Ratios as per Amended Schedule iii.

53. The figures of previous periods have been re-grouped, wherever necessary, so as to conform to the current periods classification.

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Mar 31, 2021

(i) Contractual obligations

Refer note 48.1 for disclosure of contractual commitments for the acquisition of property, plant and equipment.

(ii) Land:

(a) Includes 66,204.50 acres (66,865.29 acres as on 31“ March, 2020) owned/possessed/taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(b) Includes 34,484.73 acres (34,484.73 acres as on 31^a March, 2020) in respect of which title is under dispute.

(c) 12,908.72 acres (10,664.83 acres as on 31“ March, 2020) transferred/agreed to be transferred or made available for settlement to various Joint Ventures/Central/ State/ SemiGovernment authorities, in respect of which conveyance deeds remain to be executed/registered.

(d) 6,013.78 acres (5,775.25 acres as on 31^a March, 2020) given on lease to various agencies/employees/ex-employees.

(e) Includes 4,542.94 acres (4,542.94 acres as on 31“ March, 2020) under unauthorised occupation.

(f) 1,770.89 acres (1,770.89 acres as on 31^a March, 2020) of Land which is not in the actual possession, shown as deemed possession.

(g) ? 53.45 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(h) Vide Notification of Acquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484E dated 13.10.2012, National Highway Authority of India Ltd.(NHAI) had notified its intention to acquire 34.471 acres.

(i) Includes 34.471 acres freehold land notified for acquisition by Government of Jharkhand vide Gazette notification no. 42 & 43 dated 26^th August, 2009, matter is subjudice regarding valuation of the said land.

(j) Includes 5.51 acres freehold land out of 21.13 acres land notified for acquisition by Government of Jharkhand vide Gazette notification no. 42 & 43 dated 26^th August, 2009, are under dispute for which no compensation was fixed in favour of RDCIS-SAIL. The compensation for the balance freehold land of 15.62 acres amounting to ?13.07 crore has been considered in the accounts for the Financial Year ended 31^a March, 2020.

(k) ?0.06 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Salem during the year 2013 towards compensation payable to land losers.

(iii) Other Assets:

(a) Includes 7,906 (6,658 as on 31^a March, 2020), residential quarters/houses under unauthorised occupation.

(iv) Fair value

Fair value of Investment properties as on 31^st March, 2021 is ?26.71 crore (?32.15 crore as on 31^st March, 2020).

(v) Estimation of fair value

The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:

a) Current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.

b) Discounted cash flow projections based on reliable estimates of future cash flows.

c) Circle rate of the property as provided by State Government.

The Company is having accumulated business losses of ?17395.33 crore (previous year - ?29076.64 crore) [including accumulated unabsorbed depreciation of ?13834.78 crore (previous year - ?21537.70 crore)] as on 31^st March, 2021 as per the provisions of the Income Tax Act, 1961. The unabsorbed business losses amounting to ?3560.55 crore (previous year - ?7538.93 crore) are available for offset for maximum period of eight years from the incurrence of loss.

Accordingly, deferred tax asset of ?896.12 crores on acccumulated business losses (inlcuding nil during the year ended 31^st March, 2021) has been recognised as on 31^st March, 2021 in line with IND AS 12.

(i) On floatation of tender for sale of items of Property, Plant and Equipment, it is considered highly likely that such assets will be sold within next 12 months and such assets are treated as Assets classified as held for sale''.

(ii) Plant & Machinery classified as held for sale during the reporting period was measured at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification. The fair value of the plant & machinery was determined using the comparable value approach. This is a level 3 measurement as per the fair value hierarchy set out in fair value measurement disclosures. The key inputs under this approach is the metal price in the market.

Capital reserve

Capital reserve is created out of the capital profit, it is created out of the profit earned from some specific transactions of capital nature. Capital reserve is not available for the distribution to the shareholders.

Securities premium reserve

Securities premium reserve represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

Bond redemption reserve

The Company is required to create bond redemption reserve as per the provisions of Companies Act, 2013 out of the profits which are available for distribution of dividends. The reserve is maintained till the redemption of bonds.

Other Comprehensive Income (OCI) reserve

The Company has opted to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised.

a) Secured by charges ranking pari-passu inter-se, on all the present and future immovable property at Mouje-Wadej of City taluka, District Ahmedabad, Gujarat and Company''s Plant & Machinery, including the land on which it stands, pertaining to IISCO Steel Plant (ISP).

b) Redeemable in 12 equal yearly instalments of ?14 crore each starting w.e.f 26^th October, 2014. Instalment payable on 26^th Oct, 2021 has been shown in Other Current Liabilities.

c) Redeemable in 3 equal instalments of ?50 crore each on 15^th September of 2014, 2019 and 2024.

d) The soft basis of the loan was drawn in 3 tranches stated as 1(a), 1(b) and 1( c) at an interest rate of 8.75% p.a. The Interest on 1(a) is 0.75% p.a and balance 8% is towards meeting Exchange fluctuation (4%) and Pollution control schemes (4%). In case of 1 (b) the Interest is 0.75% p.a and balance 8.0% p.a is towards periphery development. The Interest on 1(c) is 3.66% p.a and the balance 5.09% p.a is towards meeting periphery development. The principal and interest is repayable half yearly. The loan is guaranteed by Government of India.

e) The loan is repayable by 2030. The principal and interest is paid half yearly, guaranteed by Government of India.

f) Terms of Repayment is to be decided by SDF management Committee.

g) Secured by charges ranking pari-pasu on the present and future movable plant and machinery of BSL, BSP and RSP to the extent of loan. SBIECB loan is repayable in 4 equal installments at the end of 4^th, 5^th, 6^th and 7^th from the first draw-down i.e. 25^th Sept 2017.

h) Redeemable in 5 equal yearly instalments starting w.e.f 25^th May, 2018. Installment payable on 25^th May, 2021 has been shown in current liabilities.

(a) award conferred by the Prime Minister of India to the Bhilai Steel Plant as best integrated steel plant in India and the earnings from the fund are utilised for the welfare of the employees in Bhilai.

(b) Central Government grant of ?294.82 crore (?139.99 crore received during 2020-21 and ?144.83 crores in 2019-20), against sanctioned budgetory provision of ?294.82 crore for the purpose of upgradation of Ispat General Hospital, Rourkela to Super Speciality Hospital. The Company has complied with all the conditions for such grants with in line with Ind AS 20.

i) Fair values hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are categorized into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

(iv) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Fair value of interest swap is determined based on dealer or counterparty quotes for similar instruments

(b) Fair value of forward foreign exchange contract and principal swap is determined using forward rate at balance sheet date.

(c) The carrying value of borrowings bearing variable interest rate are considered to be representative of their fair value.

(d) The carrying value of financial assets and liabilities with maturities less than 12 months are considered to be representative of their fair value.

(e) Fair value of fixed interest rate financial assets and liabilities carried at amortised cost (including lease obligations) is determined by discounting the cash flows using a discount rate equivalent to market interest rate applicable to similar assets and liabilities as at the balance sheet date.

(v) Unquoted investments:

Fair value estimates of unquoted equity investments are included in level-3 and are based on information relating to value of investee Company''s net assets. For investments in co-operative societies, the Company has determined that cost is appropriate estimate of fair value, therefore, there have been no changes on account of fair values.

ii) Risk Management

The Company is exposed to various risks in relation to financial instruments. The Company''s financial asset and liabilities by category, are summarised in note 43 (i). The main types of risks are market risk, credit risk and liquidity risk. The Company''s risk management is co-ordinated at its headquarters, in close cooperation with the Board of Directors, and focuses on actively securing the Company''s short to medium-term cash flows by minimising the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns. The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company is exposed are described below.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Comapny. The Company is exposed to this risk for various financial instruments, for example by granting loans and receivables to customers, placing deposits, etc. The Company''s maximum exposure to credit risk is limited to the carrying amount of following types financial assets.

- Cash and cash equivalents

- Derivative financial instruments

- Trade receivables

- Other financial assets measured at amortized cost

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. The Company''s policy is to deal only with creditworthy counterparties.

a) Credit risk management Cash and cash equivalent

Credit risk related to cash and cash equivalents is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Derivative financial instruments

Credit risk related to derivative financial instruments is also managed by only entering into such arrangement with highly rated banks or financial institutions as counterparties. The company diversifies its holdings with multiple counterparties.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees from customers where credit risk is high. The Company closely monitors the credit-worthiness of the debtors and only sells goods to credit-worthy parties. The Company''s internal systems are configured to define credit limits of customers, thereby limiting the credit risk to pre-calculated amounts.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

Company provides expected credit losses based on the following;

Other financial assets measured at amortized cost

Company provides for expected credit losses on "loan advances and other than trade receivables" by assessing individual financial instruments for expectation of any credit losses. Since, this category includes loans and receivables of varied natures and purpose, there is no trend that the Company can draw to apply consistently to entire population. For such financial assets, the Company''s policy is to provide for 12 month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss based impairment recognised on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.

) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyse the company''s financial liabilities into relevant maturity companying based on their contractual maturities for all non-derivative financial liabilities and the amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

C) Market Risk a) Foreign currency risk

Most of the Company''s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company''s overseas borrowing arrangements, which are primarily denominated in US dollars (USD). To mitigate the Company''s exposure to foreign currency risk, non-INR cash flows are monitored and forward exchange contracts are entered into in accordance with the Company''s risk management policies. Generally, the Company''s risk management procedures distinguish short-term foreign currency cash flows (due within 6 months) from longer-term cash flows (due after 6 months). Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no further hedging activity is undertaken. Forward exchange contracts are mainly entered into for significant long-term foreign currency exposures that are not expected to be offset by other same-currency transactions.

Sensitivity

The following table illustrates the sensitivity of profit and equity in regards to the Company''s financial assets and financial liabilities and the USD/INR exchange rate and EUR/INR exchange rate ‘all other things being equal''. It assumes a /- 4.69% change of the INR/USD exchange rate for the year ended at 31 March, 2021 (2020: 5.45%). A /- 6.78% change is considered for the INR/EUR exchange rate (2020: 7.57%). Both of these percentages have been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis is based on the Company''s foreign currency financial instruments held at each reporting date and also takes into account forward exchange contracts that offset effects from changes in currency exchange rates.

b) Interest rate risk

The Company''s policy is to minimise interest rate cash flow risk exposures on long-term financing. Long term borrowings are therefore usually at fixed rates. At 31^st March, 2021, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates. Other borrowings are at fixed interest rates. The Company''s investments in bonds all pay fixed interest rates. The exposure to interest rates for the Company''s money market funds is considered immaterial. The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of /- 1% (2020: /-1%). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

44: CAPITAL MANAGEMENT

The Company''s capital management objectives are

- to ensure the Company''s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet. Management assesses the Company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Company''s various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

47.2 a) (i) The Nine Judges Constitutional Bench of Hon''ble Supreme Court, vide its judgment dated 11.11.2016, has upheld the constitutional validity of

levy of Entry Tax Acts enacted by various States and has laid down principles/tests for consideration for deciding the specific issues related to levy of Entry Tax. As on 31^st March, 2021, the matters are pending before Regular Benches of Hon''ble Supreme Court/Jurisdictional High Courts/assigned authorities in this regard. Pending decisions by the regular Benches of other Courts on levy of Entry Tax in the States of Chhattisgarh, Odisha and Jharkhand, the Entry Tax demands under dispute of ''1092.28 crore, ''241.00 crore and ''40.14 crore respectively upto 31^st March, 2021 aggregating to ''1373.42 crore (previous year ''1092.28 crore, ''241.00 crore and ''40.14 crore respectively aggregating to ''1373.42 crore upto 31^st March, 2020) have been treated as contingent liabilities.

(ii) The West Bengal Finance Act, 2017 has included WB Entry Tax in the jurisdiction of West Bengal Taxation Tribunal. Further, Hon''ble Calcutta High Court, vide its Order dated 15^th June, 2018, transmitted the Writ Petition of DSP ISP CMO, ASP and SAIL Growth Works, Kulti on Entry Tax to the West Bengal Taxation Tribunal. During the Financial Year 2020-21, the Company has deposited an amount of ''160.80 crore under the Settlement of Dispute, 2020 scheme brought by Directorate of Commercial Taxes, Government of West Bengal for settling entry tax disputes.

b) Hon''ble Supreme Court dismissed the SLP by the Company (pertaining to Bokaro Steel Plant) in respect of dispute with Damodar Valley

Corporation(DVC) related to provisional tariff petition of electricity charges for 2009-14 vide order dated 18^th January, 2017, keeping the question of law open. The Order of Central Electricity Regulatory Commission (CERC) dt.7/8/2013 related to Tariff of 2009-14 against Petition No.275/GT/2012 has been challenged before Appellate Tribunal for Electricity (APTEL) (Appeal No.18 of 2014) in which the Company has also intervened and the order of APTEL is pending. Further, in respect of the civil appeal filed by Damodar Valley Corporation (DVC) pertaining to tariff of Financial Year 2004-05 to 2008-09 against the order of the Appellate Tribunal for Electricity (APTEL), the Hon''ble Supreme Court of India dismissed the appeal vide its Order dated 3^rd December, 2018 which can also have effect on future tariff orders in view of consideration of certain parameters for fixation of tariff. Accordingly, State Electricity Regulatory Commission (SERC) will finalise the retail tariff as directed by APTEL, the financial implication of which can only be ascertained after the Tariff fixation by SERC. For the State of Jharkhand where the dispute of ''587.72 crore arises, DVC filed its Retail Tariff Application in November, 2020 along with application for Annual Revenue Requirement before the Jharkhand State Electricity Regulatory Commission for the period of 2006-07 to 2011-12 and also seeking adjustment of Revenue Gap/Surplus in the period of 2012-13 to 2014-15. The Company has also filed their objections on 28.12.2020 to the aforesaid Application of DVC. Pending fixation of such Electricity Tariffs, disputed claims of DVC of ''587.72 crore upto 31^st March, 2021 (upto 31^st March, 2020, ''587.72crore) has been treated as Contingent Liability and included in Note No. 47.1(i)(f) above. Against the said claims, the entire amount has been paid to DVC and retained as advance. Further from 1^st April, 2017 onwards full invoice value is being paid and charged to revenue.

47.3 Under the Jharkhand Mineral Area Development Authority (Amendment) Act, 2015, the State Government of Jharkhand has made a demand of ''4356.65 crore upto 31^st March, 2021 (upto 31^st March, 2020 ''4028.18 crore) towards “Market Fee” on transaction value of coal, iron and steel items. As the matter is sub-judice, the amount has been disclosed as Contingent Liability in Note No. 47.1(i)(e) above.

47.4 In its judgement, the Central Administrative Tribunal (CAT), Kolkata has directed that Ministry of Steel shall consider the aspect of payment of arrears of revised perks and allowances and take appropriate decision of payment of revised perks and allowances amounting to ''325.13 crore to the executives for the period 26.11.2008 to 4.10.2009. Ministry of Steel intimated the matter to the Company on 7.12.2016. A stay petition in the matter has been filed on 22.12.2016 and is pending before the Hon''ble Calcutta High Court. As the matter is sub-judice, the amount has been disclosed as Contingent Liability in Note No. 47.1(v) above.

47.5 Indigenous washed coking coal supplies, have been claimed by Central Coalfields Limited (CCL) at unilaterally notified price w.e.f. 14^th January, 2017, which is in deviation from the mutually agreed price with the Company for the year 2016-17. The Company has accounted for the supplies based on agreed prices as per jointly signed Memorandum of Understanding, valid for supplies w.e.f. 1^st April, 2016 to 31^st March, 2017, between SAIL and CCL. The differential claim of CCL, amounting to ''148.07 crore at unilaterally notified higher rates over and above MOU rates, have been disclosed as contingent liability in the Note No. 47.1(ii)(d) above.

47.6 (i) The Ministry of Environment & Forest and Climate Change (MoEF& CC) vide their letter No.- 11-599/ 2014-FC dated 1^st April 2015 issued revised

Guidelines for diversion of Forest Land for non-forest purpose under the Forest (Conservation) Act, 1980 (FC Act). These revised Guidelines stipulated that in case of existing mining leases having Forest Land (partially or fully), where approval for only a part of forest land has been obtained under the FC Act, the Central Government accorded general approval under Section-2(iii) of the FC Act for the remaining area also to be Forest Land, subject to certain conditions, which includes realising Net Present Value (NPV) for the entire forest land falling in the mining lease, in case NPV of such forest land has not already been realised.

In this matter, as per legal opinion obtained by the Company, Section 2 (iii) of FC Act, 1980 will not apply to Government Corporation and NPV is required to be paid only for that limited area, which has been approved by MoEF& CC and in which mining activities are proposed to be done and not for the entire forest area. The matter of applicability of NPV for total forest land has been challenged by the Company in Hon''ble High Court of Jharkhand. The Hon''ble Court, in its order, has directed to place the matter before Division Bench of this Court.

A writ petition has also been filed in the Hon''ble High Court of Chhattisgarh against the demand of ''96.28 crore received during 2017-18 from the Office of Principal Chief Conservator of Forest, Chhattisgarh.

The Company has deposited ''96.28 crore with Principal Chief Conservator of Forest, Chhattisgarh and a Special Leave Petition has been filed in Hon''ble Supreme Court of India against the order of Hon''ble High Court of Chhattisgarh. The disputed amount of ''96.28 crore has been dis closed under contingent liability in Note no.47.1.(i)(e).

(ii) Chhattisgarh State enacted Chhattisgarh (Adhosanrachna Vikas ewam Paryaawaran) Upkar Adhiniyam, 2005 and levied Cess on the mineral extracted in the State of Chhattisgarh. BSP has filed a writ petition in the High Court of Chhattisgarh challenging the enactment as ultra vires. However, BSP has deposited of ''168.23 crore under protest till 2020-21 and shown as deposit with Government Department. Total disputed amount of ''168.23 crore (previous year ''148.39 crore) is disclosed under contingent liability in Note no.47. 1.(i) (e).

47.7 Pursuant to the Hon''ble Supreme Court Judgment dated 2^nd August, 2017 in the Common Cause matter regarding illegal mining, demand/Show cause notices have been issued for recovery of the price of minerals produced without and beyond the environmental clearances under Section 21(5) of Mines and Mineral Development Regulation Act, 1957, forest clearance under the Forest Conservation Act 1980, and towards excess production beyond consent to operate. The Company has challenged the purported demand before the High Court of Jharkhand and Odisha and obtained stay on demand.

(a) As the matter is pending for final determination and considering the implication of existing litigation, the Company has provided as detailed below:

(i) In respect of Iron Ore, by the Government of Odisha and Government of Jharkhand amounting to ''311.99 crore and ''2347.52 crore (''278.94 crore and ''2057.97 crore as on 31^st March, 2020) respectively (including interest). Based on internal assessment, the Company has provided an amount of ''378.65 crore (''363.58 crore as on 31^st March, 2020) on estimated basis. Balance amount of ''2280.86 crore (''1973.33 crore as on 31^st March, 2020) (including interest) has been treated as contingent liability in Note No. 47.1(i)(h).

(ii) In respect of Flux, by the Government of Jharkhand amounting to ''51.01 crore (''29.47 crore as on 31st March 2020) (including interest). Based on internal assessment, the Company has provided an amount of ''12.20 crore (''10.56 crore as on 31^st March 2020) on estimated basis. Balance amount of ''38.81 crore (''18.91 crore as on 31^st March 2020) (including interest) has been treated as contingent liability in Note No. 47.1(i)(h) above.

(b) In respect of Coal, by the Government of Jharkhand amounting to ''595.35 crore (''515.08 crore as on 31^st March 2020) (including interest), Revision Application has been filed under Rule 55 (5) of Mineral Concessions Rule, 1960 read with Section 30 of Mines and Minerals (Development and Regulation) Act, 1957 (MMDR). The Revisional Authority, Ministry of Coal, has granted Stay to the Company. Accordingly pending disposal, the amount of ''595.35 crore (''515.08 crore as on 31^st March 2020) (including interest) has been treated as Contingent Liability in Note No. 47.1(i)(h) above.

47.8 a) M/s Tata Projects Limited (TPL) & M/s Danieli Corus BV (DC)(in consortium) have filed a case before Arbitral Tribunal in International Chamber of

Commerce vide case No-22326/PTA against SAIL/Rourkela Steel Plant for resolution of dispute arising out of contract No. P/PROJ/643(10)/79001/08049126 dtd 01.10.2008. Arbitral Tribunal has awarded a sum of ''626.02 crores on 16-May-2018 against SAIL/Rourkela Steel Plant.

Against the award, the management has filed an appeal before Hon''ble High Court at Delhi which has been admitted. Pending disposal of appeal, management has deposited ''300 Crores with Hon''ble High Court at Delhi (Refer Note No. 20). The sum of ''962.51 cores (''834.53 crore as on 31st March, 2020) (including interest) has been disclosed under contingent liability in Note No. 47.1(ii)(c) above.

b) M/s JSC Cryogenmash have filed a case before Arbitral Tribunal in International Chamber of Commerce against SAIL/Bhilai Steel Plant for resolution of dispute arising out of contract. Arbitral Tribunal has awarded a sum of ''106.92 crores on 20.07.2018 against SAIL / Bhilai Steel plant.

Against the award, the management has filed an appeal before Hon''ble High Court at Delhi which has been admitted. Pending disposal of appeal, the sum of ''129.98 crore (including interest) has been disclosed under contingent liability in Note no 47.1(ii) (d) above.

47.9 Land measuring 5.545 acres was allotted to DVC for 30 years w.e.f. 12.07.1966 on long term lease basis. The Land was given to DVC for setting up of Electrical sub-station for ensuring supply of power for the benefit of ASF! There was no lease agreement for the subsequent period, i.e., w.e.f. 13/07/1996. In absence of any agreement, the dues receivables for the said period, could not be ascertained with reasonable certainty. The same will be accounted for in the year of settlement.

47.10 Consequent to the order of Hon''ble Odisha High Court, Company''s claim towards renewal of lease [total area of 2599.54 acre disclosed under Note No. 4.(ii) (b) ], of land at Horomoto stands rejected, except surface area of 222.54 acre for which State Govt has been directed to consider as per provisions of Law.

47.11 An award arising out of the Arbitration between M/S. Goyal Mg Gases Pvt. Ltd. (Claimant) And SAIL/Alloy Steels Plant, Durgapur (Respondent) seeking claim of ''116.86 Crore, has been received on 22.05.2020, vide SCOPE, New Delhi letter dated 18.05.2020.

By the aforesaid award the Tribunal allowed claim no. 1 and 2 of the Claimant w.r.t. differential amount pertaining to transportation charges of Argon from DSP BOO Plant to ASP based upon market rate claimed by the Claimant and refund of withheld/ deducted amount by ASP from the bills of the Claimant on account of merchant market sale of Oxygen, Nitrogen and Argon respectively along with applicable interest thereon out of the total claimed amount.

SAIL ASP is in process of taking further steps for filing a petition for setting aside the award under Section 34 of the Arbitration and Conciliation Act 1996 (the Act) before the District Court/ Commercial Court, as the issues pertain to patent illegality committed by the Tribunal while giving the award.

In view of above and based on the amount quantified by the tribunal, the net disputed liability of ''7.06 crore as on 31st March 2021, including interest, has been booked under Contingent Liability in Note No. 47.1(i)(b) above.

48.3 Balances of some of the Trade Receivables, Other Assets, Trade and Other Payables are subject to confirmations/reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made. However, Management does not expect to have any material financial impact of such pending confirmations/reconciliations.

48.4 Pursuant to the introduction of Section 115BAA under the Taxation Laws (Amendment) Act, 2019, the Company has, during the year, opted for lower tax regime under the said Section for the financial year ended 31^st March, 2020 and onwards. Consequently, the Company has charged off the Deferred Tax Assets arising due to MAT credit and restated the Deferred Tax Assets, based on the revised effective tax rate, resulting in one time charge of ''1288.22 crore in the Statement of Profit and Loss, for the year ended 31^st March, 2021.

49.1 In accordance with Ind AS 115- Revenue from Contracts with Customers'', GST amount of ''10579.84 crore (Previous Year: ''9929.08 crore) is not included in Revenue from Operations.

49.3 The long-term agreement for wage revision expired on 31^st December, 2016. Keeping in view the affordability and financial sustainability clause in the Office Memorandums dated 3^rd August, 2017 and 24^th November, 2017 issued by the Government of India, Ministry of Heavy Industries & Public Enterprises in respect of Pay Revision of employees, the Company fulfils the criteria for implementation of wage revision w.e.f. 1^st April, 2020. Accordingly, pending finalisation/fresh agreement, an all-inclusive provision towards salaries and wages revision of ''1145.71 crore and ''10.11 crore have been charged to Statement of Profit and Loss and Expenditure during Construction respectively, on estimated basis.

49.4 As per the Department of Public Enterprises (DPE) guideline, the Company is required to contribute up to 30% of Salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund, Gratuity, Pension and Post-Superannuation Benefits. Accordingly the Company has made provision for pension benefit for executive employees @ 9% of Salary w.e.f. 1^st January, 2007 and 3% of Salary w.e.f. 1^st April, 2015. Further, pension benefit for non-executive employees has been provided @ 6% of Salary w.e.f. 1^st January, 2012 and 2% of Salary w.e.f. 1^st April, 2015.

Pension Scheme was approved in the Meeting of the Board of Directors held on 9^th February, 2017 with modification that from the Financial Year 2015-16 and onwards, the contribution towards Pension shall be measured, as a percentage of Profit Before Tax(PBT) to average Net-worth. If the percentage of PBT to average Net-worth is 8% or above, amount of Pension contribution shall be limited to 9% of Basic Pay plus DA for Executives and 6% of Basic Pay plus DA for Non-executive, else the amount of contribution towards Pension will be reduced proportionately. However, a minimum Pension contribution shall be kept at the rate of 3% and 2 % of Basic Pay plus DA for Executive and Non-Executive employees respectively even in case of loss during a Financial Year. Since the profit earned by the Company during the Financial Year ended 31^st March, 2021 is more than 8% of average Net-worth, provision for Other Benefits (pension) has been made @ 9% and 6% (of Basic Pay plus DA) w.e.f. 1^st April, 2020 respectively for Executive and Non-executive employees.

The cumulative provision/liability towards Other Benefits (including pension) for Executive and Non-executive employees, amounting to ''2251.72 crore (''389.76 crore during the year) and ''52.32 crore (''2.40 crore during the year) has been charged to ''Employee Benefits Expense'' and ''Expenditure during Construction'' respectively. An amount of ''694.19 crore has been transferred to Pension Fund during the Financial Year 2020-21. Further, an amount of ''201.69 crore has been paid to retired employees during the year and an amount of ''1.32 crore deposited by the employees for being eligible for pension.

49.6 The Company considers the assets of one entire plant as Cash Generating Unit (CGU). The Company has internally reviewed whether there are any indicators that the carrying amount of its assets of CGUs may be impaired on each balance sheet date. If any such indicators exist, the asset recoverable amount is estimated as higher of the net selling price and the value in use. Value in use is based on present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss is recognised whenever the carrying amounts of assets of a CGU exceed the asset recoverable amount. Further to the internal assessment, the Company also determines net selling price of the assets of CGU, in which any such indication exists, once every three years by an independent expert.

Based on the internal assessment done by the Company at its different CGUs as per the accounting policy of the Company, no impairment loss is required to be provided.

49.9 Central Government grant of ''294.82 Crore has been received up to 31^st March, 2021 against sanctioned budgetary provision of ''294.82 crore for the purpose of up gradation of Ispat General Hospital, Rourkela to a Super Speciality Hospital and has been presented as a line item in the Balance Sheet under the head "Other Liabilities- Deferred Income".

49.10 Information on leases as per Indian Accounting Standards (Ind AS) 116 on ''Leases'':

(I) The Company has leases for Land, office building, Plant & Equipment, warehouses & related facilities and vehicles. 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. Variable lease payments which do not depend on an index or a rate are excluded from the initial measurement of the lease liability and right of use assets. The Company classifies its right-of-use assets in a consistent manner to its Property, plant and equipment.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used by the Company. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and other premises the Company must keep those properties in a good state of repair and return the properties in their original condition at the end of the lease. Further, the Company is required to pay maintenance fees in accordance with the lease contracts.

(II) Description of major leasing arrangements Power Plant

The Company has accounted for certain power plants as finance lease under Appendix C of Ind AS 17 by virtue of the power purchase agreement with the supplier. Under the terms of the power purchase agreement, the Company shall continue to purchase power until the parties decide to terminate the agreement, which has been determined to be an un-economic proposition considering the specialised nature and location of the asset. There is no change in treatment under Ind AS 116 - Leases.

Oxygen Plant

The Company has accounted for certain oxygen plants as finance lease (or operating lease) under Appendix C of Ind AS 17 by virtue of the oxygen purchase agreement with the supplier. The agreement to purchase oxygen is a 15 year fixed term agreement. There is no change in treatment under Ind AS 116 - Leases.

Mining land

The Company has accounted for leasehold lands for mining as finance leases by virtue of its rights under the lease agreement after considering the right/ economic compulsion for renewal. There is no change in treatment under Ind AS 116 - Leases.

49.11 Contributions made in cash and kind for the period from the Financial Year 2006-07 to 2017-18 to Railway authorities for laying out railway line from Rajhara to Rowghat would be recovered in cash at the rate of 7% per annum for 37 years on total contribution towards redemption of SAILs contribution after commencement and fulfilment of assured traffic from Rowghat mines. Management is of view that the criteria laid out in Memorandum of Understanding will be met and interest accrues from the date of investment. The refund amount comprises principal and interest elements. Accordingly, the interest element has been computed and recognised as income during the year amounting to ''47.17 crore (till date ''140.26 crore). As per the opinion of Expert Advisory Committee of The Institute of Chartered Accountants of India, such treatment of recognition on time proportion basis is in order as in view of the Management, no significant uncertainty exists regarding collectability and measurability of revenue.

49.12 The Company is carrying inventory of 42.60 million tonnes (previous year 42.98 million tonnes) of sub-grade iron-ore fines (SGFs) at its various mines. The low iron content of these fines has made them unsuitable for consumption in the steel plants of the Company. Moreover, the Government of India, vide notification dated 19^th September, 2012 prevented all captive miners (including the Company) from selling these sub-grade fines in the market. Since, these inventories could neither be consumed nor sold, they had no economic value and therefore, no values were assigned to these sub-grade fines till 2018-19.

In exercise of the powers conferred under Section 20A of the MMDR Act, 1957, the Ministry of Mines, Government of India, vide its order no. F.No.16/30/2019-M.VI dated 16^th September 2019 directed the concerned State Governments to allow the sale of sub-grade minerals lying at the captive mines of the Company, subject to ascertainment by the State Governments in consultation with the Indian Bureau of Mines, of the usability of such fines in the steel plant. Subsequently, by a clarification dated 4^th January 2020, Ministry of Mines has removed the condition of certification of usability. On a clarification sought by the Company on the powers of the State Government in this matter, the Additional Solicitor General of India vide opinion dated 19^th May 2020, has opined that the above notification has been issued u/s 20A (2)(v) of the MMDR Act. The matter is under the Union List of Schedule VII of the Constitution and the power to issue directives vests entirely with the Central Government. It was specifically mentioned in the opinion that the State Governments have no power to deny the Company the right to sell the fines. Further, the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI), on a query made by the Company has opined vide their communication dated 6^th June 2020 that the accumulated sub-grade fines may be regarded as a by-product and if it is determined to be an immaterial by-product, it may be valued at net realizable value as per Ind AS 2 -Inventories. The opinion of the EAC also clarified that, the increase in the carrying amount of such inventories due to the notification of the Central Government permitting sale should be recognized in the Statement of Profit and Loss in accordance with the requirements of Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors being a change in accounting estimate.

The management took steps for quantitative verification of SGFs at each of the mines and carried out qualitative analysis (including gradation) for Fe content during the previous year and based on the aforesaid Order of the Central Government, Opinion of the Additional Solicitor General of India and the Opinion of the EAC of ICAI, the Company as at 31^st March 2020 valued the inventory of SGFs of 42.98 million tonnes at NRV of ''3791.18 crore. The NRV was arrived at basis the estimates made by the management as per the average selling price (ASP) of similar SGFs declared by Indian Bureau of Mines (IBM), a Government of India organisation adjusted for royalty and other selling costs.

During the year, the Company has obtained all clearances including environmental clearance and clearance from Director General of Mines Safety, Government of India. Further, procedural clearances have been obtained from the State Government of Odisha and the same is in the advanced stages in the State of Jharkhand and which in view of the management are expected to be received soon. As a result, the management has been able to sell off such inventories in certain locations. While, on an overall basis during the current year, there has been insignificant movement (0.40 million tonnes) in the volume of such inventories, there is significant market demand for SGFs and the recent sales price trends are indicative of considerable margins over and above the carrying value of such inventories. The management also has plans to set up a beneficiation plant in future that will consume significant volume of SGFs annually. Accordingly, in view of the management, there is no adjustment required in the carrying value of these inventories at this stage.

Considering the significant volume of such inventories, the management has during the year made a detailed assessment of volumes that are expected to be sold within 12 months from the end of the current year and has accordingly, classified a part of these inventories as non-current i.e. volumes that are expected to be sold beyond 12 months from the end of the current year (Refer note 7A & 15). The carrying value of such inventories has also been pro-rated basis above assessment. Also, considering the market volatility, steel market dynamics, possibility of future additions to steel and pellet making capacity in the country which may augment the demand of these materials, the carrying value of the non-current inventories cannot been adjusted for any unforeseeable changes in the future prices. Accordingly, in view of the management, the carrying values are the best estimates basis the information available at this stage. In line with the above accounting treatment for SGFs, the management has during the year done a quantitative verification of inventories of tailings at Barsua mines and carried out qualitative analysis (including gradation) for Fe content and valued the inventory of tailings of 3.97 million tonnes at NRV of ''248.24 crore as at 31^st March 2021 (including ''204.47 crore classified as non-current inventories). The NRV has been arrived at basis the estimates made by the management as per the ASP of similar tailings declared by IBM adjusted for royalty and other selling costs. Further, the recent sales price trends for tailings also are indicative of considerable margins over and above the carrying value of such inventories. Accordingly, in view of the management, no further adjustment is required in the carrying value of these inventories as at 31^st March 2021. (Also refer Note 3.8 and 3.24.4)

49.13 The Company has valued approximately 0.57 MnT of extractable iron and steel scrap embedded in BF Slag and LD Slag at Bhilai, Bokaro, Rourkela and Durgapur Steel Plants as on 31^st March, 2021 at ''438.63 crore (corresponding inventory as on 31^st March, 2020 estimated quantity of 0.66 MnT valued at ''683.33 crore).

An estimated quantity of 4.71 MnT of Iron Ore Tailings at Dalli mines of Bhilai Steel Plant as on 31^st March 2021 has been valued at ''244.17 crore (corresponding inventory as on 31^st March, 2020 estimated at 5.60 MnT valued at ''234.92 crore).

Valuation of such inventory was considered by the Company in accordance with IND AS 2.

However, Comptroller and Auditor General of India, in its Supplementary Audit, had commented on the recognition of such material as inventory in terms of Ind AS 2. In view of the difference in opinion on the interpretation of IND AS 2 in respect of recognition of such material as inventory, the Company has referred both the matters to Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) for obtaining an opinion on such issue. Favorable opinion received from the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) dated 8^th March, 2021, that both iron and steel scrap embedded in slag and de-silted iron ore fines meets the definition of ‘inventories'' as per Ind AS 2.

49.14 The Cabinet Committee on Economic Affairs (CCEA) in its meeting held on 27^th October, 2016 had accorded ‘in-principle'' approval for Strategic Disinvestment of three units of Steel Authority of India Limited (SAIL) viz. Visvesvaraya Iron & Steel Plant (VISP), Bhadravati, Karnataka, Salem Steel Plant (SSP), Tamil Nadu and Alloy Steel Plant (ASP), West Bengal.

Subsequently, in line with the "in-principle" approval of Government of India, SAIL Board in its meeting held on 9^th February, 2017, approved the Strategic Disinvestment of ASP VISP and SSP The Company appointed various Advisors to carry out the process. The entire process of Strategic Disinvestment is being overseen by an Inter-Ministerial Group (IMG). The IMG is chaired by Secretary, Department of Public Assets Management (DIPAM) and co-chaired by Secretary (Steel).

Preliminary Information Memorandum (PIM) / Expression of Interest (EoI), Requests of ASP SSP and VISP were issued on 4^th July, 2019. The Transaction Advisor, M/s SBICAPs has informed that, in case of ASP no EOIs were received from prospective bidders upto the scheduled date. The EOIs of SSP and VISP were opened on 10^th September, 2019. The Request for Proposal (RFP), Confidential Information Memorandum (CIM) and Business Transfer Agreement (BTA) have been issued to the short-listed bidders and due diligence is ongoing by the short-listed bidders.

49.15 The Company has proposed a final dividend @ 18% of the paid-up equity share capital (i.e.''1.80 per equity share of ''10/- each) for the Financial Year 202021 subject to approval of the Shareholders in the ensuing Annual General Meeting of the Company. Earlier, the Company declared interim dividend @ 10% of the paid-up equity share capital (i.e. ''1.00 per equity share of ''10/- each).

49.16 Pursuant to notice dated January 13, 2021 ("Notice") filed with the Stock Exchanges, President of India (Promoter), acting through the Ministry of Steel, Government of India proposed to sell up to 20,65,26,264 equity shares of Steel Authority of India Limited ( the Company) having face value of ''10 each of the Company, representing 5% of the total paid-up equity share capital of the Company with an option to additionally sell up to 20,65,26,264 Equity Shares (representing 5% of the total paid-up equity share capital of the Company) (the "Oversubscription Option") through the separate designated window of BSE Limited ("BSE") and National Stock Exchange of India Limited. The promoter has exercised the Oversubscription Option, to the extent of additional 20,65,26,264 equity shares and in total sold 41,30,52,528 equity shares of the Company. Consequently, the Promoters holding in the Company has come down from 309,77,67,449 equity shares (75% of the Paid-up Equity Share Capital) to 268,47,14,921 equity shares (65% of Paid-up Equity Share Capital). The sale of equity shares took place on a separate designated window of BSE Limited and National Stock Exchange of India Limited and was undertaken in accordance with the "Comprehensive Guidelines on Offer for Sale (OFS) of shares by promoters through the Stock Exchange Mechanism" issued by the Securities and Exchange Board of India ("SEBI").

49.17 The COVID-19 pandemic outbreak and measures to curtail it had caused significant disturbances and slow down of economic activities, as a result of which the Company''s operations had to be scaled down during the first quarter of financial year ended 31^st March, 2021. Following the gradual normalization of economic activities, the Company is operating at normal capacity. In view of the positive economic environment seen across sectors, the management is of the belief that the trend is likely to continue in subsequent periods as well and the impact of COVID-19, if any, is not likely to be material.

49.18 Pending identification and reconciliation of input tax credit available for offset against output tax under the provisions of Goods and Service Tax Act and rules made there under, the balances of the same are carried at gross basis until filing of relevant monthly return.

53. The figures of previous periods have been re-grouped, wherever necessary, so as to conform to the current periods classification.

---

Mar 31, 2018

1. CAPITAL MANAGEMENT

The Company'' s capital management objectives are

- to ensure the Company''s ability to continue as a going concern

- to provide an adequate return to shareholders

The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the company''s various classes of debt. The company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

2 a) (i) The Nine Judges Constitutional Bench of Hon''ble Supreme Court, vide its judgment dated 11.11.2016, has upheld the constitutional validity of levy of Entry Tax Acts enacted by the States and has laid down principles/tests for consideration. The respective regular Benches of the Apex Court would hear the matters as per laid down principles. Pending decisions by the regular Benches of the Apex Court on levy of Entry Tax in the States of Chhattisgarh, Odisha, Uttar Pradesh, and Jharkhand, the Entry Tax demands, under dispute, of Rs,1092.28 crore, Rs,241.00 crore, Rs,92.23 crore and Rs,5.15 crore respectively up to 31^st March, 2018 aggregating to Rs,1430.66crore (including a sum of Rs,1092.28 crore, Rs,352.16 crore, Rs,92.23 crore and Rs,5.15 aggregating to Rs,1541.82 crore up to 31^st March, 2017) have been treated as contingent liabilities.

(ii) Pending final decision by the Hon''ble Calcutta High Court, in the case of levy of Entry Tax in West Bengal, the disputed Entry Tax demands of ''295.50croreupto 31^st March, 2018 (upto 31^st March, 2017 ''254.21crore) have been treated as contingent liabilities.

b) Hon''ble Supreme Court dismissed the SLP by the Company in respect of dispute with Damodar Valley Corporation(DVC) related to provisional tariff petition of electricity charges for 2009-14 vide order dated 18^th January, 2017, keeping the question of law open. The Order of Central Electricity Regulatory Commission (CERC) dt.7/8/2013 related to Tariff of 2009-14 against Petition No.275/GT/2012 has been challenged before Appellate Tribunal for Electricity (APTEL) (Appeal No.18 of 2014) in which the Company has also intervened and the order of APTEL is pending. The appeal filed by DVC pertaining to tariff of 2004-09 is yet to be decided by the Hon''ble Supreme Court of India. As per legal opinion received by the Company, the decision of Hon''ble Supreme Court of India on determination of the tariff of 2004-09 may have an effect on the subsequent periods. Pending final decision in this regard, the claim of DVC of Rs,587.72 crore up to 31^st March, 2018 (up to 31.03.2017, Rs,587.72) has been considered as Contingent Liability and included in Note No. 47.1(i)(f) above. Against the said claims, the entire amount has been paid to DVC and disclosed under Other Current Assets. Further from 1^st April, 2017 onwards full invoice value has been considered in the statement of Profit & Loss.

3 Under the Jharkhand Mineral Area Development Authority (Amendment) Act, 2015 the State Government of Jharkhand has made a demand of Rs,3374.46 crore upto 31^st March, 2018 (upto 31^st March, 2017 Rs,3045.41 crore) towards "Market Fee" on transaction value of coal, iron and steel items. As the matter is sub-judice, the amount has been disclosed as a Contingent Liability in Note No. 47.1(i)(e) above.

4 The Company pays royalty on iron ore on the basis of quantity removed from the leased area at the rates based on notification by the Ministry of Mines, Government of India and the price published by India Bureau of Mines on a monthly basis for both iron ore lumps and fines separately. A circular was issued by the State Government of Odisha regarding payment of royalty on fines at the rate of lumps on 07.09.2010 retrospectively effective from August 2009. The Government of India, vide circular dated 23.07.2012, directed the State Government of Odisha to withdraw the circular dated 07.09.2010. Accordingly, excess royalty for fines at the rate applicable for lumps, paid in two Iron Ore Mines of the Companyamounting to Rs,143.54crore, has been shown as Claims Recoverable. As the Company has disputed the matter with the Appropriate Authorities, pending withdrawal of the circular of the State Government of Odisha, the amount of Rs,143.54crore ( As on 31^st March, 2017Rs,144.34 crore) has been included in the Contingent Liability, in Note No. 47.1(ii)(b) above.

5 In its judgment, the Central Administrative Tribunal (CAT), Kolkata has directed that Ministry of Steel shall consider the aspect of payment of arrears of revised perks and allowances and take appropriate decision of payment of revised perks and allowances amounting to Rs,325.13 crore to the executives for the period 26.11.2008 to 4.10.2009. Ministry of Steel intimated the matter to the Company on 7.12.2016. A stay petition in the matter has been filed on 22.12.2016 and is pending before the Hon''ble Calcutta High Court. As the matter is sub-judice, the amount has been disclosed as a Contingent Liability in Note No. 47.1(v) above.

6 Indigenous washed coking coal supplies have been claimed by Bharat Coaking Coal Limited (BCCL) and Central Coalfields Limited (CCL) at unilaterally notified price w.e.f. 13^th January, 2017 and 14^th January, 2017 respectively, which is in deviation from the mutually agreed price with the Company for the year 2016-17. The Company has accounted for the supplies based on agreed prices as per jointly signed Memorandum of Understanding, valid for supplies w.e.f. 1^st April, 2016 to 31^st March, 2017, between SAIL and BCCL & CCL. The differential claims of BCCL & CCL, amounting to Rs,334.45 croreat unilaterally notified higher rates over and above MOU rates, have been disclosed as contingent liability in the Note No. 47.1(ii)(d) above.

7 The Ministry of Environment & Forest and Climate Change (MoEF& CC) vide their letter No.- 11-599/ 2014-FC dated 1st April 2015 issued revised Guidelines for diversion of Forest Land for non-forest purpose under the Forest (Conservation) Act, 1980 (FC Act). These revised Guidelines stipulated that in case of existing mining leases having Forest Land (partially or fully), where approval for only a part of forest land has been obtained under the FC Act, the Central Government accorded general approval under Section-2(iii) of the FC Act for the remaining area also to be Forest Land, subject to certain conditions, which includes realising Net Present Value (NPV) for the entire forest land falling in the mining lease, in case NPV of such forest land has not already been realised.

In this matter, as per legal opinion obtained by the Company, Section 2 (iii) of FC Act, 1980 will not apply to Government Corporation and NPV is required to be paid only for that limited area, which has been approved by MoEF& CC and in which mining activities are proposed to be done and not for the entire forest area. The matter of applicability of NPV for total forest land has been challenged by the Company in Hon''ble High Court of Jharkhand. The Hon''ble Court, in its order, has directed to place the matter before Division Bench of this Court.

During the year, the Company has received a demand of Rs, 96.28 crore from Office of the Principal Chief Conservator of Forest, Chhattisgarh against which writ petition has been filed in Hon''ble high Court of Chhattisgarh.

8 Pursuant to the Hon''ble Supreme Court Judgment dated 2^nd August, 2017 in the Common Cause matter regarding illegal mining, demand/Show cause notices have been issued for recovery of the price of minerals produced without and beyond the environmental clearances under Section 21(5) of Mines and Mineral Development Regulation Act, 1957, forest clearance under the Forest Conservation Act 1980, and towards excess production beyond consent to operate. The Company has challenged the purported demand before the High Court of Jharkhand and Odisha and obtained stay on demand. As the matter is pending for final determination and considering the implication of existing litigation, the Company has provided as detailed below:

(a) In respect of Iron Ore, by the Government of Odisha and Government of Jharkhand amounting to Rs,212.85crore and Rs,1478.86 respectively (including interest). Based on internal judgment, the Company has provided an amount of Rs,333.45crore during the year on estimated basis under exceptional item. Balance amount of Rs,1358.26crore(including interest) has been treated as contingent liability in Note No. 47.1(i)(h) above.

(b) In respect of Limestone, by the Government of Jharkhand amounting to Rs,20.28crore (including interest). Based on internal judgment, the Company has provided an amount of Rs,7.27crore during the year on estimated basis under exceptional item. Balance amount of Rs,13.01crore (including interest) has been treated as contingent liability in Note No. 47.1(i)(h).

9 In respect of Coal, by the Government of Jharkhand amounting to Rs,354.54crore (including interest) during the year. Revision Application has been filed under Rule 55 (5) of Mineral Concessions Rule, 1960 read with Section 30 of Mines and Minerals (Development and Regulation) Act, 1957 (MMDR). The Revisional Authority, Ministry of Coal, has granted Stay to the Company. Accordingly pending disposal the amount of Rs,354.54 crore (including interest) has been treated as Contingent Liability in Note No. 47.1(i)(h).

10 Balances of some of the Trade Receivables, Other Assets, Trade and Other Payables are subject to confirmations/reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made. However, Management does not expect to have any material financial impact of such pending confirmations/reconciliations.

11. The Block Land and Land Reforms Office, (Faridpur-Durgapur) and Andal, District: Paschim Bardhaman, Govt. Of West Bengal has raised demand of arrears of land revenue, cess and interest for part of land of Durgapur Steel Plant henceforth referred to as ''Company'' and its Township covering a period of past 40 years aggregating to Rs,494.51 crore (previous year Rs,nil crore) vide two demand notices dated 21.02.2018 and 08.03.2018 respectively.

The Company has contested the demands. Part of the land against which demand has been raised was acquired on behalf of the Central Government under Land Acquisition Act and such acquisition vested in Union of India, while certain other parts of its lands were transferred by State Government to the Central Government and the Company holds such lands on behalf of President of India. As per Article 285 of the Constitution of India no land revenue is payable on such lands. Moreover, Company had also paid capitalized value of land revenue and as per judicial pronouncement, no land revenue is payable for lands for which capitalized value is paid. As such Company is of the opinion that the demand raised against the Company is not tenable at all. Representation on that effect has already been made on 26^th April, 2018 and 28^th April, 2018.

12. Revenue from operations for the period up to 30^th June, 2017 includes excise duty of Rs,1403.90 crore , which is discontinued effective 1^st July, 2017 upon implementation of Goods and Services Tax (GST). In accordance with ''Ind AS 18- Revenue'', GST amount of Rs,7864.70 crore is not included in Revenue from Operations. In view of the aforesaid change, Revenue from operation for the year ended on 31^st March, 2018 is not comparable with the previous year.

13 Sales include sale to Government Agencies recognized on provisional contract prices during the yearended 31^st March, 2018: Rs,4802.50crore (Previous Year : Rs,3807.78 crore) and cumulatively up to 31^st March, 2018 : Rs,12271.05 crore (upto Previous Year : Rs,18342.41 crore).

14. Keeping in view the affordability and financial sustainability clause in Office Memorandum dated 3^rd August, 2017 and 24^th November, 2017 issued by the Government of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises in respect of Pay Revision of employees:

(a) an all-inclusive provision towards salary revision of Board and below Board level executives, charged to ''Employee Benefit Expenses'' and Expenditure During Construction in earlier quarters amounting to Rs,95.71 crore and Rs,3.24 crore respectively has been written back during current quarter and Rs,33.35 crore for the period from 1.1.2017 to 31.3.2017 has been written back during the current quarter and shown as ''Exceptional Item''.

(b) an all-inclusive provision towards salary and wage revision of Non-executive Employees charged to ''Employee Benefit Expenses'' in earlier quarters amounting to Rs,230.77 crore has been written back and Rs,77.47 crore for the period from 1.1.2017 to 31.3.2017 has been written back during the current quarter and shown as ''Exceptional item''.

15 As per the Department of Public Enterprises (DPE) guideline, the Company is required to contribute up to 30% of Salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund, Gratuity, Pension and Post-Superannuation Benefits. Accordingly the Company has made provision for pension benefit for executive employees @ 9% of Salary w.e.f. 1^st January, 2007 and 3% of Salary w.e.f. 1^st January, 2017. Further, pension benefit for non-executive employees has been provided @ 6% of Salary w.e.f. 1^st January, 2012 and 2% of Salary w.e.f. 1^st January, 2017.

The cumulative provision/liability towards pension benefit for executive & non-executive employees, amounting to Rs,2494.52 crore (Rs,126.59 crore during the year) and Rs,47.81 crore (Rs,1.76 crore during the year) has been charged to ''Employee Benefits Expense'' and ''Expenditure during Construction'' respectively.

Based on DPE Guidelines on superannuation benefits which may include pension benefits to employees, Board of Directors of the Company keeping in view affordability and financial sustainability to pay by the Company, revised pension benefit to 3% of Basic DA (as against 9% earlier decided) for Executives and 2% of Basic DA (as against 6% earlier decided) for Nonexecutives and accordingly:

(a) an amount of Rs,170.02 crore provided from 1^st April, 2015 to 31^st December, 2016 in earlier years in respect of pension for Executives has been written back and credited to ''Exceptional Item'' during the current year.

(b) an amount of Rs,288.14 crore provided from 1st April, 2015 to 31^st December, 2016 in earlier years in respect of pension for Non-executives has been written back and credited to ''Exceptional Items'' during the current year.

16 Pursuant to Notification dated 29^th March, 2018 issued by the Ministry of Labour and Employment, the Central Government has enhanced the ceiling of gratuity limit from Rs,0.10 crore to Rs,0.20 crore w.e.f. 29.03.2018. Accordingly, the provision for gratuity as at 31^st March 2018 has been made for Rs,582.04 crore under Employee benefit expenses, considering the enhanced ceiling based on the actuarial report.

17 Consequent to the judgment of Hon''ble Supreme Court dated 13^th October, 2017 and further interpreted by Hon''ble High Court of Bilaspur vide order dated 24^th November, 2017 (to which the Company is not a party), in the matter of establishment of District Mineral Foundation (DMF) under the Mines and Minerals (Development and Regulation) Act, 1957 and prospective contribution required to be made to the DMF by the holder of a mining lease or a prospecting licence-cum-mining lease in addition to the payment of royalty, an amount of Rs,261.76 crore has been written back under exceptional item during the year for which such levy was held not applicable.

18 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years.

On such review as on 31^st March, 2018, no provision is required to be made during the year, as the value in use of assets of BhilaiSteel Plant, Durgapur Steel Plant, Rourkela Steel Plant, BokaroSteel Plant and IISCO Steel Plant, based on the present value of estimated future cash-flows expected to arise from the continuing use of an asset and from its disposal at the end its useful life, is more than the carrying amount of the respective CGU.

No provision is required to be made during the year for Alloy SteelsPlant, Salem Steel Plant and VisvesvarayaIron and Steel Plant, as the net realisable value thereof, assessed by an independent agency, as on 31st March, 2018 for Salem Steel Plant and as on 31st March, 2017 for Alloy Steels Plant andVisvesvaraya Iron & Steel Plant, is more than the carrying amount of respective CGU.

19 (a) On the basis of Board of Directors of the Company approval dated 30^th May 2017 for surrendering of three limestone mining leases under Bhawanathpur viz. Saraiya, Ghagra

& Goregaon, the intangible assets of Rs,37.47 crore towards NPV as Mining Right have been written off along-with the corresponding provisions.

(b) The Board of Directors of the Company Board approved on 1^st March 2018 for return of two Coal Blocks , Parbatpur and Sitanala, to Ministry of Coal. The Company has taken provision of ''18.59 crore for Sitanala and ''113.05 crore for Parbatpur as exceptional expenses which appeared in CWIP

(c) The Unit has given Bank Guarantee to Ministry of Coal as per the allotment agreement for two Coal Blocks of Parbatpur and Sitanala. After the approved on 1^st March 2018 to return these two Coal Blocks to Ministry of Coal, the Company has provided Liability of ''15.18Crore for Sitanala and Rs,62.57 crore for Parbatpur Coal Block and shown as exceptional expenses.

20. As per Section 135 of the Companies Act, 2013, the Company is required to spend, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years in accordance with its Corporate Social Responsibility (CSR) Policy. Since, the Company reported average net loss during the three immediately preceding financial years; no amount is required to be spent for the Financial Year 2017-18.

However, against the budgeted amount of Rs,26.00 crore (previous year Rs,29.05crore), the Company has spent an amount of Rs,25.70 crore (previous year Rs,29.05 crore) on CSR activities during the Financial Year 2017-18 under the following heads:

21. Salem Steel Plant (SSP) had obtained 12 Export Promotion Capital Goods (EPCG)authorization between 12^th November 2008 to 30th November 2009 for import of capital goods at concessional rate of customs duty under EPCG Scheme and completed the export obligation vide letter dated 13^th February, 2018 received from the Office of Joint Director General of Foreign Trade, Coimbatore.

22. Information on leases as per Indian Accounting Standards (Ind AS) 17 on ''Leases'':

(a) The Company has granted lease of properties to the employees and third parties for varying periods. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

c) Description of major leasing arrangements Power plant

The Company has accounted for certain power plants as finance lease under Appendix C of Ind AS 17 by virtue of the power purchase agreement with the supplier. Under the terms of the power purchase agreement, the Company shall continue to purchase power until the parties decide to terminate the agreement, which has been determined to be an un-economic proposition considering the specialized nature and location of the asset.

Oxygen Plant

The Company has accounted for certain oxygen plants as finance lease (or operating lease) under Appendix C of Ind AS 17 by virtue of the oxygen purchase agreement with the supplier. The agreement to purchase oxygen is a 15 year fixed term agreement.

Mining land

The Company has accounted for leasehold lands for mining as finance leases by virtue of its rights under the lease agreement after considering the right/ economic compulsion for renewal.

d) In respect of assets taken on lease/rent:

(i) The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognized in the Statement of Profit and Loss during the year is ''18.87crore (''14.16crore).

(ii) As at the Balance Sheet date, the future minimum lease payments under non-cancellable operating leases are:

23. As per Government of India guidelines on payment of dividends, the Company is required to pay a minimum annual dividend of 30% of Profit After Tax or 5% of the Net-worth, whichever is higher, subject to the maximum dividend permitted under the Companies Act, 2013 and other rules, unless lower dividend proposed to be paid is justified after analysis of the various financial parameters of the Company. In case, the Company is not able to comply with the guidelines, specific exemption has to be obtained from Department of Investment & Public Asset Management (DIPAM), Government of India. Keeping in view the adverse financial position of the Company due to losses, the Company has been exempted from payment of dividend for the Financial Years 2015-16 and 2016-17. For the Financial year 2017-18, the Company has again taken up with DIPAM for exemption from payment of dividend.

24 Contributions in cash and kind made for the period from the Financial Year 2006-07 to 2017-18 to Railway authorities for laying out railway line from Rajhara to Rowghat would be recovered in cash at the rate of 7% per annum for 37 years on total contribution towards redemption of SAIL''s contribution after commencement and fulfillment of assured traffic from Rowghat mines. Management is of view that the criteria laid out in Memorandum of Understanding will be met and interest accrues from the date of investment. The refund amount comprises principal and interest elements. Accordingly, the interest element has been computed and recognized as income during the year, amounting to ''15.12crore (till date ''34.24crore). As per the opinion of Expert Advisory Committee of The Institute of Chartered Accountants of India received during the year such treatment of recognition on time proportion basis is in order as in view of Management, no significant uncertainty exists regarding collectability and measurability of revenue.

25 The Cabinet Committee on Economic Affairs ( CCEA) in its meeting held on 27-10-2016 has "in-principle" decided for Strategic Disinvestment of Alloy Steels Plant (ASP), Durgapur; Visvesvaraya Iron and Steel Plant (VISP), Bhadrawati and Salem Steel Plant (SSP), Salem. Further, in line with "in-principle" approval of Government of India, SAIL Board in its meeting held on 9^th February, 2017, approved the Strategic Disinvestment of ASF? VISP and SSP The Company appointed various Advisors to carry out the process. Preliminary Information Memorandum (PIM) /Expression of Interest (EoI) for ASP has been published in News papers on 14th February, 2018. PIMs/EoI of SSP and VISP have been submitted to MoS (Ministry of Steel) for obtaining the clearance of Govt of India.

26 Recent Accounting Pronouncements Standards issued but not yet effective:

In March, 2018, the Ministry of Corporate Affairs (MCA) issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115, ''Revenue from Contracts with Customers'', Appendix B to Ind AS 21, ''Foreign Currency Transaction and advance consideration and amendment to certain other standards. These amendments are in line with recent amendments made by International Accounting Standards Board (IASB). These amendments are applicable to the Company from 1^st April, 2018. The Company will be adopting the amendments from their effective date.

(a) Ind AS 115, Revenue from contracts with Customers.

Ind AS 115 supersedes Ind AS 11, Construction Contracts and Ind AS 18, Revenue. IndAS 115 requires an entity to report information regarding nature, amount, timing and uncertainty of revenue and cash flow arising from a contract with customers. The principle of Ind AS 115 is that an entity should recognize revenue that demonstrate the transfer of promised goods and services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard can be applied either retrospectively to each prior reporting period presented or can be applied retrospectively with recognition of cumulative effect of contracts that are not completed contracts at the date of initial application of the Standard.

Based on the preliminary assessment performed by the Company, the impact of application of the Standard is not expected to be material.

(b) Appendix B to Ind AS 21, ''Foreign currency transaction and advance consideration'':

The Appendix clarifies that the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the asset, expense or income (or part of it) is the date on which an entity initially recognizes the non-monetary asset or non-monetary liability arising from the payment or receipt of advance consideration towards such asset, expense or income. If there are multiple payments or receipts in advance, that an entity must determine transaction date for each payment or receipts of advance consideration.

The impact of the Appendix on the financial statements, as assessed by the Company is expected to be not material.

27 Based on materiality and comparability, in respect of temporarily discontinuation of operation of mines namely Barsua (w.e.f 17.05.2014), Bhawnathpur (w.e.f 29.04.2013) and Punapani (w.e.f 01.03.2004.) due to environmental/forestry clearance issues, net expenditure during the year 2017-18, excluding depreciation, of ''82.07crore (Previous Year '' 97.95 crore) has been included under Note No.41 ''Other Expenses'' in Statement of Profit and Loss (refer Note No 41). Head wise bifurcation is as under:

28. GENERAL

29 Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Ind AS108, Operating Segments'' issued by Ministry of Corporate Affairs.

ii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Ind AS108, Operating Segments, issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose.

30 Related Party

As per Ind AS24-''Related Party Disclosures'' issued by the Ministry of Corporate Affairs, the names of the related parties, are given below:

A. Name of the related party and nature of relationship Oth_er C_ompani_es

Subsidiary Companies ICVL Mauritius

SAIL-Jagdishpur Power Plant Limited Riverdale Mining (PTY) Limited (RML)

SAIL Refractory Company Limited Minas De Banga (Mauritius) Limited Mozambique

SAIL Sindri Projects Limited ICVL Zambeze Mauritius Limited

Chhattisgarh Mega Steel Limited Promark Services Limited RPU

Joint Venture Companies Benga Power Plant (Mauritius) Limited

NTPC-SAIL Power Company Limited Minas De Benga LDA

Bokaro Power Supply Company Limited Benga Energia SA

SAIL Bansal Service Centre Limited IISCO Ujjain Pipe & Foundry Co. Limited

Mjunction Services Limited UEC-SAIL Information Technology Limited

Bhilai Jaypee Cement Limited Post Employment Benefit Plans

S&T Mining Company Private Limited HSL BSP Provident Fund, Bhilai

SAIL&MOIL Ferro Alloys Private Limited DSP Provident Fund, Durgapur

International Coal Ventures Private Limited Hindustan Steel Ltd Contributory Provident Fund, Rourkela

SAIL-SCI Shipping Private Limited Bokaro Steel Employees Provident Fund, Bokaro

SAIL SCL K_eral_a Li_mit_ed IISCO Limited Provident Institution, Burnpur

SAIL-RITES Bengal Wagon Industry Private Limited IISCO Limited Provident Institution, Kolkata

SAIL Kobe Iron India Private Limited IISCO Limited Works Provident Fund, Burnpur

TMTSAL SAIL JV Limited SAIL ASP Provident Fund, Durgapur

SALSAIL JVC Limited Salem Steel Provident Fund, Salem

_{SAIL-Bengal Alloy Castings Private Limited} Visvesvaraya Iron and Steel Plant Employees Provident Fund Trust, Bhadravati

PrimeGold-SAIL JVC Limited SAIL Provident Fund, New Delhi

_{VSL SAIL JVC Limited} Hindustan Steel Provident Fund, Ranchi

_{Abhinav-SAIL JVC Limited} Hindustan Steel Limited, Central Purchase Organisation, Sales & Transport, Calcutta

N.E. Steel &Galvanising Private Limited ^{Provident Fund}

„ . _ . Bharat Refractories Provident Fund, Bokaro

North Bengal Dolomite Limited

IFICO Provident Fund, Ramgarh Romelt-SAIL (India) Limited ^a

CCSO Provident Fund, Dhanbad

NMDC SAIL Limited

„ . „ SAIL RMD Establishment and Administrative Offices Employees Provident Fund, Kolkata

Bastar Railway Private Limited

Bolani Ores Mines Provident Fund , Bolani

Associate Company

SAIL Employees'' Superannuation Benefit Fund

Almora Magnesite Limited

SAIL Gratuity Fund

Shri P. K. Singh

Shri C. Srikanta

Shri Anil Kumar Chaudhary

Shri S. K. Garai

Shri Raman

Shri M. R. Panda

Shri Kalyan Maity (upto 28.02.2018)

⁽ Shri Neeraj Mathur

Shri N. Mahapatra

Shri Somdev Das

Shri G. Vishwakarma

Shri Sukumar Hedge

Smt. Soma Mondal

Shri Ashoke Kumar Paul

Shri Atul Srivastava (w.e.f. 12.03.2018)

Shri P. K. Mishra

Shri P. K. Singh

Shri B. N.Thakur

Shri M. Ravi

Shri N. Ramachandran

Shri P. Saidev

Shri M. C. Jain

Shri A. Dasgupta „ ...

Shri R. Mitra

Shri A. K. Rath

Shri S. K. Das

Shri Ashwini Kumar

Shri T. S. Prakash

Smt. K. Raman

F. During the year, Sales and Trade Receivables include Rs,11770.05 crore (Rs,9009.19 crore) and Rs,2063.36 crore (Rs,1493.07 crore) for transactions with the Central Government (including Indian Railways) which constitute 20.19% (19.07 %) and 53.31% (49.97 % )of the Sales and Trade Receivables respectively.

31Disclosures of provisions required by Indian Accounting Standards (Ind AS)37 ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

Mines forestation costs - Payable on renewal (including deemed renewal)/forest clearance of mining leases to Government authorities, towards a forestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities.

Overburden backlog removal costs - To be incurred towards removal of overburden backlog at mines over the future years.

* Rs, 2.53 crore (Rs,2.53 crore), being doubtful of recovery has been provided for in the books of accounts.

ii) No loans have been given (other than loans to employees), wherein there is no repayment schedule or repayment is beyond seven years; and

iii) There are no loans and advances in the nature of loans, to firms/companies, in which directors are interested.

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Mar 31, 2017

1. INVESTMENT PROPERTY (CONTD.)

(i) Contractual obligations

There are no contractual obligation to purchase, construct or develop investment property or for its repair, maintenance or enhancement.

*Direct expenses in relation to investment properties cannot be separately identified and are expected to be insignificant.

(iii) Leasing arrangements

Certain investment properties are leased to tenants under long-term operating leases with rentals payable monthly. Minimum lease payment receivable under non-cancellable leases of investment property are as follows:

(v) Estimation of fair value

The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:

a) Current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.

b) Discounted cash flow projections based on reliable estimates of future cash flows.

c) Circle rate of the property as provided by State Government.

The Company is having accumulated business losses (Including Investment Allowance) of Rs, 24,744.77 crore (Previous year- Rs, 13,848.16 crore) [including accumulated unabsorbed depreciation of Rs, 15,057.93 crore (Previous Year - Rs, 8,851.44 crore)] and MAT credit of Rs, 1,051.00 crore as on 31 March, 2017 as per the provisions of the Income Tax Act, 1961. The unabsorbed business losses amounting to Rs, 9,686.84 crore (Previous Year - Rs, 4,996.72 crore) are available for offset for maximum period of eight years from the incurrence of loss and unused tax (MAT) credit will be available for offset within maximum period of fifteen years.

In view of the various measures being implemented by the Government for upliftment of the Steel Industry and to boost the demand coupled with steps being taken by the Company to reduce the cost, improvement in the efficiency/productivity, the Company is certain that it will be able to improve its physical and financial performance in future. Consequently, the Company will be able to earn sufficient future taxable profits to adjust the accumulated business losses/unabsorbed depreciation and unused MAT credit.

Accordingly, deferre tax asset of Rs, 3,352.42 crores on acccumulated business losses (inlcuding Rs, 1,623.16 crores during the year ended 31^st March, 2017) and MAT credit of Rs, 1,051.00 crores, has been recognized as on 31^st March, 2017.

Nature and purpose of other reserves Capital reserve

Capital reserve which is created out of the capital profit , it is created out of the profit earned from some specific transactions of capital nature. Capital reserve is not available for the distribution to the shareholders.

Securities premium reserve

Securities premium reserve represents premium received on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act.

Bond redemption reserve

The Company is required to create bond redemption reserve as per the provisions of Companies Act, 2013 out of the profits which are available for distribution of dividends. The reserve is maintained till the redemption of bonds.

Other Comprehensive Income(OCI) reserve

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the FVOCI equity investments reserve within equity. The Company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.

No loans have been guaranteed by the directors and others.

There is no default as on the balance sheet date in the repayment of borrowings and interest thereon.

All bonds are repayable on the maturity date unless otherwise stated.

Bonds are secured, in respect of respective facilities by way of :

a) Secured by charges ranking pari-passu inter-se, on all the present and future immovable property at Mouje-Wadej of City taluka, District Ahmadabad, Gujarat and Company''s Plant & Machinery, including the land on which it stands, pertaining to IISCO Steel Plant (ISP).

b) Secured by charges ranking pari-passu inter-se, on all the present and future immovable property at Mouje-Wadej of City taluka, District Ahmadabad, Gujarat and Company''s Plant & Machinery, including the land on which it stands, pertaining to Durgapur Steel Plant.( DSP ).

c) Redeemable in 12 equal yearly installments of '' 14 crore each starting w.e.f. 26^th October, 2014. Installment payable on 26^th Oct, 2017 has been shown in Other Current Liabilities

21. BORROWINGS (CONTD.)

d) Redeemable in 3 equal installments of '' 50 crore each on 15^th September of 2014, 2019 and 2024.

e) The soft basis of the loan was drawn in 3 tranches stated as 1(a), 1(b) and 1( c) at an interest rate of 8.75% p.a. The Interest on 1(a) is 0.75% p.a and balance 8% is towards meeting Exchange fluctuation (4%) and Pollution control schemes (4%). In case of 1 (b) the Interest is 0.75% p.a and balance 8.0% p.a is towards periphery development. The Interest on 1(c) is 3.66% p.a. and the balance 5.09% p.a. is towards meeting periphery development. The principal and interest is repayable half yearly. The loan is Guaranteed by Government of India.

f) The loan is repayable in 3 equal yearly installments on 11^th March starting from 2015 at an interest rate of 6 month London Inter Bank Offered Rate (LIBOR) 1%. Interest is paid half yearly.

g) The loan is repayable in 3 equal yearly installments on 11^th August starting from 2015 at an interest rate of 6 month LIBOR 1%. . Interest is paid half yearly.

h) The loan is repayable in 3 equal yearly installments on 16^th November starting from 2015 at an interest rate of 6 month LIBOR 1.06%. Interest is paid half yearly.

i) The loan is repayable by 2030. The principal and interest is paid half yearly, guaranteed by Government of India.

j) The loan is repayable in 3 equal yearly installments on 21^st December starting from 2016 at an interest rate of 6 month LIBOR 1.75%. Interest is paid half yearly,

k) Redeemable in 5 equal yearly installments starting w.e.f 25^th May, 2018.

l) Terms of Repayment is to be decided by SDF management Committee.

m) Secured by charges ranking pari-pasu on the present and future movable plant and machinery of BSL to the extent of loan.

(iv) Valuation process and technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

(a) Fair value of interest swap is determined based on dealer or counterparty quotes for similar instruments.

(b) Fair value of forward foreign exchange contract and principal swap is determined using forward rate at balance sheet date.

(c) The carrying value of borrowings bearing variable interest rate are considered to be representative of their fair value.

(d) The carrying value of financial assets and liabilities with maturities less than 12 months are considered to be representative of their fair value.

(e) Fair value of fixed interest rate financial assets and liabilities carried at amortized cost (including finance lease obligations) is determined by discounting the cash flows using a discount rate equivalent to market interest rate applicable to similar assets and liabilities as at the balance sheet date.

(v) Unquoted investments

Fair value estimates of unquoted equity investments are included in level-3 and are based on information relating to value of investee company''s net assets. For investments in co-operative societies the Company has determined that cost is approximate estimate of fair value, therefore there have been no changes on account of fair values.

ii) Risk Management

The Company is exposed to various risk in relation to financial instruments. The Company''s financial asset and liabilities are by category are summarized in note 34(i). The main types of risks are market risk, credit risk and liquidity risk. The Company''s risk management is coordinated at its headquarters, in close cooperation with the board of directors, and focuses on actively securing the Company''s short to medium-term cash flows by minimizing the exposure to volatile financial markets. Long-term financial investments are managed to generate lasting returns. The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Company is exposed are ''described below.

A) Credit risk

Credit risk is the risk that a counterparty fails to discharge an obligation to the Company. The Company is exposed to this risk for various financial instruments, for example by granting loans and receivables to customers, placing deposits, etc. The Company''s maximum exposure to credit risk is limited to the carrying amount of following types financial assets.

-Cash and cash equivalents -Derivative financial instruments -Trade receivables

-Other financial assets measured at amortized cost

The Company continuously monitors defaults of customers and other counterparties, identified either individually or by the Company, and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings and/or reports on customers and other counterparties are obtained and used. The Company''s policy is to deal only with creditworthy counterparties.

a) Credit risk management Cash and cash equivalent

Credit risk related to cash and cash equivalents is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Derivative financial instruments

Credit risk related to derivative financial instruments is also managed by only entering into such arrangement with highly rated banks or financial institutions as counterparties. The company diversifies its holdings with multiple counterparties.

Trade receivables

Credit risk related to trade receivables are mitigated by taking bank guarantees from customers where credit risk is high. The Company closely monitors the credit-worthiness of the debtors and only sells goods to credit-worthy parties. The Company''s internal systems are configured to define credit limits of customers, thereby limiting the credit risk to pre-calculated amounts.

Other financial assets measured at amortized cost

Other financial assets measured at amortized cost includes loans and advances to employees and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

b) Expected credit losses

Company provides expected credit losses based on the following:

Trade receivables

The Company recognizes lifetime expected credit losses on trade receivables using a simplified approach and uses historical information to arrive at loss percentage relevant to each category of trade receivables:

Other financial assets measured at amortized cost

Company provides for expected credit losses on "loans advances and other than trade receivables" by assessing individual financial instruments for expectation of any credit losses. Since this category includes loans and receivables of varied natures and purpose, there is no trend that the company can draws to apply consistently to entire population. For such financial assets, the Company''s policy is to provides for 12 month expected credit losses upon initial recognition and provides for lifetime expected credit losses upon significant increase in credit risk. The Company does not have any expected loss based impairment recognized on such assets considering their low credit risk nature, though incurred loss provisions are disclosed under each sub-category of such financial assets.

B) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

Maturities of financial liabilities

The tables below analyse the company''s financial liabilities into relevant maturity companying based on their contractual maturities for all non-derivative financial liabilities and the amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant

C) Market Risk

a) Foreign currency risk

Most of the Company''s transactions are carried out in INR. Exposures to currency exchange rates arise from the Company''s overseas borrowing arrangements, which are primarily denominated in US dollars (USD).

To mitigate the Company''s exposure to foreign currency risk, non-INR cash flows are monitored and forward exchange contracts are entered into in accordance with the Company''s risk management policies. Generally, the Company''s risk management procedures distinguish short-term foreign currency cash flows (due within 6 months) from longer-term cash flows (due after 6 months). Where the amounts to be paid and received in a specific currency are expected to largely offset one another, no further hedging activity is undertaken. Forward exchange contracts are mainly entered into for significant long-term foreign currency exposures that are not expected to be offset by other same-currency transactions.

Sensitivity

The following table illustrates the sensitivity of profit and equity in regards to the Company''s financial assets and financial liabilities and the USD/INR exchange rate and EUR/INR exchange rate ‘all other things being equal''. It assumes a /- 7.86% change of the INR/USD exchange rate for the year ended at 31 March, 2017 (2016: 11.83%). A /- 4.09% change is considered for the INR/EUR exchange rate (2016: 4.92%). Both of these percentages have been determined based on the average market volatility in exchange rates in the previous 12 months. The sensitivity analysis is based on the Company''s foreign currency financial instruments held at each reporting date and also takes into account forward exchange contracts that offset effects from changes in currency exchange rates.

b) Interest rate risk

The Company''s policy is to minimize interest rate cash flow risk exposures on long-term financing. Longer-term borrowings are therefore usually at fixed rates. At 31 March, 2017, the Company is exposed to changes in market interest rates through bank borrowings at variable interest rates. Other borrowings are at fixed interest rates. The Company''s investments in bonds all pay fixed interest rates. The exposure to interest rates for the Company''s money market funds is considered immaterial. The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of /- 1% (2016: /- 1%). These changes are considered to be reasonably possible based on observation of current market conditions. The calculations are based on a change in the average market interest rate for each period, and the financial instruments held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.

i) Liabilities

The company''s policy is to minimize interest rate cash flow risk exposures on long-term financing. At 31^st March, 2017, the company is exposed to changes in market interest rates through bank borrowings at variable interest rates.

ii) Assets

The company''s fixed deposits are carried at amortized cost and are fixed rate deposits. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Interest rate risk exposure

c) Price risk Exposure

The Company is exposed to other price risk in respect of its investment shares of other companies (see Note 8). The Company does not consider changes in value of its investments in shares as insignificant, therefore is not exposed to price risks on exposures outstanding on the balance sheet date.

2. CAPITAL MANAGEMENT

The company'' s capital management objectives are

- to ensure the company''s ability to continue as a going concern

- to provide an adequate return to shareholders

The company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on the face of balance sheet.

Management assesses the company''s capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the company''s various classes of debt. The company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

3. FIRST TIME ADOPTION OF IND AS

These are the Company''s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in note 3 have been applied in preparing the financial statements for the year ended 31^st March, 2017, the comparative information presented in these financial statements for the year ended 31 March, 2016 and in the preparation of an opening Ind AS balance sheet at 1^st April, 2015 (the Company''s date of transition). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

A Ind AS optional exemptions

1 Deemed cost for property, plant and equipment, investment property and intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

2 Decommissioning liabilities included in cost of property, plant and equipment

Ind AS 101 permits a first-time adopter to not comply with the requirements of accounting for changes in decommissioning liabilities that occurred before the date of transition to Ind ASs and only adjust the carrying value of property, plant and equipment by the amount of decommissioning liability that existed on the date of transition after considering the impact of accumulated depreciation.

For the purpose of the determining the present value of liability, the rate of discount on government securities applicable for the relevant period when the such liability first arose was applied.

3 Designation of previously recognized financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.

4 Leases

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.

The Company has elected to apply this exemption for such contracts/arrangements.

5 Investment in Subsidiary/ Joint ventures and associates

Ind AS 101 permits a first-time adopter who elects to account for its investments in subsidiaries, joint ventures and associates at cost to continue with the carrying value of such investments as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition.

B Ind AS mandatory exemptions

1 Estimates

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1^st April, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

a) Investment in equity instruments carried at FVTPL or FVOCI

b) Impairment of financial assets based on expected credit loss model.

2 Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets will be made considering whether the conditions as per Ind AS 109 are met based on facts and circumstances existing at the date of transition.

Financial assets can be measured using effective interest method by assessing its contractual cash flow characteristics only on the basis of facts and circumstances existing at the date of transition and if it is impracticable to assess elements of modified time value of money i.e. the use of effective interest method, fair value of financial asset at the date of transition shall be the new carrying amount of that asset. The measurement exemption applies for financial liabilities as well.

Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so. It is impracticable to apply the changes retrospectively if:

a) The effects of the retrospective application or retrospective restatement are not determinable;

b) The retrospective application or restatement requires assumptions about what management''s intent would have been in that period;

The retrospective application or retrospective restatement requires significant estimates of amounts and it is impossible to distinguish objectively information about those estimates that existed at that time.

For the purpose of certain financial instruments carried at amortized cost for which fair value was determined on the date of transition to Ind AS, discount rates as at the date of transition were determined on the following basis:

i) Loans given to employees: rates as per third party banks applicable to employees

ii) Finance lease obligations in relation to oxygen plant: rates as per Company''s last available incremental borrowing rate

iii) Finance lease obligations in relation to power plants: implicit rate in the lease

iv) Other financial assets and financial labialize: State Bank of India''s base rate

*Cash and cash equivalents as at 31^st March, 2016 and 1^st April, 2015 under Ind-AS excludes restricted bank balances.

Note - 1

Measurement of derivatives

Under previous GAAP forward contracts which are outstanding as at the reporting date were restated at the closing spot rate with corresponding amortization of forward premium. Under Ind AS, these derivative contracts are accounted for as FVTPL.

Further under Ind AS embedded derivatives not closely related to the host contract are separated and these derivative contracts have been also accounted for as FVTPL.

Note - 2

Recognition and measurement of certain arrangements and leases of land as finance leases

Under previous GAAP, leases of land were not classified between operating or finance leases as there was no specific accounting requirement. Accordingly, all such leases were capitalized as fixed assets. Further, there was no guidance for recognizing embedded leases under the previous GAAP.

Under Ind AS certain leases of land have been considered finance leases in accordance with Ind AS 17 also certain other arrangements have been treated as finance lease of property, plant and equipment (PP&E), resulting into increase in depreciation and finance cost, while reducing cost of goods/ services procured.

Note - 3

Capitalizations of major repairs and capital spares

Under previous GAAP spares were recognized as inventory and charged to P&L upon issuance and all expenditure on repairs was charged to P&L unless it increased the future benefits from the existing asset beyond its previously assessed standard of performance.

Under Ind AS spares have been capitalized if they were held by the Company for use in business and that is expected to be used for more than one year. Similarly cost of major repairs and overhauls to continue to operate an item of PP&E has been capitalized as a cost of such PP&E.

Note - 4

Measurement of financial assets and liabilities at amortized cost

Under previous GAAP, all financial assets and financial liabilities were carried at cost.

Under Ind AS, certain financial assets and financial liabilities are subsequently measured at amortized cost which involves the application of effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the fair value amount on the date of recognition of financial asset or financial liability.

Note - 5

Measurement of equity instruments at fair value through OCI

Under previous GAAP, investments in long-term equity instrument are shown at cost and tested for other than temporary diminution. Under Ind AS, such investments are accounted for under Ind AS 109 which requires the company to measure such instruments at fair value through profit and loss (FVTPL) or fair value through other comprehensive income (FVOCI) (except for investment in subsidiaries, associates and joint venture).

Note - 6

Classification of certain leases of land as operating leases

Under previous GAAP leases of land where Company was a less or were not classified between operating or finance leases as there was no specific accounting requirement. Accordingly, all such leasehold lands were derecognized and lease premium was booked as sales consideration.“Under Ind AS certain leasehold land previously derecognized have been considered operating leases in accordance with Ind AS 17 therefore the premium on such leases has been recognized as deferred income.

Note - 7

Recognition of grant from government as deferred income

Under previous GAAP grants received in nature of promoter''s contribution were directly credited to equity. Under Ind AS, grants received where conditions for recognition were not met have been recognized as deferred income.

Note - 8

Proposed dividend

Under the previous GAAP dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting.

Note -9

Retained earnings

Retained earnings as at 1^st April, 2015 has been adjusted consequent to the above Ind AS transition adjustments.

Note - 10

Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income'' includes re-measurements of defined benefit plans, foreign exchange differences arising on translation of foreign operations, effective portion of gains and losses on cash flow hedging instruments and fair value gains or (losses) on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

Note - 11 Deferred tax

Under Ind AS, deferred tax is created using a balance sheet approach considering the taxable and deductible temporary differences, unlike previous GAAP where a concept of timing difference was applied. Ind AS adjustments recorded by the Company also have a deferred tax impact which has been recognized in the financial statements.

Note - 12

Guaranteed receivables

Under Ind AS, financial assets and liabilities are not offset unless there is a legal right to set off accordingly certain trade receivables and related liabilities have been reported on a gross basis under Ind AS.

13. a) (i) The Nine Judges Constitutional Bench of Hon''ble Supreme Court, vide its judgment dated 11.11.2016, has upheld the constitutional validity of levy of Entry Tax Acts enacted by the States and has laid down principles/tests for consideration. The respective regular Benches of the Apex Court would hear the matters as per laid down principles. Pending decisions by the regular Benches of the Apex Court on levy of Entry Tax in the States of Chhattisgarh, Odisha, Uttar Pradesh and Jharkhand, the Entry Tax demands, under dispute, of Rs,1092.28 crore, Rs,352.16 crore, Rs,92.23 crore and Rs,5.15 crore respectively up to 31^st March, 2017 aggregating to Rs,1541.82 crore (including a sum of Rs,1091.02 crore, , Rs,341.15 crore, Rs,92.23 crore and Rs,5.15 Up to 31^st March, 2016 and a sum Rs,1084.32 crore, Rs,333.95 crore, Rs,92.23 crore and Rs,5.15 as at 1^st April, 2015) have been treated as contingent liabilities.

The Company has deposited Rs, 1761.20 crore (up to 31^st March, 2016 Rs, 1600.95 crore, as at 1^st April, 2015 Rs,1436.58 crore) against the said demand.

(ii) Pending final decision by the Hon''ble Calcutta High Court, in the case of levy of Entry Tax in West Bengal, the disputed Entry Tax demands of ''254.21 crore up to 31^st March, 2017 (up to 31^st March, 2016 Rs,155.44 crore, as at 1^st April, 2015 Rs, 79.90 crore) have been treated as contingent liabilities.

b) Hon''ble Supreme Court dismissed the SLP by the Company in respect of dispute with Damodar Valley Corporation(DVC) related to provisional tariff petition of electricity charges for 2009-14 vide order dated 18th January, 2017, keeping the question of law open. The Order of Central Electricity Regulatory Commission (CERC) dt.7/8/2013 related to Tariff of 2009-14 against Petition No.275/GT/2012 has been challenged before Appellate Tribunal for Electricity (APTEL) (Appeal No.18 of 2014) in which the Company has also intervened and the order of APTEL is pending. The appeal filed by DVC pertaining to tariff of 2004-09 is yet to be decided by the Hon''ble Supreme Court of India. As per legal opinion received by the Company, the decision of Hon''ble Supreme Court of India on determination of the tariff of 2004-09 may have an effect on the subsequent periods. Pending final decision in this regard, the claim of DVC of Rs, 587.72 crore up to 31^st March, 2017 (up to 31.03.2016 Rs,491.27 crore, as at 01.04.2015 Rs,393.59 crore) has been considered as Contingent Liability and included in Note No. 39.1(i)(f) above. Against the said demands, the entire amount has been paid to DVC.

14. Under the Jharkhand Mineral Area Development Authority (Amendment) Act, 2015 the State Government of Jharkhand has made a demand of Rs,3045.41 crore up to 31^st March, 2017 (up to 31.03.2016 Rs,2375.95 crore, as at 01.04.2015 Rs,63.31 crore) towards "Market Fee" on transaction value of coal, iron and steel items. As the matter is sub-judice, the amount has been disclosed as a Contingent Liability in Note No. 39.1(i)(e) above.

15 The Company pays royalty on iron ore on the basis of quantity removed from the leased area at the rates based on notification by the Ministry of Mines, Government of India and the price published by India Bureau of Mines on a monthly basis for both iron ore lumps and fines separately. A circular was issued by the State Government of Odisha regarding payment of royalty on fines at the rate of lumps on 07.09.2010 retrospectively effective from August 2009. The Government of India, vide circular dated 23.07.2012, directed the State Government of Odisha to withdraw the circular dated 07.09.2010. Accordingly, excess royalty for fines at the rate applicable for lumps, paid in two Iron Ore Mines of the Company amounting to Rs,144.34 crore, has been shown as Claims Recoverable. As the Company has disputed the matter with the Appropriate Authorities pending withdrawal of the circular of the State Government of Odisha, the amount of Rs,144.34 crore ( As on 31.03.2016 Rs,144.34 and 01.04.2015 Rs,144.34 crore) has been included in the Contingent Liability, in Note No. 39.1(ii)(b) above.

16. In its judgment, the Central Administrative Tribunal (CAT), Kolkata has directed that Ministry of Steel shall consider the aspect of payment of arrears of revised perks and allowances and take appropriate decision of payment of revised perks and allowances amounting to Rs, 325.13 crore to the executives for the period 26.11.2008 to 4.10.2009. Ministry of Steel intimated the matter to the Company on 7.12.2016. A stay petition in the matter has been filed on 22.12.2016 and is pending before the Hon''ble Calcutta High Court. As the matter is sub-judice, the amount has been disclosed as a Contingent Liability in Note No. 39.1(v) above.

17. Indigenous washed coking coal supplies, have been claimed by Bharat Coaking Coal Limited (BCCL) and Central Coalfields Limited (CCL) at unilaterally notified price w.e.f. 13^th January, 2017 and 14^th January, 2017 respectively, which is in deviation from the mutually agreed price with the Company for the year 2016-17. The Company has accounted for the supplies based on agreed prices as per jointly signed Memorandum of Understanding, valid for supplies w.e.f. 1^st April, 2016 to 31^st March, 2017, between SAIL and BCCL & CCL. The differential claims of BCCL & CCL, amounting to Rs,334.45 crore at unilaterally notified higher rates over and above MOU rates, have been disclosed as contingent liability in the Note No. 39.1(ii)(d) above.

18. The Ministry of Environment & Forest and Climate Change (MoEF & CC) vide their letter No.- 11-599/ 2014-FC dated 1^st April 2015 issued revised Guidelines for diversion of Forest Land for non-forest purpose under the Forest (Conservation) Act, 1980 (FC Act). These revised Guidelines stipulated that in case of existing mining leases having Forest Land (partially or fully), where approval for only a part of forest land has been obtained under the FC Act, the Central Government accorded general approval under Section-2(iii) of the FC Act for the remaining area also to be Forest Land, subject to certain conditions, which includes realizing Net Present Value (NPV) for the entire forest land falling in the mining lease in case, NPV of such forest land has not already been realized.

In this matter, as per legal opinion obtained by the Company, Section 2 (iii) of FC Act, 1980 will not apply to Government Corporation and NPV is required to be paid only for that limited area, which has been approved by MoEF & CC and in which mining activities are proposed to be done and not for the entire forest area. The matter of applicability of NPV for total forest land has been challenged by the Company in Hon''ble High Court of Jharkhand. The Hon''ble Court, in its order, has directed to place the matter before Division Bench of this Court.

19. Balances of some of the Trade Receivables, Other Assets, Trade and Other Payables are subject to confirmation/reconciliation and consequential adjustment, if any.

Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made. However, management does not expect to have any material financial impact of such pending confirmation/reconciliation.

20. Sales include sale to Government Agencies recognized on provisional contract prices during the Year ended 31^st March 2017: Rs,3807.78 crore (Previous Year: Rs,3779.85 crore) and cumulatively up to 31^st March, 2017: Rs,18342.41 crore (up to Previous Year: Rs,14667.87 crore).

21. The long-term agreement for wage revision expired on 31^st December, 2016. Pending finalization of fresh agreement w.e.f. 1^st January, 2017, an all-inclusive provision of Rs,107.15 crore towards salaries and wages revision, has been made on ad-hoc basis.

22. The research and development expenditure charged to Statement of Profit & Loss and allocated to Fixed Assets/Capital work-in-progress (Net), during the Year, amount to Rs,261.60 crore (Rs,226.22 crore) and Rs,77.83 crore (Rs,50.78 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

23. The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years.

On such review as on 31^st March, 2017, no provision is required to be made during the year, as the value in use of assets of Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant, Bokaro Steel Plant and IISCO Steel Plant, based on the present value of estimated future cash-flows expected to arise from the continuing use of an asset and from its disposal at the end its useful life, is more than the carrying amount of the respective CGU.

No provision is required to be made during the year for Alloy Steels Plant, Salem Steel Plant and Visvesvaraya Iron and Steel Plant, as the net realizable value thereof, assessed by an independent agency, as on 31^st March, 2015 for Salem Steel Plant and as on 31st March, 2017 for Alloy Steels Plant and Visvesvaraya Iron & Steel Plant, is more than the carrying amount of respective CGU.

24. As per Section 135 of the Companies Act, 2013 effective from 1^st April, 2014, the Company is required to spend, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years in accordance with its Corporate Social Responsibility (CSR) Policy. Since, the Company reported average net loss made during the three immediately preceding financial years, no budget is required to be spent for the Financial Year 2016-17. Total amount to be spent by the Company is Rs,22.80 crore i.e. unspent amount of previous year. The Company has spent an amount of Rs,29.05 crore on CSR activities during the year 2016-17 under the following heads :

25. Information on leases as per Indian Accounting Standards (Ind AS) 17 on ''Leases'':

a) The Company has granted lease of properties to the employees and third parties for varying periods. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

b) Finance lease liabilities (refer note 21 and 23) are secured by the related assets held under finance lease. Future minimum finance lease payments of the respective years were as follows:

c) Description of major leasing arrangements Power plant

The Company has accounted for a power plant as finance lease under Appendix C of Ind AS 17 by virtue of the power purchase agreement with the supplier. Under the terms of the power purchase agreement, the Company shall continue to purchase power until the parties decide to terminate the agreement, which has been determined to be an un-economic proposition considering the specialized nature and location of the asset.

Oxygen plant

The Company has accounted for an oxygen plant as finance lease (or operating lease) under Appendix C of Ind AS 17 by virtue of the oxygen purchase agreement with the supplier. The agreement to purchase oxygen is a 15 year fixed term agreement.

Mining land

The Company has accounted for leasehold lands for mining as finance leases by virtue of its rights under the lease agreement after considering the right/ economic compulsion for renewal.

d) (i) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognized in the Statement of Profit and Loss during the Year is Rs,14.16 crore (Rs,13.96 crore).

(ii) As at the Balance Sheet date, the future Minimum lease payments under non-cancellable operating leases are:

26. As per the Department of Public Enterprises (DPE) guidelines, the Company is required to contribute 30% of Salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund (CPF), Gratuity, Pension and Post-Superannuation Benefits. Accordingly the Company has made provision for pension benefit for executives @ 9% of Salary w.e.f. 1^st January, 2007 and 3% of Salary w.e.f. 1^st January, 2017. Further, pension benefit for non-executives has been provided @ 6% of Salary w.e.f. 1^st January, 2012 and 2% of Salary w.e.f. 1^st January, 2017.

The cumulative provision/liability towards pension benefit for executive (w.e.f. 1^st January, 2007) & non-executive (w.e.f. 1^st January, 2012) employees, amounting to Rs,2367.93 crore (Rs,324.81 crore during the Year) and Rs,46.05 crore (Rs,5.45 crore during the Year) have been charged to ‘Employee Benefits Expense'' and ‘Expenditure during Construction'' respectively.

27. During the year, the Company had Specified Bank Notes (SBN) or other denomination notes as defined in the MCA notification G.S.R. 308E dated March 30, 2017 on the details of SBN held and transacted during the period from November 8, 2016 to December 30, 2016, the denomination-wise SBNs and other notes as per the notification is given below:

28. As per Government of India guidelines on payment of dividends, the Company is required to pay a minimum annual dividend of 30% of Profit After Tax or 5% of the Net-worth, whichever is higher, subject to the maximum dividend permitted under the Companies Act, 2013 and other rules, unless lower dividend proposed to be paid is justified after analysis of the various financial parameters of the Company. In case, the Company is not able to comply with the guidelines, specific exemption has to be obtained from Department of Investment & Public Asset Management (DIPAM), Government of India. Keeping in view the adverse financial position of the Company due to losses, the Company took up the matter with DIPAM for exemption from compliance of the guidelines for payment of dividends for the financial year 2015-16. DIPAM intimated to the Company that efforts should be made to pay minimum dividend. The Company has again represented the matter to DIPAM for exemption and final decision in this regard is awaited.

29. Contributions in cash and kind made for the period from the Financial Year 2006-07 to 2016-17 to Railway authorities for laying out railway line from Rajhara to Rowghat would be recovered in cash at the rate of 7% per annum for 37 years on total contribution towards redemption of SAIL''s contribution after commencement and fulfillment of assured traffic from Rowghat mines. Management is of view that the criteria laid out in Memorandum of Understanding will be met and interest accrues from the date of investment. The refund amount comprises principal and interest elements. Accordingly, the interest element has been computed and recognized as income during the year amounting to Rs,11.40 crore (till date Rs,19.11 crore). As per the opinion of Expert Advisory Committee of The Institute of Chartered Accountants of India received during the year such treatment of recognition on time proportion basis is in order as in view of Management, no significant uncertainty exist regarding collectability and measurability of revenue.

30. Based on materiality and comparability, in respect of temporarily discontinuation of operation of mines namely Barsua (w.e.f 17.05.2014), Bhawnathpur (w.e.f. 29.04.2013) and Punapani (w.e.f 01.03.2004.) due to environmental/forestry clearance issues, net expenditure during the year 2016-17, excluding depreciation, of Rs, 97.95 crore (Previous Year Rs, 101.04 crore) has been included under Note No.32 Rs,Other Expenses'' in Statement of Profit and Loss (refer Note No 32). Head-wise bifurcation is as under:

31. DEFINED BENEFIT SCHEMES

32. General Description of Defined Benefit Schemes:

Gratuity : Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of ''10 lakhs for executives & non-executives joined on or after 1st July, 2014 and without any monetary limit for other non-executives, has been considered for actuarial valuation.

Leave Encashment: Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days combined for earned leave and half pay leave. Encashment of accumulated earned leave is also allowed up to 30 days once in a financial year up to 18th November, 2015 and stopped thereafter.

Provident Fund: 12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund Trusts by the company.

Post Retirement Medical Benefits: Available to retired employees at company''s hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits: Payable to retiring employees for settlement at their home town.

Long Term Service Award: Payable in kind on rendering minimum 25 years of service and also on superannuation.

33. Other disclosures, as required under Ind AS 19 on ''Employee Benefits'', in respect of defined benefit obligations are :

*The Company does not expect to contribute any amount towards the expenses of Gratuity Fund during the year 2017-18, after considering the return on the investments. The defined benefit obligations, other than gratuity, are unfounded.

34. GENERAL

35.Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Ind AS 108, Operating Segments'' issued by Ministry of Corporate Affairs.

ii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Ind AS 108, Operating Segments, issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose.

36. Related Party

As per Ind AS 24 ''Related Party Disclosures'' issued by the Ministry of Corporate Affairs, the names of the related parties, are given below: -

^A. ^{Name of the related party and nature of relationship} IISCO Limited Provident Institution, Burnpur

^Sub^{sidiary Companies} IISCO Limited Provident Institution, Kolkata

SAIL-Jagdishpur Power Plant Limited IISCO Limited Works Provident Fund, Burnpur

^{SAIL Refractor}y ^Comp^any ^Limited SAIL ASP Provident Fund, Durgapur

SAIL Sindri Projects Limited Salem Steel Provident Fund, Salem

^{Chhattisgarh Mega Steel Limited} Visvesvaraya Iron and Steel Plant Employees Provident Fund Trust, Bhadravati

^{Joint Venture Companies} SAIL Provident Fund, New Delhi

NTPC-SAIL Power Company Limited Hindustan Steel Provident Fund, Ranchi

^{Bokaro Power Supply Company Private Limited} Hindustan Steel Limited, Central Purchase Organization, Sales & Transport, Calcutta

SAIL Bansal Service Centre Limited ^{Provident Fund}

Mjunction Services Limited Bharat Refractoriness Provident Fund, Bokaro

Bhilai Jaypee Cement Limited IFICO Provident Fund, Ramgarh

S&T Mining Company Private Limited ^{CCSO Provident Fund}, ^Dhanbad

SAIL & MOIL F_erro All_oy_s P_rivate Limited SAIL RMD Establishment and Administrative Offices Employees Provident Fund, Kolkata

International Coal Ventures Private Limited ^{Bolani Ores Mines Provident Fund} , ^Bolani

SAIL-SCI Shipping Private Limited SAIL Employees'' Superannuation Benefit Fund

SAIL SCL Kerala Limited SAIL Gratuity Fund

SAIL-RITES Bengal Wagon Industry Private Limited ^B. ^{Key Management Personnel}

SAIL Kobe Iron India Private Limited ^{Shri PK}. ^Singh

TMTSAL SAIL JV Limited Shri Anil Kumar Chaudhary

SAL SAIL JVC Limited Shri Raman

SAIL-Bengal Alloy Castings Private Limited ^{Shri S}.^S. ^{Mohanty (Up to 30th June 2016)}

Prime Gold-SAIL JVC Limited ^{Shri Kalyan Maity}

VSL SAIL JVC Limited Shri Binod Kumar (Up to 28th Feb 2017)

Abhinav-SAIL JVC Limited ^Dr- ^N. ^Mahapatra

N.E. Steel & Galvanising Private Limited ^{Dr. G. Vishwakarma}

North Bengal Dolomite Limited ^Ms. ^{Soma Mondal (w}.^e.^{f 1st March 2017)}

Romelt-SAIL (India) Limited ^{Shri A}. ^Maitra

NMDC SAIL Limited Shri S. Chandrasekaran

Bastar Railway Private Limited ^{Shri P Saidev}

Associate Company ^{Shri RK}. ^Rathi

Almora Magnesite Limited ^{Shri A.K. Rath}

Other Companies Smt. K Raman

ICVL Mauritius Shri C Srikanta

Riverdale Mining (PTY) Limited (RML) ^{Shri S K Garai}

Minas De Banga (Mauritius) Limited Mozambique ^{Shri M. Ravi}

ICVL Zambeze Mauritius Limited ^{Shri M}.^R. ^Panda

ICVL Ventures Mauritius ^{Shri B}.^K. ^{Jha (Up to 30th April 2016)}

Promark Services Limited RPU ^{Shri Neeraj Mathur}

Benga Power Plant (Mauritius) Limited ^{Shri Somdev Das}

Minas De Benga LDA ^{Shri R Mitra}

ICVL Zambeze LDA Shri S K Aggarwal

ICVL Ventures LDA ^{Shri H}.^{P Sin}g^h

Minas De Changara LDA ^{Shri S.K. Jain}

Benga Energia SA Shri U.K. De

IISCO Ujjain Pipe & Foundry Co. Limited ^{Shri S}. ^Kolay

UEC-SAIL Information Technology Limited ^{Shri Sukumar Hedge}

Post Employment Benefit Plans ^{Shri A.Kumar}

HSL BSP Provident Fund, Bhilai Shri Ashoke Kumar Paul (w.e.f. 2nd May, 2016)

DSP Provident Fund, Durgapur ^{Shri PK}. ^Mishra

Hindustan Steel Ltd Contributory Provident Fund, Rourkela ^{Shri B.N. Thakur}

Bokaro Steel Employees Provident Fund, Bokaro ^{Shri N Ramachandran}

E. During the year, Sales and Trade Receivables include Rs,9009.19 crore (Rs, 9912.77 crore) and Rs, 1493.07 crore (Rs, 2506.50 crore) for transactions with the Central Government (including Indian Railways) which constitute 19.07 % (23.62%) and 49.97% (69.72% ) of the Sales and Trade Receivables respectively.

37.Disclosures of provisions required by Indian Accounting Standards (Ind AS)37 ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

Mines forestation costs - Payable on renewal (including deemed renewal)/forest clearance of mining leases to Government authorities, towards a forestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities.

Overburden backlog removal costs - To be incurred towards removal of overburden backlog at mines over the future years.

38.Particulars in respect of Loans and Advances as per the disclosure requirement of regulation 34(3) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015:

* Rs, 2.53 crore (Rs, 2.53 crore), being doubtful of recovery has been provided for in the books of accounts.

ii) No loans have been given (other than loans to employees), wherein there is no repayment schedule or repayment is beyond seven years; and

iii) There are no loans and advances in the nature of loans, to firms/companies, in which directors are interested.

---

Mar 31, 2016

1. a) Pending final decision by the Hon''ble Supreme Court of India in Special

Leave Petition against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the State of Uttar Pradesh, the entry tax amount included in Note No. 29.1(i)(g), includes disputed demand of Rs.97.22 crore (Rs.94.89 crore). The Company has deposited Rs.114.21 crore (Rs.96.45 crore) against the said demand which has been shown as deposit and disclosed under Long term Loans and Advances.

Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 29.1 (i)(g) includes disputed demands of Rs.1091.02 crore (Rs.1084.32 crore) in Chhattisgarh State and Rs.341.15 crore ( Rs. 333.95 crore) in Odisha State respectively.

In respect of the case pertaining to Chhattisgarh State, liability of Rs.1409.23 crore (Rs.1251.41 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs.1409.23 crore (Rs.1251.41 crore) and Rs.109.82 crore (Rs.103.27 crore) in Chhattisgarh and Odisha State respectively against the said demand which has been treated as Deposit and disclosed under Long term Loans and Advances. b) Pending decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Jharkhand dismissing the writ petition of the Company, demands of Rs.491.27 crore (Rs.393.59 crore) made by Damodar Valley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, have been disclosed as contingent liability included in Note No. 29.1(i)(f). Against the said demands, the entire amount have been paid to DVC against bills raised by them and disclosed under short term loans and advances.

2. Under the Jharkhand Mineral Area Development Authority (Amendment) Act, the State Government of Jharkhand has made a demand of Rs. 97.85 crore (Rs.63.31 crore) towards "Market Fee" on transaction value of coal. As the matter is sub-judice, the amount has been disclosed as a Contingent Liability in Note No. 29.1(i)(e) above.

3. The Company pays royalty on iron ore on the basis of quantity removed from the leased area at the rates based on notification by the Ministry of Mines, Government of India and the price published by India Bureau of Mines on a monthly basis for both iron ore lumps and fines separately. A circular was issued by the State Government of Odisha regarding payment of royalty on fines at the rate of lumps on 07.09.2010 retrospectively effective from August 2009.The Government of India, vide circular dated 23.07.2012, directed the State Government of Odisha to withdraw the circular dated 07.09.2010. Accordingly, excess royalty for fines at the rate applicable for lumps, paid in two Iron Ore Mines of the Company amounting to Rs.144.34 crore, has been shown as Claims Recoverable. As the Company has disputed the matter with the Appropriate Authorities pending withdrawal of the circular of the State Government of Odisha, the amount of Rs.144.34 crore (Rs.144.34 crore) has been included in the Contingent Liability, in Note No. 29.1(ii)(b) above.

4. FIXED ASSETS

4.1 Land:

(i) Includes 67681.64 acres (67354.96 acres) owned / possessed / taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 34061.08 acres (35334.08 acres) in respect of which title is under dispute.

(iii) 8856.73 acres (8851.69 acres) transferred/agreed to be transferred or made available for settlement to various Joint Ventures / Central / State Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 7181.43 acres (6345.43 acres) given on lease to various agencies/ employees/ex-employees.

(v) Includes 4440.70 acres (4211.42 acres) under unauthorised occupation.

(vi) 1762.92 acres (1762.92 acres) of Land which is not in the actual possession, shown as deemed possession.

(vii) Rs.64.18 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(viii) Vide Notification ofAcquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484E dated 13.10.2012, National Highway Authority of India Ltd.(NHAI) had notified its intention to acquire 9.553 acres of Land. The compensation for 7.895 acres of Land has already been received and accounted for. Any further acquisition in part or full from the balance 1.658 acres of the notified land shall be accounted for on receipt of compensation for the actual quantity of land acquired by NHAI in future, if any.

5. Buildings include net block of Rs.21.73 crore (Rs.22.15 crore) for which conveyance deed is yet to be registered in the name of the Company.

6. Assets retired from active use and waiting for disposal amounting to Rs.75.98 crore has been shown under note 11 (a) " Tangible Fixed Assets", the net realizable value of which in the opinion of the management, will not be less than the amount shown and does not require any provision.

7. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 3151 March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11- The Effects of Changes in Foreign Exchange Rates''. During the Year ended 31st March, 2016, the net foreign exchange variations of Rs.154.64 crore (net debit) [Year ended 31st March 2015- Rs.66.57 crore (net credit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2016, an amount of Rs.496.39 crore (net debit) [Rs.414.55 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 2016.

8. Estimated amount of contracts remaining to be executed and not provided for (net of advances), on capital account are Rs. 15688.09 crore (Rs.13013.17 crore) and on revenue account are Rs.1444.26 crore (Rs.1399.69 crore).

9. INVESTMENT,CURRENT ASSETS,LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

10. The amount due to Micro and Small Enterprises as defined in the The Micro, Small and Medium Enterprises Development Act, 2006 (as disclosed in Note No. 8- Trade Payables) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March, 2015 are as under:

11. Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

12. STATEMENT OF PROFIT & LOSS

12.1 Net Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2016: Rs.3376.11 crore (Previous year: Rs.2907.36 crore) and cumulatively upto 31st March 2016: Rs. 13074.67 crore (Previous year: Rs.9750.99 crore).

12.2 The research and development expenditure charged to Statement of Profit & Loss and allocated to Fixed Assets/Capital work-in-progress (Net), during theYear, amount to Rs.226.22 crore (Rs.232.06 crore) and Rs.50.78 crore (Rs.32.14 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

12.3 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years.

On such review as on 31st March 2016, no provision is required to be made during the year, as the value in use of assets of Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant and Bokaro Steel Plant, based on the present value of estimated future cash-flows expected to arise from the continuing use of an asset and from its disposal at the end its useful life, is more than the carrying amount of the respective CGU.

No provision is required to be made during the year for IISCO Steel Plant, Alloy Steels Plant, Salem Steel Plant and Visvesvaraya Iron and Steel Plant, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2015 for Salem Steel Plant and as on 31st March, 2014, for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Rotary Polisher unit in Salem amounting to Rs.7.73 crore as the net realisable value is higher than the book value. Similarly, the net realizable value of Pipe Coating Plant at RSP is higher than the book value at Rs.36.60 crore.

12.4 As per section 135 of the Companies Act, 2013 effective from 1st April 2014, the Company is required to spend, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years in accordance with its Corporate Social Responsibility (CSR) Policy. Based on above, the CSR amount has been budgeted at Rs.56 crore for the year 2015-16. Total amount to be spent by the Company is Rs. 98.96 crore (including unspent amount of Rs. 42.96 crore for previous year), out of which the Company has spent an amount of Rs.76.16 crore on CSR activities during the year 2015-16 under the following heads :

12.5 Information on leases as per Accounting Standard 19 on Leases'':

(a) The Company has granted lease of properties to the employees and third parties for varying periods. The lease premium received up- front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the year is Rs.13.96 crore (Rs.12.86 crore).

13. As per the Department of Public Enterprises (DPE)''s Guidelines, the Company is required contribute 30% of salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund (CPF), Gratuity, Pension and Post-Superannuation Benefits. To comply with the DPE''s Guidelines relating to contribution to Superannuation Benefits within overall limit of 30% of salary of executive employees , the provision for pension benefit has been made @ 9% (rounded-off) w.e.f. 1st January 2007. Further, as per agreement dated 1st July, 2014 between the Management and the Unions of non-executive employees, pension benefit for non-executives has been provided @ 6% of salary (Basic Pay Dearness Allowance) w.e.f. 1st January, 2012.

The cumulative provision/liability towards pension benefit for executive (w.e.f. 1st January, 2007) & non-executive (w.e.f. 1st January,20l2) employees, amounting to Rs.2043.12 crore (Rs.425.48 crore during the year) and Rs.40.62 crore (Rs.7.60 crore during the year) have been charged to Employee Benefits Expense'' and Expenditure during Construction'' respectively.

14. The Company has assessed the useful life of the assets and major components of Plant & Machinery, Factory Buildings, Railway Line & Sidings and Water Supply & Sewerage based on the technical parameters/assessment and supported by external technical advice''. Accordingly, depreciation of Rs. 86.58 crore (net of deferred tax liability Rs. 45.82 crore) on account of fixed assets with no remaining useful life as on 1st April, 2015 has been adjusted in retained earnings.

In view of above, depreciation for the year ended 31st March, 2016 is higher by Rs.54.07 crore.

15. The Government of India promulgated Mines and Minerals (Development & Regulation), Amendment Act, 2015 (MMDR, 2015), effective from 26th March, 2015. The Ministry of Mines, vide notification dated 17.9.2015, notified the Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015, deemed to have come into force on 12.1.2015, specifying the contribution payable to the District Mineral Foundation. Vide Notification dated 14th August, 2015, the Ministry of Mines, established the National Mineral Exploration Trust, effective from the date of its publication in the official gazette. As per provisions of the MMDR, 2015, an amount of Rs.398.97 crore towards contributions to District Mineral Foundation and National Mineral Exploration Trust has been charged to the Statement of Profit and Loss during the year. Hon''ble high Court of Delhi has stayed the recovery proceedings on the basis of petition filed by Federation of Indian Mineral Industries and others.

16. Contributions in cash and kind made for the period from the Financial Year 2006-07 to 2015-16 to Railway authorities for laying out railway line from Rajhara to Rowghat would result in return of 7% of investment at the end of every year after commencement and fulfillment of assured traffic from Rowghat mines. Management has assumed that the criteria laid out in the Memorandum of Understanding will be met and interest will occur from the date of investment. The refund amount comprises principal and interest elements. Accordingly, the interest element has been computed and recognized at effective rate of interest as income during the year (Rs.44.02 core). Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) has opined to account for the same on recovery. To ascertain whether measurability and collectability criteria is being fulfilled or not in terms of AS-9, the matter has been referred to EAC of ICAI.

17. SAIL has invested a sum of Rs.495.03 crore in Equity Shares in International Coal Venture Private Limited (ICVL), a Joint Venture with Rastriya Ispat Nigam Limited (RINL), NMDC Limited (NMDC), NTPC Limited (NTPC) and Coal India Limited. In addition, SAIL has provided a letter of comfort of US$ 30 million to Exim Bank. Presently, holding of SAIL in ICVL is 46.62% of the Equity Shares. ICVL has 100% subsidiary in Mauritius by the name of ICVL, Mauritius which has 100% step down subsidiary Riversdale Mining (Pty) Limited (RML) in Australia which in turn holds a share of 65% stake in Minas De Benga Mauritius Ltd. (a Joint Venture Enterprise operating coal mines in Mozambique) which is running into heavy losses due to fall in international coal prices and currently no mining operation are being carried out. In the absence of financial statements and relevant information, the investment in ICVL is being carried at book value. Based on valuation carried out by SBI Capital Markets Limited, no diminution in investment is anticipated.

18. GENERAL

18.1 DEFINED BENEFIT SCHEMES

18.1.1 General Description of Defined Benefit Schemes:

Gratuity: Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.l0 lakhs for executives & non-executives joined on or after 1st July, 2014 and without any monetary limit for other non- executives, has been considered for actuarial valuation.

Leave Encashment: Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days combined for earned leave and half pay leave. Encashment of accumulated earned leave allowed upto 30 days once in the financial year upto 18th November, 2015 and stopped thereafter.

Provident Fund: 12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund Trusts by the company.

Post Retirement Medical Benefits: Available to retired employees at company''s hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits: Payable to retiring employees for settlement at their home town.

Employees'' Family Benefit Scheme: Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long Term Service Award: Payable in kind on rendering minimum 25 years of service and also on superannuation.

19. Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs.

Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

ii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Accounting Standard-17 - Segment Reporting'', issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose.

20. Previous year''s figures have been re-arranged/re-grouped/re cast, wherever necessary. Figures in brackets pertain to previous year.

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Mar 31, 2015

1.1 a) Pending final decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the state of Uttar Pradesh, the entry tax amount included in Note No. 29.1(i)(g), includes disputed demand of Rs.94.89 crore (Rs.91.55 crore). The Company has deposited Rs.96.45 crore (Rs.79.21 crore) against the said demand which has been shown as deposit and disclosed under Long term Loans and Advances.

Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 29.1 (i)(g) includes disputed demands of Rs.1084.32 crore (Rs.1071.28 crore) in Chhattisgarh State and Rs.333.95 crore (Rs.214.81 crore) in Odisha State respectively.

In respect of the case pertaining to Chhattisgarh State, liability of Rs.1251.41 crore (Rs.1071.15 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs.1251.41 crore (Rs.1071.15 crore) and Rs.103.27 crore (Rs.78.12 crore) in Chhattisgarh and Odisha State respectively against the said demand which has been treated as Deposit and disclosed under Long term Loans and Advances.

b) Pending decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Jharkhand dismissing the writ petition of the Company, claims of Rs.393.59 crore (Rs.291.76 crore) made by Damodar Valley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, have been disclosed as contingent liability included in Note No. 29.1(i)(f). Against the said claims, the entire amount have been paid to DVC against bills raised by them, and disclosed under short term loans and advances.

c) The unpaid amount of Rs.63.61 crore claimed by BCCL towards MADA Cess @1% on the invoices raised by it, has been disclosed as contingent liability, as the matter is sub- judice.

2. FIXED ASSETS

2.1 Land:

(i) Includes 66484.91 acres (66484.91 acres) owned/ possessed/ taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 35334.08 acres (35937.55 acres) in respect of which title is under dispute.

(iii) 8851.69 acres (8200.76 acres) transferred/agreed to be transferred or made available for settlement to various

Joint Ventures / Central / State Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6345.43 acres (6345.43 acres) given on lease to various agencies/employees/ex- employees.

(v) Includes 4075.67 acres (4066.88 acres) under unauthorised occupation.

(vi) 824.86 acres (824.86 acres) of Land which is not in the actual possession, shown as deemed possession.

(vii) Rs.59.88 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(viii)Vide Notification of Acquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484 E dated 13.10.2012, National Highway Authority of India Ltd (NHAI) has acquired 9.553 acres of Land of DSP. The compensation for 8.0013 acres of Land has already been received & accounted for and for balance 1.5517 acres of Land, compensation is under determination by NHAI.

2.2 Buildings include net block of Rs.22.15 crore (Rs.22.58 crore) for which conveyance deed is yet to be registered in the name of the Company.

2.3 Assets retired from active use and waiting for disposal amounting to Rs.75.98 crore has been shown under note 11 (a) "Tangible Fixed Assets", the net realizable value of which in the opinion of the management, will not be less than the amount shown and does not require any provision.

2.4 Capital Work in Progress includes Rs.126.25 crore (Rs.122.03 crore) in respect of 20 Hi Sendzemir Mill which could not be completed due to accident in the trailer carrying Mill Housing. The case filed by M/s. Waterbury Farrel, original supplier, was dismissed by Hon''ble District Court of Salem by its order dated 13.08.2013. To complete the balance portion of work on risk purchase basis, retendering process was completed and orders have been placed in respect of electrical, major mechanical & erection work during the year 2014-15. The jobs are in progress. For balance work, the retendering process is in progress.

2.5 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11- ''The Effects of Changes in Foreign Exchange Rates''. During the Year ended 31st March, 2015, the net foreign exchange variations of Rs.66.57 crore (net credit) [Year ended 31st March 2014- Rs.340.44 crore (net debit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2015, an amount of Rs.414.55 crore (net debit) [Rs.433.70 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 2015.

2.6 Estimated amount of contracts remaining to be executed and not provided for (net of advances), on capital account are Rs.13013.17 crore (Rs.13724.69 crore) and on revenue account are Rs.1399.69 crore (Rs.1459.72 crore).

2.7 Boiler 3 (appearing in Note No. 12- CWIP at a value Rs. 37.00 crores) was damaged on 12th March 2013 due to explosion. A contract has been awarded to the same contractor for repairing the Boiler at a value of Rs.22.00 crore, net of CENVAT and Rs.9.27 crore incurred for restoration of damages has been charged to the statement of Profit and Loss in F.Y. 2014-15. It may also be noted that ISP has obtained a report from a Boiler Expert for analysing the cause of explosion and it was confirmed that all operational requirements in connection with the lighting of the Boiler were duly complied with. Based on such report, in a joint meeting between ISP and the vendor, it is decided that the matter shall be placed before the surveyor for consideration. Insurance claim, lodged by the contractor for damages caused, are also under active consideration at the end of Insurer as confirmed by them vide Insurer''s letter dated 19th May, 2015.

3. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS.

3.1 The Central Board of Direct Taxes vide its Notification dated 25th December 2001 revised the rules for computation of certain perquisites. The Unions of non-executives filed writ petition with the Hon''ble High Court at Kolkata challenging the above Notification. In pursuance of the Hon''ble Court''s orders, the term deposits (including interest earned thereon) amounting to Rs.101.20 crore (Rs.95.48 crore), in respect of tax deducted at source, have been kept separately with bank(s). Such deductions and deposits after 31st Dec. 2005 have been made in accordance with amended law/judicial decisions. The writ petition filed by Steel Workers Federation of India is still pending before the Hon''ble Court. However, there is no impact on accounts of the Company as the additional tax, if required, shall be recoverable from the employees.

3.2 The amount due to Micro and Small Enterprises as defined in the ''The Micro, Small and Medium Enterprises Development Act, 2006 (as disclosed in Note No. 8- Trade Payables) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March, 2015 are as under:

3.3 Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under ''Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

3.4 The Company has stock of iron ore fines of 41.09 million tonnes (41.12 million tonnes) at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

4. STATEMENT OF PROFIT & LOSS

4.1 Net Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2015: Rs.2907.36 crore (Previous year: Rs.3257.40 crore) and cumulatively upto 31st March 2015: Rs.9750.99 crore (Previous year: Rs.6900.19 crore).

4.2 ''Other income'' includes Rs.199.81 crore towards profit on sale of investment in one of the Joint Ventures of the Company.

4.3 Sales include Railway Receipts (RR) made upto 31st March, 2015 and endorsed in favour of the customers and retired upto 21st April, 2015.

4.4 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

4.5 The research and development expenditure charged to Statement of Profit & Loss and allocated to Fixed Assets/Capital work-in- progress (Net), during the Year, amount to Rs.232.06 crore (T106.05 crore) and Rs.32.14 crore (Rs.4.38 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

4.6 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years. On such review as on 31st March 2015, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2015 for Salem Steel Plant and as on 31st March, 2014, for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Polisher unit in Salem amounting to Rs.7.97 crore as the net realisable value is higher than the book value. Similarly, the net realizable value of Pipe Coating Plant at RSP is higher than the book value atRs.38.39 crore.

4.7 As per section 135 of the Companies Act, 2013 effective from 1st April 2014, the Company is required to spend, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years in accordance with its CSR Policy. Based on above, the CSR amount has been budgeted at Rs.78.00 crore for the year 2014-15. The Company has spent an amount of Rs.35.04 crore on CSR activities during the year 2014-15 under the following heads :

The balance unspent amount of Rs.42.96 crore will be spent in due course.

4.8 The Company has revised the accounting policy for depreciation of assets in alignment with Schedule II to the Companies Act, 2013 which has become applicable from 1st April, 2014. Consequently, profit for the year ended 31st March, 2015, is higher by Rs.438.50 crore and the fixed assets (net block), as at 31st March, 2015 are higher by Rs.208.84 crore Further, an amount of Rs.229.66 crore has been recognised in the opening balance of the retained earnings where the remaining useful life of such tangible assets is Nil as at 1st April, 2014 in line with the provisions of Schedule – II to the Companies Act, 2013.

4.9 The Company has adopted the useful lives of the Plant and Machinery used in manufacture of Steel, as defined in Clause 5 (iv) (g) of Part ''C'' of the Schedule II to the Companies Act. The depreciation rates, derived on above-mentioned basis correspond with the useful lives applicable on ''No Extra Shift Depreciation (NESD)'' basis. Therefore, the Company has considered the depreciation rates based on above-mentioned useful lives of Plant and Machinery used in manufacture of steel on ''NESD'' basis, based on technical opinion obtained by the Company from an independant expert.

4.10 The Government of India has promulgated Mines and Minerals

(Development & Regulation), Amendment Act, 2015, w.e.f 12th January, 2015. As per the Act, the State Government is empowered to set up a Foundation Trust by notification, called the District Mineral Foundation for specified purposes, for which, the existing mining lease holder, in addition to royalty, shall pay to the Foundation Trust of the District, an amount not exceeding royalty amount, in such manner as may be prescribed and to establish a National Mineral Exploration Trust (NMET), for utilising the funds for regional and detailed exploration in the prescribed manner. The mining lease holder shall pay an amount of 2% of royalty to NMET, in such manner as may be prescribed by the Central Government. As the above amounts are payable after issue of notification(s) and formation of trusts by the State Governments & Central Government respectively and since so far neither any notification has been issued nor any trust has been formed, no liability has been considered in the accounts.

4.11 Information on leases as per Accounting Standard 19 on Rs.Leases'':

(a) The Company has granted lease of properties to the employees and third parties for varying periods. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the Year of receipt.

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the Year is f12.86 crore (Rs.12.11 crore).

4.12 As per the Department of Public Enterprises (DPE)''s Guidelines, the Company is required contribute 30% of salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund (CPF), Gratuity, Pension and Post- Superannuation Benefits. To comply with the DPE''s Guidelines relating to contribution to Superannuation Benefits within overall limit of 30% of salary of executive employees, the provision for pension benefit has been made @ 9% (rounded-off) w.e.f. 1st January 2007. Further, as per agreement dated 1st July 2014 between the Management and the Unions of non-executives employees, pension benefit for non-executives has been provided @ 6% of salary (Basic Pay Dearness Allowance) w.e.f. 1st January, 2012.

The cumulative provision/liability towards pension benefit for executive (w.e.f. 1st January, 2007) & non-executive (w.e.f. 1st January, 2012) employees, amounting to Rs.1614.18 crore (Rs.382.08 crore for the year) and Rs.36.48 crore (Rs.8.44 crore for the year) have been charged to ''Employee Benefits Expense'' and ''Expenditure during Construction'' respectively.

5. GENERAL

5.1 DEFINED BENEFIT SCHEMES

5.1.1. General Description of Defined Benefit Schemes:

Gratuity : Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives & non-executives joined on or after 1st July, 2014 and without any monetary limit for other non- executives, has been considered for actuarial valuation.

Leave Encashment : Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days combined for earned leave and half pay leave.

Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

Provident Fund : 12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund Trusts by the company.

Post Retirement Medical Benefits : Available to retired employees at company''s hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits : Payable to retiring employees for settlement at their home town.

Employees'' Family Benefit Scheme : Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long term service Award : Payable in kind on rendering minimum 25 years of service and also on superannuation.

5.2 Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

iii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Accounting Standard-17 - Segment Reporting'', issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose The disclosure of segment wise information is given at Annexure-I

5.3 Disclosures of provisions required by Accounting Standard (AS) 29 - ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

Mines afforestation costs - Payable on renewal (including deemed renewal) / forest clearance of mining leases to Government authorities, towards afforestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities.

Overburden - To be incurred towards removal of overburden backlog at mines over the future years.

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Mar 31, 2014

Other Notes to Financial Statements

1.1 : CONTINGENT LIABILITIES

(Rs. crore)

As at As at 31st March, 2014 31st March, 2013

(i) Claims against the Company pending appellate/judicial decisions :

a) Excise Duty 1350.97 1120.73

b) Sales Tax on inter-state stock transfers from plants to stockyards*. 743.12 740.94

c) Other sales tax matters 167.41 172.19

d) Income Tax 1028.85 797.30

e) Other duties, cess and levies 5274.71 2151.82

f) Civil Matters ** 1918.04 831.59

g) Entry Tax 1443.85 1166.18

h) Miscellaneous ** 541.14 449.31

* No liability is expected to arise, as sales tax has been paid on eventual sales.

** includes claims of Rs. 45.88 crore (Rs.22.54 crore), against which there are counter-claims of Rs. 26.85 crore (Rs.18.41 crore).

(ii) Other claims against the Company not acknowledged as debt:

a) Sales Tax 23.12 17.32

b) Duties, cess and levies 257.14 250.38

c) Civil Matters 50.31 23.03

d) Miscellaneous $ 7167.45 5498.71

$ includes claims of Rs. 100.94 crore (Rs.100.94 crore), against which there are counter-claims of Rs. 103.95 crore (Rs.103.95 crore).

(iii) Disputed income tax/service tax/other demand on joint venture company for which Company may be contingently liable under the joint venture agreement 30.39 29.33

(iv) Bills drawn on customers and discounted with banks 47.94 66.89

(v) Price escalation claims by contractors/ suppliers and claims by certain employees, - - extent whereof is not ascertainable

1.2 a) Pending final decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the State of Uttar Pradesh, the entry tax amount included in Note No. 28.1(i)(g), includes disputed demand of Rs.91.55 crore (Rs.81.64 crore). The Company has deposited Rs.81.88 crore (Rs.70.57 crore) against the said demand which has been shown as deposit and disclosed under Long-term Loans and Advances.

Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 28.1 (i)(g) includes disputed demands of Rs.1071.28 crore (Rs.888.46 crore) in Chattisgarh State and Rs.214.81 crore (Rs.170.32 crore) in Odisha State respectively.

In respect of the case pertaining to Chattisgarh State, liability of Rs. 1071.15 crore (Rs.891.04 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs. 1071.15 crore (Rs.891.04 crore) and Rs. 78.12 crore (Rs.53.74 crore) in Chattisgarh and Odisha State respectively against the said demand which has been treated as Deposit and disclosed under Long-term Loans and Advances.

b) Pending decision by the Hon''ble Supreme Court of India in

SLP against order by the Honorable High Court of Jharkhand dismissing the writ petition of the Company, claim of Rs.291.76 crore (Rs.217.40 crore) made by Damodar Valley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, has been disclosed as contingent liability included in Note No. 28.1(i)(f). Against the said claim, the entire amount has been paid to DVC against bills raised by them, and disclosed under Short Term Loans and Advances.

c) Pending decision by ''Appellate Tribunal For Electricity'', the claims of Rs. 79.30 crore (Rs. 50.06 crore) made by Damodar Valley Corporation in respect of electricity supplied to Durgapur Steel Plant and Alloy Steels Plant of the Company, has been disclosed as contingent liability included in Note No. 28.1(i)(h).

d) Rourkela Steel Plant of the Company has proposed to the Government of Odisha for an out of court settlement of the matter relating to levy of water tax under the provisions of Odisha Irrigation Act, 1959 and rules thereunder, keeping in view of overall interest of the Company. If the settlement is accepted, the Company may have to pay an amount which shall be mutually agreed to with the State Government of Odisha.

e) BCCL has claimed an amount of Rs.60.21 crore towards MADA Cess @1% on the invoices raised by it. The Company has not paid the said amount and disclosed as contingent liability as the matter is sub-judice. BCCL has confirmed that Cess is not being paid for other buyers also, though collected.

f) The Contingent Liabilities stated in para 28.1 also include court/arbitration cases where the Company has lost the cases in first or subsequent appeals and has gone to appeal in the higher forums.

2. FIXED ASSETS

2.1 Land:

(i) Includes 66484.91 acres (67178.24 acres) owned/possessed/ taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 35902.82 acres (35903.35 acres) in respect of which title is under dispute.

(iii) 8200.76 acres (10881.28 acres) transferred/agreed to be transferred or made available for settlement to various Joint Ventures / Central / State Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6345.43 acres (6156.20 acres) given on lease to various agencies/employees/ex-employees.

(v) Includes 4066.88 acres (4262.42 acres) under unauthorised occupation.

(vi) 824.86 acres (824.86 acres) of Land which is not in the actual possession, shown as deemed possession.

(vii) Rs.59.88 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(viii) Vide Notification of Acquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484 E dated 13.10.2012, National Highway Authority of India Ltd (NHAI) has acquired 6.486 acres of Land of the Plant. The compensation for the land is under determination by NHAI and will be accounted for on final determination.

2.2 Buildings include net block of Rs.22.58 crore (Rs.25.26 crore) for which conveyance deed is yet to be registered in the name of the Company.

2.3 Assets retired from active use and waiting for disposal amounting to Rs. 29.10 crore has been shown under note 10 (a) "Tangible Fixed Assets", the net realizable value of which in the opinion of the management will not be less than the amount shown and does not require any provision.

2.4 a) Capital work-in-Progress includes Rs.38.07crore (Rs.107.17 crore) ( Consultancy charges) in respect of some deferred capital schemes, which are to be implemented in the near future. Therefore, no provision is required at this stage.

b) Capital Work-in-Progress includes Rs.115.38 crore (Rs.103.95 crore) in respect of Steel Processing Unit at Bettiah comprising of various processing units for producing a range of products, which is awaiting commissioning. The unit will be capitalized after integrated commissioning and put to use for commercial production.

c) Capital Work-in-Progress includes Rs.122.03 crore (Rs.121.80 crore) in respect of 20 Hi Sendzemir Mill which could not be completed due to accident in the trailer carrying Mill Housing. The case filed by M/s. Waterbury Farrel, original supplier, was dismissed by Hon''ble District Court of Salem by their order dated 13.08.2013 and retendering process is going on to complete the balance portion of work on risk purchase basis.

2.5 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11-Rs.The Effects of Changes in Foreign Exchange Rates''. During the year ended 31st March, 2014, the net foreign exchange variations of Rs.340.44 crore (net debit) [Rs.134.53 crore (net debit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2014, an amount of Rs.433.70 crore (net debit) [Rs.220.08 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 2014.

2.6 Estimated amount of contracts remaining to be executed and not provided for (net of advances), on capital account are Rs.13724.69 crore (Rs.17750.86 crore) and on revenue account are Rs.1459.72 crore (Rs.1085.96 crore).

3.1 As part of its Modernization and Expansion Plan / other Capital Schemes in IISCO Steel Plant, Burnpur, in the opinion of the Management, the following Assets have become usable and have been capitalized after installation, trial run, removal of all defects, issue of acceptance certificate and having become ready for commercial production during the year:

3.2 As part of its Modernization and Expansion Plan / other Capital Schemes in Rourkela Steel Plant, in the opinion of the Management, the following Assets have become usable and have been capitalized after installation, trial run, removal of all defects, issue of acceptance certificate and having become ready for commercial production during the year:

3.3 Further, an amount of Rs.15502.02 crore, detailed below, is kept under Capital Work-in-Progress representing capital expenditure on various Packages/Schemes installed/under installation and in the opinion of the Management, not yet ready for operation. The same will be capitalized after completion of installation, trial run, removal of all defects and getting ready for commercial production:

3.4 Boiler 3 (appearing in Note No. 11- Capital Work-in-Progress at a value of Rs.37.00 crore) was damaged on 12th March, 2013 due to explosion. Insurance claim was lodged by the Contractor working on the project for the damages caused due to explosion. The insurance claim was refuted twice by the Insurer. However, the Contractor has been further pursuing the claim with the Insurer. In the meantime, a contract has been awarded to the same Contractor for repairing of the Boiler at a value of Rs.22.00 crore, net of Cenvat. The amount on the repair job will be charged to Statement of Profit & Loss as and when it is incurred.

4. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS.

4.1 The Central Board of Direct Taxes vide its Notification dated 25th September, 2001 revised the rules for computation of certain perquisites. The Unions of non-executives filed writ petition with the Hon''ble High Court at Kolkata challenging the above Notification. In pursuance of the Hon''ble Court''s orders, the term deposits (including interest earned thereon) amounting to Rs.95.48 crore (Rs.130.51 crore), in respect of tax deducted at source, have been kept separately with bank(s). Such deductions and deposits after 31st March 2005 have been made in accordance with amended law/judicial decisions. The writ petition filed by Steel Workers Federation of India is still pending before the Hon''ble Court. However, there is no impact on accounts of the Company as the additional tax, if required, shall be recoverable from the employees.

4.2 Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under ''Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

4.3 During the year, additional liability of Rs.22.30 crore has been provided towards supply of electricity by BPSCL, on account of completion of reconciliation of accounts pertaining to earlier years.

4.4 The Company has stock of iron ore fines of 41.12 million tonnes (41.15 million tonnes) at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

5. STATEMENT OF PROFIT & LOSS

5.1 Net Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2014: Rs.3257.40 crore (Previous year: Rs.3617.90 crore) and cumulatively upto 31st March 2014: Rs.6900.19 crore (Previous year: Rs.18288.38 crore). During the year, the provisional rates of supplies to Indian Railways have been finalised upto 31st March, 2012, resulting in decrease in net sales of Rs.925.06 crore for the period from 1st January, 2008 to 30th June, 2010 and increase in net sales by Rs.678.96 crore for the period from 1st July, 2010 to 31st March, 2012. As a result, the net sales and profit for the year are lower by Rs.246.10 crore and Rs.277.27 crore respectively.

5.2 Sales include Railway Receipts (RR) made upto 31st March, 2014 and endorsed in favour of the customers and retired upto 21st April, 2014.

5.3 Prior period income includes :

a) Rs.120.94 crore towards write back of depreciation on fixed assets depreciated at 100% in earlier years as against 95% of the cost of fixed assets.

b) Rs.20.67 crore towards interest income on deposits made by Bokaro Steel Plant in the name of ''District & Sessions Judge – A/c Land'' and utilised fully for payment to land owners in respect of land acquired by the Bokaro Steel Plant.

5.4 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

5.5 The research and development expenditure charged to Statement of Profit & Loss and allocated to fixed assets, during the year, amount to Rs.106.05 crore (Rs.145.07 crore) and Rs.4.38 crore (Rs.2.56 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

5.6 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years. On such review as on 31st March 2014, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2014 for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant and as on 31st March, 2012, for Salem Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Polisher unit in Salem amounting to Rs. 8.51 crore as the net realisable value is higher than the book value. Similarly, the net realizable value of Pipe Coating Plant at RSP is higher than the book value at Rs. 40.30 crore

5.7 During the year, the unspent carried forward amount of Rs.17.19 crore on account of Corporate Social Responsibility (CSR) activities pertaining to the year 2012-13, was incurred in full. Against the approved budgeted amount of Rs.40.00 crore towards the CSR activities for the year 2013-14, the Company spent Rs.44.87 crore during the year.

5.8 The SAIL Refractory Unit, Bhilai continues to charge depreciation at the rate other than the rate prescribed in the Schedule XIV of the Companies Act,1956 for assets acquired prior to 01-04-1993 as per the option exercised by the Company provided in the circular no.1/12/92-CL5 circular 14/93 dated 20.12.1993 issued by the Ministry of Law & Justice and Company Affairs, the additional depreciation amount on such assets at the rates prescribed in Schedule XIV is Rs.6.40 crore.

5.9 Information on leases as per Accounting Standard 19 on Rs.Leases'':

(a) The Company has granted lease of properties to the employees and third parties for varying periods. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the year is Rs. 11.98 crore (Rs.11.18 crore).

6.1After the expiry of long term wage agreements with non- executives on 31st December, 2011, the Company entered into a Memorandum of Understanding with the Unions, for implementation of wage revision of non-executives w.e.f. 1st January, 2012. Accordingly, Employee Benefits Expense charged to the Statement of Profit & Loss and Expenditure. During Construction (EDC) for the year ended 31st March, 2014 are inclusive of wage revision arrears of non-executives upto 31st March, 2013, amounting to Rs.431.30 crore and Rs.1.92 crore respectively.

6.2 As per the Department of Public Enterprises (DPE''s) Guidelines, the Company is required to contribute 30% of salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund (CPF), Gratuity, Pension and Post- Superannuation Benefits. From 1.1.2007 to 31.3.2013, the Company had been providing for Superannuation Benefits, as per details given in the table below. During the year, contribution rate to Post- retirement Medical Benefit (PRMB) Schemes for executive employees has been actuarially computed and as per the Actuary''s Report dated 5th May, 2014, the cost of PRMB Schemes as a proportion of salary for the executive employees is 4.26%. To comply with the DPE''s Guidelines relating to contribution to Superannuation Benefits within overall limit of 30% of salary of executive employees, the provision for pension benefit has been reduced from 12% to 9% (rounded-off) during the year, as per details given below:

Further, as per Memorandum of Understanding entered on dated 25th January,2014 between SAIL Management and the Unions of non-executive employees, pension benefit for non-executives has been agreed @6% of salary w.e.f. 1st January, 2012.

Keeping in view the above, an excess provision of other benefits for executive employees upto 31st March 2013, of Rs.201.21 crore in Employee Benefits Expense (EBE) and Rs.9.63 crore in Expenditure During Construction (EDC), has been written back during the year, as per details given below:

7. GENERAL

7.1 DEFINED BENEFIT SCHEMES

7.1.1. General Description of Defined Benefit Schemes:

Gratuity : Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non-executives has been considered for actuarial valuation.

Leave Encashment : Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days combined for earned leave and half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

Provident Fund : 12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund Trusts by the company.

Post Retirement Medical Benefits : Available to retired employees at company''s hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits : Payable to retiring employees for settlement at their home town.

Employees'' Family Benefit Scheme : Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long Term Service Award : Payable in kind on rendering minimum 25 years of service and also on superannuation.

7.1.2 Other disclosures, as required under Accounting Standard (AS)–15 (revised) on ''Employees Benefits'', in respect of defined benefit obligations are :

(c) Provident Fund : Company''s contribution paid/payable during the year to Provident Funds are recognised in the Statement of Profit & Loss. The Company''s Provident Fund Trusts are exempted under section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-à-vis statutory rate. The Company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment.

7.2 Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - ''Segment Reporting'' issued by Ministry of Corporate Affairs.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

iii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Accounting Standard-17 - ''Segment Reporting'', issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose.

7.3 Disclosures of provisions required by Accounting Standard (AS) 29 ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

Mines afforestation costs - Payable on renewal (including deemed renewal) / forest clearance of mining leases to Government authorities, towards afforestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities. Overburden backlog removal costs

To be incurred towards removal of overburden backlog at mines over the future years.

8. Previous year''s figures have been re-arranged/re-grouped/re cast, wherever necessary. Figures in brackets pertain to previous year.

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Mar 31, 2013

1.1 a) Pending final decision by the Hon''ble Supreme Court of India in Special Leave Petition(SLP) against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the state of Uttar Pradesh, included in Note No. 28.1(i)(g), includes disputed demand of Rs.81.64 crore (Rs.64.02 crore).The Company has deposited Rs. 70.57 crore (Rs.43.83 crore) against the said demand which has been shown as current assets.

b) Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 28.1 (i)(g) includes disputed demands of Rs.888.46 crore (Rs.623.37 crore) in Chattisgarh State and Rs. 170.32 crore (Rs.131.12 crore) in Odisha State respectively. In respect of the case pertaining to Chattisgarh State, liability of Rs. 891.04 crore (Rs.727.21 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs. 891.04 crore (Rs.727.21 crore) against the said demand which has been treated as current assets.

c) Pending final decision by the Hon''ble Supreme Court of India in SLP against the order of the High Court of Delhi dismissing the appeal of the Company on disallowance of depreciation on the reduced value of assets by Rs.2578.13 crore consequent to waiver of loans by Steel Development Fund, the demand of Rs.87.62 crore (Rs.87.62 crore) pertaining to assessment years from 2006-07 to 2010-11 has been treated as contingent liability, included in note no. 28.1(i)(d). The Company has deposited Rs.87.62 crore against the said demand which has been treated as current assets.

d) Pending decision by the Hon''ble Supreme Court of India in SLP against order by the Honorable High Court of Jharkhand dismissing the writ petition of the Company, claim of Rs.217.40 crore (Rs. 128.60 crore) made by DamodarValley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, has been disclosed as contingent liability included in Note No. 28.1(i)(f). Against the said claim, the entire amount has been paid to DVC against bills raised by them, and treated as current assets.

e) Rourkela Steel Plant of the Company has proposed to the Government Odisha for an out of court settlement of the matter relating to levy of water tax under the provisions of Odisha Irrigation Act, 1959 and rules thereunder, keeping in view the overall interest of the Company. If the settlement is accepted, the Company may have to pay an amount which shall be mutually agreed with the State Government of Odisha.

f) The above para 28.1 relating to Contingent Liabilities also include court / arbitration cases where the Company has lost some of the cases in first or subsequent appeals amounting to Rs.85.34 crore and has gone to appeal in the higher forums.

g) The Renewable Power / Energy Obligations amounting to Rs.39.94 crore, as contested, have been disclosed as contingent liabilities

h) BCCL has claimed MADA Cess @1% on the invoices raised by it. The Company has not paid the said amount and disclosed as contingent liability as the matter is sub-judice. BCCL has confirmed that Cess is not being paid for other buyers also, though collected.

2. The Ministry of Corporate Affairs, vide order dated 10th June,20ll, approved the amalgamation of Maharashtra Elektrosmelt Limited (MEL), with the Company under sections 391 to 394 of the Companies Act, 1956. As per order, the amalgamation was operative from the appointed date of 1st April, 2010 and came into effect (effective date) on 13th July, 2011. The Accounts of erstwhile Maharashtra Elektrosmelt Limited (MEL) were consolidated in the Accounts of the Company for the Financial Year 2011-12.

3. FIXED ASSETS

3.1 Land:

(i) Includes 67406.03 acres (66126.21 acres) owned / possessed / taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 4616.11 acres (1917.06 acres) in respect of which title is under dispute.

(iii) 10881.28 acres (10594.22 acres) transferred/agreed to be transferred or made available for settlement to various Central / State / Semi- Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6156.20 acres (6162.74 acres) given on lease to various agencies/ employees/ex-employees.

(v) Includes 4262.42 acres under unauthorised occupation.

(vi) 824.86 acres of Land shown as deemed possession which is not in actual possession.

(vii) Rs.70.00 crore has been deposited (in respect of land already acquired) with the District Judge, Bokaro during the year 2007 towards compensation payable to land losers and lying in deposit account.

3.2 Buildings include net block of Rs. 25.26 crore (Rs.25.71 crore) for which conveyance deed is yet to be registered in the name of the Company.

3.3 Assets retired from active use and waiting for disposal amounting to Rs. 30.50 crore has been shown under note 10 (a) " Tangible Fixed Assets", the net realizable value of which in the opinion of the management will not be less than the amount shown and does not require any provision.

3.4 a) Capital Work-in-Progress includes Rs.107.17 crore (consultancy charges) in respect of some deferred capital schemes, which in view of the management are to be implemented in near future. Therefore, no provision is required at this stage.

b) Capital Work-in-progress includes Rs.981.83 crore in respect of some capital schemes which have not been capitalized due to lack of sustained production on commissioning requiring further rectification of several defects. The reasons for non-capitalisation are on account of :

i) As a part of its expansion scheme, Rourkela Steel Plant of the Company has awarded a contract for construction of Sinter Plant -III which is under progress. The expenditure incurred upto 31st March, 2013 for Sinter Plant-III is Rs.721.11 crore. During the trial run of the Plant, defects were noticed and subject to removal of such defects, the preliminary acceptance certificate was issued. Subsequent to removal of all such defects, the commissioning of the Plant will be done. Further, as the Plant has not achieved commercially feasible level of production in a commercially practicable manner, the Plant is not ready for its intended use and hence not capitalized in the books.

ii) Capital Work in Progress includes Rs.103.95 crore in respect of Steel Processing Unit at Bettiah comprising of various processing units for producing a range of products, which is awaiting commissioning. The unit will be capitalized after integrated commissioning and put to use for commercial production.

iii) Capital Work in Progress includes Rs.34.05 crore towards area drainage system for New SMS-III at Bokaro steel Plant.The drainage system is a part of entire SMS-III which is yet to be completed. Capitalisation will be taken up on completion of the Plant.

iv) Capital Work in Progress includes Rs.0.92 core towards Plant civil work including building at DSP. The Bar & Rod Mill is yet to be completed. Therefore, all civil works including plant building will be capitalized on completion of Bar & Rod Mill.

v) In Salem Steel Plant, capital schemes relating to 20 Hi Sendzimir Mill, amounting to Rs.121.80 crore included in capital work-in- progress, could not be completed due to accident in the trailer carrying Mill housing. Due to accident, the matter is under litigation and the project could not be completed which will be done as per court order.

3.5 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11- ''The Effects of Changes in Foreign Exchange Rates''. During the year ended 31st March, 2013, the net foreign exchange variations of Rs.134.53 crore (net debit) [Rs. 127.85 crore (net debit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/ capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2013, an amount of Rs.220.08 crore (net debit) [Rs.81.13 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 20l3.

3.6 Estimated amount of contracts remaining to be executed and not provided for (net of advances) on capital account are Rs.17967.99 crore (Rs.21063.53 crore) and on revenue account, are Rs.1190.43 crore (Rs.1236.54 crore).

4. INVESTMENT,CURRENT ASSETS,LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

4.1 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees'' Union/Association filed writ petitions with the Hon''ble High Court at Kolkata challenging the above Notification. In pursuance of the Hon''ble Court''s orders, the term deposits (including interest earned thereon) amounting to Rs. 130.51 (Rs. 177.90) crore, in respect of tax deducted at source (TDS), have been kept separately with bank(s). Such deductions and deposits after 31st March 2005 have been made in accordance with amended law/judicial decisions. Vide Order dated 11th September, 2012, the Hon''ble High Court has vacated the stay on the petition filed by Association of Executives. Accordingly, the TDS on perquisites kept as fixed deposits in respect of Executives is being deposited with Income Tax Authorities after the Balance Sheet date. The writ petition filed by Steel Workers Federation of India is still pending before the Hon''ble Court. However, there is no impact on accounts of the Company as the additional tax, if required, shall be recoverable from the employees.

4.2 The amount due to Micro and Small Enterprises as defined in the ''The Micro, Small and Medium Enterprises Development Act, 2006'', (as disclosed in Note No. 7- Trade Payables ) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March 2013 are as under:

4.3 Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

4.4 During the year, ad-hoc/additional liability of Rs.33.76 crore has been provided towards supply of electricity by BPSCL, on account of reconciliation of accounts which is in progress. On completion of reconciliation, consequential adjustments, if any, will be dealt with in the accounts accordingly in the year of completion.

4.5 The Company has stock of iron ore fines of 41.15 million tonnes (41.18 million tonnes) at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

4.6 An amount of Rs.51.34 crore has been deposited with Chhattisgarh State Power Transmission Company Limited, as per demand letters dated 4th May, 2010 for providing transmission lines and power connection at upcoming Rowghat Mines. The amount has been reflected as "Long Term Loans & Advances - Deposits". The transmission lines will not be owned by the Company. The MOU has been signed on 12th May, 2011.

The accounting treatment of above mentioned issue has been referred to the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) for opinion.The accounting of the above referred issue and similar cases will be done as per the opinion of the EAC of ICAI.

5. STATEMENT OF PROFIT & LOSS

5.1 Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2013: Rs.3617.90 crore (Previous year: Rs.3479.04 crore) and cumulatively upto 31st March 2013: Rs. 18288.38 crore (Previous year: Rs.14901.94 crore).

5.2 Sales include Railway Receipts (RR) made upto 31st March 2013 and endorsed in favour of the customers and retired upto the cut-off date.

5.3 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

5.4 The research and development expenditure charged to Statement of Profit & Loss and allocated to fixed assets, during the year, amount to Rs.145.07 crore (Rs.129.08 crore) and Rs.2.56 crore (Rs.5.37 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

5.5 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years. On such review as on 31st March 2013, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2011 for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant and as on 31st March, 2012, for Salem Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Polisher unit in Salem amounting to Rs. 9.38 crore as the net realisable value is higher than the book value. The asset could not be used for 3 years pending removal of defects. Similarly, the net realizable value of Pipe Coating plant at RSP is higher than the book value at Rs. 43.14 crore.

5.6 The long-term agreement for wage revision for non-executives expired on 31st December 2011. Pending finalisation of fresh agreement w.e.f 1st January 2012, provision towards wage revision including consequential benefits and pension of Rs.611.03 crore (Rs. 549.95 crore for the year) and Rs. 1.73 crore (Rs. 1.54 crore for the year) have been charged to Statement of Profit & Loss and Expenditure during construction respectively, on an estimated basis. The provision for wage revision includes an amount of Rs.332.86 crore towards actuarial valuation of gratuity and leave encashment liabilities arising on account of wage revision, of which Rs. 332.14 crore and Rs. 0.72 crore have been charged to the Statement of Profit & Loss and Expenditure during Construction respectively, during the year. The provision for wage revision includes liability on account of pension to Non-Executives.

5.7 Actuarial Valuation for Post Retirement Benefit of Badli workmen is done at SRU (SAIL Refractory Unit) and in case of annexed workmen of IISCO, it is treated on cash basis.

5.8 During the year, the accounting policy regarding amortisation of Mining Rights has been revised from the lease period'' to annual production vis- a-vis total estimated mineable reserves''. As a result, the profit for the year is higher by Rs.214.14 crore.

5.9 During the previous year, the basis of valuation of scrap was revised, resulting in higher profit of Rs.164.34 crore of that year.

5.10 During the year, the unspent carried forward amount of Rs.28.48 crore on account of Corporate Social Responsibility (CSR) activities pertaining to the year 2011-12, was incurred in full. Against the approved budgeted amount of Rs.42.00 crore towards the CSR activities for the year 2012-13, the Company incurred Rs.24.81 crore.The balance budgeted amount of Rs.17.19 crore, will be spent in due course. Since the Company does not have any contractual obligation/liability as on 31st March, 2013, the unspent amount has not been provided in the books and would be accounted for as and when spent/incurred.

5.11 The SAIL Refractory Unit, Bhilai continues to charge depreciation at the rate other than the rate prescribed in the Schedule XIV of the Companies Act,l956 for assets acquired prior to 01-04-1993 as per the option exercised by the Company provided in the circular no.l/l2/92-CL5 circular 14/93 dated 20.12.1993 issued by the Ministry of Law & Justice and Company Affairs, the amount of which is not ascertainable.

5.12 Information on leases as per Accounting Standard 19 on Leases'':

(a) The Company has granted lease of properties to the employees and third parties for varying periods. The lease premium received up- front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit & Loss during the year is Rs. 11.19 crore (Rs.11.92 crore).

6. GENERAL

6.1 DEFINED BENEFIT SCHEMES

6.1.1 General Description of Defined Benefit Schemes:

Gratuity: Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non-executives has been considered for actuarial valuation.

Leave Encashment: Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days for earned leave and 240 days of half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

Provident Fund: 12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund Trusts by the Company.

Post Retirement Medical Benefits: Available to retired employees at company''s hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits: Payable to retiring employees for settlement at their home town.

Employees'' Family Benefit Scheme: Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long term service Award: Payable in kind on rendering minimum 25 years of service and also on superannuation.

6.2 Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

iii) In the opinion of the management, the captive mines are not a business segment of the Company as per Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs, as captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose. However, due to issues involved, it is decided to refer the matter to the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) for its opinion.

6.3 Disclosures of provisions required by Accounting Standard (AS) 29 ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

Mines afforestation costs - Payable on renewal (including deemed renewal) / forest clearance of mining leases to Government authorities, towards afforestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities.

Overburden backlog removal costs - To be incurred towards removal of overburden backlog at mines over the future years.

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Mar 31, 2012

(a) Secured by charges ranking pari-passu inter-se, on all the present and future immovable property at Mouje-Wadej of City taluka, District Ahmeda- bad, Gujarat and Company's Plant & Machinery, including the land on which it stands, pertaining to IISCO Steel Plant (ISP)

(b) Secured by charges ranking pari-passu inter-se, on all the present and future immovable property at Mouje-Wadej of City taluka, District Ahmedabad, Gujarat and Company's Plant & Machinery, including the land on which it stands, pertaining to Durgapur Steel Plant. (DSP)

(c) Redeemable in 12 equal yearly instalments of Rs.14 crore each starting w.e.f. 26th October, 2014

(d) Redeemable in 3 equal instalments of Rs.50 crore each on 15th September of 2014, 2019 and 2024

(e) The loan availed for 7 years is secured by charges ranking pari-passu inter-se, over movable properties pertaining to Rourkela Steel Plant. the loan is repayable anytime within 15 days notice and no prepayment penalty. The interest rate is Benchmark Prime lending rate (BPLR) (-) 4.25% for B1 (Base Rate w.e.f. 1.10.2010) and BPLR (-) 4.50 % for B2

(f) Guaranteed by Government of India, Redeemable in 4 equal instalments of 16 crore each starting w.e.f 15th October, 2010

(g) The soft basis of the loan was drawn in 3 tranches stated as 1(a), 1(b) and 1(c) at an interest rate 8.75% p.a. The interest on 1(a) is 0.75% p.a. and balance 8% p.a. is towards exchange fluctuation (4%) and Pollution control Schemes (4%). In case of 1(b), the interest is @ 3.66% p.a. and balance 5.09% p.a. is towards periphery development. The interest on 1(c) is 0.75% p.a. and balance 8% p.a. is towards periphery development. The principal and interest is repayable half yearly.

(h) The loan is repayble in in 3 equal instalments on 11th March starting from 2015 at an interest rate of 6 month London Inter Bank Operating Rate (LIBOR) 1%. Interest is paid half yearly

(i) The loan is repayble in 3 equal instalments on 11th August starting from 2015 at an interest rate of 6 month LIBOR 1%. Interest is paid half yearly (j) The loan is repayble in 3 equal instalments on 16th November starting from 2015 at an interest rate of 6 month LIBOR 1.06%. Interest is paid half yearly

(k) The loan is repayble in 2030 and Interest is paid half yearly, guaranteed by Government of India (l) Terms of repayment to be decided by SDF Management Committee (m) Interest free loan from Government of Maharashtra

1. i) The Ministry of Corporate Affairs, vide order dated 10th June, 2011, approved the amalgamation of Maharashtra Elektrosmelt Limited (MEL), with the Company under sections 391 to 394 of the Companies Act, 1956. As per order, the amalgamation is operative from the appointed date of 1st April, 2010 and has come into effect (effective date) on 13th July, 2011.

ii) The operation of MEL includes production of manganese based ferro-alloys, used as raw materials in the Company.

iii) As per order of amalgamation, the amalgamation has been accounted for under the "pooling of interests" method as prescribed by Accounting Standard (AS) -14, issued by the Institute of Chartered Accountants of India. Accordingly, the assets, liabilities and reserves of MEL as at 1st April, 2010 have been taken over at their book values. As stipulated in the Scheme of Amalgamation, all reserves of the transferor Company have been transferred to the respective reserve account of the Company except for balance lying in the Statement of Profit and Loss as on 31st March, 2010 which has been credited to the Statement of Profit and Loss Account of the Company. Accordingly, all the assets, liabilities, reserves of the said company as on 1st April 2010 have been merged with those of the Company under the respective heads as follows:

iv) The exchange ratio, at which the shareholders of the erstwhile MEL have been offered Shares in SAIL, has been worked out based on the independent valuation of shares of the companies as per the accepted methods of valuation.

v) In terms of the Scheme of amalgamation, the equity shares in SAIL issued by the Company to the shareholders of MEL on 30th September 2011, rank pari passu in all respects to the existing equity shares of SAIL with effect from the appointed date and upon the Scheme of amalgamation becoming effective. Accordingly, the appropriation for the dividend includes dividend on 1,24,744 Equity Shares, which have been issued to the shareholders of MEL.

vi) The income accruing and expenses incurred by erstwhile MEL during the period 1st April, 2010 to 31st March, 2011 have also been incorporated in these accounts. During the period between the appointed date and the effective date as MEL carried on the existing business in "trust" on behalf of the Company, all vouchers, documents, etc., for the period are in the name of MEL.

vii) The accounts of erstwhile MEL have been consolidated in the accounts of the Company for the Financial Year 2011- 12. The accounts of Company for the year Financial year 2010-11, do not include the figures of the erstwhile MEL and hence, are not comparable with those of the current year,

2. FIXED ASSETS

2.1 Land:

(i) Includes 62152.52 acres (62101.12 acres) owned/possessed/ taken on lease by the Company, in respect of which title/ lease deeds are pending for registration.

(ii) Includes 1917.06 acres (1845.71 acres) in respect of which title is under dispute.

(iii) 10594.22 acres (10615.66 acres) transferred/agreed to be transferred or made available for settlement to various Central / State / Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6162.74 acres (6204.60 acres) given on lease to various agencies/employees/ex-employees.

2.2 Buildings include net block of Rs.25.71 crore (Rs.23.71 crore) for which conveyance deed is yet to be registered in the name of the Company.

2.3 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11. During the year ended 31st March, 2012, the net foreign exchange variations of Rs.127.85 crore (net debit) [Rs.8.09 crore (net credit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2012, an amount of Rs.81.13 crore (net debit) [Rs.33.14 crore (net credit)] is yet to be depreciated/amortised as at 31st March, 2012. Further, exchange variations amounting to Rs.334.85 crore have been treated as interest cost in accordance with paragraph 4(e) of AS-16 - 'Borrowings Costs'.

2.4 Estimated amount of contracts remaining to be executed and not provided for (net of advances) on capital account are Rs.23860.45 crore (Rs.25477.01 crore) and on revenue account are Rs.1236.54 crore (Rs.841.18 crore).

3. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

3.1 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees' Union/Association filed writ petitions with the Hon'ble High Court at Kolkata challenging the above Notification. In pursuance of Hon'ble Court's orders, the term deposits (including interest earned thereon) amounting to Rs.177.90 crore (Rs.161.74 crore) have been kept separately with bank(s) in respect of tax deducted on house perquisite w.e.f. 1st April 2003 and other perquisites w.e.f. 1st October 2001, upto 31st March 2005, pending final decision of the Hon'ble Court. Such deductions and deposits after 31st March 2005, have been made in accordance with amended law/judicial decisions. However, there is no impact on accounts of the company as the additional tax, if required, shall be recoverable from the employees.

3.2 The amount due to Micro and Small Enterprises as defined in the 'The Micro, Small and Medium Enterprises Development Act, 2006', (as disclosed in Note No. 7- Trade Payables ) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March, 2012 are as under:

3.3 Balances shown under 'Other Current Liabilities', 'Short term Loans & Advances' and 'Claims Recoverable' include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

3.4 The Company has stock of iron ore fines of 41.18 (41.21) million tonnes at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

3.5 i) An amount of Rs.51.34 crore has been given to Chhattisgarh State Power Transmission Company Limited out of total amount of Rs.51.34 crore payable as per demand letter No. CE/Trans./ PL-HTC-31/0461 and 0462 dated 04th May, 2010 for providing transmission lines and power connection at upcoming Rowghat Mines. The amount has been reflected as "Long Term Loans & Advances - Deposits". The transmission lines will not be owned by the Company. The MOU has been signed on 12th May, 2011.

ii) An amount of Rs.132.91 crore has been given to Railways, out of total amount of Rs.844.23 crore payable as per MOU dated 11th December, 2007 and revised estimate by M/s. RVNL dated 17th July, 2009, for construction of railway line for movement of ore from upcoming Rowghat Mines. The amount has been reflected as "Long Term Loans & Advances - Deposits". As per the Agreement, the Railways will pay at the end of every year to the Company cash @ 7% per annum for 37 years on total contribution towards redemption of Company's contribution, commencing from the 1st year after commissioning of the Phase-I of the Project, subject to fulfill-ment of certain conditions. The underlying assets will not be owned by the Company.

The accounting treatment of above mentioned issues has been referred to the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) for opinion. The accounting of the above referred issues and similar cases will be done as per the opinion of the EAC of ICAI.

4. STATEMENT OF PROFIT & LOSS

4.1 Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2012: Rs.3479.04 crore (Previous year: Rs.3466.59 crore) and upto 31st March, 2012: Rs.14642.06 crore (Previous year: Rs.11272.27 crore).

4.2 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

4.3 The Research and Development expenditure charged to Statement of Profit & Loss and allocated to Fixed Assets, during the year, amount to Rs.129.08 crore (Rs.127.06 crore) and Rs.5.37 crore (Rs.5.08 crore) respectively. The aggregate amount of revenue expenditure incurred on Research and Development is shown in the respective head of accounts. The break-up of the amount is as under:

4.4 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit. On such review as at 31st March, 2012, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agency as at 31st March, 2011 for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant and as at 31st March, 2012 for Salem Steel Plant, is more than the carrying amount.

4.5 During the year, the basis of valuation of scrap has been revised, resulting in higher profit of Rs.164.34 crore for the year.

4.6 The long-term agreement for wage revision for non-executives expired on 31st December 2011. Pending finalisation of fresh agreement w.e.f. 1st January 2012, provision towards salaries and wages revision of Rs.61.08 crore and Rs.0.19 crore have been charged to Statement of Profit & Loss and Expenditure during construction respectively, on an estimated basis.

4.7 Provision for pension under superannuation benefits has been made for executives as per DPE Guidelines and approval of the Board. As the issue remains to be discussed at later date for non-executives and as on date is undecided and there exists no liability, no provision has been made.

4.8 During the year, the unspent carried forward amount of Rs.25.73 crore on account of Corporate Social Responsibility (CSR) activities pertaining to the year 2010-11, was incurred in full. Against the approved budgeted amount of Rs.64 crore towards the CSR activities for the year 2011-12, the Company incurred Rs.35.52 crore. The balance budgeted amount of Rs.28.48 crore, will be spent in due course. Since the Company does not have any contractual obligation/liability as on 31st March, 2012, the unspent amount has not been provided in the books and would be accounted for as and when spent/ incurred.

4.9 Information on leases as per Accounting Standard 19 on ' Leases':

(a) The Company has granted lease of properties to the employees and third parties for varying periods. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

(b) In respect of assets taken on lease/rent :

(i) The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the year is Rs.11.92 crore (Rs.14.66 crore).

(ii) Sub-lease recoveries recognised in the accounts are Rs.Nil crore (Rs.0.02 crore).

4.10 The matter with regard to imposition of Entry Tax on Coking Coal and Iron Ore in Bhilai Steel Plant (BSP), Bhilai of the Company is pending in the Hon'ble Supreme Court of India and is sub-judice. As per the Court's Order dated 9th Feb, 2010, BSP is paying Entry Tax @3% adhoc on Coking Coal and Iron Ore, on month to month basis and as per the same order, the payments towards Entry Tax are being treated as deposits. Till previous year, liability towards Entry Tax (including interest) was provided @6% on Coking Coal and Iron Ore. During the year, based on the legal opinion, the liability towards Entry Tax on Coking Coal and Iron Ore has been retained in the books to the extent of 3% adhoc payments made and the balance liability alongwith interest amount of Rs.511.20 crore provided till previous year, has been written back. The same has been disclosed as contingent liability and shown as Exceptional Item in the Statement of Profit & Loss for the year resulting in increase of Profit by Rs.511.20 crore.

4.11 Pending final decision by the Hon'ble Supreme Court of India on levy of entry tax in Uttar Pradesh, the entry tax demand of Rs.62.58 crore during the year in Uttar Pradesh, under dispute, has been treated as contingent liability.

4.12 During the year, the amount of income/expenditure relating to prior period and prepaid expenses, which do not exceed Rs.10 lakhs in each case, as against Rs.5 lakhs considered upto previous year, have been treated as income/expenditure of current year. As a result, the prior period income/expenditure and prepaid expenses of Rs.0.22 crore (net debit) and of Rs.07 crore respectively have been charged to normal heads of revenue and expenditure during the year.

5. GENERAL

5.1 Defined Benefit Schemes

5.1.1 General Description of Defined Benefit Schemes:

Gratuity: Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non-executives has been considered for actuarial valuation.

Leave Encashment : Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days for earned leave and 240 days of half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

Provident Fund :12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund Trusts by the company.

Post Retirement Medical Benefit : Available to retired employees at company's hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits : Payable to retiring employees for settlement at their home town.

Employees' Family Benefit Scheme : Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long Term Service Award : Payable in kind on rendering minimum 25 years of service and also on superannuation.

(b) Reconciliation of Fair Value of Assets and Obligations:

The Company has partly funded the gratuity liability through a separate Gratuity Fund. The fair value of the plan assets is mainly based on the information given by the insurance companies through whom the investments have been made by the Fund. The reconciliation of fair value of assets of the Gratuity Fund and defined benefit gratuity obligations is as under:

* The company does not expect to contribute any amount to the Gratuity Fund during the year 2012-13, after considering the return on the investments.

The defined benefit obligations, other than gratuity, are unfunded.

(c) Provident Fund : Company's contribution paid/payable during the year to Provident Funds are recognised in the Statement of Profit & Loss. The Company's Provident Fund Trusts are exempted under section 17 of Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-a-vis statutory rate. The Company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment, as confirmed by actuary.

5.2 Segment Reporting :

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under 'Accounting Standard-17 - Segment Reporting' issued by the Institute of Chartered Accountants of India.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

The disclosure of segment-wise information is given at Annexure-I.

5.3 Related Party :

As per Accounting Standard - 18 - 'Related Party Disclosures' issued by the Institute of Chartered Accountants of India, the names of the related parties, excluding Government controlled enterprises, are given below: -

5.4 Disclosures of provisions required by Accounting Standard (AS) 29 'Provisions, Contingent Liabilities and Contingent Assets: Brief Description of Provisions :

Mines afforestation costs - Payable on renewal (including deemed renewal) / forest clearance of mining leases to Government authorities, towards afforestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities.

Overburden backlog removal costs - To be incurred towards removal of overburden backlog at mines over the future years.

* Out of outstanding amount, Rs.2.53 crore ( Rs.2.53 crore), being doubtful of recovery, has been provided for.

ii) No loans have been given (other than loans to employees), wherein there is no repayment schedule or repayment is beyond seven years; and

iii) There are no loans and advances in the nature of loans, to firms/companies, in which directors are interested.

6. The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre- revised Schedule VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared under the revised Schedule VI. Accordingly, the previous year's figures have been re-arranged/re-grouped/re-cast, wherever necessary. Figures in brackets pertain to previous year.

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Mar 31, 2011

1. CONTINGENT LIABILITIES

As at 31st As at 31st March, 2011 March, 2010

(Rs.in crore)

(i) Claims against the Company pending appellate/judicial decisions :

a) Excise Duty 1947.97 1822.71

b) Sales Tax on inter-state stock transfers from plants to stockyards*. 836.31 867.44

c) Other sales tax matters 282.73 207.02

d) Income Tax 256.56 134.99

e) Other duties, cess and levies 428.19 375.93

f) Civil matters ** 266.77 252.31

g) Miscellaneous ** 300.01 282.06

* No liability is expected to arise, as sales tax has been paid on eventual sales.

** includes claims of Rs.22.54 crore (Rs.25.70 crore), against which there are counter-claims of Rs.17.24 crore (Rs.28.90 crore).

(ii) Other claims against the Company not acknowledged as debt:

a) Sales Tax 10.52 0.86

b) Duties, cess and levies 14.73 13.05

c) Civil Matters 14.58 20.53

d) Miscellaneous $ 525.67 725.08

$$ $ includes claims of Rs.73.16 crore (Rs.62.24 crore), against which there are counter-claims of Rs. 62.42 crore (Rs.49.62 crore).

(iii) Disputed income tax/service tax/other demand on joint venture company for which company may be contingently liable under the joint venture agreement 147.85 26.94

(iv) Guarantees/Counter-guarantees of Rs.28.85 crore (Rs.28.85 crore) given to banks on behalf of a subsidiary company. As at the end of the year, the guarantees utilised to the extent of 0.37 0.37

(v) Bills drawn on customers and discounted with banks. 10.53 17.29

(vi) Price escalation claims by contractors/ suppliers and claims by certain employees, extent whereof is not ascertainable - -

$$ The Provisional Duty Assessment Bonds against concessional duty for project imports of Rs.250.64 crore, submitted to the Customs Authorities, were included as at 31st March, 2010 erroneously. After review during the year ended 31st March, 2011, the same have been excluded from contingent liabilities considering the possibility of outflow of funds as remote.

2. FIXED ASSETS

2.1 Land:

(i) Includes 62101.12 acres (62094.00 acres) owned / possessed / taken on lease by the Company, in respect of which title/ lease deeds are pending for registration.

(ii) Includes 1845.71 acres (1845.71 acres) in respect of which title is under dispute.

(iii) 10615.66 acres (10615.66 acres) transferred/agreed to be transferred or made available for settlement to various Central / State / Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6204.60 acres (6190.37 acres) given on lease to various agencies/employees/ex-employees.

3.2 Buildings include net block of Rs.24.11 crore (Rs.24.06 crore) for which conveyance deed is yet to be registered in the name of the Company.

3.3 Foreign exchange variations aggregating to Rs.1.46 crore (net credit) [Rs. 61.63 crore (net credit)] have been adjusted in the carrying amount of fixed assets during the year.

3.4 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) - Rs.25477.01 crore (Rs.23822.80 crore).

4. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

4.1 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees' Union/Association filed writ petitions with the Hon'ble High Court at Kolkata challenging the above Notification. In pursuance of Hon'ble Court's orders, the term deposits (including interest earned thereon) amounting to Rs.161.74 crore (Rs.152.16 crore) have been kept separately with bank(s) in respect of tax deducted on house perquisite w.e.f. 1st April 2003 and other perquisites w.e.f. 1st October 2001, upto 31st March 2005, pending final decision of the Hon'ble Court. Such deductions and deposits after 31st March 2005, have been made in accordance with amended law/judicial decisions. However, there is no impact on accounts of the company as the additional tax, if required, shall be recoverable from the employees.

4.3 Balances shown under creditors, debtors, claims recoverable and advances include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

4.4 The Company has stock of iron ore fines of 41.23 (41.22) million tonnes at various mines of the Company. Since the usage/sale of such iron ore fines, not being readily useable /saleable, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

4.5 i) An amount of Rs 51.34 crore has been given to Chhattisgarh State Power Transmission Company Limited out of total amount of Rs 51.34 crore payable as per demand letter No. CE/Trans./PL-HTC-31/0461 and 0462 dated 04th May, 2010 for providing transmission lines and power connection at upcoming Rowghat Mines. The amount has been reflected as "Loans & Advances - Deposits". The transmission lines will not be owned by the Company. The MOU has been signed on 12th May 2011.

ii) An amount of Rs. 132.49 crore has been given to Railways, out of total amount of Rs 844.23 crore payable as per MOU dated 11th December, 2007 and revised estimate by M/s. RVNL dated 17th July, 2009, for construction of railway line for movement of ore from upcoming Rowghat mines. The amount has been reflected as "Loans & Advances - Deposits". As per agreement, Railways will pay at the end of every year to the Company cash at the rate of 7% per annum for 37 years on total contribution towards redemption of Company's contribution, commencing from the 1st year after commissioning of the Phase - I of the project, subject to fulfilment of certain conditions. The underlyingassets will not be owned by the Company.

4.6 In respect of services provided by Central Industrial Security Force, an agency of Government of India, the issue of payment of service tax on the services for the period 1st May, 2006 to 31st March, 2009 is under examination by Ministry of Finance, Government of India. No contingent liability thereof has been disclosed for the period as there is no impact on profitability due to availability of CENVAT credit of the same amount.

5. PROFIT & LOSS ACCOUNT

5.1 Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2011:Rs 3466.59 crore (Previous year: Rs 3320.53 crore) and upto 31st March, 2011: Rs 11272.27 crore (Previous year: Rs 7970.77 crore).

5.2 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the plants which have been included under the primary heads of account.

5.4 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit. On such review as at 31st March, 2011, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agency as at 31st March, 2011 for IISCO Steel Plant, Alloy Steels Plant and Visvesvaraya Iron & Steel Plant, is more than the carrying amount.

5.5 Pending issuance of accounting and disclosure practices on emission trading by the Institute of Chartered Accountants of India, carbon credit earned by the Company upto 31st March, 2011 in the form of VER (Voluntary Emission Reduction) has not been considered in the accounts.

5.6 Other revenues for the year ended 31st March, 2011 includes Rs. 124.36 crore, being the write back of liability/excess payment in respect of disputed electricity dues of Damodar Valley Corporation (DVC) from 1st April, 2009 to 31st March, 2010, arising out of order of the Appellate Tribunal of Electricity in favour of the Company. However, the appeal filed by DVC in the matter for the period from 1st April 2006 to 31st March 2009 is pending before the Hon'ble Supreme Court.

5.7 Arising out of implementation of revised salaries & wages, Rs.Employees' Remuneration & Benefits' charged to the Profit & Loss account for the previous year ended 31st March, 2010 are net off of excess provision for wage revision, amounting to X 1572.14 crore for the period 1st January, 2007 to 31st March, 2009.

5.8 Provision for pension under superannuation benefits has been made for executives as per DPE guidelines and approval of Board. As the issue remains to be discussed at later date for non-executives and as on date is undecided and there exists no liability, no provision has been made.

5.9 Against the budgeted amount of Rs.94.00 crore approved by the Board towards expenditure on Corporate Social Responsibility activities during the year 2010-11, the Company incurred Rs.68.27 crore on the same and the balance budgeted amount of Rs.25.73 crore will be spent in due course. Since the company does not have any contractual obligation/liability as on 31st March 2011, the unspent amount has not been provided for in the accounts and would be accounted for as and when spent/incurred.

5.10 Information on leases as per Accounting Standard 19 on Rs.Leases':

(a) The Company has granted long term lease of properties to the employees, ex-employees for varying periods, renewable for maximum of two like/unlike periods as per provisions contained in the respective lease agreements. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

(b) In respect of assets taken on lease/rent :

(i) The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Profit and Loss Account during the year is Rs.14.66 crore (Rs.16.31 crore).

(ii) Sub -lease recoveries recognised in the accounts are Rs.0.02 crore (Rs.0.03 crore).

6. GENERAL

6.1.1 General description of defined benefit schemes:

Gratuity

Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non- executives has been considered for actuarial valuation for executives.

Leave Encashment

Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

Provident Fund

12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund Trusts by the company.

Post Retirement Medical Benefits

Available to retired employees at company's hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits Payable to retiring employees for settlement at their home town.

Employees' Family Benefit Scheme Monthly payments to disabled separated employees / legal heirs of deceased

employees in lieu of prescribed deposit till the notional date of superannuation.

Long Term Service Award Payable in kind on rendering minimum 25 years of service and also on superannuation.

(c) Provident fund : Company's contribution paid/payable during the year to provident fund are recognised in the Profit & Loss Account. The Company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment as confirmed by the actuary.

6.2 Segment Reporting

i) Business Segments: The five integrated steel plants and three alloy steel plants, being manufacturing units, have been considered as primary business segments for reporting under Rs.Accounting Standard-17 - Segment Reporting' issued by the Institute of Chartered Accountants of India.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

6.6 Disclosures of provisions required by Accounting Standard (AS) 29 'Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

Mines afforestation - Payable on renewal (including deemed renewal) / forest clearance of mining leases to Government

costs authorities, towards afforestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities.

Overburden - To be incurred towards removal of overburden backlog at mines over the future years.

Bcklog removal costs

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Mar 31, 2010

1. CONTINGENT LIABILITIES

As at 31st As at 31st March, 2010 March, 2009 (Rs. in crore)

i) Claims against the Company pending appellate/judicial decisions :

a) Excise Duty 1822.71 1664.75

b) Sales Tax on inter-state stock transfers from plants to stockyards*. 867.44 960.91

c) Other sales tax matters 202.91 217.78

d) Income Tax 134.99 66.00

e) Other duties, cess and levies 375.93 297.24

f) Civil Matters ** 252.01 193.86

g) Miscellaneous ** 282.06 216.02

* No liability is expected to arise, as sales tax has been paid on eventual sales.

** includes claims of Rs. 25.70 crore (Rs. 24.31 crore), against which there are counter-claims of Rs. 28.90 crore ( Rs. 26.12 crore).

(ii) Other claims against the Company not acknowledged as debt:

a) Sales Tax 4.99 1.87

b) Duties, cess and levies 13.05 11.59

c) Civil Matters 20.53 22.90

d) Miscellaneous $ 693.04 352.90 $ includes claims of Rs. 11.80 crore (Rs. 11.80 crore), against which there are counter-claims of Rs. 8.98 crore (Rs. 8.98 crore).

(iii) Disputed income tax/service tax/other demand on joint venture company for which company may be contingently liable under the joint venture agreement 26.94 140.38

(iv) Guarantees/Counter-guarantees of Rs. 28.85 crore (28.85 crore) given to banks on behalf of a subsidiary company.

As at the end of the year, the guarantees utilised to the extent of 0.37 1.05

(v) Bills drawn on customers and discounted with banks 17.29 52.45

(vi) Price escalation claims by contractors/suppliers and claims by certain employees, extent whereof is not ascertainable - -

2. FIXED ASSETS

2.1 Land:

(i) Includes 62089.25 acres (62093.53 acres) owned / possessed / taken on lease by the Company, in respect of which title/ lease deeds are pending for registration.

(ii) Includes 1845.71 acres (1844.33 acres) in respect of which title is under dispute.

(iii) 10615.66 acres (10507.07 acres) transferred/agreed to be transferred or made available for settlement to various Central / State / Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6190.37 acres (6189.39 acres) given on lease to various agencies/employees/ex-employees.

3.0 Buildings include net block of Rs.24.06 crore (Rs.24.50 crore) for which conveyance deed is yet to be registered in the name of the Company.

3.1 Foreign exchange variations aggregating to Rs.61.63 crore (net credit) [Rs.26.14 crore (net debit)] have been adjusted in the carrying amount of fixed assets during the year.

3.2 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) - Rs.23668.20 crore (Rs.27988.93 crore).

4. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

4.1 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees Union/Association filed writ petitions with the Honble High Court at Kolkata challenging the above Notification. In pursuance of Honble Courts orders, the term deposits (including interest earned thereon) amounting to Rs.152.16 crore (Rs.139.87 crore) have been kept separately with bank(s) in respect of tax deducted on house perquisite w.e.f. 1st April 2003 and other perquisites w.e.f. 1st October 2001, upto 31st March 2005, pending final decision of the Honble Court. Such deductions and deposits after 31st March 2005, have been made in accordance with amended law/judicial decisions. However, there is no impact on accounts of the company as the additional tax, if required, shall be recoverable from the employees.

4.1 Balances shown under creditors, debtors, claims recoverable and advances include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

4.2 The Company has stock of iron ore fines of 41.21 (42.01) million tonnes at various mines of the Company. Since the usage/sale of such iron ore fines, not being readily usable /saleable, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

5. PROFIT & LOSS ACCOUNT

5.1 During the year, the Company implemented the revised salaries & wages w.e.f. 1st January, 2007, after the expiry of long term wage agreements with the employees on 31st December, 2006. Accordingly, Employees Remuneration & Benefits charged to the Profit & Loss account for the year ended 31st March, 2010 are net off of excess provision for wage revision, amounting to Rs.1572.14 crore for the period 1st January, 2007 to 31st March, 2009. In addition, Expenditure during Construction for the year ended 31st March, 2010, includes Rs.15.65 crore (credit) towards salaries & wages revision arrears (including consequential benefits) for the period 1st January, 2007 to 31st March, 2009.

5.2 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the plants which have been included under the primary heads of account.

5.3 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit. On such review as at 31st March, 2010, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agency as at 31st March, 2010 for Alloy Steels Plant and Visvesvaraya Iron & Steel Plant, is more than the carrying amount.

5.4 During the year, the estimates of provision towards slow / non-moving & obsolete stores & spares have been revised. As a result, the profit for the year is lower by Rs.16.44 crore.

5.5 Pending issuance of accounting and disclosure practices on emission trading by the Institute of Chartered Accountants of India, carbon credit earned by the Company upto 31st March, 2010 in the form of VER (Voluntary Emission Reduction) has not been considered in the accounts.

5.6 Information on leases as per Accounting Standard 19 on ‘Leases’:

(a) The Company has granted long term lease of residential premises to the employees, ex-employees etc. of initial period of 33 years, renewable for two like periods. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease.

(b) In respect of assets taken on lease/rent :

(i) The Company has various operating leases for, office facilities, guest houses and residential premises for that are renewable on a periodic basis. Rental expenses for these leases recognised in the Profit and Loss Account during the year is Rs.14.93 crore (Rs.19.82 crore) .

(ii) Sub-lease recoveries recognised in the accounts are Rs.0.03 crore (Rs.0.02 crore).

6. GENERAL

6.1.1 General description of defined benefit schemes:

Gratuity

Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs has been considered for actuarial valuation for executives.

Leave Encashment

Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

Provident Fund : 12% of Basic Pay Plus Dearness Allowance, contributed to the Provident Fund

Trusts by the Company.

Post Retirement Medical Benefits : Available to retired employees at companys hospitals and/or under the health insurance policy.

Post Retirement Settlement Benefits : Payable to retiring employees for settlement at their home town.

Employees Family Benefit Scheme : Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

Long Term Service Award : Payable in kind on rendering minimum 25 years of service and also on superannuation.

(c) Provident fund : Companys contribution paid/payable during the year to provident fund are recognised in the Profit & Loss Account. The Company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment as certified by the actuary.

6.2 Segment Reporting

i) Business Segments: The five integrated steel plants and three alloy steel plants, being manufacturing units, have been considered as primary business segments for reporting under ‘Accounting Standard-17 - Segment Reporting issued by the Institute of Chartered Accountants of India.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

The disclosure of segment-wise information is given at Annexure-I.

6.3 Related Party

As per Accounting Standard - 18 - ‘Related Party Disclosures issued by the Institute of Chartered Accountants of India, the names of the related parties, excluding Government controlled enterprises, are given below:

A.

Nature of Relationship Name of the related party

Joint Ventures SAIL Bansal Service Centre Limited

Mjunction Services Limited UEC-SAIL Information Technology Limited

Romelt SAIL (India) Limited

N.E. Steel & Galvanising Pvt. Limited

Bhilai Jaypee Cement Limited

Bokaro Jaypee Cement Limited

S & T Mining Co. Pvt. Limited

Nature of Relationship Name of the related party

Key Management Personnel Shri S.K.Roongta

Shri V.Shyam Sunder(upto 31st October 2009)

Shri V.K.Srivastava

Shri G.Ojha (upto 31st January 2010)

Shri R.Ramaraju

Shri Soiles Bhattacharya

Shri S.S.Ahmed

Shri V.K.Gulhati

Shri S.P. Rao

Shri S.N. Singh

Shri P.K.Bajaj (w.e.f.1st November 2009)

Shri M.K.Bhattacharya

Shri B.B. Singh (upto 24th October 2009)

Shri A.J. Vijh (upto 31st October 2009)

Shri S.P. Patnaik

Shri A.S. Mathur

Shri N.K.Jha (upto 30th September 2009)

Shri S.R. Subhedar

Shri K.K. Singhal

Shri Kiran Kapoor (upto 31st July 2009)

Shri P.C. Tibrewal (w.e.f. 1st August 2009)

Shri H.K.Jain

Shri Hanumantha Rao (w.e.f. 10th October 2009)

Shri Pankaj Gautam (w.e.f. 25th October 2009)

Shri S. Chandrasekaran (w.e.f. 1st November 2009)

6.4 Disclosures of provisions required by Accounting Standard (AS) 29 Provisions, Contingent Liabilities and Contingent Assets :

Brief Description of Provisions :

Mines afforestation - Payable on renewal (including deemed renewal) / forest clearance of mining leases to Government costs authorities, towards afforestation cost at mines for use of forest land for mining purposes.

Mines closure costs - Estimated liability towards closure of mines, to be incurred at the time of cessation of mining activities.

Overburden - To be incurred towards removal of overburden backlog at mines over the future years. backlog removal costs

6. Figures in brackets pertain to previous year. Previous years figures have been re-arranged / re-grouped / re-cast, wherever necessary.