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Notes to Accounts of JSW Steel Ltd.

Mar 31, 2016

1. CONTINGENT LIABILITIES:

a) Bills discounted with re-course Rs. Nil (previous year Rs. 144.98 crores).

b) i) Guarantees provided on behalf of subsidiaries Rs. 2,124.11 crores (previous year Rs. 1,273.97 crores).

ii) Standby letter of credit facility availed from resident Indian Banks secured by specific fixed assets of the Company in relation to overseas long-term borrowing by JSW Steel Holding (USA) Inc and JSW Steel (Netherlands) B.V. (wholly owned subsidiaries of the Company) is Rs. 2,653.32 crores (previous year Rs. 2,503.63 crores) and Rs. 530.66 crores (previous year Rs. 1439.59 crores) respectively.

iii) Provision of Rs. 957.85 crores (previous year Rs. Nil) has been created against aforesaid guarantees and standby letter of credit facilities (refer note 25(4)(a)).

c) Disputed claims/levies (excluding interest, if any), in respect of:

(i) Excise duty Rs. 305.39 crores (previous year Rs. 466.88 crores);

(ii) Custom duty Rs. 407.92 crores (previous year Rs. 437.03 crores);

(iii) Income tax Rs. 170.68 crores (previous year Rs. 170.68 crores);

(iv) Sales tax / Special entry tax Rs. 155.94 crores (previous year Rs. 155.94 crores);

(v) Service tax Rs. 142.06 crores (previous year Rs. 146.54 crores);

(vi) Miscellaneous Rs. 0.05 crores (previous year Rs. 0.05 crores);

(vii) Levies by local authorities Rs. 3.04 crores (previous year Rs. 3.04 crores); and

(viii) Claims by suppliers and other parties Rs. 109.98 crores (previous year Rs. 350.80 crores)

d) Arrears of fixed cumulative dividend on preference shares (CPRS) Rs. 0.56 crores (previous year Rs. 0.51 crores).

e) Claims related to Forest Development Tax Rs. 966.98 crores (previous year Rs. 909.38 crores). (including FDT amount paid under protest Rs. 665 crores (previous year Rs. 665 crores)). In 2008, the State Government of Karnataka levied Forest Development Tax (FDT) treating iron ore as forest produce. In response to writ petitions filed by various stakeholders, the Hon''ble High Court of Karnataka granted partial relief vide judgement dated December 3, 2015. In view thereof, the State Government of Karnataka has stopped levying FDT with effect from January 29, 2016. The State Government of Karnataka has filed an appeal before the Hon''ble Supreme Court of India against the judgement. The Hon''ble Supreme Court while hearing the petition on April 12, 2016 admitted the appeal, and granted an interim stay on refund of the FDT. The matter is posted for final arguments in the month of August 2016.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 5,064.37 crores (previous year Rs. 6,177.96 crores).

3. OTHER COMMITMENTS :

(a) The Company from time to time provides need based support to subsidiaries and joint ventures entity towards capital and other requirements.

(b) The Company has imported capital goods under the export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate. These benefits are subject to future exports within the stipulated period. Such export obligations at year end aggregate to Rs. 1,316.22 crores (previous year Rs. 628.25 crores).

4. EXCEPTIONAL ITEMS COMPRISE PROVISION TOWARDS :

a) (i) Rs. 982.37 crores (Rs. 333.75 crores for the year ended 31 March, 2015) for ''other than temporary'' diminution in value of investments relating to JSW Steel USA Inc., JSW Panama Holding Corporation, and Periama Holding LLC, subsidiaries of the Company; (ii) Rs. 3,915.30 crores (Rs. nil for the year ended 31 March, 2015) for loans to the said subsidiaries and interest thereon considered doubtful of recovery; and (iii) Rs. 957.85 crores (Rs. nil for the year ended 31 March, 2015)*; towards certain guarantees for borrowings by the said subsidiaries, which provisions are recognised based on estimate of values of the businesses/ assets of the said subsidiaries by independent External Valuers and based on cash flow projections. In making the said projections, reliance has been placed on estimates in respect of future prices of coal and iron ore, mineable resources, and assumptions relating to operational performance including improvement in capacity utilisation of the plants and margins, and availability of infrastructure for mines.

* amount used/unused amount reversed during the period Rs. nil

b) Pursuant to the order of the Honourable Supreme Court dated 24 September 2014 regarding cancellation of the allotment of coal blocks, the Company has made an assessment of investments in and loans and advances to the subsidiaries, joint ventures and associates affected by the said order and recognised provision of Rs. 4.19 crores (Rs. 21.20 crores for the year ended 31 March 2015) against carrying amount of investments as Exceptional Item during the year considering the principle of conservatism.

c) Based on careful evaluation of estimated projections, the management has recognised provision for diminution of other than temporary nature of Rs. 0.74 crores (Previous year Rs. 41.35 crores) in the carrying amount of investment in certain subsidiaries as Exceptional Item during the year.

5. In respect of certain investments/ loans and advances, following basis/assumptions/estimates have been considered in concluding that there is no further decline, other than temporary, in the value of the investments and that the loans / advances are fully recoverable:

a) Equity shares of JSW Steel Bengal Limited, a subsidiary (carrying amount: Rs. 436.15 crores (net of provision) as at March 31, 2016).

Evaluation of the status of its integrated Steel Complex (including power plant) to be implemented in phases at Salboni of district Paschim Medinipur in West Bengal by the said subsidiary, and the projections relating to the said complex considering estimates in respect of future raw material prices, foreign exchange rates, operating margins, etc. and the plans for commencing construction of the said complex.

b) Equity shares of Peddar Realty Private Limited (PRPL) (carrying amount of investments: Rs. 56.72 crores (net of provision) as at March 31, 2016), and recoverability of loans of Rs. 158.18 crores as at March 31, 2016.

Valuation by an independent valuer of the residential complex in which PRPL holds interest.

c) Investment of Rs. 4.51 crores (net of provision) and loan of Rs. 112.42 crores as at March 31, 2016 relating to JSW Natural Resources Mozambique Limitada and JSW ADMS Carvo Limitada (step down subsidiaries).

Assessment of minable reserves by independent experts and cash flow projections based on the plans to commence operations after mining lease arrangements are in place for which application has been submitted to regulatory authorities and infrastructure is developed.

d) Equity shares of JSW Severfield Structures Limited, a joint venture (JV) (carrying amount: Rs. 115.44 crores as at March 31, 2016).

Cash fow projections approved by the said JV which are based on estimates and assumptions relating to order book, capacity utilisation, operational performance, market prices of materials, inflation, terminal value, etc.

6. (a) Pursuant to the requirement under Schedule II to the Companies Act, 2013 the Company has, based on the external technical advice, effective 1 April, 2015, identified components (significant parts) of the main asset having different useful lives as compared to the main asset and consequently revised the estimated useful lives of Plant & Machinery and Buildings. Accordingly, the depreciation charge for the year ended 31 March 2016 is lower by Rs. 499.07 crores, and amount of Rs. 109.98 crores (net of deferred tax) being effect of componentization, where the remaining useful life of the asset was determined to be nil, has been adjusted against the retained earnings as per transitional provision in Note 7 (b) of Schedule II.

(b) Effective from 1 April 2014, the Company had re- worked depreciation with reference to the estimated useful lives of fixed assets prescribed under Schedule II to the Act or useful life of fixed assets as per technical evaluation. As a result the charge for depreciation was lower by Rs. 207.30 crores for the year ended March 31, 2015. Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company had fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and had adjusted an amount of Rs. 47.29 crores (net of deferred tax) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

7. Trade receivables include Rs. 159.54 crores (previous year Rs.172.04 crores) recoverable from a customer towards supply of steel. The Company recovered an amount of Rs. 12.50 crores from the customer during the year ended 31 March 2016. Pursuant to the Consent Term, fled by the Company and the customer with the Honorable Bombay High Court and adopted by the Court as its order, the receivables of the Company shall be secured by a first ranking pari-passu charge over the fixed assets of the customer and shall be at par with other CDR lenders. The process of creating charge by the Company over the customer''s certain fixed assets has been completed and the charge creation for the remaining fixed assets is under progress. Based on these developments, the Company is reasonably confident about the recoverability of the said amount.

8. DERIVATIVES:

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments, highly probable forecast transactions and foreign currency required at the settlement date of certain receivables/payables. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the board of directors, which provide principles on the use of such forward contracts consistent with the Company''s risk management policy.

b) The Company also uses derivative contracts other than forward contracts to hedge the interest rate and currency risk on capital account. Such transactions are governed by the strategy approved by the board of directors, which provide principles on the use of these instruments, consistent with the Company''s risk management policy. The Company does not use these contracts for speculative purposes.

9. RELATED PARTIES RELATIONSHIPS, TRANSACTIONS AND BALANCES :

A) LIST OF RELATED PARTIES

1 SUBSIDIARIES

JSW Steel (Netherlands) B.V.

JSW Steel (UK) Limited

Argent Independent Steel (Holdings) Limited (ceased w.e.f 17/11/2015)

JSW Steel Service Centre (UK) Limited

JSW Steel Holding (USA) Inc.

JSW Steel (USA) Inc.

Periama Holdings, LLC

Purest Energy, LLC

Meadow Creek Minerals, LLC

Hutchinson Minerals, LLC

R.C. Minerals, LLC

Keenan Minerals, LLC

Peace Leasing, LLC

Prime Coal, LLC

Planck Holdings, LLC

Rolling S Augering, LLC

Periama Handling, LLC

Lower Hutchinson Minerals, LLC

Caretta Minerals, LLC

JSW Panama Holdings Corporation

Inversiones Eroush Limitada

Santa Fe Mining

Santa Fe Puerto S.A.

JSW Natural Resources Limited

JSW Natural Resources Mozambique Limitada

JSW ADMS Carvo Lda

JSW Mali Resources SA (ceased w.e.f 18.06.2015)

JSW Steel Processing Centre Limited

JSW Bengal Steel Limited

JSW Natural Resources India Limited

Barbil Beneficiation Company Limited

Barbil Iron Ore Company Limited

JSW Jharkhand Steel Limited

JSW Steel East Africa Limited

Amba River Coke Limited

JSW Energy (Bengal) Limited

JSW Natural Resource Bengal Limited

JSW Steel Coated Products Limited

Peddar Realty Private Limited

Nippon Ispat Singapore (PTE) Limited

Erebus Limited

Arima Holding Limited

Lakeland Securities Limited

JSW Steel (Salav) Limited (w.e.f 31.10.2014)

Everbest Steel & Mining Holdings Limited (w.e.f. 13.02.2015) (ceased w.e.f 04.12.2015)

2 ASSOCIATES

JSW Praxair Oxygen Private Limited

Dolvi Minerals & Metals Private Limited (w.e.f. 27.11.2014)

Dolvi Coke Projects Limited (w.e.f. 04.12.2014)

3 JOINT VENTURES

Vijayanagar Minerals Private Limited

Rohne Coal Company Private Limited

JSW Severfeld Structures Limited

Gourangdih Coal Limited

Toshiba JSW Power System Private Limited

MJSJ Coal Limited

GEO Steel LLC

JSW Structural Metal Decking Limited

JSW MI Steel Service Centre Private Limited

JSW Vallabh Tin Plate Private Limited (w.e.f. 07.04.2014)

4 KEY MANAGEMENT PERSONNEL (KMP)

Mr. Sajjan Jindal

Mr. Seshagiri Rao M V S

Dr. Vinod Nowal

Mr. Jayant Acharya

Mr. Rajeev Pai

Mr. Lancy Varghese

5 RELATIVE OF KEY MANAGERIAL PERSONNEL

Mr. Parth Jindal

6 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL AND RELATIVES OF SUCH PERSONNEL EXERCISE SIGNIFICANT INFLUENCE

JSW Energy Limited

Jindal Stainless Limited

JSW Realty & Infrastructure Private Limited

Jindal Saw Limited

Jindal Saw USA LLC

Jindal Steel & Power Limited

JSOFT Solutions Limited

Jindal Industries Private Limited

JSW Cement Limited

JSW Jaigarh Port Limited

Reynold Traders Private Limited

Raj West Power Limited

JSW Power Trading Company Limited

JSW Infrastructure Limited

South West Port Limited

JSW Techno Projects Management Limited

JSW Global Business Solutions Limited (Formerly known as Sapphire Technologies Limited)

South West Mining Limited

JSL Architecture Limited

JSW Projects Limited

JSW Foundation

O P Jindal Foundation

Jindal Technologies & Management Services Private Limited

JSW Dharamatar Port Private Limited

Jindal Tubular (India) Limited

M/s Shadeed Iron & Steel Co. LLC

JSW Investment Private Limited

JSW IP Holdings Private Limited (w.e.f. 01.04.2015)

Epsilon Carbon Private Limited (Formerly known as AVH Private Limited)

JSW International Trade Corp PTE Limited

Heal Institute Private Limited

JSL Lifestyle Limited

Jindal Power Limited

Jindal Fittings Limited

Jindal Education Trust

10. OPERATING LEASE

A) AS LESSOR:

i. The Company has entered into lease arrangements, for renting :

- 2,279 houses (admeasuring approximately 1,410,997 square feet) at the rate of Rs. 100/- per house per annum, for a period of 120 months.

- 9 houses (admeasuring approximately 9,027 square feet) at the rate of Rs. 43/- per square feet per month per house, for a period of 60 months.

- Office premises (admeasuring approximately 1795 square feet) at the rate of Rs. 146/- square feet for the period of 22 months.

The agreements are renewable at the option of the lessee after the end of the lease term.

ii. Disclosure in respect of assets (building) given on operating lease:

The agreements are executed for a period of 11 to 180 months with a renewable clause and also provide for termination at will by either party giving a prior notice period of 1 to 3 months.

(ii) The agreements for certain plant and equipment is on non-cancellable basis for a period of 10-15 years, which are renewable on expiry of the lease period at mutually acceptable terms.

11. THE COMPANY HAS THE FOLLOWING JOINT VENTURE INTEREST IN INDIA AS AT 31ST MARCH 2016: INTEREST AS VENTURER IN JOINTLY CONTROLLED ENTITIES

Vijayanagar Minerals Private Limited: Percentage of holding-40% (previous year 40%) Rohne Coal Company Private Limited: Percentage of holding–49% (previous year 49%) JSW Severfield Structures Limited: Percentage of holding-50% (previous year 50%) Gourangdih Coal Limited: Percentage of holding–50% (previous year 50%) JSW MI Steel Service Center Private Limited: Percentage of holding-50% (previous year 50%) JSW Vallabh Tinplate Private Limited: Percentage of holding–50% (previous year 50%)

INTEREST AS INVESTOR

MJSJ Coal Limited: Percentage of holding–11% (previous year 11%)

Toshiba JSW Power Systems Private Limited: Percentage of holding–2.48% (previous year 2.48%)

15. FIGURES OF THE PREVIOUS YEAR ARE REGROUPED AND RECLASSIFIED WHEREVER NECESSARY TO CORRESPOND TO FIGURES OF THE CURRENT YEAR.


Mar 31, 2014

Note 1

1. Contingent liabilities :

a) Bills discounted Rs. 3,285.56 crores (previous year Rs. 3,012.92 crores).

b) Guarantees provided to banks on behalf of subsidiaries Rs. 1,372.57 crores (previous year Rs. 1,223.95 crores).

c) Standby letter of credit facility availed from resident Indian Banks secured / to be secured by specific fixed assets of the company in relation to overseas long term borrowing by JSW Steel Holding (USA) Inc and JSW Steel (Netherlands) B.V. (wholly owned subsidiaries of the company) is Rs. 2,403.99 crores (previous year nil) and Rs. 480.80 crores (previous year nil) respectively.

d) Disputed claims/levies (excluding interest, if any), in respect of: (i) Excise duty Rs. 441.95 crores (previous year Rs. 199.82 crores); (ii) Custom duty Rs. 460.12 crores (previous year Rs. 632.76 crores); (iii) Income tax Rs. 1.74 crores (previous year Rs. 1.47 crores);

(iv) Sales tax / Special entry tax Rs. 223.37 crores (previous year Rs. 226.93 crores);

(v) Service tax Rs. 129.25 crores (previous year Rs. 98.10 crores);

(vi) Miscellaneous Rs. 0.05 crores (previous year Rs. 0.05 crores);

(vii) Levies by local authorities Rs. 3.04 crores (previous year Rs. 3.04 crores); and

(viii) Claims by suppliers and other parties (including for Forest Development Tax of Rs. 669.54 crores (previous year Rs. 650.75 crores)) Rs. 1039.60 crores (previous year Rs. 872.79 crores)

In 2008, the State of Karnataka levied a Forest Development Tax (FDT) treating iron ore as a forest produce. Writ petitions filed by various stakeholders challenging the levy before Karnataka High Court are pending disposal. The Management of the Company has been legally advised that this is a fairly arguable case from the company''s perspective and accordingly, the tax is considered as recoverable. Tax payments made under protest in the earlier years (refer note 14) / tax payable are considered as ''contingent liabilities''.

e) Arrears of fixed cumulative dividend on preference shares (CPRS) Rs. 0.46 crores.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 3,176.36 crores (previous year Rs. 3,217.49 crores).

3. Other commitments :

(a) The Company from time to time provides need based support to subsidiaries and joint ventures entity towards capital and other requirements.

(b) The Company has imported capital goods under the export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate. These benefits are subject to future exports. Such export obligations at year end aggregate to Rs. 3,817.11 crores (previous year Rs. 10,903.50 crores) by the Company within the stipulated period.

4. On May 3, 2013 the Bombay High Court sanctioned a Composite Scheme of Amalgamation and Arrangement (Scheme) under Sections 391 to 394 of the Companies Act, 1956 amongst JSW Steel Limited, JSW Ispat Steel Limited, JSW Building Systems Limited, JSW Steel Coated Products Limited and their respective shareholders and creditors with July 1, 2012 being the appointed date. The certified copy of the scheme is filed with the Registrar of Companies (RoC) on June 1, 2013. Accordingly, effect of the scheme is considered in the financial statements of the current year.

In terms of the scheme, effectively, from July 1, 2012:

- The Vasind and Tarapur units of JSW Steel Limited and the Kalmeshwar unit of JSW Ispat Steel Limited were demerged and their businesses transferred and vested to JSW Steel Coated Products Limited.

- The residual JSW Ispat Steel Limited was merged with JSW Steel Limited.

- JSW Steel Coated Products Limited emerged as a subsidiary of JSW Steel Limited.

- Accordingly, an amount of Rs. 341.95 crores for the period July 1, 2012 to March 31, 2013, have been debited to the reserve & surplus under surplus in statement of profit and loss.

This amalgamation is an amalgamation in the nature of purchase as defined by Accounting Standard 14 – Accounting for Amalgamations specified in the Companies (Accounting Standards) Rules 2006. Entries have been passed in the books of account of the Company to give effect to the scheme, as follows:

With effect from the appointed date,

(a) All the assets and liabilities of residual JSW Ispat and JSW Building vest in and are transferred to the Company and recorded at their respective fair values.

(b) 1,86,08,844 equity shares of Rs. 10 each at par are issued to the equity shareholders of JSW Ispat in the ratio of 1 equity share of the company for every 72 equity shares of JSW Ispat.

(c) 48,54,14,604 ,0.01% preference shares of Rs. 10 each are issued to the preference shareholders of JSW Ispat in the ratio of 1 preference share for every preference share of JSW Ispat.

(d) Inter-company investments and balances, between the company, JSW Building and residual JSW Ispat stand cancelled.

(e) Assets and liabilities related to the Vasind and Tarapur units of the company are transferred to and vested in JSW Steel Coated.

(f) The difference of Rs. 3,055.12 crores resulting from the above is credited to the capital reserve account.

5. In view of the losses from operations of, JSW Steel USA Inc, a subsidiary of the Company for last few years, the Company has considered valuations of its fixed assets carried out by an independent valuer and concluded that no provision is presently necessary against the carrying amounts of investments and loans aggregating to Rs. 2,007.46 crores and with respect to financials guarantees of Rs. 2,752.57 crores [included under contingent liabilities – note 26 (1) [(b) and (c)], relating to the said subsidiary.

6. The carrying amount of investment in equity shares of JSW Severfield, India, a joint venture (JV) of the Company, is Rs. 98.44 crores as at March 31, 2014. Having regard to its continued operating losses and current external economic environment, the Management of the Company has assessed whether the decline in the value of the said investment is ''other than temporary'' in terms of Accounting Standard (AS) 13, Investments. On a careful evaluation of the business plans of the JV and expected profits based thereon, it has been concluded that the decline is temporary and accordingly, no provision is required.

7. Trade receivable includes Rs. 184.02 crores (previous year Rs. 184.02 crores) recoverable from a customer towards supply of steel. The customer has applied for corporate debt restructuring to CDR Cell and mentioned JSW Steel as their "critical and essential supplier" whose dues needs to be paid on priority basis. The scheme was approved by CDR empowered group during the year. Based on these developments, the Company is reasonably confident about the recoverability of the said amount.

8. Exceptional items represents effect of significant movement and volatility in the value of the Indian rupee against US dollar.

9. Derivatives:

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable forecast transactions. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy.

b) The Company also uses derivative contracts other than forward contracts to hedge the interest rate and currency risk on capital account. Such transactions are governed by the strategy approved by the Board of Directors, which provide principles on the use of these instruments, consistent with the Company''s Risk Management Policy. The Company does not use these contracts for speculative purposes.

10. Employee benefits:

A) Defined contribution plan:

Company''s contribution to provident fund Rs. 29.10 crores. (previous year Rs. 25.62 crores)

11. Segment reporting:

The company is primarily engaged in the business of manufacture and sale of iron and steel products. The company has identified two primary business segments, namely steel and power (used mainly for captive consumption), which in the context of Accounting Standard 17 on "segment reporting" constitute reportable segments.

12. Related parties disclosure as per Accounting Standard (AS)-18 :

Parties with whom the company has entered into transactions during the period where control exists :

1 Subsidiaries

JSW Steel (Netherlands) B.V.

JSW Steel (UK) Limited

Argent Independent Steel (Holdings) Limited

JSW Steel Service Centre (UK) Limited

JSW Steel Holding (USA) Inc.

JSW Steel (USA) Inc.

Periama Holdings, LLC

Purest Energy, LLC

Meadow Creek Minerals, LLC

Hutchinson Minerals, LLC

R.C. Minerals, LLC

Keenan Minerals, LLC

Peace Leasing, LLC

Prime Coal, LLC

Planck Holdings, LLC

Rolling S Augering, LLC

Periama Handling, LLC

Lower Hutchinson Minerals, LLC

Caretta Minerals, LLC

JSW Panama Holdings Corporation

Inversiones Eroush Limitada

Santa Fe Mining

Santa Fe Puerto S.A.

JSW Natural Resources Limited

JSW Natural Resources Mozambique Limitada

JSW ADMS Carvo Lda

JSW Mali Resources SA (w.e.f 18.02.13)

JSW Steel Processing Centres Limited

JSW Bengal Steel Limited

JSW Natural Resources India Limited

Barbil Beneficiation Company Limited

JSW Jharkhand Steel Limited

JSW Steel East Africa Limited

Amba River Coke Limited

JSW Energy (Bengal) Limited

JSW Natural Resource Bengal Limited (w.e.f. 3.04.2012)

JSW Steel Coated Products Limited (w.e.f. 31.08.2012)

Peddar Realty Private Limited (w.e.f. 16.05.2012)

Nippon Ispat Singapore (PTE) Limited

EREBUS Limited

Arima Holding Limited

Lakeland Securities Limited

2 Associates

Jindal Praxair Oxygen Company Private Limited

JSW Ispat Steel Limited [Refer Note 26(4)]

3 Joint Ventures

Vijayanagar Minerals Private Limited

Rohne Coal Company Private Limited

JSW Severfield Structures Limited

Gourangdih Coal Limited

Toshiba JSW Power Systems Private Limited

MJSJ Coal Limited

GEO Steel LLC

JSW Structural Metal Decking Limited

JSW MI Steel Service Center Private Limited

4 Key Management Personnel (KMP)

Mr. Sajjan Jindal Mr. Seshagiri Rao M V S Dr. Vinod Nowal Mr. Jayant Acharya

5 Relative of Key Managerial Personnel

Mr. Parth Jindal

6 Enterprises over which Key Management Personnel and Relatives of such personnel exercise significant influence.

JSW Energy Limited

Jindal Stainless Limited

JSW Realty & Infrastructure Private Limited

Jindal Saw Limited

Jindal Steel & Power Limited

JSOFT Solutions Limited

Jindal Industries Limited

JSW Cement Limited

JSW Jaigarh Port Limited

Reynold Traders Private Limited

Raj West Power Limited

JSW Power Trading Company Limited

JSW Aluminim Limited (ceased from 15.10.2013)

O P Jindal Foundation

JSW Infrastructure Limited

South West Port Limited

JSW Techno Projects Management Limited

South West Mining Limited

JSL Architecture Limited

JSW Projects Limited

Sapphire Technologies Limited

Jindal Technologies & Management Services Private Limited

JITF Shipping & Logistics (Singapore) PTE Limited

JSW Foundation

JSW Bengaluru Football Club Private Limited

Shadeed Iron & Steel Co. LLC

15. Operating lease

a) As lessor:

i. The company has entered into lease arrangements, for renting :

2,279 houses (admeasuring approximately 1,410,997 square feet) at the rate of Rs. 100/- per house per annum, for a period of 120 months.

9 houses (admeasuring approximately 9,027 square feet) at the rate of Rs. 43/- per square feet per month per house, for a period of 60 months.

The agreements are renewable at the option of the lessee after the end of the lease term.

13. The company has the following joint venture interest in India as at 31 March 2014: Interest as venturer

Vijayanagar Minerals Private Limited: Percentage of holding – 40% (previous year 40%) Rohne Coal Company Private Limited: Percentage of holding – 49% (previous year 49%)

JSW Severfield Structures Limited: Percentage of holding - 50 % (previous year 50%)

Gourangdih Coal Limited: Percentage of holding – 50 % (previous year 50%)

JSW MI Steel Service Center Private Limited: Percentage of holding - 50% (previous year 50%)

Interest as investor

MJSJ Coal Limited: Percentage of holding – 11% (previous year 11%)

Toshiba JSW Power Systems Private Limited: Percentage of holding – 2.54% (previous year 2.54%)

14. Interest includes Rs. 5.96 crores (previous year Rs. 2.89 crores) on account of shortfall in payment of direct taxes.

15. Figures of the previous year are regrouped and reclassified wherever necessary to correspond to figures of the current year. Figures of the previous year are not comparable on account of Composite Scheme of Amalgamation and Arrangement as referred to in Note 26 (4) above.


Mar 31, 2013

1. Contingent Liabilities not provided for in respect of :

a) Bills Discounted Rs. 3,012.92 crores (Previous year Rs. 3,117.13 crores).

b) Guarantees provided to banks on behalf of subsidiaries Rs. 1,223.95 crores (Previous year Rs. 1,096.27 crores).

c) Disputed claims/levies (excluding interest, if any), in respect of:

(i) Excise Duty Rs. 199.82 crores (Previous year Rs. 200.27 crores);

(ii) Custom Duty Rs. 632.76 crores (Previous year Rs. 477.44 crores);

(iii) Income Tax Rs. 1.47 crores (Previous year Rs. 1.47 crores);

(iv) Sales Tax / Special Entry tax Rs. 226.93 crores (Previous year Rs. 170.30 crores);

(v) Service Tax Rs. 98.10 crores (Previous year Rs. 70.08 crores);

(vi) Miscellaneous Rs. 0.05 crores (Previous year Rs. 0.05 crores);

(vii) Levies by local authorities Rs. 3.04 crores (Previous year Rs. 3.04 crores); and

(viii) Claims etc. by suppliers and other parties (including for Forest Development Tax) Rs. 872.79 crores (Previous year Rs. 509 crores)

In 2008, the State of Karnataka levied a Forest Development Tax (FDT) treating iron ore as a forest produce. Writ Petitions challenging the levy of FDT filed before Karnataka High Court by various stakeholders are pending for disposal. Accordingly, the Company has disclosed in the financial statements FDT paid under protest of Rs. 650.75 crores (including under e auction) as an advance and Rs. 866.03 crores (above) as a contingent liability.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 3,217.49 crores (Previous year Rs. 3,729.12 crores).

3. Other Commitments :

(a) The company has issued an undertaking to associate bankers for non disposal of its investment of Rs. 2,357.11 crores (Previous year Rs. 2,357.11) in an associate till that entity repays its debts.

(b) The Company from time to time provides need based support to subsidiaries and a joint venture entity towards capital and other requirements.

(c) The company has imported capital goods under the Export Promotion Capital Goods Scheme to utilise the benefit of a zero or concessional customs duty rate. These benefits are subject to future exports. Such export obligations at year end aggregate to Rs. 10,903.50 crores (Previous year Rs. 16,912.59 crores) by the company within the stipulated period.

4. On 3rd May 2013 the Bombay High Court sanctioned a Composite Scheme of Amalgamation and Arrangement under sections 391 to 394 of the Companies Act, 1956 amongst JSW Steel Limited, JSW ISPAT Steel Limited, JSW Building Systems Limited, JSW Steel Coated Products Limited and their respective shareholders and creditors with effect from 1 July 2012, being the appointed date. The certified copy of the Court Order is awaited, on receipt of which the Company will initiate requisite formalities to give effect to the Scheme. Accordingly therefore, the accounting treatment laid out in the Scheme and consequential adjustments that would arise will be dealt with by the Company in the financial statements, once the Scheme is implemented.

5. In respect of the Company''s long term, strategic investment in one of its subsidiaries, JSW Steel (USA) Inc., the Company periodically reviews and assesses its business plans and expected future cash flows. The company has also considered recent independent valuations of the underlying fixed assets. Whilst the subsidiary may have a longer gestation period than originally envisaged, the Company has concluded that the decline is temporary and no provision against the carrying amounts of investments and loans of Rs. 3,155.65 crores relating to the subsidiary is presently necessary.

6. Due to the significant movement and volatility in the value of the rupee against US dollar, the net foreign exchange loss has been considered by the Company as exceptional in nature.

7. Derivatives:

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable forecast transactions. The use of foreign currency forward contracts is governed by the Company''s strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Company''s Risk Management Policy

b) The Company also uses derivative contracts other than forward contracts to hedge the interest rate and currency risk on capital account. Such transactions are governed by the strategy approved by the Board of Directors, which provide principles on the use of these instruments, consistent with the Company''s Risk Management Policy. The Company does not use these contracts for speculative purposes.

11. Employee Benefits:

a) Defined Contribution Plan:

Company''s contribution to Provident Fund Rs. 25.62 crores. (Previous Year Rs. 24 crores)

The Company expects to contribute Rs. 37.09 crores (previous year Rs. 23.66 crores) to its Gratuity Plan for the next year. In assessing the Company''s Post Retirement Liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the Indian Assured Lives Mortality (2006-08) Ultimate.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(ii) Provident Fund:

The company makes monthly contributions to Provident Fund managed by Trust for qualifying employees. Under the scheme, the company is required to contribute a specified percentage of the payroll costs to fund the benefits.

In keeping with the Guidance on Implementing Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by the Companies (Accounting Standards) Rules, 2006, employer established provident fund trusts are treated as Defined Benefit Plans, since the Company is obliged to meet interest shortfall, if any, with respect to covered employees. According to the Defined Benefit Obligation of Interest rate Guarantee on exempted Provident Fund in respect of employees of the company as at 31st March, 2013 works out to Rs. Nil (previous year Rs. Nil) and hence no provision is required to be provided for in the books of accounts towards the guarantee given for notified interest rates.

8. Segment Reporting:

The Company is primarily engaged in the business of manufacture and sale of Iron and Steel Products. The Company has identified two primary business segments, namely Steel and Power (used mainly for captive consumption), which in the context of Accounting Standard 17 on "Segment Reporting" constitute reportable segments.

9. Related Parties disclosure as per Accounting Standard (AS) - 18:

A) List of Related Parties

Parties with whom the Company has entered into transactions during the period where control exists :

1 Subsidiaries

JSW Steel (Netherlands) B.V.

JSW Steel (UK) Limited

Argent Independent Steel (Holdings) Limited

JSW Steel Service Centre (UK) Limited

JSW Steel Holding (USA) Inc.

JSW Steel (USA) Inc.

Periama Holdings, LLC

Purest Energy, LLC

Meadow Creek Minerals, LLC

Hutchinson Minerals, LLC

R.C. Minerals, LLC

Keenan Minerals, LLC

Peace Leasing, LLC

Prime Coal, LLC

Planck Holdings, LLC

Rolling S Augering, LLC

Periama Handling, LLC

Lower Hutchinson Minerals, LLC

Caretta Minerals, LLC

JSW Panama Holdings Corporation

Inversiones Eroush Limitada

Santa Fe Mining

Santa Fe Puerto S.A.

JSW Natural Resources Limited

JSW Natural Resources Mozambique Limitada

JSW ADMS Carvo Lda

JSW Mali Resources SA (w.e.f. 18.02.2013)

JSW Steel Processing Centres Limited

JSW Bengal Steel Limited

JSW Natural Resources India Limited

Barbil Beneficiation Company Limited

JSW Jharkhand Steel Limited

JSW Building Systems Limited

JSW Steel East Africa Limited

Amba River Coke Limited

JSW Energy (Bengal) Limited

JSW Natural Resource Bengal Limited (w.e.f. 03.04.2012)

JSW Steel Coated Products Limited (w.e.f. 31.08.2012)

2 Associates

Jindal Praxair Oxygen Company Private Limited

JSW Ispat Steel Limited

JSW Energy (Bengal) Limited (upto 04.03.2012)

3 Joint Ventures

Vijayanagar Minerals Private Limited

Rohne Coal Company Private Limited

JSW Severfield Structures Limited

Gourangdih Coal Limited

Toshiba JSW Turbine and Generator Private Limited

MJSJ Coal Limited

GEO Steel LLC

JSW Structural Metal Decking Limited

JSW MI Steel Service Center Private Limited

4 Key Management Personnel (KMP)

Mr. Sajjan Jindal

Mr. Seshagiri Rao M V S

Dr. Vinod Nowal

Mr. Jayant Acharya

5 Relative of Key Managerial Personnel

Mrs. Savitri Devi Jindal

Mr. Parth Jindal

6 Enterprises over which Key Management Personnel and Relatives of such personnel exercise significant influence.

JSW Energy Limited

JSL Limited

JSW Realty & Infrastructure Private Limited

Jindal Saw Limited

Jindal Steel & Power Limited

JSOFT Solutions Limited

Jindal Industries Limited

Jindal Aluminum Limited

JSW Cement Limited

JSW Jaigarh Port Limited

Reynold Traders Private Limited

Raj West Power Limited

JSW Power Trading Company Limited

JSW Aluminim Limited

O P Jindal Foundation

JSW Infrastructure Limited

South West Port Limited

JSW Techno Projects Management Limited

South West Mining Limited

JSL Architecture Limited

JSW Projects Limited

Sapphire Technologies Limited

Jindal Technologies & Management Services Private Limited

10. Operating Lease

a) As Lessor:

i. The Company has entered into lease arrangements, for renting :

2,279 houses (admeasuring approximately 1,410,997 square feet) at the rate ofRs. 100/-perhouseperannum, for a period of 180 months.

684 houses (admeasuring approximately 350,103 square feet) at the rate of Rs. 24/- per square feet per annum, for a period of 36 to 60 months.

9 houses (admeasuring approximately 9,027 square feet) at the rate of Rs. 43/- per square feet per month per house, for a period of 60 months.

Office premises (part) admeasuring approximately 15,392 square feet at the rate of Rs. 130 per square feet for a period of 11 months.

The agreements are renewable at the option of the lessee after the end of the lease term.

11. The Company has the following Joint venture interest in India as at 31st March 2013:

Interest as Venturer

Vijayanagar Minerals Private Limited: Percentage of holding - 40% (Previous year 40 %)

Rohne Coal Company Private Limited: Percentage of holding - 49% (Previous year 49 %)

JSW Severfield Structures Limited : Percentage of holding - 50 % (Previous Year 50%)

Gourangdih Coal Limited : Percentage of holding - 50 % (Previous Year 50 %)

JSW MI Steel Service Center Private Limited : Percentage of holding - 50% (Previous Year 50% )

Interest as Investor

MJSJ Coal Limited: Percentage of holding - 11% (Previous year 11 %)

Toshiba JSW Turbine and Generator Private Limited : Percentage of holding - 2.54% (Previous year 3.67%)

12. Interest includes Rs. 2.89 crores (previous year Rs. 2.5 crores) on account of shortfall in payment of Direct Taxes.

13. Comparative financial information (i.e. the amounts and other disclosure for the preceding year) presented above, is included as an integral part of the current year''s financial statements, and is to be read in relation to the amounts and other disclosures relating to the current year. Figures of the previous year are regrouped and reclassified wherever necessary to correspond to figures of the current year.


Mar 31, 2010

1. Contingent Liabilities not provided for in respect of :

a) Bills Discounted Rs. 1,275.88 crores (Previous year Rs. 977.32 crores).

b) Guarantees provided on behalf of subsidiaries (including step down subsidiaries) and others Rs. 1,818.24 crores (Previous year Rs. 2,135.74 crores).

c) Disputed statutory claims/levies including those pending in courts (excluding interest leviable, if any), in respect of:

(i) Excise Duty Rs. 96.67 crores (Previous year Rs. 90.01 crores);

(ii) Customs Duty Rs. 108.07 crores (Previous year Rs. 223.85 crores);

(iii) Income Tax Rs. 12.47 crores (Previous year Rs. 36.28 crores);

(iv) Sales Tax/Special Entry tax Rs. 0.35 crores (Previous year Rs. 0.35 crores);

(v) Service Tax Rs. 24.46 crores (Previous year Rs.31.27 crores);

(vi) Miscellaneous Rs. 0.05 crores (Previous year Rs. 0.24 crores); and

(vii) Levies by local authorities Rs. 3.04 crores (Previous year Rs. 15.28 crores).

d) Claims by Suppliers and other third parties not acknowledged as debts Rs. 6.31 crores (Previous year Rs. 131.76 crores).

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 3,644.94 crores (Previous year Rs. 4,660.30 crores).

3. Unlike the previous year which saw an unprecedented depreciation of the rupee against major foreign currencies, the movement of the rupee during the year is much less volatile. Accordingly, exchange fluctuations for the year have not been considered as an Exceptional item.

b) Expenses arising from employees share- based payment plans - Rs. 4.03 crores (Previous year Rs. 4.65 crores).

4. Derivatives:

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable forecast transactions. The use of foreign currency forward contracts is governed by the Companys strategy approved by the Board of Directors, which provide principles on the use of such forward contracts consistent with the Companys Risk Management Policy.

b) The Company also uses derivative contracts other than forward contracts to hedge the interest rate and currency risk on capital account. Such transactions are governed by the strategy approved by the Board of Directors, which provide principles on the use of these instruments, consistent with the Companys Risk Management Policy. The Company does not use these contracts for speculative purposes.

5. Employee Benefits:

a) Defined Contribution Plan:

Companys contribution to Provident Fund Rs. 12.89 crores. (Previous year Rs. 12.04 crores).

6. Segment Reporting:

The Company is primarily engaged in the business of manufacture and sale of Iron and Steel Products. The Company has identified two primary business segments, namely Steel and Power (used mainly for captive consumption), which in the context of Accounting Standard 17 on "Segment Reporting" constitute reportable segments.

7. Related parties disclosure as per Accounting Standard (AS) -18: A. List of Related Parties

Parties with whom the Company has entered into transactions during the year/where control exists :

1. Subsidiaries

JSW Steel (UK) Limited

JSW Steel Service Centre (UK) Limited

Argent Independent Steel (Holdings) Limited

JSW Natural Resources Limited

JSW Natural Resources Mozambique Limitada

JSW Steel (Netherlands) B.V.

JSW Steel Holding (USA) Inc

JSW Steel (USA) Inc

JSW Panama Holdings Corporation

Inversiones Eurosh Limitada

Santa Fe Mining

Santa Fe Puerto S.A.

JSW Steel Processing Centres Limited

JSW Jharkhand Steel Limited

JSW Bengal Steel Limited

Barbil Benefication Company Limited

JSW Building Systems Limited

2. Associates

Jindal Praxair Oxygen Company Private Limited

3. Joint Ventures

Vijayanagar Minerals Private Limited

Rohne Coal Company Private Limited

JSW Severfield Structures limited

Gourangdih Coal Limited

Toshiba JSW Turbine and Generator Private Limited

MJSJ Coal Limited

4. Key Management Personnel

Mrs. Savitri Devi Jindal

Mr. Sajjan Jindal

Mr. Seshagiri Rao M. V. S.

Dr. Vinod Nowal

Mr. Y. Siva Sagar Rao (Upto 15.05.2009)

Mr. Jayant Acharya (w.e.f. 7.05.2009)

5. Enterprises over which Key Management Personnel and Relatives of such personnel exercise significant influence.

JSW Energy Limited

JSL Limited

JSW Realty & Infrastructure Private Limited

Jindal Saw Limited

Jindal Steel & Power Limited

Jindal South West Holdings Limited

Jsoft Solutions Limited

Jindal Industries Limited

JSW Energy (Ratnagiri) Limited

JSW Cement Limited

JSW Jaigarh Port Limited

Nalwa Sons & Investments Limited

JSW Investments Private Limited

Reynold Traders Private Limited

Raj West Power Limited

JSW Power Trading Company Limited

JSW Aluminium Limited

O P Jindal Foundation

JSW Infrastructure & Logistic Limited

South West Port Limited

8. Operating Lease:

a) As Lessor:

i. The Company has entered into lease arrangements, for renting:

2,279 houses (admeasuring approximately 1,410,997 square feet) at the rate of Rs 100/- per house per annum, for a period of 180 months. 672 houses (admeasuring approximately 551,051 square feet) at the rate of Rs. 24/- per square feet per annum, for a period of 36 to 60 months. 1 house at the rate of Rs. 0.60 lacs per annum, for a period of 11 months.

9. The Company has the following Joint venture interest in India as at 31 March, 2010:

Interest as Venturer

Vijayanagar Minerals Private Limited: Percentage of holding - 40% (Previous year 40%)

Rohne Coal Company Private Limited: Percentage Of holding - 49% (Previous year 49%)

JSW Severfield Structures Limited: Percentage of holding - 50% (Previous Year Nil)

Gaurangdih Coal Limited: Percentage of holding - 50% (Previous Year Nil)

Interest as Investor

MJSJ Coal Limited: Percentage of holding -11% (Previous year 11%)

Toshiba JSW Turbine and Generator Private Limited - 5% (Previous year Nil)

10. Previous years figures have been regrouped, wherever necessary, to conform to current years presentation.

 
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