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

Mar 31, 2016

1. a) Pending final decision by the Hon''ble Supreme Court of India in Special

Leave Petition against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the State of Uttar Pradesh, the entry tax amount included in Note No. 29.1(i)(g), includes disputed demand of Rs.97.22 crore (Rs.94.89 crore). The Company has deposited Rs.114.21 crore (Rs.96.45 crore) against the said demand which has been shown as deposit and disclosed under Long term Loans and Advances.

Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 29.1 (i)(g) includes disputed demands of Rs.1091.02 crore (Rs.1084.32 crore) in Chhattisgarh State and Rs.341.15 crore ( Rs. 333.95 crore) in Odisha State respectively.

In respect of the case pertaining to Chhattisgarh State, liability of Rs.1409.23 crore (Rs.1251.41 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs.1409.23 crore (Rs.1251.41 crore) and Rs.109.82 crore (Rs.103.27 crore) in Chhattisgarh and Odisha State respectively against the said demand which has been treated as Deposit and disclosed under Long term Loans and Advances. b) Pending decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Jharkhand dismissing the writ petition of the Company, demands of Rs.491.27 crore (Rs.393.59 crore) made by Damodar Valley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, have been disclosed as contingent liability included in Note No. 29.1(i)(f). Against the said demands, the entire amount have been paid to DVC against bills raised by them and disclosed under short term loans and advances.

2. Under the Jharkhand Mineral Area Development Authority (Amendment) Act, the State Government of Jharkhand has made a demand of Rs. 97.85 crore (Rs.63.31 crore) towards "Market Fee" on transaction value of coal. As the matter is sub-judice, the amount has been disclosed as a Contingent Liability in Note No. 29.1(i)(e) above.

3. The Company pays royalty on iron ore on the basis of quantity removed from the leased area at the rates based on notification by the Ministry of Mines, Government of India and the price published by India Bureau of Mines on a monthly basis for both iron ore lumps and fines separately. A circular was issued by the State Government of Odisha regarding payment of royalty on fines at the rate of lumps on 07.09.2010 retrospectively effective from August 2009.The Government of India, vide circular dated 23.07.2012, directed the State Government of Odisha to withdraw the circular dated 07.09.2010. Accordingly, excess royalty for fines at the rate applicable for lumps, paid in two Iron Ore Mines of the Company amounting to Rs.144.34 crore, has been shown as Claims Recoverable. As the Company has disputed the matter with the Appropriate Authorities pending withdrawal of the circular of the State Government of Odisha, the amount of Rs.144.34 crore (Rs.144.34 crore) has been included in the Contingent Liability, in Note No. 29.1(ii)(b) above.

4. FIXED ASSETS

4.1 Land:

(i) Includes 67681.64 acres (67354.96 acres) owned / possessed / taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 34061.08 acres (35334.08 acres) in respect of which title is under dispute.

(iii) 8856.73 acres (8851.69 acres) transferred/agreed to be transferred or made available for settlement to various Joint Ventures / Central / State Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 7181.43 acres (6345.43 acres) given on lease to various agencies/ employees/ex-employees.

(v) Includes 4440.70 acres (4211.42 acres) under unauthorised occupation.

(vi) 1762.92 acres (1762.92 acres) of Land which is not in the actual possession, shown as deemed possession.

(vii) Rs.64.18 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(viii) Vide Notification ofAcquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484E dated 13.10.2012, National Highway Authority of India Ltd.(NHAI) had notified its intention to acquire 9.553 acres of Land. The compensation for 7.895 acres of Land has already been received and accounted for. Any further acquisition in part or full from the balance 1.658 acres of the notified land shall be accounted for on receipt of compensation for the actual quantity of land acquired by NHAI in future, if any.

5. Buildings include net block of Rs.21.73 crore (Rs.22.15 crore) for which conveyance deed is yet to be registered in the name of the Company.

6. Assets retired from active use and waiting for disposal amounting to Rs.75.98 crore has been shown under note 11 (a) " Tangible Fixed Assets", the net realizable value of which in the opinion of the management, will not be less than the amount shown and does not require any provision.

7. The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 3151 March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11- The Effects of Changes in Foreign Exchange Rates''. During the Year ended 31st March, 2016, the net foreign exchange variations of Rs.154.64 crore (net debit) [Year ended 31st March 2015- Rs.66.57 crore (net credit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2016, an amount of Rs.496.39 crore (net debit) [Rs.414.55 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 2016.

8. Estimated amount of contracts remaining to be executed and not provided for (net of advances), on capital account are Rs. 15688.09 crore (Rs.13013.17 crore) and on revenue account are Rs.1444.26 crore (Rs.1399.69 crore).

9. INVESTMENT,CURRENT ASSETS,LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

10. The amount due to Micro and Small Enterprises as defined in the The Micro, Small and Medium Enterprises Development Act, 2006 (as disclosed in Note No. 8- Trade Payables) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March, 2015 are as under:

11. Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

12. STATEMENT OF PROFIT & LOSS

12.1 Net Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2016: Rs.3376.11 crore (Previous year: Rs.2907.36 crore) and cumulatively upto 31st March 2016: Rs. 13074.67 crore (Previous year: Rs.9750.99 crore).

12.2 The research and development expenditure charged to Statement of Profit & Loss and allocated to Fixed Assets/Capital work-in-progress (Net), during theYear, amount to Rs.226.22 crore (Rs.232.06 crore) and Rs.50.78 crore (Rs.32.14 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

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

On such review as on 31st March 2016, no provision is required to be made during the year, as the value in use of assets of Bhilai Steel Plant, Durgapur Steel Plant, Rourkela Steel Plant and Bokaro Steel Plant, based on the present value of estimated future cash-flows expected to arise from the continuing use of an asset and from its disposal at the end its useful life, is more than the carrying amount of the respective CGU.

No provision is required to be made during the year for IISCO Steel Plant, Alloy Steels Plant, Salem Steel Plant and Visvesvaraya Iron and Steel Plant, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2015 for Salem Steel Plant and as on 31st March, 2014, for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Rotary Polisher unit in Salem amounting to Rs.7.73 crore as the net realisable value is higher than the book value. Similarly, the net realizable value of Pipe Coating Plant at RSP is higher than the book value at Rs.36.60 crore.

12.4 As per section 135 of the Companies Act, 2013 effective from 1st April 2014, the Company is required to spend, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years in accordance with its Corporate Social Responsibility (CSR) Policy. Based on above, the CSR amount has been budgeted at Rs.56 crore for the year 2015-16. Total amount to be spent by the Company is Rs. 98.96 crore (including unspent amount of Rs. 42.96 crore for previous year), out of which the Company has spent an amount of Rs.76.16 crore on CSR activities during the year 2015-16 under the following heads :

12.5 Information on leases as per Accounting Standard 19 on Leases'':

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

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the year is Rs.13.96 crore (Rs.12.86 crore).

13. As per the Department of Public Enterprises (DPE)''s Guidelines, the Company is required contribute 30% of salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund (CPF), Gratuity, Pension and Post-Superannuation Benefits. To comply with the DPE''s Guidelines relating to contribution to Superannuation Benefits within overall limit of 30% of salary of executive employees , the provision for pension benefit has been made @ 9% (rounded-off) w.e.f. 1st January 2007. Further, as per agreement dated 1st July, 2014 between the Management and the Unions of non-executive employees, pension benefit for non-executives has been provided @ 6% of salary (Basic Pay Dearness Allowance) w.e.f. 1st January, 2012.

The cumulative provision/liability towards pension benefit for executive (w.e.f. 1st January, 2007) & non-executive (w.e.f. 1st January,20l2) employees, amounting to Rs.2043.12 crore (Rs.425.48 crore during the year) and Rs.40.62 crore (Rs.7.60 crore during the year) have been charged to Employee Benefits Expense'' and Expenditure during Construction'' respectively.

14. The Company has assessed the useful life of the assets and major components of Plant & Machinery, Factory Buildings, Railway Line & Sidings and Water Supply & Sewerage based on the technical parameters/assessment and supported by external technical advice''. Accordingly, depreciation of Rs. 86.58 crore (net of deferred tax liability Rs. 45.82 crore) on account of fixed assets with no remaining useful life as on 1st April, 2015 has been adjusted in retained earnings.

In view of above, depreciation for the year ended 31st March, 2016 is higher by Rs.54.07 crore.

15. The Government of India promulgated Mines and Minerals (Development & Regulation), Amendment Act, 2015 (MMDR, 2015), effective from 26th March, 2015. The Ministry of Mines, vide notification dated 17.9.2015, notified the Mines and Minerals (Contribution to District Mineral Foundation) Rules, 2015, deemed to have come into force on 12.1.2015, specifying the contribution payable to the District Mineral Foundation. Vide Notification dated 14th August, 2015, the Ministry of Mines, established the National Mineral Exploration Trust, effective from the date of its publication in the official gazette. As per provisions of the MMDR, 2015, an amount of Rs.398.97 crore towards contributions to District Mineral Foundation and National Mineral Exploration Trust has been charged to the Statement of Profit and Loss during the year. Hon''ble high Court of Delhi has stayed the recovery proceedings on the basis of petition filed by Federation of Indian Mineral Industries and others.

16. Contributions in cash and kind made for the period from the Financial Year 2006-07 to 2015-16 to Railway authorities for laying out railway line from Rajhara to Rowghat would result in return of 7% of investment at the end of every year after commencement and fulfillment of assured traffic from Rowghat mines. Management has assumed that the criteria laid out in the Memorandum of Understanding will be met and interest will occur from the date of investment. The refund amount comprises principal and interest elements. Accordingly, the interest element has been computed and recognized at effective rate of interest as income during the year (Rs.44.02 core). Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) has opined to account for the same on recovery. To ascertain whether measurability and collectability criteria is being fulfilled or not in terms of AS-9, the matter has been referred to EAC of ICAI.

17. SAIL has invested a sum of Rs.495.03 crore in Equity Shares in International Coal Venture Private Limited (ICVL), a Joint Venture with Rastriya Ispat Nigam Limited (RINL), NMDC Limited (NMDC), NTPC Limited (NTPC) and Coal India Limited. In addition, SAIL has provided a letter of comfort of US$ 30 million to Exim Bank. Presently, holding of SAIL in ICVL is 46.62% of the Equity Shares. ICVL has 100% subsidiary in Mauritius by the name of ICVL, Mauritius which has 100% step down subsidiary Riversdale Mining (Pty) Limited (RML) in Australia which in turn holds a share of 65% stake in Minas De Benga Mauritius Ltd. (a Joint Venture Enterprise operating coal mines in Mozambique) which is running into heavy losses due to fall in international coal prices and currently no mining operation are being carried out. In the absence of financial statements and relevant information, the investment in ICVL is being carried at book value. Based on valuation carried out by SBI Capital Markets Limited, no diminution in investment is anticipated.

18. GENERAL

18.1 DEFINED BENEFIT SCHEMES

18.1.1 General Description of Defined Benefit Schemes:

Gratuity: Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.l0 lakhs for executives & non-executives joined on or after 1st July, 2014 and without any monetary limit for other non- executives, has been considered for actuarial valuation.

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

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

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

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

Employees'' Family Benefit Scheme: Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

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

19. Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs.

Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

ii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Accounting Standard-17 - Segment Reporting'', issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose.

20. Previous year''s figures have been re-arranged/re-grouped/re cast, wherever necessary. Figures in brackets pertain to previous year.


Mar 31, 2015

1.1 a) Pending final decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the state of Uttar Pradesh, the entry tax amount included in Note No. 29.1(i)(g), includes disputed demand of Rs.94.89 crore (Rs.91.55 crore). The Company has deposited Rs.96.45 crore (Rs.79.21 crore) against the said demand which has been shown as deposit and disclosed under Long term Loans and Advances.

Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 29.1 (i)(g) includes disputed demands of Rs.1084.32 crore (Rs.1071.28 crore) in Chhattisgarh State and Rs.333.95 crore (Rs.214.81 crore) in Odisha State respectively.

In respect of the case pertaining to Chhattisgarh State, liability of Rs.1251.41 crore (Rs.1071.15 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs.1251.41 crore (Rs.1071.15 crore) and Rs.103.27 crore (Rs.78.12 crore) in Chhattisgarh and Odisha State respectively against the said demand which has been treated as Deposit and disclosed under Long term Loans and Advances.

b) Pending decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Jharkhand dismissing the writ petition of the Company, claims of Rs.393.59 crore (Rs.291.76 crore) made by Damodar Valley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, have been disclosed as contingent liability included in Note No. 29.1(i)(f). Against the said claims, the entire amount have been paid to DVC against bills raised by them, and disclosed under short term loans and advances.

c) The unpaid amount of Rs.63.61 crore claimed by BCCL towards MADA Cess @1% on the invoices raised by it, has been disclosed as contingent liability, as the matter is sub- judice.

2. FIXED ASSETS

2.1 Land:

(i) Includes 66484.91 acres (66484.91 acres) owned/ possessed/ taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 35334.08 acres (35937.55 acres) in respect of which title is under dispute.

(iii) 8851.69 acres (8200.76 acres) transferred/agreed to be transferred or made available for settlement to various

Joint Ventures / Central / State Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6345.43 acres (6345.43 acres) given on lease to various agencies/employees/ex- employees.

(v) Includes 4075.67 acres (4066.88 acres) under unauthorised occupation.

(vi) 824.86 acres (824.86 acres) of Land which is not in the actual possession, shown as deemed possession.

(vii) Rs.59.88 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(viii)Vide Notification of Acquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484 E dated 13.10.2012, National Highway Authority of India Ltd (NHAI) has acquired 9.553 acres of Land of DSP. The compensation for 8.0013 acres of Land has already been received & accounted for and for balance 1.5517 acres of Land, compensation is under determination by NHAI.

2.2 Buildings include net block of Rs.22.15 crore (Rs.22.58 crore) for which conveyance deed is yet to be registered in the name of the Company.

2.3 Assets retired from active use and waiting for disposal amounting to Rs.75.98 crore has been shown under note 11 (a) "Tangible Fixed Assets", the net realizable value of which in the opinion of the management, will not be less than the amount shown and does not require any provision.

2.4 Capital Work in Progress includes Rs.126.25 crore (Rs.122.03 crore) in respect of 20 Hi Sendzemir Mill which could not be completed due to accident in the trailer carrying Mill Housing. The case filed by M/s. Waterbury Farrel, original supplier, was dismissed by Hon''ble District Court of Salem by its order dated 13.08.2013. To complete the balance portion of work on risk purchase basis, retendering process was completed and orders have been placed in respect of electrical, major mechanical & erection work during the year 2014-15. The jobs are in progress. For balance work, the retendering process is in progress.

2.5 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11- ''The Effects of Changes in Foreign Exchange Rates''. During the Year ended 31st March, 2015, the net foreign exchange variations of Rs.66.57 crore (net credit) [Year ended 31st March 2014- Rs.340.44 crore (net debit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2015, an amount of Rs.414.55 crore (net debit) [Rs.433.70 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 2015.

2.6 Estimated amount of contracts remaining to be executed and not provided for (net of advances), on capital account are Rs.13013.17 crore (Rs.13724.69 crore) and on revenue account are Rs.1399.69 crore (Rs.1459.72 crore).

2.7 Boiler 3 (appearing in Note No. 12- CWIP at a value Rs. 37.00 crores) was damaged on 12th March 2013 due to explosion. A contract has been awarded to the same contractor for repairing the Boiler at a value of Rs.22.00 crore, net of CENVAT and Rs.9.27 crore incurred for restoration of damages has been charged to the statement of Profit and Loss in F.Y. 2014-15. It may also be noted that ISP has obtained a report from a Boiler Expert for analysing the cause of explosion and it was confirmed that all operational requirements in connection with the lighting of the Boiler were duly complied with. Based on such report, in a joint meeting between ISP and the vendor, it is decided that the matter shall be placed before the surveyor for consideration. Insurance claim, lodged by the contractor for damages caused, are also under active consideration at the end of Insurer as confirmed by them vide Insurer''s letter dated 19th May, 2015.

3. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS.

3.1 The Central Board of Direct Taxes vide its Notification dated 25th December 2001 revised the rules for computation of certain perquisites. The Unions of non-executives filed writ petition with the Hon''ble High Court at Kolkata challenging the above Notification. In pursuance of the Hon''ble Court''s orders, the term deposits (including interest earned thereon) amounting to Rs.101.20 crore (Rs.95.48 crore), in respect of tax deducted at source, have been kept separately with bank(s). Such deductions and deposits after 31st Dec. 2005 have been made in accordance with amended law/judicial decisions. The writ petition filed by Steel Workers Federation of India is still pending before the Hon''ble Court. However, there is no impact on accounts of the Company as the additional tax, if required, shall be recoverable from the employees.

3.2 The amount due to Micro and Small Enterprises as defined in the ''The Micro, Small and Medium Enterprises Development Act, 2006 (as disclosed in Note No. 8- Trade Payables) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March, 2015 are as under:

3.3 Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under ''Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

3.4 The Company has stock of iron ore fines of 41.09 million tonnes (41.12 million tonnes) at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

4. STATEMENT OF PROFIT & LOSS

4.1 Net Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2015: Rs.2907.36 crore (Previous year: Rs.3257.40 crore) and cumulatively upto 31st March 2015: Rs.9750.99 crore (Previous year: Rs.6900.19 crore).

4.2 ''Other income'' includes Rs.199.81 crore towards profit on sale of investment in one of the Joint Ventures of the Company.

4.3 Sales include Railway Receipts (RR) made upto 31st March, 2015 and endorsed in favour of the customers and retired upto 21st April, 2015.

4.4 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

4.5 The research and development expenditure charged to Statement of Profit & Loss and allocated to Fixed Assets/Capital work-in- progress (Net), during the Year, amount to Rs.232.06 crore (T106.05 crore) and Rs.32.14 crore (Rs.4.38 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

4.6 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years. On such review as on 31st March 2015, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2015 for Salem Steel Plant and as on 31st March, 2014, for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Polisher unit in Salem amounting to Rs.7.97 crore as the net realisable value is higher than the book value. Similarly, the net realizable value of Pipe Coating Plant at RSP is higher than the book value atRs.38.39 crore.

4.7 As per section 135 of the Companies Act, 2013 effective from 1st April 2014, the Company is required to spend, in every financial year, at least 2% of the average net profits of the Company made during the three immediately preceding financial years in accordance with its CSR Policy. Based on above, the CSR amount has been budgeted at Rs.78.00 crore for the year 2014-15. The Company has spent an amount of Rs.35.04 crore on CSR activities during the year 2014-15 under the following heads :

The balance unspent amount of Rs.42.96 crore will be spent in due course.

4.8 The Company has revised the accounting policy for depreciation of assets in alignment with Schedule II to the Companies Act, 2013 which has become applicable from 1st April, 2014. Consequently, profit for the year ended 31st March, 2015, is higher by Rs.438.50 crore and the fixed assets (net block), as at 31st March, 2015 are higher by Rs.208.84 crore Further, an amount of Rs.229.66 crore has been recognised in the opening balance of the retained earnings where the remaining useful life of such tangible assets is Nil as at 1st April, 2014 in line with the provisions of Schedule – II to the Companies Act, 2013.

4.9 The Company has adopted the useful lives of the Plant and Machinery used in manufacture of Steel, as defined in Clause 5 (iv) (g) of Part ''C'' of the Schedule II to the Companies Act. The depreciation rates, derived on above-mentioned basis correspond with the useful lives applicable on ''No Extra Shift Depreciation (NESD)'' basis. Therefore, the Company has considered the depreciation rates based on above-mentioned useful lives of Plant and Machinery used in manufacture of steel on ''NESD'' basis, based on technical opinion obtained by the Company from an independant expert.

4.10 The Government of India has promulgated Mines and Minerals

(Development & Regulation), Amendment Act, 2015, w.e.f 12th January, 2015. As per the Act, the State Government is empowered to set up a Foundation Trust by notification, called the District Mineral Foundation for specified purposes, for which, the existing mining lease holder, in addition to royalty, shall pay to the Foundation Trust of the District, an amount not exceeding royalty amount, in such manner as may be prescribed and to establish a National Mineral Exploration Trust (NMET), for utilising the funds for regional and detailed exploration in the prescribed manner. The mining lease holder shall pay an amount of 2% of royalty to NMET, in such manner as may be prescribed by the Central Government. As the above amounts are payable after issue of notification(s) and formation of trusts by the State Governments & Central Government respectively and since so far neither any notification has been issued nor any trust has been formed, no liability has been considered in the accounts.

4.11 Information on leases as per Accounting Standard 19 on Rs.Leases'':

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

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the Year is f12.86 crore (Rs.12.11 crore).

4.12 As per the Department of Public Enterprises (DPE)''s Guidelines, the Company is required contribute 30% of salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund (CPF), Gratuity, Pension and Post- Superannuation Benefits. To comply with the DPE''s Guidelines relating to contribution to Superannuation Benefits within overall limit of 30% of salary of executive employees, the provision for pension benefit has been made @ 9% (rounded-off) w.e.f. 1st January 2007. Further, as per agreement dated 1st July 2014 between the Management and the Unions of non-executives employees, pension benefit for non-executives has been provided @ 6% of salary (Basic Pay Dearness Allowance) w.e.f. 1st January, 2012.

The cumulative provision/liability towards pension benefit for executive (w.e.f. 1st January, 2007) & non-executive (w.e.f. 1st January, 2012) employees, amounting to Rs.1614.18 crore (Rs.382.08 crore for the year) and Rs.36.48 crore (Rs.8.44 crore for the year) have been charged to ''Employee Benefits Expense'' and ''Expenditure during Construction'' respectively.

5. GENERAL

5.1 DEFINED BENEFIT SCHEMES

5.1.1. General Description of Defined Benefit Schemes:

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

Leave Encashment : Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days combined for earned leave and half pay leave.

Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

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

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

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

Employees'' Family Benefit Scheme : Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

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

5.2 Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

iii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Accounting Standard-17 - Segment Reporting'', issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose The disclosure of segment wise information is given at Annexure-I

5.3 Disclosures of provisions required by Accounting Standard (AS) 29 - ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

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

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

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


Mar 31, 2014

Other Notes to Financial Statements

1.1 : CONTINGENT LIABILITIES

(Rs. crore)

As at As at 31st March, 2014 31st March, 2013

(i) Claims against the Company pending appellate/judicial decisions :

a) Excise Duty 1350.97 1120.73

b) Sales Tax on inter-state stock transfers from plants to stockyards*. 743.12 740.94

c) Other sales tax matters 167.41 172.19

d) Income Tax 1028.85 797.30

e) Other duties, cess and levies 5274.71 2151.82

f) Civil Matters ** 1918.04 831.59

g) Entry Tax 1443.85 1166.18

h) Miscellaneous ** 541.14 449.31

* No liability is expected to arise, as sales tax has been paid on eventual sales.

** includes claims of Rs. 45.88 crore (Rs.22.54 crore), against which there are counter-claims of Rs. 26.85 crore (Rs.18.41 crore).

(ii) Other claims against the Company not acknowledged as debt:

a) Sales Tax 23.12 17.32

b) Duties, cess and levies 257.14 250.38

c) Civil Matters 50.31 23.03

d) Miscellaneous $ 7167.45 5498.71

$ includes claims of Rs. 100.94 crore (Rs.100.94 crore), against which there are counter-claims of Rs. 103.95 crore (Rs.103.95 crore).

(iii) Disputed income tax/service tax/other demand on joint venture company for which Company may be contingently liable under the joint venture agreement 30.39 29.33

(iv) Bills drawn on customers and discounted with banks 47.94 66.89

(v) Price escalation claims by contractors/ suppliers and claims by certain employees, - - extent whereof is not ascertainable

1.2 a) Pending final decision by the Hon''ble Supreme Court of India in Special Leave Petition against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the State of Uttar Pradesh, the entry tax amount included in Note No. 28.1(i)(g), includes disputed demand of Rs.91.55 crore (Rs.81.64 crore). The Company has deposited Rs.81.88 crore (Rs.70.57 crore) against the said demand which has been shown as deposit and disclosed under Long-term Loans and Advances.

Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 28.1 (i)(g) includes disputed demands of Rs.1071.28 crore (Rs.888.46 crore) in Chattisgarh State and Rs.214.81 crore (Rs.170.32 crore) in Odisha State respectively.

In respect of the case pertaining to Chattisgarh State, liability of Rs. 1071.15 crore (Rs.891.04 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs. 1071.15 crore (Rs.891.04 crore) and Rs. 78.12 crore (Rs.53.74 crore) in Chattisgarh and Odisha State respectively against the said demand which has been treated as Deposit and disclosed under Long-term Loans and Advances.

b) Pending decision by the Hon''ble Supreme Court of India in

SLP against order by the Honorable High Court of Jharkhand dismissing the writ petition of the Company, claim of Rs.291.76 crore (Rs.217.40 crore) made by Damodar Valley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, has been disclosed as contingent liability included in Note No. 28.1(i)(f). Against the said claim, the entire amount has been paid to DVC against bills raised by them, and disclosed under Short Term Loans and Advances.

c) Pending decision by ''Appellate Tribunal For Electricity'', the claims of Rs. 79.30 crore (Rs. 50.06 crore) made by Damodar Valley Corporation in respect of electricity supplied to Durgapur Steel Plant and Alloy Steels Plant of the Company, has been disclosed as contingent liability included in Note No. 28.1(i)(h).

d) Rourkela Steel Plant of the Company has proposed to the Government of Odisha for an out of court settlement of the matter relating to levy of water tax under the provisions of Odisha Irrigation Act, 1959 and rules thereunder, keeping in view of overall interest of the Company. If the settlement is accepted, the Company may have to pay an amount which shall be mutually agreed to with the State Government of Odisha.

e) BCCL has claimed an amount of Rs.60.21 crore towards MADA Cess @1% on the invoices raised by it. The Company has not paid the said amount and disclosed as contingent liability as the matter is sub-judice. BCCL has confirmed that Cess is not being paid for other buyers also, though collected.

f) The Contingent Liabilities stated in para 28.1 also include court/arbitration cases where the Company has lost the cases in first or subsequent appeals and has gone to appeal in the higher forums.

2. FIXED ASSETS

2.1 Land:

(i) Includes 66484.91 acres (67178.24 acres) owned/possessed/ taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 35902.82 acres (35903.35 acres) in respect of which title is under dispute.

(iii) 8200.76 acres (10881.28 acres) transferred/agreed to be transferred or made available for settlement to various Joint Ventures / Central / State Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6345.43 acres (6156.20 acres) given on lease to various agencies/employees/ex-employees.

(v) Includes 4066.88 acres (4262.42 acres) under unauthorised occupation.

(vi) 824.86 acres (824.86 acres) of Land which is not in the actual possession, shown as deemed possession.

(vii) Rs.59.88 crore is lying under deposits (in respect of land already acquired) with the District & Sessions Judge, Bokaro during the year 2007 towards compensation payable to land losers.

(viii) Vide Notification of Acquisition in the Gazette of India (Extraordinary) bearing No S.O. 1309(E) dated 08.06.2012 and No. S.O. 2484 E dated 13.10.2012, National Highway Authority of India Ltd (NHAI) has acquired 6.486 acres of Land of the Plant. The compensation for the land is under determination by NHAI and will be accounted for on final determination.

2.2 Buildings include net block of Rs.22.58 crore (Rs.25.26 crore) for which conveyance deed is yet to be registered in the name of the Company.

2.3 Assets retired from active use and waiting for disposal amounting to Rs. 29.10 crore has been shown under note 10 (a) "Tangible Fixed Assets", the net realizable value of which in the opinion of the management will not be less than the amount shown and does not require any provision.

2.4 a) Capital work-in-Progress includes Rs.38.07crore (Rs.107.17 crore) ( Consultancy charges) in respect of some deferred capital schemes, which are to be implemented in the near future. Therefore, no provision is required at this stage.

b) Capital Work-in-Progress includes Rs.115.38 crore (Rs.103.95 crore) in respect of Steel Processing Unit at Bettiah comprising of various processing units for producing a range of products, which is awaiting commissioning. The unit will be capitalized after integrated commissioning and put to use for commercial production.

c) Capital Work-in-Progress includes Rs.122.03 crore (Rs.121.80 crore) in respect of 20 Hi Sendzemir Mill which could not be completed due to accident in the trailer carrying Mill Housing. The case filed by M/s. Waterbury Farrel, original supplier, was dismissed by Hon''ble District Court of Salem by their order dated 13.08.2013 and retendering process is going on to complete the balance portion of work on risk purchase basis.

2.5 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11-Rs.The Effects of Changes in Foreign Exchange Rates''. During the year ended 31st March, 2014, the net foreign exchange variations of Rs.340.44 crore (net debit) [Rs.134.53 crore (net debit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2014, an amount of Rs.433.70 crore (net debit) [Rs.220.08 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 2014.

2.6 Estimated amount of contracts remaining to be executed and not provided for (net of advances), on capital account are Rs.13724.69 crore (Rs.17750.86 crore) and on revenue account are Rs.1459.72 crore (Rs.1085.96 crore).

3.1 As part of its Modernization and Expansion Plan / other Capital Schemes in IISCO Steel Plant, Burnpur, in the opinion of the Management, the following Assets have become usable and have been capitalized after installation, trial run, removal of all defects, issue of acceptance certificate and having become ready for commercial production during the year:

3.2 As part of its Modernization and Expansion Plan / other Capital Schemes in Rourkela Steel Plant, in the opinion of the Management, the following Assets have become usable and have been capitalized after installation, trial run, removal of all defects, issue of acceptance certificate and having become ready for commercial production during the year:

3.3 Further, an amount of Rs.15502.02 crore, detailed below, is kept under Capital Work-in-Progress representing capital expenditure on various Packages/Schemes installed/under installation and in the opinion of the Management, not yet ready for operation. The same will be capitalized after completion of installation, trial run, removal of all defects and getting ready for commercial production:

3.4 Boiler 3 (appearing in Note No. 11- Capital Work-in-Progress at a value of Rs.37.00 crore) was damaged on 12th March, 2013 due to explosion. Insurance claim was lodged by the Contractor working on the project for the damages caused due to explosion. The insurance claim was refuted twice by the Insurer. However, the Contractor has been further pursuing the claim with the Insurer. In the meantime, a contract has been awarded to the same Contractor for repairing of the Boiler at a value of Rs.22.00 crore, net of Cenvat. The amount on the repair job will be charged to Statement of Profit & Loss as and when it is incurred.

4. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS.

4.1 The Central Board of Direct Taxes vide its Notification dated 25th September, 2001 revised the rules for computation of certain perquisites. The Unions of non-executives filed writ petition with the Hon''ble High Court at Kolkata challenging the above Notification. In pursuance of the Hon''ble Court''s orders, the term deposits (including interest earned thereon) amounting to Rs.95.48 crore (Rs.130.51 crore), in respect of tax deducted at source, have been kept separately with bank(s). Such deductions and deposits after 31st March 2005 have been made in accordance with amended law/judicial decisions. The writ petition filed by Steel Workers Federation of India is still pending before the Hon''ble Court. However, there is no impact on accounts of the Company as the additional tax, if required, shall be recoverable from the employees.

4.2 Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under ''Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

4.3 During the year, additional liability of Rs.22.30 crore has been provided towards supply of electricity by BPSCL, on account of completion of reconciliation of accounts pertaining to earlier years.

4.4 The Company has stock of iron ore fines of 41.12 million tonnes (41.15 million tonnes) at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

5. STATEMENT OF PROFIT & LOSS

5.1 Net Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2014: Rs.3257.40 crore (Previous year: Rs.3617.90 crore) and cumulatively upto 31st March 2014: Rs.6900.19 crore (Previous year: Rs.18288.38 crore). During the year, the provisional rates of supplies to Indian Railways have been finalised upto 31st March, 2012, resulting in decrease in net sales of Rs.925.06 crore for the period from 1st January, 2008 to 30th June, 2010 and increase in net sales by Rs.678.96 crore for the period from 1st July, 2010 to 31st March, 2012. As a result, the net sales and profit for the year are lower by Rs.246.10 crore and Rs.277.27 crore respectively.

5.2 Sales include Railway Receipts (RR) made upto 31st March, 2014 and endorsed in favour of the customers and retired upto 21st April, 2014.

5.3 Prior period income includes :

a) Rs.120.94 crore towards write back of depreciation on fixed assets depreciated at 100% in earlier years as against 95% of the cost of fixed assets.

b) Rs.20.67 crore towards interest income on deposits made by Bokaro Steel Plant in the name of ''District & Sessions Judge – A/c Land'' and utilised fully for payment to land owners in respect of land acquired by the Bokaro Steel Plant.

5.4 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

5.5 The research and development expenditure charged to Statement of Profit & Loss and allocated to fixed assets, during the year, amount to Rs.106.05 crore (Rs.145.07 crore) and Rs.4.38 crore (Rs.2.56 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

5.6 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years. On such review as on 31st March 2014, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2014 for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant and as on 31st March, 2012, for Salem Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Polisher unit in Salem amounting to Rs. 8.51 crore as the net realisable value is higher than the book value. Similarly, the net realizable value of Pipe Coating Plant at RSP is higher than the book value at Rs. 40.30 crore

5.7 During the year, the unspent carried forward amount of Rs.17.19 crore on account of Corporate Social Responsibility (CSR) activities pertaining to the year 2012-13, was incurred in full. Against the approved budgeted amount of Rs.40.00 crore towards the CSR activities for the year 2013-14, the Company spent Rs.44.87 crore during the year.

5.8 The SAIL Refractory Unit, Bhilai continues to charge depreciation at the rate other than the rate prescribed in the Schedule XIV of the Companies Act,1956 for assets acquired prior to 01-04-1993 as per the option exercised by the Company provided in the circular no.1/12/92-CL5 circular 14/93 dated 20.12.1993 issued by the Ministry of Law & Justice and Company Affairs, the additional depreciation amount on such assets at the rates prescribed in Schedule XIV is Rs.6.40 crore.

5.9 Information on leases as per Accounting Standard 19 on Rs.Leases'':

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

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the year is Rs. 11.98 crore (Rs.11.18 crore).

6.1After the expiry of long term wage agreements with non- executives on 31st December, 2011, the Company entered into a Memorandum of Understanding with the Unions, for implementation of wage revision of non-executives w.e.f. 1st January, 2012. Accordingly, Employee Benefits Expense charged to the Statement of Profit & Loss and Expenditure. During Construction (EDC) for the year ended 31st March, 2014 are inclusive of wage revision arrears of non-executives upto 31st March, 2013, amounting to Rs.431.30 crore and Rs.1.92 crore respectively.

6.2 As per the Department of Public Enterprises (DPE''s) Guidelines, the Company is required to contribute 30% of salary (Basic Pay Dearness Allowance) in respect of executive employees as superannuation benefits, which may include Contributory Provident Fund (CPF), Gratuity, Pension and Post- Superannuation Benefits. From 1.1.2007 to 31.3.2013, the Company had been providing for Superannuation Benefits, as per details given in the table below. During the year, contribution rate to Post- retirement Medical Benefit (PRMB) Schemes for executive employees has been actuarially computed and as per the Actuary''s Report dated 5th May, 2014, the cost of PRMB Schemes as a proportion of salary for the executive employees is 4.26%. To comply with the DPE''s Guidelines relating to contribution to Superannuation Benefits within overall limit of 30% of salary of executive employees, the provision for pension benefit has been reduced from 12% to 9% (rounded-off) during the year, as per details given below:

Further, as per Memorandum of Understanding entered on dated 25th January,2014 between SAIL Management and the Unions of non-executive employees, pension benefit for non-executives has been agreed @6% of salary w.e.f. 1st January, 2012.

Keeping in view the above, an excess provision of other benefits for executive employees upto 31st March 2013, of Rs.201.21 crore in Employee Benefits Expense (EBE) and Rs.9.63 crore in Expenditure During Construction (EDC), has been written back during the year, as per details given below:

7. GENERAL

7.1 DEFINED BENEFIT SCHEMES

7.1.1. General Description of Defined Benefit Schemes:

Gratuity : Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non-executives has been considered for actuarial valuation.

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

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

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

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

Employees'' Family Benefit Scheme : Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

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

7.1.2 Other disclosures, as required under Accounting Standard (AS)–15 (revised) on ''Employees Benefits'', in respect of defined benefit obligations are :

(c) Provident Fund : Company''s contribution paid/payable during the year to Provident Funds are recognised in the Statement of Profit & Loss. The Company''s Provident Fund Trusts are exempted under section 17 of Employees'' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-à-vis statutory rate. The Company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment.

7.2 Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - ''Segment Reporting'' issued by Ministry of Corporate Affairs.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

iii) In the opinion of the management, the captive mines are not a reportable business segment of the Company as per Para 27 of Accounting Standard-17 - ''Segment Reporting'', issued by Ministry of Corporate Affairs. As captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose.

7.3 Disclosures of provisions required by Accounting Standard (AS) 29 ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

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

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

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

8. Previous year''s figures have been re-arranged/re-grouped/re cast, wherever necessary. Figures in brackets pertain to previous year.


Mar 31, 2013

1.1 a) Pending final decision by the Hon''ble Supreme Court of India in Special Leave Petition(SLP) against order by the Hon''ble High Court of Allahabad dismissing the writ petition of the Company, on levy of entry tax in the state of Uttar Pradesh, included in Note No. 28.1(i)(g), includes disputed demand of Rs.81.64 crore (Rs.64.02 crore).The Company has deposited Rs. 70.57 crore (Rs.43.83 crore) against the said demand which has been shown as current assets.

b) Pending final decision by the Hon''ble Supreme Court of India in SLP against order by the respective Hon''ble High Courts dismissing the writ petitions of the Company, the entry tax amount in Note No. 28.1 (i)(g) includes disputed demands of Rs.888.46 crore (Rs.623.37 crore) in Chattisgarh State and Rs. 170.32 crore (Rs.131.12 crore) in Odisha State respectively. In respect of the case pertaining to Chattisgarh State, liability of Rs. 891.04 crore (Rs.727.21 crore), based on legal opinion, has been provided in the books towards entry tax @3% against the demand @6%. The Company has deposited Rs. 891.04 crore (Rs.727.21 crore) against the said demand which has been treated as current assets.

c) Pending final decision by the Hon''ble Supreme Court of India in SLP against the order of the High Court of Delhi dismissing the appeal of the Company on disallowance of depreciation on the reduced value of assets by Rs.2578.13 crore consequent to waiver of loans by Steel Development Fund, the demand of Rs.87.62 crore (Rs.87.62 crore) pertaining to assessment years from 2006-07 to 2010-11 has been treated as contingent liability, included in note no. 28.1(i)(d). The Company has deposited Rs.87.62 crore against the said demand which has been treated as current assets.

d) Pending decision by the Hon''ble Supreme Court of India in SLP against order by the Honorable High Court of Jharkhand dismissing the writ petition of the Company, claim of Rs.217.40 crore (Rs. 128.60 crore) made by DamodarValley Corporation (DVC) in respect of electricity supplied to Bokaro Steel Plant of the Company, has been disclosed as contingent liability included in Note No. 28.1(i)(f). Against the said claim, the entire amount has been paid to DVC against bills raised by them, and treated as current assets.

e) Rourkela Steel Plant of the Company has proposed to the Government Odisha for an out of court settlement of the matter relating to levy of water tax under the provisions of Odisha Irrigation Act, 1959 and rules thereunder, keeping in view the overall interest of the Company. If the settlement is accepted, the Company may have to pay an amount which shall be mutually agreed with the State Government of Odisha.

f) The above para 28.1 relating to Contingent Liabilities also include court / arbitration cases where the Company has lost some of the cases in first or subsequent appeals amounting to Rs.85.34 crore and has gone to appeal in the higher forums.

g) The Renewable Power / Energy Obligations amounting to Rs.39.94 crore, as contested, have been disclosed as contingent liabilities

h) BCCL has claimed MADA Cess @1% on the invoices raised by it. The Company has not paid the said amount and disclosed as contingent liability as the matter is sub-judice. BCCL has confirmed that Cess is not being paid for other buyers also, though collected.

2. The Ministry of Corporate Affairs, vide order dated 10th June,20ll, approved the amalgamation of Maharashtra Elektrosmelt Limited (MEL), with the Company under sections 391 to 394 of the Companies Act, 1956. As per order, the amalgamation was operative from the appointed date of 1st April, 2010 and came into effect (effective date) on 13th July, 2011. The Accounts of erstwhile Maharashtra Elektrosmelt Limited (MEL) were consolidated in the Accounts of the Company for the Financial Year 2011-12.

3. FIXED ASSETS

3.1 Land:

(i) Includes 67406.03 acres (66126.21 acres) owned / possessed / taken on lease by the Company, in respect of which title/lease deeds are pending for registration.

(ii) Includes 4616.11 acres (1917.06 acres) in respect of which title is under dispute.

(iii) 10881.28 acres (10594.22 acres) transferred/agreed to be transferred or made available for settlement to various Central / State / Semi- Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6156.20 acres (6162.74 acres) given on lease to various agencies/ employees/ex-employees.

(v) Includes 4262.42 acres under unauthorised occupation.

(vi) 824.86 acres of Land shown as deemed possession which is not in actual possession.

(vii) Rs.70.00 crore has been deposited (in respect of land already acquired) with the District Judge, Bokaro during the year 2007 towards compensation payable to land losers and lying in deposit account.

3.2 Buildings include net block of Rs. 25.26 crore (Rs.25.71 crore) for which conveyance deed is yet to be registered in the name of the Company.

3.3 Assets retired from active use and waiting for disposal amounting to Rs. 30.50 crore has been shown under note 10 (a) " Tangible Fixed Assets", the net realizable value of which in the opinion of the management will not be less than the amount shown and does not require any provision.

3.4 a) Capital Work-in-Progress includes Rs.107.17 crore (consultancy charges) in respect of some deferred capital schemes, which in view of the management are to be implemented in near future. Therefore, no provision is required at this stage.

b) Capital Work-in-progress includes Rs.981.83 crore in respect of some capital schemes which have not been capitalized due to lack of sustained production on commissioning requiring further rectification of several defects. The reasons for non-capitalisation are on account of :

i) As a part of its expansion scheme, Rourkela Steel Plant of the Company has awarded a contract for construction of Sinter Plant -III which is under progress. The expenditure incurred upto 31st March, 2013 for Sinter Plant-III is Rs.721.11 crore. During the trial run of the Plant, defects were noticed and subject to removal of such defects, the preliminary acceptance certificate was issued. Subsequent to removal of all such defects, the commissioning of the Plant will be done. Further, as the Plant has not achieved commercially feasible level of production in a commercially practicable manner, the Plant is not ready for its intended use and hence not capitalized in the books.

ii) Capital Work in Progress includes Rs.103.95 crore in respect of Steel Processing Unit at Bettiah comprising of various processing units for producing a range of products, which is awaiting commissioning. The unit will be capitalized after integrated commissioning and put to use for commercial production.

iii) Capital Work in Progress includes Rs.34.05 crore towards area drainage system for New SMS-III at Bokaro steel Plant.The drainage system is a part of entire SMS-III which is yet to be completed. Capitalisation will be taken up on completion of the Plant.

iv) Capital Work in Progress includes Rs.0.92 core towards Plant civil work including building at DSP. The Bar & Rod Mill is yet to be completed. Therefore, all civil works including plant building will be capitalized on completion of Bar & Rod Mill.

v) In Salem Steel Plant, capital schemes relating to 20 Hi Sendzimir Mill, amounting to Rs.121.80 crore included in capital work-in- progress, could not be completed due to accident in the trailer carrying Mill housing. Due to accident, the matter is under litigation and the project could not be completed which will be done as per court order.

3.5 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11- ''The Effects of Changes in Foreign Exchange Rates''. During the year ended 31st March, 2013, the net foreign exchange variations of Rs.134.53 crore (net debit) [Rs. 127.85 crore (net debit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/ capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2013, an amount of Rs.220.08 crore (net debit) [Rs.81.13 crore (net debit)] is yet to be depreciated/amortised as at 31st March, 20l3.

3.6 Estimated amount of contracts remaining to be executed and not provided for (net of advances) on capital account are Rs.17967.99 crore (Rs.21063.53 crore) and on revenue account, are Rs.1190.43 crore (Rs.1236.54 crore).

4. INVESTMENT,CURRENT ASSETS,LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

4.1 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees'' Union/Association filed writ petitions with the Hon''ble High Court at Kolkata challenging the above Notification. In pursuance of the Hon''ble Court''s orders, the term deposits (including interest earned thereon) amounting to Rs. 130.51 (Rs. 177.90) crore, in respect of tax deducted at source (TDS), have been kept separately with bank(s). Such deductions and deposits after 31st March 2005 have been made in accordance with amended law/judicial decisions. Vide Order dated 11th September, 2012, the Hon''ble High Court has vacated the stay on the petition filed by Association of Executives. Accordingly, the TDS on perquisites kept as fixed deposits in respect of Executives is being deposited with Income Tax Authorities after the Balance Sheet date. The writ petition filed by Steel Workers Federation of India is still pending before the Hon''ble Court. However, there is no impact on accounts of the Company as the additional tax, if required, shall be recoverable from the employees.

4.2 The amount due to Micro and Small Enterprises as defined in the ''The Micro, Small and Medium Enterprises Development Act, 2006'', (as disclosed in Note No. 7- Trade Payables ) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March 2013 are as under:

4.3 Balances of Trade Receivables and Recoverables shown under ''Current Assets'' and Trade and Other Payables shown under Current Liabilities'', include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

4.4 During the year, ad-hoc/additional liability of Rs.33.76 crore has been provided towards supply of electricity by BPSCL, on account of reconciliation of accounts which is in progress. On completion of reconciliation, consequential adjustments, if any, will be dealt with in the accounts accordingly in the year of completion.

4.5 The Company has stock of iron ore fines of 41.15 million tonnes (41.18 million tonnes) at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

4.6 An amount of Rs.51.34 crore has been deposited with Chhattisgarh State Power Transmission Company Limited, as per demand letters dated 4th May, 2010 for providing transmission lines and power connection at upcoming Rowghat Mines. The amount has been reflected as "Long Term Loans & Advances - Deposits". The transmission lines will not be owned by the Company. The MOU has been signed on 12th May, 2011.

The accounting treatment of above mentioned issue has been referred to the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) for opinion.The accounting of the above referred issue and similar cases will be done as per the opinion of the EAC of ICAI.

5. STATEMENT OF PROFIT & LOSS

5.1 Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2013: Rs.3617.90 crore (Previous year: Rs.3479.04 crore) and cumulatively upto 31st March 2013: Rs. 18288.38 crore (Previous year: Rs.14901.94 crore).

5.2 Sales include Railway Receipts (RR) made upto 31st March 2013 and endorsed in favour of the customers and retired upto the cut-off date.

5.3 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

5.4 The research and development expenditure charged to Statement of Profit & Loss and allocated to fixed assets, during the year, amount to Rs.145.07 crore (Rs.129.08 crore) and Rs.2.56 crore (Rs.5.37 crore) respectively. The aggregate amount of revenue expenditure incurred on research and development is shown in the respective head of accounts. The break-up of the amount is as under:

5.5 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit (CGU). If any such indication exists, the assets recoverable amount is estimated, as higher of the net selling price and the value in use. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The net selling price of the CGU is determined once in every three years. On such review as on 31st March 2013, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agencies, as on 31st March, 2011 for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant and as on 31st March, 2012, for Salem Steel Plant, is more than the carrying amount of respective CGU.

In the opinion of the management, there is no impairment of assets in the Polisher unit in Salem amounting to Rs. 9.38 crore as the net realisable value is higher than the book value. The asset could not be used for 3 years pending removal of defects. Similarly, the net realizable value of Pipe Coating plant at RSP is higher than the book value at Rs. 43.14 crore.

5.6 The long-term agreement for wage revision for non-executives expired on 31st December 2011. Pending finalisation of fresh agreement w.e.f 1st January 2012, provision towards wage revision including consequential benefits and pension of Rs.611.03 crore (Rs. 549.95 crore for the year) and Rs. 1.73 crore (Rs. 1.54 crore for the year) have been charged to Statement of Profit & Loss and Expenditure during construction respectively, on an estimated basis. The provision for wage revision includes an amount of Rs.332.86 crore towards actuarial valuation of gratuity and leave encashment liabilities arising on account of wage revision, of which Rs. 332.14 crore and Rs. 0.72 crore have been charged to the Statement of Profit & Loss and Expenditure during Construction respectively, during the year. The provision for wage revision includes liability on account of pension to Non-Executives.

5.7 Actuarial Valuation for Post Retirement Benefit of Badli workmen is done at SRU (SAIL Refractory Unit) and in case of annexed workmen of IISCO, it is treated on cash basis.

5.8 During the year, the accounting policy regarding amortisation of Mining Rights has been revised from the lease period'' to annual production vis- a-vis total estimated mineable reserves''. As a result, the profit for the year is higher by Rs.214.14 crore.

5.9 During the previous year, the basis of valuation of scrap was revised, resulting in higher profit of Rs.164.34 crore of that year.

5.10 During the year, the unspent carried forward amount of Rs.28.48 crore on account of Corporate Social Responsibility (CSR) activities pertaining to the year 2011-12, was incurred in full. Against the approved budgeted amount of Rs.42.00 crore towards the CSR activities for the year 2012-13, the Company incurred Rs.24.81 crore.The balance budgeted amount of Rs.17.19 crore, will be spent in due course. Since the Company does not have any contractual obligation/liability as on 31st March, 2013, the unspent amount has not been provided in the books and would be accounted for as and when spent/incurred.

5.11 The SAIL Refractory Unit, Bhilai continues to charge depreciation at the rate other than the rate prescribed in the Schedule XIV of the Companies Act,l956 for assets acquired prior to 01-04-1993 as per the option exercised by the Company provided in the circular no.l/l2/92-CL5 circular 14/93 dated 20.12.1993 issued by the Ministry of Law & Justice and Company Affairs, the amount of which is not ascertainable.

5.12 Information on leases as per Accounting Standard 19 on Leases'':

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

(b) In respect of assets taken on lease/rent : The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit & Loss during the year is Rs. 11.19 crore (Rs.11.92 crore).

6. GENERAL

6.1 DEFINED BENEFIT SCHEMES

6.1.1 General Description of Defined Benefit Schemes:

Gratuity: Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non-executives has been considered for actuarial valuation.

Leave Encashment: Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days for earned leave and 240 days of half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

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

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

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

Employees'' Family Benefit Scheme: Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

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

6.2 Segment Reporting

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

iii) In the opinion of the management, the captive mines are not a business segment of the Company as per Accounting Standard-17 - Segment Reporting'' issued by Ministry of Corporate Affairs, as captive mines are supplying raw materials to various plants, the Mines have been treated as cost centre for accounting purpose. However, due to issues involved, it is decided to refer the matter to the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) for its opinion.

6.3 Disclosures of provisions required by Accounting Standard (AS) 29 ''Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

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

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

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


Mar 31, 2012

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

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

(c) Redeemable in 12 equal yearly instalments of Rs.14 crore each starting w.e.f. 26th October, 2014

(d) Redeemable in 3 equal instalments of Rs.50 crore each on 15th September of 2014, 2019 and 2024

(e) The loan availed for 7 years is secured by charges ranking pari-passu inter-se, over movable properties pertaining to Rourkela Steel Plant. the loan is repayable anytime within 15 days notice and no prepayment penalty. The interest rate is Benchmark Prime lending rate (BPLR) (-) 4.25% for B1 (Base Rate w.e.f. 1.10.2010) and BPLR (-) 4.50 % for B2

(f) Guaranteed by Government of India, Redeemable in 4 equal instalments of 16 crore each starting w.e.f 15th October, 2010

(g) The soft basis of the loan was drawn in 3 tranches stated as 1(a), 1(b) and 1(c) at an interest rate 8.75% p.a. The interest on 1(a) is 0.75% p.a. and balance 8% p.a. is towards exchange fluctuation (4%) and Pollution control Schemes (4%). In case of 1(b), the interest is @ 3.66% p.a. and balance 5.09% p.a. is towards periphery development. The interest on 1(c) is 0.75% p.a. and balance 8% p.a. is towards periphery development. The principal and interest is repayable half yearly.

(h) The loan is repayble in in 3 equal instalments on 11th March starting from 2015 at an interest rate of 6 month London Inter Bank Operating Rate (LIBOR) 1%. Interest is paid half yearly

(i) The loan is repayble in 3 equal instalments on 11th August starting from 2015 at an interest rate of 6 month LIBOR 1%. Interest is paid half yearly (j) The loan is repayble in 3 equal instalments on 16th November starting from 2015 at an interest rate of 6 month LIBOR 1.06%. Interest is paid half yearly

(k) The loan is repayble in 2030 and Interest is paid half yearly, guaranteed by Government of India (l) Terms of repayment to be decided by SDF Management Committee (m) Interest free loan from Government of Maharashtra

1. i) The Ministry of Corporate Affairs, vide order dated 10th June, 2011, approved the amalgamation of Maharashtra Elektrosmelt Limited (MEL), with the Company under sections 391 to 394 of the Companies Act, 1956. As per order, the amalgamation is operative from the appointed date of 1st April, 2010 and has come into effect (effective date) on 13th July, 2011.

ii) The operation of MEL includes production of manganese based ferro-alloys, used as raw materials in the Company.

iii) As per order of amalgamation, the amalgamation has been accounted for under the "pooling of interests" method as prescribed by Accounting Standard (AS) -14, issued by the Institute of Chartered Accountants of India. Accordingly, the assets, liabilities and reserves of MEL as at 1st April, 2010 have been taken over at their book values. As stipulated in the Scheme of Amalgamation, all reserves of the transferor Company have been transferred to the respective reserve account of the Company except for balance lying in the Statement of Profit and Loss as on 31st March, 2010 which has been credited to the Statement of Profit and Loss Account of the Company. Accordingly, all the assets, liabilities, reserves of the said company as on 1st April 2010 have been merged with those of the Company under the respective heads as follows:

iv) The exchange ratio, at which the shareholders of the erstwhile MEL have been offered Shares in SAIL, has been worked out based on the independent valuation of shares of the companies as per the accepted methods of valuation.

v) In terms of the Scheme of amalgamation, the equity shares in SAIL issued by the Company to the shareholders of MEL on 30th September 2011, rank pari passu in all respects to the existing equity shares of SAIL with effect from the appointed date and upon the Scheme of amalgamation becoming effective. Accordingly, the appropriation for the dividend includes dividend on 1,24,744 Equity Shares, which have been issued to the shareholders of MEL.

vi) The income accruing and expenses incurred by erstwhile MEL during the period 1st April, 2010 to 31st March, 2011 have also been incorporated in these accounts. During the period between the appointed date and the effective date as MEL carried on the existing business in "trust" on behalf of the Company, all vouchers, documents, etc., for the period are in the name of MEL.

vii) The accounts of erstwhile MEL have been consolidated in the accounts of the Company for the Financial Year 2011- 12. The accounts of Company for the year Financial year 2010-11, do not include the figures of the erstwhile MEL and hence, are not comparable with those of the current year,

2. FIXED ASSETS

2.1 Land:

(i) Includes 62152.52 acres (62101.12 acres) owned/possessed/ taken on lease by the Company, in respect of which title/ lease deeds are pending for registration.

(ii) Includes 1917.06 acres (1845.71 acres) in respect of which title is under dispute.

(iii) 10594.22 acres (10615.66 acres) transferred/agreed to be transferred or made available for settlement to various Central / State / Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6162.74 acres (6204.60 acres) given on lease to various agencies/employees/ex-employees.

2.2 Buildings include net block of Rs.25.71 crore (Rs.23.71 crore) for which conveyance deed is yet to be registered in the name of the Company.

2.3 The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Notification dated 31st March, 2009 issued by Ministry of Corporate Affairs on Accounting Standard 11. During the year ended 31st March, 2012, the net foreign exchange variations of Rs.127.85 crore (net debit) [Rs.8.09 crore (net credit)] on foreign currency loans have been adjusted in the carrying amount of fixed assets/capital work-in-progress. Out of the exchange differences adjusted from 1st April, 2008 to 31st March, 2012, an amount of Rs.81.13 crore (net debit) [Rs.33.14 crore (net credit)] is yet to be depreciated/amortised as at 31st March, 2012. Further, exchange variations amounting to Rs.334.85 crore have been treated as interest cost in accordance with paragraph 4(e) of AS-16 - 'Borrowings Costs'.

2.4 Estimated amount of contracts remaining to be executed and not provided for (net of advances) on capital account are Rs.23860.45 crore (Rs.25477.01 crore) and on revenue account are Rs.1236.54 crore (Rs.841.18 crore).

3. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

3.1 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees' Union/Association filed writ petitions with the Hon'ble High Court at Kolkata challenging the above Notification. In pursuance of Hon'ble Court's orders, the term deposits (including interest earned thereon) amounting to Rs.177.90 crore (Rs.161.74 crore) have been kept separately with bank(s) in respect of tax deducted on house perquisite w.e.f. 1st April 2003 and other perquisites w.e.f. 1st October 2001, upto 31st March 2005, pending final decision of the Hon'ble Court. Such deductions and deposits after 31st March 2005, have been made in accordance with amended law/judicial decisions. However, there is no impact on accounts of the company as the additional tax, if required, shall be recoverable from the employees.

3.2 The amount due to Micro and Small Enterprises as defined in the 'The Micro, Small and Medium Enterprises Development Act, 2006', (as disclosed in Note No. 7- Trade Payables ) has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises as at 31st March, 2012 are as under:

3.3 Balances shown under 'Other Current Liabilities', 'Short term Loans & Advances' and 'Claims Recoverable' include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

3.4 The Company has stock of iron ore fines of 41.18 (41.21) million tonnes at various mines of the Company. Since the usage/sale of such iron ore fines, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

3.5 i) An amount of Rs.51.34 crore has been given to Chhattisgarh State Power Transmission Company Limited out of total amount of Rs.51.34 crore payable as per demand letter No. CE/Trans./ PL-HTC-31/0461 and 0462 dated 04th May, 2010 for providing transmission lines and power connection at upcoming Rowghat Mines. The amount has been reflected as "Long Term Loans & Advances - Deposits". The transmission lines will not be owned by the Company. The MOU has been signed on 12th May, 2011.

ii) An amount of Rs.132.91 crore has been given to Railways, out of total amount of Rs.844.23 crore payable as per MOU dated 11th December, 2007 and revised estimate by M/s. RVNL dated 17th July, 2009, for construction of railway line for movement of ore from upcoming Rowghat Mines. The amount has been reflected as "Long Term Loans & Advances - Deposits". As per the Agreement, the Railways will pay at the end of every year to the Company cash @ 7% per annum for 37 years on total contribution towards redemption of Company's contribution, commencing from the 1st year after commissioning of the Phase-I of the Project, subject to fulfill-ment of certain conditions. The underlying assets will not be owned by the Company.

The accounting treatment of above mentioned issues has been referred to the Expert Advisory Committee (EAC) of the Institute of Chartered Accountants of India (ICAI) for opinion. The accounting of the above referred issues and similar cases will be done as per the opinion of the EAC of ICAI.

4. STATEMENT OF PROFIT & LOSS

4.1 Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2012: Rs.3479.04 crore (Previous year: Rs.3466.59 crore) and upto 31st March, 2012: Rs.14642.06 crore (Previous year: Rs.11272.27 crore).

4.2 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the Plants which have been included under the primary heads of account.

4.3 The Research and Development expenditure charged to Statement of Profit & Loss and allocated to Fixed Assets, during the year, amount to Rs.129.08 crore (Rs.127.06 crore) and Rs.5.37 crore (Rs.5.08 crore) respectively. The aggregate amount of revenue expenditure incurred on Research and Development is shown in the respective head of accounts. The break-up of the amount is as under:

4.4 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit. On such review as at 31st March, 2012, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agency as at 31st March, 2011 for IISCO Steel Plant, Alloy Steels Plant, Visvesvaraya Iron & Steel Plant and as at 31st March, 2012 for Salem Steel Plant, is more than the carrying amount.

4.5 During the year, the basis of valuation of scrap has been revised, resulting in higher profit of Rs.164.34 crore for the year.

4.6 The long-term agreement for wage revision for non-executives expired on 31st December 2011. Pending finalisation of fresh agreement w.e.f. 1st January 2012, provision towards salaries and wages revision of Rs.61.08 crore and Rs.0.19 crore have been charged to Statement of Profit & Loss and Expenditure during construction respectively, on an estimated basis.

4.7 Provision for pension under superannuation benefits has been made for executives as per DPE Guidelines and approval of the Board. As the issue remains to be discussed at later date for non-executives and as on date is undecided and there exists no liability, no provision has been made.

4.8 During the year, the unspent carried forward amount of Rs.25.73 crore on account of Corporate Social Responsibility (CSR) activities pertaining to the year 2010-11, was incurred in full. Against the approved budgeted amount of Rs.64 crore towards the CSR activities for the year 2011-12, the Company incurred Rs.35.52 crore. The balance budgeted amount of Rs.28.48 crore, will be spent in due course. Since the Company does not have any contractual obligation/liability as on 31st March, 2012, the unspent amount has not been provided in the books and would be accounted for as and when spent/ incurred.

4.9 Information on leases as per Accounting Standard 19 on ' Leases':

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

(b) In respect of assets taken on lease/rent :

(i) The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Statement of Profit and Loss during the year is Rs.11.92 crore (Rs.14.66 crore).

(ii) Sub-lease recoveries recognised in the accounts are Rs.Nil crore (Rs.0.02 crore).

4.10 The matter with regard to imposition of Entry Tax on Coking Coal and Iron Ore in Bhilai Steel Plant (BSP), Bhilai of the Company is pending in the Hon'ble Supreme Court of India and is sub-judice. As per the Court's Order dated 9th Feb, 2010, BSP is paying Entry Tax @3% adhoc on Coking Coal and Iron Ore, on month to month basis and as per the same order, the payments towards Entry Tax are being treated as deposits. Till previous year, liability towards Entry Tax (including interest) was provided @6% on Coking Coal and Iron Ore. During the year, based on the legal opinion, the liability towards Entry Tax on Coking Coal and Iron Ore has been retained in the books to the extent of 3% adhoc payments made and the balance liability alongwith interest amount of Rs.511.20 crore provided till previous year, has been written back. The same has been disclosed as contingent liability and shown as Exceptional Item in the Statement of Profit & Loss for the year resulting in increase of Profit by Rs.511.20 crore.

4.11 Pending final decision by the Hon'ble Supreme Court of India on levy of entry tax in Uttar Pradesh, the entry tax demand of Rs.62.58 crore during the year in Uttar Pradesh, under dispute, has been treated as contingent liability.

4.12 During the year, the amount of income/expenditure relating to prior period and prepaid expenses, which do not exceed Rs.10 lakhs in each case, as against Rs.5 lakhs considered upto previous year, have been treated as income/expenditure of current year. As a result, the prior period income/expenditure and prepaid expenses of Rs.0.22 crore (net debit) and of Rs.07 crore respectively have been charged to normal heads of revenue and expenditure during the year.

5. GENERAL

5.1 Defined Benefit Schemes

5.1.1 General Description of Defined Benefit Schemes:

Gratuity: Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non-executives has been considered for actuarial valuation.

Leave Encashment : Payable on superannuation to eligible employees who have accumulated earned and half pay leave, subject to maximum limit of 300 days for earned leave and 240 days of half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

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

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

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

Employees' Family Benefit Scheme : Monthly payments to disabled separated employees / legal heirs of deceased employees in lieu of prescribed deposit till the notional date of superannuation.

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

(b) Reconciliation of Fair Value of Assets and Obligations:

The Company has partly funded the gratuity liability through a separate Gratuity Fund. The fair value of the plan assets is mainly based on the information given by the insurance companies through whom the investments have been made by the Fund. The reconciliation of fair value of assets of the Gratuity Fund and defined benefit gratuity obligations is as under:

* The company does not expect to contribute any amount to the Gratuity Fund during the year 2012-13, after considering the return on the investments.

The defined benefit obligations, other than gratuity, are unfunded.

(c) Provident Fund : Company's contribution paid/payable during the year to Provident Funds are recognised in the Statement of Profit & Loss. The Company's Provident Fund Trusts are exempted under section 17 of Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The conditions for grant of exemptions stipulate that the employer shall make good deficiency, if any, in the interest rate declared by the Trusts vis-a-vis statutory rate. The Company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment, as confirmed by actuary.

5.2 Segment Reporting :

i) Business Segments: The five Integrated Steel Plants and three Alloy Steel Plants, being manufacturing units, have been considered as primary business segments for reporting under 'Accounting Standard-17 - Segment Reporting' issued by the Institute of Chartered Accountants of India.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

The disclosure of segment-wise information is given at Annexure-I.

5.3 Related Party :

As per Accounting Standard - 18 - 'Related Party Disclosures' issued by the Institute of Chartered Accountants of India, the names of the related parties, excluding Government controlled enterprises, are given below: -

5.4 Disclosures of provisions required by Accounting Standard (AS) 29 'Provisions, Contingent Liabilities and Contingent Assets: Brief Description of Provisions :

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

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

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

* Out of outstanding amount, Rs.2.53 crore ( Rs.2.53 crore), being doubtful of recovery, has been provided for.

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

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

6. The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre- revised Schedule VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared under the revised Schedule VI. Accordingly, the previous year's figures have been re-arranged/re-grouped/re-cast, wherever necessary. Figures in brackets pertain to previous year.


Mar 31, 2011

1. CONTINGENT LIABILITIES

As at 31st As at 31st March, 2011 March, 2010

(Rs.in crore)

(i) Claims against the Company pending appellate/judicial decisions :

a) Excise Duty 1947.97 1822.71

b) Sales Tax on inter-state stock transfers from plants to stockyards*. 836.31 867.44

c) Other sales tax matters 282.73 207.02

d) Income Tax 256.56 134.99

e) Other duties, cess and levies 428.19 375.93

f) Civil matters ** 266.77 252.31

g) Miscellaneous ** 300.01 282.06

* No liability is expected to arise, as sales tax has been paid on eventual sales.

** includes claims of Rs.22.54 crore (Rs.25.70 crore), against which there are counter-claims of Rs.17.24 crore (Rs.28.90 crore).

(ii) Other claims against the Company not acknowledged as debt:

a) Sales Tax 10.52 0.86

b) Duties, cess and levies 14.73 13.05

c) Civil Matters 14.58 20.53

d) Miscellaneous $ 525.67 725.08

$$ $ includes claims of Rs.73.16 crore (Rs.62.24 crore), against which there are counter-claims of Rs. 62.42 crore (Rs.49.62 crore).

(iii) Disputed income tax/service tax/other demand on joint venture company for which company may be contingently liable under the joint venture agreement 147.85 26.94

(iv) Guarantees/Counter-guarantees of Rs.28.85 crore (Rs.28.85 crore) given to banks on behalf of a subsidiary company. As at the end of the year, the guarantees utilised to the extent of 0.37 0.37

(v) Bills drawn on customers and discounted with banks. 10.53 17.29

(vi) Price escalation claims by contractors/ suppliers and claims by certain employees, extent whereof is not ascertainable - -

$$ The Provisional Duty Assessment Bonds against concessional duty for project imports of Rs.250.64 crore, submitted to the Customs Authorities, were included as at 31st March, 2010 erroneously. After review during the year ended 31st March, 2011, the same have been excluded from contingent liabilities considering the possibility of outflow of funds as remote.

2. FIXED ASSETS

2.1 Land:

(i) Includes 62101.12 acres (62094.00 acres) owned / possessed / taken on lease by the Company, in respect of which title/ lease deeds are pending for registration.

(ii) Includes 1845.71 acres (1845.71 acres) in respect of which title is under dispute.

(iii) 10615.66 acres (10615.66 acres) transferred/agreed to be transferred or made available for settlement to various Central / State / Semi-Government authorities, in respect of which conveyance deeds remain to be executed/registered.

(iv) 6204.60 acres (6190.37 acres) given on lease to various agencies/employees/ex-employees.

3.2 Buildings include net block of Rs.24.11 crore (Rs.24.06 crore) for which conveyance deed is yet to be registered in the name of the Company.

3.3 Foreign exchange variations aggregating to Rs.1.46 crore (net credit) [Rs. 61.63 crore (net credit)] have been adjusted in the carrying amount of fixed assets during the year.

3.4 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) - Rs.25477.01 crore (Rs.23822.80 crore).

4. INVESTMENT, CURRENT ASSETS, LOANS & ADVANCES AND CURRENT LIABILITIES & PROVISIONS

4.1 The Central Board of Direct Taxes vide its Notification dated 25th September 2001 revised the rules for computation of certain perquisites. The Employees' Union/Association filed writ petitions with the Hon'ble High Court at Kolkata challenging the above Notification. In pursuance of Hon'ble Court's orders, the term deposits (including interest earned thereon) amounting to Rs.161.74 crore (Rs.152.16 crore) have been kept separately with bank(s) in respect of tax deducted on house perquisite w.e.f. 1st April 2003 and other perquisites w.e.f. 1st October 2001, upto 31st March 2005, pending final decision of the Hon'ble Court. Such deductions and deposits after 31st March 2005, have been made in accordance with amended law/judicial decisions. However, there is no impact on accounts of the company as the additional tax, if required, shall be recoverable from the employees.

4.3 Balances shown under creditors, debtors, claims recoverable and advances include balances subject to confirmation/reconciliation and consequential adjustment, if any. Reconciliations are carried out on on-going basis. Provisions, wherever considered necessary, have been made.

4.4 The Company has stock of iron ore fines of 41.23 (41.22) million tonnes at various mines of the Company. Since the usage/sale of such iron ore fines, not being readily useable /saleable, involves elements of uncertainties, as a matter of prudence, no valuation of such fines has been made in the accounts. However, the revenue earned from actual disposal thereof during the year has been recognised in the books of accounts.

4.5 i) An amount of Rs 51.34 crore has been given to Chhattisgarh State Power Transmission Company Limited out of total amount of Rs 51.34 crore payable as per demand letter No. CE/Trans./PL-HTC-31/0461 and 0462 dated 04th May, 2010 for providing transmission lines and power connection at upcoming Rowghat Mines. The amount has been reflected as "Loans & Advances - Deposits". The transmission lines will not be owned by the Company. The MOU has been signed on 12th May 2011.

ii) An amount of Rs. 132.49 crore has been given to Railways, out of total amount of Rs 844.23 crore payable as per MOU dated 11th December, 2007 and revised estimate by M/s. RVNL dated 17th July, 2009, for construction of railway line for movement of ore from upcoming Rowghat mines. The amount has been reflected as "Loans & Advances - Deposits". As per agreement, Railways will pay at the end of every year to the Company cash at the rate of 7% per annum for 37 years on total contribution towards redemption of Company's contribution, commencing from the 1st year after commissioning of the Phase - I of the project, subject to fulfilment of certain conditions. The underlyingassets will not be owned by the Company.

4.6 In respect of services provided by Central Industrial Security Force, an agency of Government of India, the issue of payment of service tax on the services for the period 1st May, 2006 to 31st March, 2009 is under examination by Ministry of Finance, Government of India. No contingent liability thereof has been disclosed for the period as there is no impact on profitability due to availability of CENVAT credit of the same amount.

5. PROFIT & LOSS ACCOUNT

5.1 Sales include sales to Government agencies recognised on provisional contract prices during the year ended 31st March 2011:Rs 3466.59 crore (Previous year: Rs 3320.53 crore) and upto 31st March, 2011: Rs 11272.27 crore (Previous year: Rs 7970.77 crore).

5.2 Power & Fuel does not include expenses for generation of power and consumption of certain fuel elements produced by the plants which have been included under the primary heads of account.

5.4 The Company reviews the carrying amount of its fixed assets on each balance sheet date for the purpose of ascertaining impairment, if any, by considering assets of entire one plant as Cash Generating Unit. On such review as at 31st March, 2011, no provision for the loss making units is required to be made, as the net realisable value thereof, assessed by an independent agency as at 31st March, 2011 for IISCO Steel Plant, Alloy Steels Plant and Visvesvaraya Iron & Steel Plant, is more than the carrying amount.

5.5 Pending issuance of accounting and disclosure practices on emission trading by the Institute of Chartered Accountants of India, carbon credit earned by the Company upto 31st March, 2011 in the form of VER (Voluntary Emission Reduction) has not been considered in the accounts.

5.6 Other revenues for the year ended 31st March, 2011 includes Rs. 124.36 crore, being the write back of liability/excess payment in respect of disputed electricity dues of Damodar Valley Corporation (DVC) from 1st April, 2009 to 31st March, 2010, arising out of order of the Appellate Tribunal of Electricity in favour of the Company. However, the appeal filed by DVC in the matter for the period from 1st April 2006 to 31st March 2009 is pending before the Hon'ble Supreme Court.

5.7 Arising out of implementation of revised salaries & wages, Rs.Employees' Remuneration & Benefits' charged to the Profit & Loss account for the previous year ended 31st March, 2010 are net off of excess provision for wage revision, amounting to X 1572.14 crore for the period 1st January, 2007 to 31st March, 2009.

5.8 Provision for pension under superannuation benefits has been made for executives as per DPE guidelines and approval of Board. As the issue remains to be discussed at later date for non-executives and as on date is undecided and there exists no liability, no provision has been made.

5.9 Against the budgeted amount of Rs.94.00 crore approved by the Board towards expenditure on Corporate Social Responsibility activities during the year 2010-11, the Company incurred Rs.68.27 crore on the same and the balance budgeted amount of Rs.25.73 crore will be spent in due course. Since the company does not have any contractual obligation/liability as on 31st March 2011, the unspent amount has not been provided for in the accounts and would be accounted for as and when spent/incurred.

5.10 Information on leases as per Accounting Standard 19 on Rs.Leases':

(a) The Company has granted long term lease of properties to the employees, ex-employees for varying periods, renewable for maximum of two like/unlike periods as per provisions contained in the respective lease agreements. The lease premium received up-front, after adjusting against book value, is booked to other revenues in the year of lease. Renewal premium, ground rent and service charges of properties, pending for renewal, given on lease are treated as income in the year of receipt.

(b) In respect of assets taken on lease/rent :

(i) The Company has various operating leases for, office facilities, guest houses and residential premises for employees that are renewable on a periodic basis. Rental expenses for these leases recognised in the Profit and Loss Account during the year is Rs.14.66 crore (Rs.16.31 crore).

(ii) Sub -lease recoveries recognised in the accounts are Rs.0.02 crore (Rs.0.03 crore).

6. GENERAL

6.1.1 General description of defined benefit schemes:

Gratuity

Payable on separation @15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount of Rs.10 lakhs for executives and without any monetary limit for non- executives has been considered for actuarial valuation for executives.

Leave Encashment

Payable on separation to eligible employees who have accumulated earned and half pay leave. Encashment of accumulated earned leave is also allowed upto 30 days once in a financial year.

Provident Fund

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

Post Retirement Medical Benefits

Available to retired employees at company's hospitals and/or under the health insurance policy.

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

Employees' Family Benefit Scheme Monthly payments to disabled separated employees / legal heirs of deceased

employees in lieu of prescribed deposit till the notional date of superannuation.

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

(c) Provident fund : Company's contribution paid/payable during the year to provident fund are recognised in the Profit & Loss Account. The Company does not anticipate any further obligations in the near foreseeable future having regard to the assets of the funds and return on investment as confirmed by the actuary.

6.2 Segment Reporting

i) Business Segments: The five integrated steel plants and three alloy steel plants, being manufacturing units, have been considered as primary business segments for reporting under Rs.Accounting Standard-17 - Segment Reporting' issued by the Institute of Chartered Accountants of India.

ii) Geographical segments have been considered for Secondary Segment Reporting, by treating sales revenue in India and foreign countries as separate geographical segments.

6.6 Disclosures of provisions required by Accounting Standard (AS) 29 'Provisions, Contingent Liabilities and Contingent Assets:

Brief Description of Provisions :

Mines afforestation - Payable on renewal (including deemed renewal) / forest clearance of mining leases to Government

costs authorities, towards afforestation cost at mines for use of forest land for mining purposes.

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

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

Bcklog removal costs

 
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