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Notes to Accounts of Jindal Saw Ltd.

Mar 31, 2016

An asset is classified as current when it is:

a) Expected to be realized or intended to be sold or consumed in normal operating cycle,

b) Held primarily for the purpose of trading,

c) Expected to be realized within twelve months after the reporting period, or

d) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when it is:

a) Expected to be settled in normal operating cycle,

b) Held primarily for the purpose of trading,

c) Due to be settled within twelve months after the reporting period, or

d) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other liabilities are classified as non-current.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

1. Critical accounting estimates, assumptions and judgments

In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgments, which have significant effect on the amounts recognized in the financial statement:

(a) Property, plant and equipment

External adviser or internal technical team assesses the remaining useful lives and residual value of property, plant and equipment. Management believes that the assigned useful lives and residual value are reasonable.

On transition to IND AS, the Company has adopted optional exemption under IND AS 101 for fair valuation of property, plant and equipment, impact of fair valuation is provided in Note no 61, subsequent to fair valuation depreciation has been charged on fair valued amount less estimated salvage value. On transition to IND AS, the Company has revisited useful life of various categories of assets, impact of revision in estimate of useful life of various assets is provided in Note no 5. Property, plant and equipment also represent a significant proportion of the asset base of the Company. Therefore, the estimates and assumptions made to determine their carrying value and related depreciation are critical to the Company''s financial position and performance.

(b) Intangibles

Internal technical or user team assess the remaining useful lives of Intangible assets. Management believes that assigned useful lives are reasonable.

Before transition to IND AS, the company has revisited the useful life of the assets and the impact of change in life on transition is considered in opening carrying values. Also all Intangibles are carried at net book value on transition.

(c) Income taxes

Management judgment is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.

(d) Contingencies

Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

(e) Allowance for uncollected accounts receivable and advances

Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not to be collectible. Impairment is made on the expected credit losses, which are the present value of the cash shortfall over the expected life of the financial assets.

(f) Mine restoration obligation

In determining the fair value of the mine restoration obligation the Company uses technical estimates to determine the expected cost to restore the mines and the expected timing of these costs. Discount rates are determined based on the government bond of similar tenure.

(g) Insurance claims

Insurance claims are recognized when the Company have reasonable certainty of recovery. Subsequently any change in recoverability is provided for.

(h) Liquidated damages

Liquidated damages payable are estimated and recorded as per contractual terms; estimate may vary from actual as levy by customer.

Notes

[i] The Company has elected to measure the items of Property, Plant and equipment at their fair value on date of transition. Refer note no. 61

[ii] The impact of change in depreciation for 2014-15 due to change in life and salvage value is Rs. 14,832.76 lacs, refer Note 3.2

[iii] Freehold land includes Rs. 1,950 lacs, conveyance deed for which is yet to be executed.

[iv] $ Refer Note no 54 for Composite Scheme of Arrangement.
(i) The Company has elected to fair value investment in subsidiaries on date of transition, refer note no. 61.

(ii) * Face Value of 1 Share @ US$ 1 each and another Face Value of 1 Share @ US$ 1950000 each.

(iii) # 11,10,000 Equity Shares of Jindal ITF Limited have been pledged in favor of lenders for loans availed by the subsidiary companies. Non disposal undertaking for 1,40,36,515 Equity Shares of Jindal ITF Limited, given to banks against credit facilities/financial assistance availed by subsidiaries.

(iv) ## Investment in subsidiaries reclosed to assets held for sale.

(v) A Pursuant to Composite Scheme of arrangement equity investment in subsidiaries JITF Urban Infrastructure Services Limited and JITF Infralogistics Limited cancelled. Investment in subsidiary JITF Shipyards Limited is reduced by Rs. 1,479 lacs. Investment in compulsorily convertible debentures in subsidiary JITF Shipyards Limited amounting to Rs. 24,264.44 lacs cancelled.

(vi) aa Pursuant to Composite Scheme of arrangement, investment in step down subsidiary transferred to company.

(vii) @ The company becomes an associate on disposal of 58,32,001 equity shares of Rs. 10 each during the year.

(viii) $ Investment in 0.01% Non Cumulative, Redeemable Preference Shares after 7 years from the date of allotment i.e. Dec 16, 2015 has been fair valued at discounted rate of 12%. Accordingly, the equity component works out to 54.72%.

(ix) a) Absolute figure A(i)(i) Rs. 83.38, b) Absolute figure A(i)(j) is Rs. 82.58, Absolute figure A(i)(g) is Rs. 1, c) Absolute figure A(i)(h) is Rs. 100, d] Absolute figure A(i)(p) is Rs. 67.

(x) National saving certificates are pledged with Government authorities.

(c) Aggregate number of bonus shares issued, shares issued for consideration other than cash and bought back shares during the period of five years immediately preceding the reporting date: Nil Nil Nil

(d) 3,250 equity shares have been held in abeyance as a result of attachment orders by Govt. authorities, lost shares certificates and other disputes.

(e) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per equity share. Each equity shareholder is entitled to one vote per share.

(f) The Company allotted 4,35,30,596, 0% Compulsorily Convertible Debentures (CCDs) on preferential basis under the SEBI ICDR Regulations to the promoters group entity @ Rs. 81.10 per CCD on December 5, 2014. Out of these CCDs, first tranche 1,38,08,414 CCDs were already converted into equal number of equity shares of Rs. 2 each on March 25, 2015. The second tranche of 1,44,98,696 CCDs have been converted into equal number of shares of Rs. 2 each on May 7, 2015. The remaining CCDs shall be converted into 1,52,23,486 of equity shares of Rs. 2 each during the month of April, 2016.

Nature of reserves

Retained Earnings represent the undistributed profits of the Company.

Other Comprehensive Income Reserve represent the balance in equity for items to be accounted in Other Comprehensive Income. OCI is classified into i). Items that will not be reclassified to profit and loss ii). Items that will be reclassified to profit and loss.

Debenture Redemption Reserve represents the statutory reserve for non-convertible debentures issued by the Company. This is in accordance with Indian Corporate Law wherein a portion of the profits are apportioned each year until the aggregate amount equals 25% of the face value of the debentures issued and outstanding. The reserve will be released on redemption of the debentures.

Capital Redemption Reserve represents the statutory reserve created when capital is redeemed.

General Reserve represents the statutory reserve, this is in accordance with Indian Corporate law wherein a portion of profit is apportioned to general reserve. Under Companies Act, 1956 it was mandatory to transfer amount before a company can declare dividend, however under Companies Act, 2013 transfer of any amount to General reserve is at the discretion of the Company.

Securities Premium Reserve represents the amount received in excess of par value of securities (equity shares, preference shares and debentures). Premium on redemption of securities is accounted in security premium available. Where security premium is not available, premium on redemption of securities is accounted in statement of profit and loss. Section 52 of Companies Act, 2013 specify restriction and utilization of security premium.

(vi) Term Loan of Rs. 30,000 lacs (rate of interest 10.65% p.a.) (March 31, 2015 Rs. Nil and April 1, 2014 Rs. Nil) is secured by subservient charge on entire moveable assets of the Company. The loan is repayable in two installments of Rs. 6,000 lacs and Rs. 24,000 lacs in financial year 2017-18 and 2018-19 respectively.

(vii) Term Loan of Rs. 12,500 lacs (rate of interest 10.60% p.a.) (including Rs. 312.50 lacs shown in current maturity) (March 31, 2015 Rs. Nil and April 1, 2014 Rs. Nil) is secured by first pari passu charge by way of equitable mortgage on Company''s immovable properties and hypothecation of movable fixed assets both present and future. The loan is repayable in seven installments of Rs. 312.50 lacs, Rs. 312.50 lacs, Rs. 625 lacs, Rs. 2,812.50 lacs, Rs. 2,812.50 lacs, Rs. 2,812.50 lacs and Rs. 2,812.50 lacs in financial year 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23 respectively.

(viii) Term Loan of Rs. 9,375 lacs (rate of interest 10.40% p.a.) (including Rs. 234.38 lacs shown in current maturity) (March 31, 2015 Rs. Nil and April 1, 2014 Rs. Nil) is secured by first pari passu charge by way of equitable mortgage on Company''s immovable properties and hypothecation of movable fixed assets both present and future. The loan is repayable in seven installments of Rs. 234.38 lacs, Rs. 234.38 lacs, Rs. 468.76 lacs, Rs. 2,109.37 lacs, Rs. 2,109.37 lacs, Rs. 2,109.37 lacs and Rs. 2,109.37 lacs in financial year 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23 respectively.

(ix) Term Loans include Vehicle Loans of Rs. 75.06 lacs (including Rs. 35.12 lacs shown in current maturity) (March 31, 2015 Rs. 331.99 lacs and April 1, 2014 Rs. 284.82 lacs) which are secured by way of hypothecation of Vehicles, which carries rate of interest ranging from 10.50% to 12.25% p.a. The loan is repayable in three installments of Rs. 35.12 lacs, Rs. 30.22 lacs and Rs. 9.72 lacs in financial year 2016-17, 2017-18 and 2018-19 respectively.

(x) There is no default in repayment of principal and interest thereon.

Terms of repayment of Unsecured ECB:

(i) External Commercial Borrowings of USD 1,33,00,000 (Rs. 8,812.58 lacs) (including USD 57,00,000 - Rs. 3,776.82 lacs shown in current maturity) (March 31, 2015 USD 1,90,00,000 - Rs. 11,892.26 lacs and April 1, 2014 USD 1,90,00,000 - Rs. 11,418.96 lacs) is repayable in two installments of USD 57,00,000 (Rs. 3,776.82 lacs) and USD 76,00,000 (Rs. 5,035.76 lacs) on Nov 27, 2016 and Nov 27, 2017, respectively. Rate of Interest is 6 months USD LIBOR plus 2.30% p.a.

(ii) External Commercial Borrowing of USD 4,89,22,284 (Rs. 32,415.90 lacs) (including USD 2,40,96,050 - Rs. 15,966.04 lacs shown in current maturity) (March 31, 2015 USD 7,30,18,334 - Rs. 45,702.76 lacs and April 1, 2014 USD 7,30,18,334 - Rs. 43,883.87 lacs) is repayable in two installments of USD 2,40,96,050 (Rs. 15,966.04 lacs) and USD 2,48,26,234 (Rs. 16,449.86 lacs) on June 30, 2016 and June 30, 2017, respectively. Rate of Interest is 6 months USD LIBOR plus 2.55% p.a.

Loan from related parties

Term loan from related parties are repayable in twelve equal monthly installments starting from April 30, 2017. These loans carry interest rate 12% p.a.

There is no default in repayment of principal and interest thereon.

2. Financial risk management

3. Financial risk factors

The Company''s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to manage finances for the Company''s operations. The Company has loan and other receivables, trade and other receivables, and cash and short-term deposits that arise directly from its operations. The Company also enters into derivative transactions. The Company''s activities expose it to a variety of financial risks:

i) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments. Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. This is based on the financial assets and financial liabilities held as at March 31, 2016 and March 31, 2015.

ii) Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.

iii) Liquidity risk.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.

The Company''s overall risk management programmed focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company''s financial performance. The Company uses derivative financial instruments to hedge certain risk exposures. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes.

Risk management is carried out by the treasury department under policies approved by the board of directors. The treasury team identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, and credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

Market Risk

The sensitivity analysis excludes the impact of movements in market variables on the carrying value of post-employment benefit obligations provisions and on the non-financial assets and liabilities. The sensitivity of the relevant Statement of Profit and Loss item is the effect of the assumed changes in the respective market risks. The Company''s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest rates. The Company uses derivative financial instruments such as foreign exchange forward contracts and interest rate swaps of varying maturity depending upon the underlying contract and risk management strategy to manage its exposures to foreign exchange fluctuations and interest rate.

(a) Foreign exchange risk and sensitivity

The Company transacts business primarily in Indian Rupee, USD and Euro. The Company has obtained foreign currency loans and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts a policy of selective hedging based on risk perception of the management. Foreign exchange hedging contracts are carried at fair value.

The following table demonstrates the sensitivity in the USD, Euro, Yen and other currencies to the Indian Rupee with all other variables held constant. The impact on the Company''s profit before tax and other comprehensive income due to changes in the fair value of monetary assets and liabilities is given below:

(b) Interest rate risk and sensitivity

The Company’s exposure to the risk of changes in market interest rates relates primarily to long term debt. The Company has entered into interest rate swap contracts, in which it agrees to exchange, at specific intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed upon principal amount. The management also maintains a portfolio mix of floating and fixed rate debt. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. As at March 31, 2016, after taking into account the effect of interest rate swaps, approximately 59.96% of the Company''s borrowings are at a fixed rate of interest (March 31, 2015: 71.13%). Borrowings issued at fixed interest rate exposes the Company to fair value interest rate risk.

With all other variables held constant, the following table demonstrates the impact of borrowing cost on floating rate portion of loans and borrowings and loans on which interest rate swaps are taken.

(c) Commodity price risk and sensitivity

The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. The Company enter into contracts for procurement of material, most of the transactions are short term fixed price contract and a few transactions are long term fixed price contracts.

Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds and financial institutions and other financial instruments.

Trade Receivables

The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. The Company has also taken advances and security deposits from its customers, which mitigate the credit risk to an extent.

Liquidity risk

The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

The table below provides undiscounted cash flows towards non-derivative financial liabilities and net-settled derivative financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

The Company is required to maintain ratios (including total debt to EBITDA / net worth, EBITDA to gross interest, debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels. In the event of failure to meet any of these ratios these loans become callable at the option of lenders, except where exemption is provided by lender.

Interest rate and currency of borrowings

The below details do not necessarily represent foreign currency or interest rate exposure to the income statement, since the Company has taken derivatives for offsetting the foreign currency and interest rate exposure.

4. Competition and price risk

The Company faces competition from local and foreign competitors. Nevertheless, it believes that it has competitive advantage in terms of high quality products and by continuously upgrading its expertise and range of products to meet the needs of its customers.

5. Capital risk management

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company''s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2016 and March 31, 2015.

For the purpose of the Company''s capital management, capital includes issued capital, compulsorily convertible debentures, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and short term deposits, excluding discontinued operations.

The Company monitors capital using gearing ratio, which is net debt divided by total capital.

During 2015-16, the company''s strategy, which was unchanged from 2014-15, was to maintain a gearing ratio within 40% to 50%, the gearing ratios at March 31, 2016 and March 31, 2015 were as follows: ''

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches of the financial covenants of any interest bearing loans and borrowing for reported periods.

6. Fair value of financial assets and liabilities

Set out below is a comparison by class of the carrying amounts and fair value of the Company''s financial instruments that are recognized in the financial statements.

- Non-current investment in equity shares designated at fair value through other comprehensive income where carrying value and fair value is nil as on March 31, 2016

Fair valuation techniques

The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available. The fair values of the financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The following methods and assumptions were used to estimate the fair values:

1) Fair value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

2) Long-term fixed-rate and variable-rate receivables / borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. For fixed interest rate borrowing fair value is determined by using the discounted cash flow (DCF) method using discount rate that reflects the issuer''s borrowings rate. Risk of non-performance for the company is considered to be insignificant in valuation.

3) The fair values of derivatives are estimated by using pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity, and market parameters such as interest rates, foreign exchange rates, and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgment, and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its derivative counterparties and believe them to be insignificant and not warranting a credit adjustment.

4) IND AS 101 allow Company to fair value property, plant and machinery on transition to IND AS, the Company has fair valued property, plant and equipment, and the fair valuation is based on replacement cost approach.

5) IND AS 101 allows Company to fair value investment in subsidiary on transition to IND AS, the Company has fair valued investment in some subsidiaries, and the fair valuation is based on income approach.

Fair Value hierarchy

The following table provides the fair value measurement hierarchy of Company''s asset and liabilities, grouped into Level 1 to Level 3 as described below:

- Quoted prices / published NVA (unadjusted) in active markets for identical assets or liabilities (level 1). It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date and financial instruments like mutual funds for which net assets value (NAV) is published mutual fund operators at the balance sheet date.

- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). It includes fair value of the financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2.

- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Fair value hierarchy

The following table provides the fair value measurement hierarchy of Company''s asset and liabilities, grouped into Level 1 to Level 2 as described below

During the year ended March 31, 2016 and March 31, 2015, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements. There is no transaction / balance under level 3.

Following table describes the valuation techniques used and key inputs to valuation for level 2 of the fair value hierarchy as at March 31, 2016 and March 31, 2015, respectively:

7. Segment information

Information about primary segment

The Company is engaged primarily into manufacturing of Iron and steel pipes and pellets. The Company''s primary segments as identified by management are Iron and steel products and Waterways oceangoing.

Segments have been identified taking into account nature of product and differential risk and returns of the segment. These business segments are reviewed by the Chief Operating Officer of the Company (Chief operating decision maker).

Iron and steel products:

The segment comprises of manufacturing of Iron and Steel pipes and pellets in India.

Waterways oceangoing:

The segment comprises of ocean going shipping business.

Others:

These include administrative and support services provided to other segments.

The measurement principles for segment reporting are based on IND AS. Segment''s performance is evaluated based on segment revenue and profit or loss from operating activities

1. Operating revenues and expenses related to both third party and inter-segment transactions are included in determining the segment results of each respective segment.

2. Finance income earned and finance expense incurred are not allocated to individual segment and the same has been reflected at the Company level for segment reporting.

3. The total assets disclosed for each segment represent assets directly managed by each segment, and primarily include receivables, property, plant and equipment, intangibles, inventories, operating cash and bank balances, intersegment assets and exclude derivative financial assets, deferred tax assets and income tax recoverable.

4. Segment liabilities comprise operating liabilities and exclude external borrowings, provision for taxes, deferred tax liabilities and derivative financial liabilities.

5. Segment capital expenditure comprises additions to property, plant and equipment and intangible assets (net of rebates, where applicable).

6. Unallocated expenses/ results, assets and liabilities include expenses/ results, assets and liabilities (including inter-segment assets and liabilities) and other activities not allocated to the operating segments. These also include current taxes, deferred taxes and certain financial assets and liabilities not allocated to the operating segments.

Interest rate swaps

The company has variable interest foreign currency borrowings, to offset the risk of variation in interest rates, the company has entered into, fix pay and variable receipt, interest rate swaps, these swap contracts are in US$. Outstanding amortized notional value of loan for swap contracts was US$ 48.92 million and US$ 73.02 million as on March 31, 2016 and March 31, 2015 respectively.

Forward Contracts

The Company has foreign currency sale and purchase forward contracts to offset the risk of currency fluctuations. These contracts are for settlement of operational receivable and payable. As at March 31, 2016 outstanding contracts are for net purchase of Euro 44.5 million and sale of US$ 7 million. As at March 31, 2015 outstanding contracts were for net purchase of Euro 18 million, sale of US$ 10 million and sale of OMR 27.80 million.

OCI presentation of defined benefit plan

- Gratuity is in the nature of defined benefit plan, Re-measurement gains/(losses) on defined benefit plans is shown under OCI as Items that will not be reclassified to profit or loss and also the income tax effect on the same.

- Leave encashment cost is in the nature of short term employee benefits.

Presentation in Statement of Profit & Loss and Balance Sheet

Expense for service cost, net interest on net defined benefit liability (asset) is charged to Statement of Profit & Loss.

IND AS 19 do not require segregation of provision in current and non-current, however net defined liability (Assets) is shown as current and non-current provision in balance sheet as per IND AS 1.

Actuarial liability for short term benefits (leave encashment cost) is shown as current and non-current provision in balance sheet.

When there is surplus in defined benefit plan, company is required to measure the net defined benefit asset at the lower of; the surplus in the defined benefit plan and the assets ceiling, determined using the discount rate specified, i.e. market yield at the end of the reporting period on government bonds, this is applicable for domestic companies, foreign company can use corporate bonds rate.

The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The mortality rates used are as published by one of the leading life insurance companies in India.

d) Details of loans given, investment made and Guarantees given, covered U/S 186(4) of the Companies Act, 2013.

- Loans given and investment made are given under the respective heads

- Corporate Guarantees have been issued on behalf of subsidiary companies, details of which are given in related Party transactions refer Note no. 50.

b) Foreign currency fluctuation on long term borrowing

The Company has opted to continue the policy to capitalize foreign currency fluctuation on long term borrowings which was followed as per previous I-GAAP as per optional election of Ind AS -101, on all long term foreign currency borrowings outstanding on March 31, 2015. Accordingly, the Company has capitalized such exchange fluctuation to fixed assets of Rs. 2,755.04 lacs and Rs. 3,121.59 lacs for the year ended March 31, 2016 and March 31, 2015 respectively.

The Company is doing specific borrowing cost capitalization only.

* Including bonus, sitting fee, commission on accrual basis and value of perquisites.

# As the liability for gratuity and leave encashment are provided on actuarial basis for the Company as a whole, amounts accrued pertaining to key managerial personnel are not included above. $ including PF, leave encashment paid and any other benefit. @ Any shares allotted for other than cash i.e. ESOP or consideration for services in shares.

8. Government Grant

Packaged Scheme of Incentive (PSI) - Maharashtra

The Company’s manufacturing facility at Nashik has been granted “Mega Project Status” by Government of Maharashtra and therefore is eligible for Industrial Promotion Subsidy (IPS) under Packaged Scheme of Incentive (PSI) 2007. The purpose of the scheme is for intensifying and accelerating the process of dispersal of industries to the less developed regions and promoting high tech industries in the developed areas of the state coupled with the object of generating mass employment opportunities.

Entitlements under the scheme consists of the following:

a). Electricity Duty exemption for a period of 7 years from the date of commencement of commercial production- from September 10, 2009 to September 9, 2016

b). 100% exemption from payment of Stamp duty.

c). VAT and CST payable to the State Government (on sales made from Nashik plant, within a period of 7 years starting from September 10, 2009).

IPS will be payable so as to restrict up to 75% of the Eligible Fixed Capital investments made from September 13, 2007 to September 10, 2009 . The Eligibility Certificate issued allows maximum Fixed Capital Investment of Rs. 35,000 lacs and restricts IPS to 75% of Rs. 35,000 lacs i.e. Rs. 26,250 lacs.

In terms of the Indian Accounting Standard (IND AS 20) “Accounting for Government Grants”, incentive for which details are as provided below is considered to be in the nature of promoters'' contribution. Amount of benefits receivable in excess of grant income accrued based on usage of the assets is accounted as Government grant received in advance and has been credited to Statement of Profit and Loss on a systematic basis over the useful life of the asset.

Balances of Government grant received in advance and income recognized during the period are as follows:

Rajasthan Investment Promotion Scheme (RIPS) Rajasthan

The Company''s manufacturing facility at Bhilwara has been granted “Customized Package” by Government of Rajasthan and therefore is eligible for Investment Promotion Subsidy (IPS) under Rajasthan Investment Promotion Scheme - 2010 (RIPS-2010). The purpose of the Customize Package Scheme of RIPS-2010 is to promote investment in the State of Rajasthan and to further generate employment opportunities through such investment. Modalities of payment of IPS consists of the following:

a). 50% exemption from payment of Electricity Duty for a period of 10 years from the date of issuance of Entitlement Certificate - from December 9, 2015 to December 8, 2025.

b). Investment Subsidy equivalent to 70% of Taxes (VAT & CST) which have become due and have been deposited into the Government exchequer, for a period of 7 years from the date of issuance of Entitlement Certificate - from December 9, 2015 to December 8, 2022.

c). Employment Generation Subsidy - for General category: Rs. 15000/- per employee & for Women/SC/ST/PwD: Rs. 18000/- per employee per completed year of service, subject to maximum, 05% of Taxes (VAT & CST) which have become due and have been deposited into the Government exchequer, for a period of 7 years from the date of issuance of Entitlement Certificate - from December 9, 2015 to December 8, 2022.

d). 50% exemption from payment of Stamp duty & Conversion charges for change of land use.

In terms of the Indian Accounting Standard (IND AS 20) “Accounting for Government Grants”, incentive for which details are as provided below is considered to be in the nature of promoters'' contribution. Amount of benefits receivable in excess of grant income accrued based on usage of the assets is accounted as Government grant received in advance and has been credited to Statement of Profit and Loss on a systematic basis over the useful life of the asset.

Balances of Government grant received in advance and income recognized during the period are as follows:

The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity.

9. Impairment review

Assets are tested for impairment whenever there are any internal or external indicators of impairment.

Impairment test is performed at the level of each Cash Generating Unit (‘CGU'') or groups of CGUs within the Company at which the goodwill or other assets are monitored for internal management purposes, within an operating segment.

The impairment assessment is based on higher of value in use and value from sale calculations.

During the year, the testing did not result in any impairment in the carrying amount of goodwill and other assets.

The measurement of the cash generating units'' value in use is determined based on financial plans that have been used by management for internal purposes. The planning horizon reflects the assumptions for short to- mid term market conditions.

Key assumptions used in value-in-use calculations:

- Operating margins (Earnings before interest and taxes)

- Discount rate

- Growth rates

- Capital expenditures

Operating margins: Operating margins have been estimated based on past experience after considering incremental revenue arising out of adoption of valued added and data services from the existing and new customers, though these benefits are partially offset by decline in tariffs in a hyper competitive scenario. Margins will be positively impacted from the efficiencies and initiatives driven by the Company; at the same time, factors like higher churn, increased cost of operations may impact the margins negatively.

Discount rate: Discount rate reflects the current market assessment of the risks specific to a CGU or group of CGUs. The discount rate is estimated based on the weighted average cost of capital for respective CGU or group of CGUs.

Growth rates: The growth rates used are in line with the long term average growth rates of the respective industry and country in which the Company operates and are consistent with the forecasts included in the industry reports.

Capital expenditures: The cash flow forecasts of capital expenditure are based on past experience coupled with additional capital expenditure required

10. Discontinued operation and Non-current assets held for distribution Composite Scheme of Arrangement

1. A Composite Scheme of Arrangement (hereinafter referred to as ‘Scheme'') amongst Jindal Saw Limited and its three wholly owned subsidiaries namely JITF Infralogistics Limited, JITF Shipyards Limited and JITF Waterways Limited and their respective shareholders and creditors under section 391-394 lead with 100-103 of the Companies Act, 1956 and other relevant provisions of Companies Act, 1956 and / or Companies Act, 2013 has been sanctioned by the Hon''ble High Court of Judicature at Allahabad (Uttar Pradesh) vide its Order dated July 8, 2016, made effective from August 5, 2016, operative from appointed date April 1, 2015 and consequently ocean waterways business of JITF Waterways Limited has been transferred to the Company and interest in Infrastructure business has been transferred from the Company. In view of this, figures of previous year are not comparable.

2. As per the accounting treatment detailed in the Scheme, the Company has recorded the under mentioned assets and liabilities of merged and demerged undertakings at their respective book values as on the appointed date i.e. April 1, 2015. The combined effect of which is given in table below:

3. As per the scheme the shareholders of the Company will be eligible to get 50 numbers of equity shares of face value of Rs. 2 each for every 622 numbers of equity shares of face value of Rs. 2 each held as on the record date.

Discontinued operation

Disposal of interest in subsidiary Universal Tube Accessories Private Limited

The Company has entered into an agreement dated March 29, 2016 with minority shareholders for disposal of interest in the subsidiary Universal Tube Accessories Private Limited. As per agreement, shareholding held by the Company will be transferred in exchange for takeover of certain assets and repayment of certain loans of the subsidiary which are guaranteed by the Company, guarantee of balance loans will be released by bank. The summary of transactions is as below. The Company has designated the highly probable transaction as discontinued operation and assets and liabilities of the disposal group are designated as held for sale.

11. New Developments

The Company has disposed 15% shareholding in its subsidiary Jindal Fittings Limited on March 29, 2016. With the disposal of interest company has lost control on the subsidiary and the balance investment has been designated as ‘investment in associate'' on reporting date March 31, 2016.

12. Jindal Saw Limited has given loans to certain subsidiaries of Rs. 51,479.77 lacs and Rs. 741.51 lacs to other related parties, which are outstanding as at March 31, 2016 as detailed in outstanding loan in note no 50. As per the loan agreements, the loans are payable over a period of one year or more with option with borrowing entity to prepay.

Subsequent to approval of the Composite Scheme of Arrangement by the Honb''le High Court of Allahabad, the borrowing subsidiaries and other related parties have repaid and also represented that these loans are being repaid and would be repaid within one year and as such these loans have been classified as Short Term Loans in these financial statements.

13. Information related to Consolidated financial

The company is listed on stock exchange in India, the Company has prepared consolidated financial as required under IND AS 110, Sections 129 of Companies Act, 2013 and listing requirements. The consolidated financial statement is available on company''s web site for public use.

14. Transition to IND AS Basis of preparation

For all period up to and including the year ended March 31, 2015, the Company has prepared its financial statements in accordance with generally accepted accounting principles in India (Indian GAAP). These financial statements for the year ended March 31, 2016 are the Company''s first annual IND AS financial statements and have been prepared in accordance with IND AS.

Accordingly, the Company has prepared financial statements which comply with IND AS applicable for periods beginning on or after April 1, 2014 as described in the accounting policies. In preparing these financial statements, the Company''s opening Balance Sheet was prepared as at April 1, 2014 the Company''s date of transition to IND AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP Balance Sheet as at April 1, 2014 and its previously published Indian GAAP financial statements for the quarter ended March 31, 2015 and year ended March 31, 2015.

Exemptions Applied

IND AS 101 First-time adoption of Indian Accounting Standards allows first time adopters certain exemptions from the retrospective application of certain IND AS, effective for April 1, 2014 opening balance sheet.

Following exceptions to the retrospective application of other IND AS as per Appendix B of IND AS 101.

1. Government loans - The Company has outstanding deferred sales tax loans from state governments, the Company on transition was not doing the recognition and measurement of government loan at below market rate of interest, on transition these loans are not fair valued. No incremental loan received from government at below market rate during the year 2014-15 and 2015-16.

2. Embedded derivatives - The Company has assessed whether an embedded derivative is required to be separated from the host contract and as per assessment no material embedded derivative is identified and hence no embedded derivative is accounted for.

Following exemptions availed from other IND AS per Appendix D of IND AS 101.

1. Deemed cost for Property, Plant and Equipment [PPE] - The Company has elected to measure items of PPE at the date of transition to IND AS at their fair value. Company has used the fair value of assets, which is considered as deemed cost on transition. The impact on fair valuation of Property, Plant and Equipment on transition from previous GAAP is Rs. 1,76,523.26 lacs and the deemed cost considered on transition is Rs. 5,30,099.60 lacs

Life and salvage value of assets has been revisited on transition date and revised estimated life less life expired on date of transition has been considered as revised life for all assets. The impact of change in life and salvage value is provided in Note no 5.

2. Under previous GAAP, company was carrying assets of one location at revaluation assessed on March 31, 1996, to fair value assets with corresponding increase in revaluation reserve. On transition to IND AS the Company has elected not to carry those assets at revaluation done under previous GAAP and those assets are fair valued as on transition date. On transition revaluation reserve has been adjusted against retained earnings. The impact of such measurement is provided in summary of effect of transition.

3. Long Term Foreign Currency Monetary Items

The Company has opted to continue the policy adopted for accounting for exchange differences arising from translation of long term foreign currency monetary items recognized in the financial statements for the period ending immediately before the beginning of the first IND AS financial reporting period as per the previous GAAP, accordingly the Company has continued the capitalized of force on long term loan outstanding on the date of transition i.e April 1, 2014 and such capitalized amount is amortized over the remaining useful life of the asset. Refer Note no 47 for exchange differences capitalized during 2014-15 and 2015-16.

4. Investments in subsidiaries, joint ventures and associates

The Company has elected to adopt the fair valued deemed cost of investment in certain investment in Subsidiaries and recognition of balance investments in subsidiaries at previous GAAP carrying values on the date of transition. The impact of such measurement is provided in summary of effect of transition.

5. Decommissioning liabilities included in the cost of property, plant and equipment

The Company has availed the exemption for decommissioning and restoration liability and accordingly measured the discounted liability as at the date of transition, the liability prior to transition date is adjusted in retained earnings. The impact of such measurement is provided in summary of effect of transition.

Principal differences between IND AS and Indian GAAP Measurement and recognition difference for year ended March 31, 2015

1. Property, plant and Machinery

i. Decommissioning liabilities or Assets Retirement obligation

Under Indian GAAP obligation is initially measured at the expected cost to settle the obligation, whereas under IND AS obligation is initially measured at the present value of expected cost to settle the obligation. The discounted value of obligation is charged to P&L. Discounted value of liability recognized was Rs. 2.78 lacs and Rs. 7.38 lacs on April 1, 2015 and March 31, 2016. Also expense booked under previous GAAP during 2014-15 amounting to Rs. 416.91 lacs has been reversed and discounted value of expense amounting to Rs. 4.34 lacs has been accounted under other expenses. Also interest accrual of Rs. 0.25 lacs recognized during 2014-15.

ii. Asset carried at Deemed cost in IND AS

On transition to IND AS PPE was fair valued with life being the balance revised remaining life of each assets. During 2014-15 additional loss for discard of assets amounting to Rs. 229.24 lacs is recognized for, the increase is loss is due to discard of fair valued assets.

iii. The Company has not elected to carry assets at revaluation done under previous GAAP, revaluation reserve carrying value of Rs. 415.68 lacs has been adjusted against retained earnings on transition. Subsequently during 2014-15, depreciation charged to revaluation reserve under previous GAAP has been reversed, and depreciation as per INDAS has been accounted.

2. Financial instruments

i. Derivative financial instruments

Under Indian GAAP, derivative contracts are measured at fair value at each balance sheet date to the extent of any reduction in fair value, and the loss on valuation is recognized in Statement of Profit and Loss. A gain on valuation is only recognized by the Company if it represents the subsequent reversal of an earlier loss. Also under IGAAP premium on forward contract is amortized over the contract period and fair value was calculated excluding the premium.

Under IND AS, both reductions and increases to the fair values of derivative contracts are recognized in profit & loss. Premium is not separately accounted and amortized.

ii. Fair valuation of financial assets and liabilities

Under Indian GAAP, receivables and payables were measured at transaction cost less allowances for impairment, if any. Under IND AS, these financial assets and liabilities are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less allowance for impairment, if any. The resulting finance charge or income is included in finance expense or finance income in the Statement of Profit and Loss for financial liabilities and financial assets respectively.

iii. Investments others than investment in subsidiary, joint arrangement and associates.

Under Indian GAAP current investments other than investment in subsidiary, joint arrangement and associates are measured at the lower of cost or market price and non-current investments other than investment in subsidiary, joint arrangement and associates are measured at cost less any permanent dimension in value of investment. Difference between the cost and market price is recognized in profit and loss.

Under IND AS investments are designated as fair value through other comprehensive income (FVOCI), fair value through profit and loss (FVTPL) and carried at amortized cost. For investment designated as FVOCI, difference between the fair value and carrying value is recognized in OCI. For investment designated as FVTPL, difference between the fair value and carrying value is recognized in profit and loss. For investment designated as amortized cost, accrual of interest is recognized in profit and loss with which value of investment will be equal to maturity date contractual cash flows which includes solely payments of interest and principal.

iv. Compound financial instrument

Under Indian GAAP, compulsory convertible debentures (CCD) are stated initially at cost. On conversion, the carrying amount is transferred to equity.

Under IND AS, the CCD is analyzed as a compound financial instrument and is separated into a liability and an equity component. The fair value of the liability component is initially measured at amortized cost determined using a market rate for an equivalent non-convertible bond. The residual amount is recognized in equity. The finance cost arising on the liability component is included in finance cost in the Statement of Profit and Loss. The carrying amount of the conversion option as reflected in the equity is not re-measured in subsequent periods.

CCD issued by the Company are of fix to fix nature hence there is no amount towards fair valuation of liability and whole of the amount has been recognized as equity.

v. Investment in subsidiary, joint ventures and associates

The impact for adoption of fair valued deemed cost of investment in subsidiary has caused decrease in value of investment by Rs. 28,332.78 lacs

vi. Cost of borrowing

Borrowing designated and carried at amortized cost are accounted on EIR method. The upfront fee or cost of borrowing incurred is deferred and accounted on EIR. Borrowings are shown as net of unamortized amount of upfront fee incurred. On transition company has deferred Rs. 125 lacs of upfront fee.

3. Proposed Dividend

Under Indian GAAP, proposed dividends are recognized as liability in the period to which they relate irrespective of the approval by shareholders. Under IND AS a proposed dividend is recognized as liability in the period in which it is declared (on approval of shareholders in a general meeting) or paid. Therefore the proposed dividend and dividend distribution tax of Rs. 3,231.72 lacs on March 31, 2014 has been derecognized and recognized during 2014-15 on payment. Similarly proposed dividend and dividend distribution tax of Rs. 2,900.35 lacs on March 31, 2015 has been derecognized and recognized during 2015-16.

4. Deferred Tax

The Company has accounted for deferred tax on the various adjustments between Indian GAAP and IND AS at the tax rate at which they are expected to be reversed.

The Company has fair valued investment in subsidiaries on transition, considering that there would be no long term capital gain in foreseeable future period, no deferred tax assets has been created on the fair valuation impact.

5. MAT entitlement credit being of the nature of deferred tax, on transition to IND AS MAT credit entitlement of Rs. 15,474 lacs and Rs. 23,986 lacs for April 1, 2014 and March 31, 2015 respectively has been regrouped under deferred tax assets from Current tax assets (net).

6. Government grant - Under previous GAAP, government grant receivable under Incentive under Investment promotion scheme was accounted in capital reserve under equity. Under IND AS the grant has to be recognized in Statement of Profit and Loss on a systematic basis over the life of the asset/project. For this purpose the grant accrued and receivable has been recognized as Government grant received in advance for period prior to transition date and for 2014-15. Due to this change Rs. 6,278.73 lacs and Rs. 1929.57 lacs of capital reserve is derecognized and recognized as Government grant for transition date and 2014-15 respectively. Also the grant is amortized retrospectively for periods prior to transition date and for 2014-15 and accounted as other income. Due to this other income of Rs. 341.17 lacs is adjusted against opening retained earnings for period prior to transition date and Rs. 233.09 lacs is recognized as other income in 2014-15.

7. The impact of change in actuarial assumption and experience adjustments for defined benefit obligation towards gratuity liability is accounted in the Statement of Other Comprehensive Income and corresponding tax impact on the same. Due to this Rs. 572.1 lacs and Rs. 197.99 lacs for the period ended March 31, 2015 and March 31, 2016 respectively, tax credit there on is shown in OCI and reversal in Statement of Profit and loss.

8. Exceptional items for 2014-15 are for foreign currency loss, same has been reassessed for classification under exceptional item, and this being in the nature of recurring item with respect to foreign currency reinstatement of monetary assets and liabilities. Profit or loss on reinstatement of loan given is shown under finance income, profit or loss on reinstatement with respect to borrowings and regarded as an adjustment to borrowing cost are shown under finance expense, and others are shown as operating expenses. Rs. 4,439.48 lacs, Rs. 184.61 lacs and Rs. 1,053.30 lacs are shown under finance cost, other income and other expenses respectively.

9. Statement of Cash Flows

The impact of transition from Indian GAAP to IND AS on the Statement of Cash Flows is due to various reclassification adjustments recorded under IND AS in Balance Sheet, Statement of Profit & Loss and difference in the definition of cash and cash equivalents and these two GAAP''s.

10. Depreciation on Property, Plant and Equipment

Depreciation on Property, Plant and Equipment has been calculated on the fair value and on revised useful life evaluated by technical valuer. As a result depreciation for the year 2014-15 is lower by Rs. 4,428.75 lacs.


Mar 31, 2015

1 Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 2/- per equity share. Each equity shareholder is entitled to one vote per share.

2 The Company allotted 435,30,596, 0% Compulsorily Convertible Debentures (CCDs) on preferential basis under the SEBI ICDR Regulations to the promoters group entity @ Rs. 81.10 per CCD. Out of these CCDs, 1,38,08,414 CCDs have been converted into equal number of equity shares of Rs. 2 each on 25th March, 2015. The remaining CCDs shall be converted into two trenches as follows:-

i) 1,44,98,696 number of CCDs would be converted into equal number of equity shares of Rs. 2 each any time during 1st April, 2015 to 31st March, 2016; and

ii) 1,52,23,486 number of CCDs shall be converted into equal number of equity shares of Rs. 2 each during the month of April, 2016.

3 Non convertible Debentures include :

[i] 10.75% Non Convertible Debentures of Rs. 30,000 lacs [including Rs. 10,000 lacs shown in current maturity] [Previous Year Rs. 30,000 lacs] are secured by first pari passu charge by way of English mortgage on the Company''s specific immovable properties located in the state of Gujarat and by way of equitable mortgage of Company''s other immovable properties and hypothecation of movable fixed assets both present and future in favour of Debenture Trustees. The same are repayable in three equal installments of Rs. 10,000 lacs each on 08 April, 2015, 08 April, 2016 and 08 April, 2017.

[ii] 10.50% Non Convertible Debentures of Rs. 10,000 lacs [Previous Year Rs. 10,000 lacs] in three series are secured by first pari passu charge by way of English mortgage on the Company''s specific immovable properties located in the state of Gujarat and by way of equitable mortgage of Company''s other immovable properties and hypothecation of movable fixed assets both present and future in favour of Debenture Trustees. The same are repayable in three installments of Rs. 3,000 lacs [Series I], Rs. 3,000 lacs [Series II] and Rs. 4,000 lacs [Series III] on 12 September, 2018, 12 September, 2019 and 12 September, 2020 respectively. There is a call option exercisable at the end of three years from the date of allotment [12 September, 2012] for all series of NCDs. The Call option is also available in every subsequent year for each series of NCD individually i.e. at the end of 4th, 5th, 6th and 7th year from the date of allotment upto their respective dates of maturity.

[iii] 10.38% Non Convertible Debentures of Rs. 30,000 lacs [Previous Year Rs. 30,000 lacs] in two series are secured by first pari passu charge by way of English mortgage on the Company''s specific immovable properties located in the state of Gujarat and by way of equitable mortgage of Company''s other immovable properties and hypothecation of movable fixed assets both present and future in favour of Debenture Trustees. The same are repayable in single installment of Rs. 30,000 lacs on 26 December, 2021. There is a put/call option for Rs. 15,000 lacs [Series 1] at the end of third year [26 December, 2015] and for Rs.15,000 lacs [Series 2] at the end of Fourth year [26 December, 2016] from the date of allotment i.e. 26 December, 2012.

4 Term Loans from Banks include :

[i] Term Loan of Rs. 13,700 lacs [rate of interest 1.50% p.a.][Previous Year Rs. 13,700 lacs] is secured by way of second charge on all the assets of the Company both present and future and also by way of personal guarantee of a Director. The same is repayable in three installments of Rs. 4,110 lacs, Rs.4,110 lacs and Rs. 5,480 lacs on 31 Jan, 2017, 31 Jan, 2018 and 31 Jan, 2019 respectively.

[ii] Term Loan of Rs. 5,000 lacs [rate of interest 10.75% p.a.] [Previous Year Rs. 5,000 lacs] is secured by way of second charge on all the assets of the Company, both present and future and also by way of personal guarantee of a Director. The repayment is by way of a bullet payment of Rs. 5,000 lacs on 23 May, 2017.

[iii] Term Loan of USD 89,04,719.50 [Rs. 5,573.53 lacs] [rate of interest 6 Months LIBOR 400 bps p.a.] [Previous Year USD 89,04,719.50 - Rs. 5,351.72 lacs] is secured by way of second charge on all the assets of the Company both present and future and also by way of personal guarantee of a Director. The repayment is by way of a bullet payment of USD 89,04,719.50 [Rs. 5,573.53 lacs] on 23 May, 2017.

[iv] Term Loan of Rs. 50,000 lacs [including Rs. 1,000 lacs shown in current maturity] [rate of interest 11.25% p.a.] [Previous Year Rs. 29,500 lacs] is secured/to be secured by first pari passu charge by way of equitable mortgage on Company''s immovable properties and hypothecation of movable fixed assets both present and future.

The Company allotted 435,30,596, 0% Compulsorily Convertible Debentures [CCDs] on preferential basis under the SEBI ICDR Regulations to the promoters group entity @ Rs. 81.10 per CCD. Out of these CCDs, 1,38,08,414 CCDs have been converted into equal number of equity shares of Rs. 2 each on 25th March, 2015. The remaining CCDs shall be converted into two trenches as follows :

i] 1,44,98,696 number of CCDs would be converted into equal number of equity shares of Rs. 2 each any time during 1st April, 2015 to 31st March, 2016; and

ii] 1,52,23,486 number of CCDs shall be converted into equal number of equity shares of Rs. 2 each during the month of April, 2016.

5. Terms of repayment of Unsecured ECB :

a] External Commercial Borrowings of USD 1,90,00,000 [Rs. 11,892.26 lacs] [including USD 57,00,000 Rs. 3,567.68 lacs shown in current maturity] [Previous Year USD 1,90,00,000 Rs. 11,418.96 lacs] is repayable in three installments of USD 57,00,000 [Rs. 3,567.68 lacs], USD 57,00,000 [Rs. 3,567.68 lacs] and USD 76,00,000 [Rs. 4,756.90 lacs] on 27 November, 2015, 27 November, 2016 and 27 November, 2017 respectively. Rate of Interest is 6 months USD LIBOR 2.30% p.a.

b] External Commercial Borrowing of USD 7,30,18,334 [Rs. 45,702.76 lacs] [including USD 2,40,96,050 - Rs. 15,081.91 lacs shown in current maturity] [Previous Year USD 7,30,18,334 - Rs. 43,883.87 lacs] is repayable in three installments of USD 2,40,96,050 [Rs. 15,081.91 lacs], USD 2,40,96,050 [Rs. 15,081.91 lacs] and USD 2,48,26,234 [Rs. 15,538.94 lacs] on 30 June, 2015, 30 June, 2016 and 30 June, 2017, respectively. Rate of Interest is 6 months USD LIBOR 2.55% p.a.

PARTICULARS As At As At 31st March, 31st March, 2015 2014 (Rs. in lacs) [Rs. in lacs]

6. CONTINGENT LIABILITIES

a] Guarantees issued by the Company''s 7 8,419.52 78,348.56 bankers on behalf of the Company

b] Letter of Credit Outstanding 67,589.82 51,142.53

c] Claims against the company not 81.22 81.22 acknowledged as debt

d] Corporate guarantees/ undertakings 144,058.29 138,445.59 issued to lenders of subsidiary companies

e] Disputed Excise duty, Custom Duty 264.27 212.68 and service tax

f] Income tax demands against which 893.64 2,534.68 company has preferred appeals

g] Disputed Sales Tax 585.41 585.41

h] Liability in respect of Corporate 2,415.72 4,915.03 Guarantees/Duty Saved for availing various export based incentive schemes

30. Estimated amount of contracts remaining to be executed on capital 6,800.07 22,809.66 account and not provided for [Net of Advances]

7. The Company''s manufacturing facility at Nashik has been granted "Mega Project Status" by Government of Maharashtra and therefore is eligible for Industrial Promotion Subsidy [IPS] under Packaged Scheme of Incentive [PSI] 2007.

The purpose of the Packaged Scheme of Incentive [PSI] 2007 is for intensifying and accelerating the process of dispersal of industries to the less developed regions and promoting high tech industries in the developed areas of the state coupled with the object of generating mass employment opportunities.

Modalities of payment of IPS consists of the following:

a. Electricity Duty exemption for a period of 7 years from the date of commencement of commercial production- from 10 September, 2009 to 09 September, 2016

b. 100% exemption from payment of Stamp duty.

c. VAT and CST payable to the State Government [on sales made from Nashik plant, within a period of 7 years starting from 10 September, 2009].

IPS will be payable so as to restrict up to 75% of the Eligible Fixed Capital investments made from 13 September, 2007 to 10 September, 2009 . The Eligibility Certificate issued allows maximum Fixed Capital Investment of Rs. 350 croresand restricts IPS to 75% of Rs. 350 crores i.e. Rs. 262.50 crores.

In terms of the Accounting Standard [AS 12] "Accounting for Government Grants" prescribed under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies [Accounts], Rules, 2014, eligible incentive of Rs. 1,929.57 lacs [Previous Year Rs. 1,749.96 lacs] is considered to be in the nature of promoters'' contribution and has been credited to Capital Reserve.

8. Exceptional items represents net loss on reinstatement/settlement of foreign currency monetary items other than long term foreign currency monetary items related to acquisition of depreciable assets.

9. The Company has exercised the option in financial year 2011-12 for accounting of the exchange differences arising on long term foreign currency monetary items in line with Companies (Accounting Standard (Second Amendment) Rules, 2011 dated 29th December, 2011 relating to Accounting Standard (AS-11) notified by Central Government w.e.f. 1st April, 2011. Accordingly it has capitalized the exchange difference on long term foreign currency loans related to acquisition of depreciable assets.

10. The Company''s significant leasing arrangements are in respect of operating leases for premises-residential and offices. These leasing arrangements are cancellable. The aggregate lease rentals payables are charged as rent.

11. The Company has unquoted investments of Rs. 91,107.73 lacs (Previous Year Rs. 72,260.47 lacs) and Share Application Money of Rs. 2,029.36 lacs ( Previous Year Rs. 3,949.67 lacs ) in Subsidiary Companies, which have accumulated losses as per the latest available Balance Sheet and certain other unquoted investments where the fair value (amount unascertained) is lower than the cost, considering the long term strategic investments and future prospects, such diminution, in the opinion of the management, has been considered to be of temporary nature and hence no provision for the same is considered necessary.

12. An amount of Rs. 40,594.78 lacs (Previous Year Rs. 5,403.48 lacs) is outstanding from Subsidiary companies, which have accumulated losses. Having regard to the long- term involvement and future prospects, no provision is considered necessary towards these outstandings.

13. Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any, which is not likely to be material, will be adjusted at the time of confirmation.

14. (a) The company has provided sponsor''s undertakings to lenders of the projects being sponsored by its wholly owned subsidiary namely Jindal ITF Limited. Major terms of the undertakings envisage investment/buy back of equity/instruments,retention of major equity in subsidiary company, supporting the projects for shortfall in debt servicing and in the eventuality of any cost overrun.

(b) Company has given guarantees/ indemnities for its step down subsidiary Company namely Jindal Saw Italia S.p.A (JSI) favoring supplier/lessor for (i) Inventory purchase by JSI, (ii) towards plant performance/upkeep, and (iii) employees benefits; total amounting to Rs. 2902.95 lacs ( Previous Year Rs. 8,419.42 lacs).

(c) Some of the subsidiaries of the Company have privately placed various instruments including 9.25% -Compulsorily Convertible Debentures of Rs. 8,000 lacs, 0%- Compulsorily Convertible Debentures of Rs. 8,060 lacs and Redeemable Non Convertible Debentures aggregating to Rs. 28,130 lacs all aggregating to Rs. 44,190 lacs. The subscribers of such instruments have put option to require the Company to purchase the securities at the Put Option Price within the time period as per the terms of the agreement/s which is spread over a period ending June, 2017. The estimated amount of put option of such securities as per the terms of the agreement/s is Rs. 52,354.08 lacs as on 31st March, 2015 ( previous year Rs. 64,245.19 lacs).

15. Depreciation for the year ended 31st March, 2015 has been provided for based on useful life prescribed in Schedule II of the Companies Act, 2013. During the previous year ended 31st March, 2014, the depreciation was charged at the rates prescribed under Schedule-XIV of the Companies Act, 1956. As a result, the depreciation charge for the year ended 31st March, 2015 is higher by Rs. 646.43 lacs. Also depreciation of Rs. 1071.04 lacs (net of deferred tax of Rs. 566.83 lacs) where useful life of assets is nil is adjusted against opening balance of retained earnings.

16. In the opinion of the Management, the realizable value of assets other than fixed assets and long term investments, in the ordinary course of business, would not be less than the amount at which they are stated.

17. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.

18. Related Parties Transactions

List of Related Parties & Relationship

A. List of Direct Subsidiaries/ Indirect Subsidiaries/ Joint Ventures

I Direct Subsidiaries

S. No. Name of the Company

1 Jindal ITF Limited

2 IUP Jindal Metals & Alloys Limited

3 S.V. Trading Limited

4 Jindal Fittings Limited

5 Quality Iron and Steel Limited

6 Ralael Holdings Limited

7 Jindal Saw Holdings FZE

8 Greenray Holdings Limited

9 Universal Tube Accessories Private Limited

10 Jindal Saw Espana,S.L.

11 Jindal Tubular (India) Limited (w.e.f. 5th February, 2015)

12 JITF Urban Infrastructure Services Limited (indirect subsidiary upto 23rd January, 2015)

13 JITF Shipyards Limited (indirect subsidiary upto 29th January, 2015)

14 JITF Infralogistics Limited (indirect subsidiary upto 23rd January, 2015)

II Indirect Subsidiaries

1 Jindal Saw USA, LLC

2 Jindal Saw Italia S.p.A.

3 Jindal Saw Middle East FZC

4 Derwent Sand SARL

5 Jindal Saw Gulf (LLC)

6 Jindal Intellicom Limited

7 JITF Water Infrastructure Limited

8 Jindal Rail Infrastructure Limited

9 JITF Waterways Limited

10 JITF Urban Infrastructure Limited

11 JITF Coal Logistics Limited

12 Intellicom Insurance Advisors Limited

13 JITF Shipping & Logistics (Singapore) Pte. Limited

14 JITF Water Infra (Naya Raipur) Limited

15 JITF ESIPL CETP (Sitarganj) Limited

16 JITF Industrial Infrastructure Development Company Limited

17 JITF Urban Waste Management (Ferozepur) Limited

18 JITF Urban Waste Management (Jalandhar) Limited

19 JITF Urban Waste Management (Bathinda) Limited

20 Timarpur- Okhla Waste Management Company Private Limted

21 Jindal Tubular USA LLC (w.e.f. 6th May, 2014)

22 World Transload & Logistics LLC

23 5101 Boone LLP

24 Tube Technologies INC w.e.f. 22nd May, 2014

25 Helical Anchors INC

26 Boone Real Property Holding LLC

27 Drill Pipe International LLC

III Joint Ventures

1 Jindal SAW Pipeline Solutions Limited

2 JWIL-SSIL JV

3 SMC-JWIL JV

4 JWIL-RANHILL JV

5 TAPI-JWIL JV

B. List of Key Management Personnel (KMP) & person having significant influence

S.No Name

1 Mr. Prithvi Raj Jindal Chairman (Non Executive)

2 Ms. Sminu Jindal Managing Director

3 Mr. Indresh Batra Managing Director (upto 17th May, 2014)

4 Mr. Neeraj Kumar Group CEO & Whole- time Director

5 Mr. Hawa Singh Chaudhary Whole-time Director

6 Mr. O.P. Sharma Chief Operating Officer (Large Dia Pipe- SBU)

7 Dr. Dharmendra Gupta Director (Mines & Steel)

8 Mr. Dinesh Chandra Sinha President & SBU Head

9 Mr. N.K. Agarwal Vice President (Corp. Accounts & Taxation) & CFO

10 Mr. P. Venkatesh Vice President - Operations

11 Mr. Sunil K.Jain Company Secretary

C. List of Relatives of Key Management Personnel ( KMP ) where transactions have taken place

S.No. Name of Relatives Relationship

1 Ms. Shradha Jatia Daughter of Mr. Prithvi Raj Jindal

2 Ms. Tripti Puneet Arya Daughter of Mr. Prithvi Raj Jindal

3 Mr. Vikram Pal Singh Son of Mr. H. S. Chaudhary

4 Mr. Vinay Chaudhary Son of Mr. H. S. Chaudhary

5 Ms. Mamta Chaudhary Daughter of Mr. H. S. Chaudhary

6 Ms. Madhulika Jain Wife of Mr. Sunil K.Jain

7 Master Sohil Jain Son of Mr. Sunil K.Jain

8 Master Shreyansh Jain Son of Mr. Sunil K.Jain

D. Entities, where individual,having significant influence over reporting enterprise or KMP and/or their relatives having significant influence

1 Bir Plantation Private Limited

2 Colorado Trading Company Limited

3 Four Seasons Investments Limited

4 Hexa Securities and Finance Company Limited

5 Hexa Tradex Limited

6 Jindal Equipment Leasing and Consultancy Services Limited

7 Jindal Industries Private Limited

8 Jindal Stainless Limited

9 Jindal Steel & Power Limited

10 Jindal Systems Private Limited

11 JSW Steel Limited

12 Mansarover Investments Limited

13 Nalwa Investments Limited

14 O. P. Jindal Charitable Trust

15 Rohit Tower Building Limited

16 Sminu Jindal Charitable Trust

17 Stainless Investments Limited

19. Segment Reporting

(i) Information about Business Segment

The Company has only one business segment '' Iron & Steel Products '' as primary Segment.

20. Details of Loans given, Investment made and Guarantees given, covered U/S 186[4] of the Companies Act, 2013:

* Loans given and Investment made are given under the respective heads

* Corporate Guarantees have been issued on behalf on subsidiary companies, details of which are given in related parties transactions at Note No. 44.

21. Previous year figures have been regrouped/rearranged, wherever considered necessary.


Mar 31, 2014

PARTICULARS As At As At 31st March, 2014 31st March, 2013 (Rs. in lacs) (Rs. in lacs)

1. CONTINGENT LIABILITIES

a) Guarantees issued by the Company''s bankers on behalf of the Company 78,348.56 87,721.40

b) Letter of Credit Outstanding 51,142.53 24,513.21

c) Claims against the company not acknowledged as debt 81.22 81.22

d) Corporate guarantees/ undertaking issued to lenders of subsidiary companies 138,445.59 91,596.56

e) Disputed Excise duty, Custom Duty and service tax 212.68 229.27

f) Income tax demands against which company has preferred appeals 2,534.68 2,609.59

g) Disputed Sales Tax 585.41 585.41

h) Liability in respect of Corporate Guarantee/Duty Saved for availing various export based incentive schemes 4,915.03 11,479.81

30. Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of Advances) 22,809.66 23,102.15

2. The details of amount outstanding to the Micro, Small and Medium Enterprises is as under :

There is no overdue principal amount and interest due to Micro, Small & Medium Enterprises. During the year no interest has been paid to such parties. This information has been determined to the extent such parties have been identified on the basis of information available with the company.

3. The Company''s manufacturing facility at Nashik has been granted "Mega Project Status" by Government of Maharashtra and therefore is eligible for Industrial Promotion Subsidy (IPS) under Packaged Scheme of Incentive (PSI) 2007.

The purpose of the Packaged Scheme of Incentive (PSI) 2007 is for intensifying and accelerating the process of dispersal of industries to the less developed regions and promoting high tech industries in the developed areas of the state coupled with the object of generating mass employment opportunities.

Modalities of payment of IPS consists of the following:

a. Electricity Duty exemption for a period of 7 years from the date of commencement of commercial production- from 10.09.2009 to 09.09.2016.

b. 100% exemption from payment of Stamp duty.

c. VAT and CST payable to the State Government (on sales made from Nashik plant, within a period of 7 years starting from10th Sep 2009).

IPS will be payable so as to restrict up to 75% of the Eligible Fixed Capital investments made from 13th Sep 2007 to 10th Sep 2009 . The Eligibility Certificate issued allows maximum Fixed Capital Investment of Rs. 350 crores and restricts IPS to 75% of Rs. 350 crores i.e. Rs. 262.50 crores.

In terms of the Accounting Standard (AS 12) "Accounting for Government Grants" prescribed by Companies (Accounting Standards) Amendment Rules, 2006, eligible incentive of Rs. 1,749.96 lacs ( Previous Year Rs. 1,538.06 lacs) is considered to be in the nature of promoters'' contribution and has been credited to Capital Reserve.

4. Due to unusual Depreciation in the value of the rupee against US Dollar and other foreign currencies during the year, the net loss on reinstatement/settlement of foreign currency monetary items other than long term foreign currency monetary items related to acquisition of depreciable assets has been considered by the Company to be exceptional in nature.

5. The Company has exercised the option in financial year 2011-12 for accounting of the exchange differences arising on long term foreign currency monetary items in line with Companies (Accounting Standard (Second Amendment) Rules, 2011 dated 29th December, 2011 relating to Accounting Standard (AS-11) notified by Central Government w.e.f. 1st April, 2011. Accordingly it has capitalized the exchange difference on long term foreign currency loans related to acquisition of depreciable assets.

6. The Company''s significant leasing arrangements are in respect of operating leases for premises-residential and offices. These leasing arrangements are cancellable. The aggregate lease rentals payables are charged as rent.

7. The Company has unquoted investments of Rs. 72,260.47 lacs (Previous Year Rs. 69,049.50 lacs) and Share Application Money of Rs. 3,949.67 lacs ( Previous Year Rs. 5,037.24 lacs ) in Subsidiary Companies, which have accumulated losses as per the latest available Balance Sheet and certain other unquoted investments where the fair value (amount unascertained) is lower than the cost, considering the long term strategic investments and future prospects, such diminution, in the opinion of the management, has been considered to be of temporary nature and hence no provision for the same is considered necessary.

8. An amount of Rs. 5,403.48 lacs (Previous Year Rs. 5,811.55 lacs) is outstanding from Subsidiary companies, which have accumulated losses. Having regard to the long- term involvement and future prospects, no provision is considered necessary towards these outstanding.

9. Charity and Donations includes Rs. NIL (Previous year Rs. 25 lacs paid to Bhartiya Janta Party, Gujarat State Unit ) as contribution to political parties.

10. Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any, which is not likely to be material, will be adjusted at the time of confirmation.

11. (a) The company has provided sponsor''s undertakings to lenders of the projects being sponsored by its wholly owned subsidiary namely Jindal ITF Limited. Major terms of the undertakings envisage investment/buy back of equity/instruments, retention of major equity in subsidiary company, supporting the projects for shortfall in debt servicing and in the eventuality of any cost overrun.

(b) Company has given guarantees/ indemnities for its step down subsidiary Company namely Jindal Saw Italia SPA (JSI)favoring supplier/lessor for (i) Inventory purchase by JSI (ii) towards plant performance/upkeep and (iii) employees benefits; total amounting to Rs. 8,419.42 lacs ( Previous Year Rs. 14,181.23 lacs).

(c) Some of the subsidiaries of the Company have privately placed various instruments including 9.25% -Compulsorily Convertible Debentures of Rs. 20,000 lacs, 0%- Compulsorily Convertible Debentures of Rs. 8,960 lacs and Redeemable Non Convertible Debentures aggregating to Rs. 28,130 lacs all aggregating to Rs. 57,090 lacs. The subscribers of such instruments have put option to require the Company to purchase the securities at the Put Option Price within the time period as per the terms of the agreement/s which is spread over a period ending June, 2017. The estimated amount of Put option of such securities as per the terms of the agreement/s is Rs. 64,245.19 lacs as on 31st March, 2014.

12. In the opinion of the Management, the realizable value of assets other than fixed assets and long term investments, in the ordinary course of business, would not be less than the amount at which they are stated.

13. Related Party Transactions

List of Related Parties and Relationship

A) Subsidiaries

i) Direct Subsidiaries

Sr. No. Name of the Company

1 Jindal ITF Limited

2 IUP Jindal Metal and Alloys Limited

3 S.V. Trading Limited

4 Jindal Fittings Limited

5 Quality Iron and Steel Limited

6 Ralael Holdings Limited

7 Jindal Saw Holdings FZE

8 Greenray Holdings Limited

9 Universal Tube Accessories Pvt. Limited

10 Jindal Saw Espana SL

ii) Indirect Subsidiaries (Control Exist)

Sr. No. Name of the Company

1 Jindal Saw USA, LLC

2 Jindal Saw Middle East FZC

3 Jindal Intellicom Limited

4 JITF Water Infrastructure Limited

5 JITF Urban Infrastructure Limited

6 JITF Shipyards Limited

7 Jindal Rail Infrastructure Limited

8 JITF Waterways Limited

9 JITF Infralogistics Limited

10 JITF Water Infra (Naya Raipur ) Limited

11 JITF ESIPL CETP (Sitarganj) Limited

12 Timarpur-Okhla Waste Management Co. Pvt. Limited

13 Jindal Saw Gulf LLC

14 Jindal Saw Italia S.P.A.

15 JITF Urban Infrastructure Services Limited

16 Intellicom Insurance Advisors Limited

17 Derwant Sand SARL

18 JITF Coal Logistics Limited

19 JITF Shipping and Logistics ( Singapore) PTE. Limited

20 JITF Urban Waste Management (Ferozepur) Limited

21 JITF Urban Waste Management (Jalandhar) Limited

22 JITF Urban Waste Management (Bathinda) Limited

23 JITF Industrial Infrastructure Development Co. Limited

B) Joint Ventures

Sr. No. Name of the Joint Venture

1 Jindal Saw Pipeline Solutions Limited(formerly known as Jindal Sigma Limited)

2 JWIL- SSIL JV

3 SMC-JWIL- JV

4 JWIL- Ranhill- JV

C) Key Management Personnel

1 Ms. Sminu Jindal Managing Director

2 Mr. Indresh Batra Managing Director

3 Mr. Neeraj Kumar Group CEO & Whole -time Director (w.e.f. 1st July, 2013 )

4 Mr. H S Chaudhary Whole Time Director

5 Mr. O P Sharma Chief Operating Officer (Large Dia. Pipe- SBU)

6 Dr. Dharmendra Gupta Director (Mines & Steel)

7 Mr. Dinesh Chandra Sinha President & SBU Head (w.e.f 19th August 2013 )

8 Mr. P. Venkatesh VP Operations (w.e.f 27th November, 2013 )

9 Mr. V S Konnur Joint Managing Director (Seamless Business) (upto 16th September, 2013 )

10 Mr. Anurag Shrivastva President (Mundra Operations) (upto 27th November, 2013 )

D) Relative of Key Management Personnel

Mr. P.R. Jindal

E) Enterprise over which Key Management Personnel having significant influence

1 Sminu Jindal Charitable Trust

2 Hexa Securities and Finance Co. Limited

3 Hexa Tradex Limited

14. Segment Reporting

(i) Information about Business Segment

The company has only one business segment '' Iron & Steel Products '' as primary Segment.

15. Previous year figures have been regrouped/re-arranged, wherever considered necessary.

16. Notes 1 to 52 are annexed and form integral part of Financial Statements.


Mar 31, 2013

1 The Scheme of Arrangement and Demerger (Scheme) entailing de-merger of Investment Undertaking of the Company into Hexa Tradex Limited (HTL) was sactioned by the Hon''ble High Court of Judicature at Allahabad. The Scheme became effective from November 5, 2011 on filing the same with the Registrar of Companies, UP.

As per the said Scheme, with effect from the Appointed Date i.e. 1st January, 201 1, the Investment Undertaking was transferred to and vested in HTL on a going concern basis pursuant to the provisions contained in Sections 391 to 394 and other applicable provisions of the Companies Act 1956. The effect of the Scheme was given in the financial results for the year ended 31st March, 2012.

As a consideration of transfer of Investment Undertaking, HTL issued and alloted to the equity shareholders of Company 1 (one) equity share of face value of Rs. 2/- (credited as fully paid-up) for every 5 (five) fully paid-up equity shares of Rs. 2/- each held by them in Jindal Saw Ltd. as on the record date, i.e., November 23, 2011. The equity shares so allotted by HTL are listed on NSE and BSE. As per the Scheme investment made by the company in HTL of Rs. 5 lacs stands cancelled and is debited to capital reserve.

The difference between the book value of assets and liabilities transferred pursuant to the Scheme was adjusted in previous year as follows:

(a) Capital Reserve Account: Rs. 2,133.90 lacs

(b) Security Premium Account: Rs. 1,9697.04 lacs

2 The Company''s manufacturing facility at Nashik has been granted "Mega Project Status" by Government of Maharashtra and therefore is eligible for Industrial Promotion Subsidy (IPS) under Packaged Scheme of Incentive (PSI) 2007.

The purpose of the Packaged Scheme of Incentive (PSI) 2007 is for intensifying and accelerating the process of dispersal of industries to the less developed regions and promoting high tech industries in the developed areas of the state coupled with the object of generating mass employment opportunities.

Modalities of payment of IPS consists of the following:

a. Electricity Duty exemption for a period of 7 years from the date of commencement of commercial production - from 10.09.2009 to 09.09.2016

b. 100% exemption from payment of Stamp duty.

c. VAT and CST payable to the State Government (on sales made from Nashik plant, within a period of 7 years starting from 10th Sep 2009).

IPS will be payable so as to restrict up to 75% of the Eligible Fixed Capital investments made from 13th Sep 2007 to 10th Sep 2009 . The Eligibility Certificate issued allows maximum Fixed Capital Investment of Rs. 350 crores and restrict IPS to 75% of Rs. 350 crores ie Rs. 262.50 crores.

In terms of the Accounting Standard (AS 12) "Accounting for Government Grants" prescribed by Companies (Accounting Standards) Amendment Rules, 2006, eligible incentive of Rs. 1538.06 lacs ( Previous Year Rs. 1,523.93 lacs) is considered to be in the nature of promoters'' contribution and has been credited to Capital Reserve.

3 Due to unusual Depreciation in the value of the rupee against US Dollar and other foreign currencies during the year, the net loss on reinstatement/settlement of foreign currency monetary items other than long term foreign currency monetary items related to acquistion of depreciable assets has been considered by the Company to be exceptional in nature.

Exceptional items for the current year includes Rs. 1,446.18 lacs ( debit ) on account of foreign exchange fluctuation relating to sales and material purchases . The amount of such fluctuation amounting to Rs. 9,318.86 lacs ( credit ) was included under the relevant heads of expenditure & income during last year.

4 The Company has exercised the option in financial year 2011-12 for accounting of the exchange differences arising on long term foreign currency monetary items in line with Companies (Accounting Standard (Second Amendment) Rules, 2011 dated 29th December, 201 1 relating to Accounting Standard (AS-1 1) notified by Central Government w.e.f 1st April, 201 1. Accordingly it has capitalized the exchange difference on long term foreign currency loans related to acquisition of depreciable assets.

5 The Company''s significant leasing arrangements are in respect of operating leases for premises-residential and offices. These leasing arrangements are cancellable. The aggregate lease rentals payables are charged as rent.

6 The Company has unquoted investments of Rs. 69,049.50 lacs (Previous Year Rs. 5,9911.89 lacs) and Share Application Money of Rs. 5,037.24 lacs ( Previous Year Rs. 8,660.78 lacs ) in Subsidiary Companies, which have accumulated losses as per the latest available Balance Sheet and certain other unquoted investments where the fair value (amount unascertained) is lower than the cost, considering the long term strategic investments and future prospects, such diminution, in the opinion of the manage- ment, has been considered to be of temporary nature and hence no provision for the same is considered necessary.

7 An amount of Rs. 5,811.55 lacs (Previous Year Rs. 6,777.54 lacs) is outstanding from Subsidiary companies, which have accumu- lated losses. Having regard to the long- term involvement and future prospects, no provision is considered necessary towards these outstanding.

8 Charity and Donations includes Rs. 25 lacs (Previous year NIL ) paid to Bhartiya Janta Party,Gujrat State Unit as contribution to political parties.

9 Sundry Debtors, Creditors and other advances are subject to confirmation. The effect of the same, if any, which is not likely to be material, will be adjusted at the time of confirmation.

10 (a) The company has provided sponsor''s undertakings to lenders of the projects being sponsored by its wholly owned subsidiary namely Jindal ITF Limited. Major terms of the undertakings envisage investment/buyback of equity/instruments, retention of major equity in subsidiary company, supporting the projects for shortfall in debt servicing and in the eventual- ity of any cost overrun.

(b) Company has given guarantees/ indemnities for its step down subsidiary Company namely Jindal Saw Italia SPA (JSI)favoring supplier/lessor for (i) Inventory purchase by JSI (ii) towards plant performance/upkeep and (iii) employees benefits; total amounting to Rs. 1,4181.23 lacs ( Previous Year Rs. 21994.37 lacs)

(c) One of the subsidiary of the Company has privately placed various instruments including 9.25% -Compulsorily Convert- ible Debentures of Rs. 20,000 Lacs, 0%- Compulsorily Convertible Debentures of Rs. 10,000 Lacs and Redeemable Non Convertible Debentures aggregating to Rs.16,000 lacs all aggregating to Rs. 46,000 lacs. The subscribers of such instruments have put option to require the Company to purchase the put securities at the Put Option Price within the time period as per the terms of the agreement/s which is spread over a period ending June, 2017. The estimated amount of buy back option, if so opted of such securities as per the pricing of the agreement/s as on 31st March, 2013 is Rs. 49,870 lacs.

11 In the opinion of the Management, the realizable value of assets other than fixed assets and long term investments, in the ordinary course of business, would not be less than the amount at which they are stated.

12 Related Party Disclosures

List of Related Parties and Relationship

A) Subsidiaries

i) Direct Subsidiaries:-

Sr.No Name of the Company

1 Jindal ITF Ltd.

2 IUP Jindal Metal and Alloys Ltd.

3 S.V. Trading Ltd.

4 Jindal Fittings Ltd.

5 Quality Iron and Steel Ltd.

6 Ralael Holdings Ltd.

7 Jindal Saw Holdings FZE

8 Greenray Holdings Limited

9 Universal Tube Accessories Pvt Ltd (w.e.f 30th August 2012)

10 Jindal Saw Espana SL (w.e.f. 21st March 2013)

ii) Indirect Subsidiaries (Control Exist)

Sr.No Name of the Company

1 Jindal Saw USA, LLC

2 Jindal Saw Middle East FZC

3 Jindal Intellicom Limited

4 JITF Water Infrastructure Limited

5 JITF Urban Infrastructure Ltd.

6 JITF Shipyards Ltd.

7 Jindal Rail Infrastructure Ltd.

8 JITF Waterways Ltd.

9 JITF Infralogistics Ltd.

10 JITF Water Infra (Naya Raipur ) Ltd.

11 JITF ESIPL CETP (Sitarganj) Ltd.

12 Timarpur-Okhla Waste Management Co. Pvt. Ltd.

13 Jindal Saw Gulf LLC

14 Jindal Saw Italia S.P.A.

15 JITF Urban Infrastucture Services Ltd.

16 Intellicom Insurance Advisors Ltd.

17 Derwant Sand SARL

18 JITF Coal Logistics Ltd.

19 JITF Shipping and Logistics ( Singapore) PTE. Ltd.

20 JITF Urban Waste Management (Ferozepur) Ltd.

21 JITF Urban Waste Management (Jalandhar) Ltd.

22 JITF Urban Waste Management (Bathinda) Ltd.

23 JITF Industrial Infrastructure Development Co. Limited (w.e.f 2nd May 2012)

24 Jindal ITF Kobelco Eco Ltd. (upto 31st October 2012)

25 JITF Manila Water Development Co Ltd (upto 6th Feburuary 2013 )

26 JITF Global Water Holding Pte. Ltd.

(Strike off application for closure is filed on 3rd January, 2013 with Accounting and Corporate Regulatory Authority, Singapore. Closure action is awaited)

27 JITF Water Infra (Rajkot) Ltd. (upto 29th January, 2013)

B) Joint Venture

1 Jindal Sigma Ltd.

2 JWIL-SSIL JV (w.e.f 28th Feb. 2012)

3 SMC-JWIL- JV (w.e.f 24th Dec. 2012)

4 JWIL- Ranhill- JV (w.e.f 27th Nov. 2012 )

C) Key Management Personnel

1 Ms. Sminu Jindal Managing Director

2 Mr. Indresh Batra Managing Director

3 Mr. H S Chaudhary Whole Time Director

4 Mr. O P Sharma Chief Operating Officer (Large Dia. Pipe- SBU)

5 Mr. K Chandrayya Director (Works- IPU) (upto 28th Feb. 2013 )

6 Mr. V S Konnur Joint Managing Director (Seamless Business)

7 Mr. Anurag Shrivastva President (Mundra Operations)

8 Dr. Dharmendra Gupta Director (Mines & Steel)

D) Relative of Key Management Personnel

Mr. P.R. Jindal

E) Enterprise over which Key Management Personnel having significant influence

1 Sminu Jindal Charitable Trust

2 Hexa Securities and Finance Co. Ltd.

3 Hexa Tradex Limited

13. Previous year figures have been regrouped/re-arranged, wherever considered necessary.

14. Notes 1 to 53 are annexed and form integral part of Financial Statements.

 
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