Mar 31, 2019
1. Complete Standalone Balance Sheet, Standalone Statement of Profit and Loss, Standalone Statement of Changes in Equity, Standalone Statement of Cash Flows and other statements and notes thereto prepared as per requirements of Division II to the Schedule III to the Act (âAnnual Standalone Financial Statementsâ) are available at the Companyâs website www.jsw.in. Copy of financial statement is also available for inspection at the registered office of the company during working hours for a period of 21 days before the date of AGM.
2. Basis of preparation
These abridged standalone financial statements have been prepared on the basis of complete set of the standalone financial statements for the year ended 31 March 2019, in accordance with the proviso to subsection (1) of section 136 of the Companies Act, 2013 (âthe Actâ) and Rule 10 of the Companies (Accounts) Rules, 2014.
a) Incentives under the State Industrial Policy
The Company units at Dolvi in Maharashtra and Vijayanagar in Karnataka are eligible for incentives under the respective State Industrial Policy and have been availing incentives in the form of VAT deferral / CST refunds historically. The Company currently recognises income for such government grants, on the basis using State Goods Service Tax rates instead of VAT rates, in accordance with the relevant notifications issued by the State of Maharashtra and the State of Karnataka post implementation of Goods S Services Tax (GST).
The State Government of Karnataka vide its circular dated 26 February 2019, has issued guidelines for determining the eligible incentive amount under the GST regime.
The State Government of Maharashtra (âGOMâ) vide its Government Resolution (GR) dated 20 December 2018 issued the modalities for sanction and disbursement of incentives, under GST regime, and introduced certain new conditions / restrictions for accruing incentive benefits granted to the Company including denying incentives on related party transactions and certain other restrictions. Subsequently, the GOM issued a corrigendum dated 08 March 2019 to the above mentioned GR allowing eligible units to claim incentives on related party transactions.
The management has evaluated the impact of other conditions imposed and has obtained legal advice on the tenability of these changes in the said scheme. Based on such legal advice, the Company has also made the representation to GOM and believes that said Incentives would continue to be made available to the Company under the GST regime, since the new conditions are not tenable legally and will contest these changes appropriately.
Accordingly, the Company has recognized grant income without giving effect to the above restrictions amounting to Rs. 161 crores (previous year Rs. 110 crores) for the year ended 31 March 2019. The cumulative amount receivable towards the same as at 31 March 2019 amounting to Rs. 271 crores has been considered good and recoverable.
b) Implementation of Goods and Service Tax (GST)
Revenue from operations for periods up to 30 June 2017 includes excise duty, which is discontinued with effect from 1 July 2017 upon implementation of Goods and Service Tax (GST). In accordance with âInd AS 115 - Revenueâ, GST is not included in Revenue from operations. In view of the aforesaid change in indirect taxes, Revenue from operations for the year ended 31 March 2019 is not comparable to the year ended 31 March 2018.
c) Ind AS 115 Revenue from Contracts with Customers
Ind AS 115 Revenue from Contracts with Customers, mandatory for reporting periods beginning on or after 1 April 2018 replaces the existing revenue recognition standards. The application of Ind AS 115 did not have any significant impact on financial statement of the Company.
However, the Company has determined that, in case of certain contracts, shipping services provided to customer is a separate performance obligation and accordingly the revenue attributable to such shipping services has been recognised as Revenue from operations, which was hitherto netted off against the corresponding freight expenses included as part of other expenditure in the Statement of Profit and Loss. The Company has applied the full retrospective approach and restated the previous periods presented.
The restated revenue for the year ended 31 March 2018 is higher by Rs. 1,489 crores with the corresponding increase in Other expenses. Further, the export benefits amounting to Rs. 300 crores for the year ended 31 March 2018 which was earlier included as part of Revenue from sale of products has been reclassified to Other operating revenue
The above adjustments have no impact on the balance sheet and cash flow statement for the previous period.
*Advance from customer includes the amount relating to a five year Advance Payment and Supply Agreement (âAPSAâ) agreement with Duferco S.A. for supply of Steel Products. Duferco S.A has provided an interest bearing advance amount of US $ 700 million under this agreement. The advance and interest will be adjusted by export of steel products to Duferco S.A .
The credit period on sales of goods ranges from 7 to 60 days with or without security.
As at 31 March 2019, Rs. 82 crore (previous Rs. 78 crores) was recognised as provision for allowance for doubtful debts on trade receivables.
Contract liabilities include long term and short term advances received for sale of goods. The outstanding balances of these accounts increased in due to the continuous increase in the customer base. Long term advances is detailed in note 23 of the annual standalone financial statements.
Amount of revenue recognized from amounts included in the contract liabilities at the beginning of the year Rs. 232 crores (previous year Rs.260 crores) and performance obligations satisfied in previous years Rs. NIL (previous year Rs.NIL).
Out of the total contract liabilities outstanding as on 31 March 2019, Rs.986 crores will be recognized by 31 March 2020, and remaining thereafter.
The Company does not have any significant adjustments between the contracted price and revenue recognized in the Statement of profit and loss account.
3. Segment reporting
The Company is in the business of manufacturing steel products having similar economic characteristics, primarily with operations in India and regularly reviewed by the Chief Operating Decision Maker for assessment of Companyâs performance and resource allocation.
The information relating to revenue from external customers and location of non-current assets of its single reportable segment has been disclosed as below
Revenue from operations have been allocated on the basis of location of Customers.
b) Non-current assets
All non-current assets other than financial instruments of the company are located in India.
4. Income tax
Indian companies are subject to Indian income tax on a standalone basis. For each fiscal year, the entity profit or loss is subject to the higher of the regular income tax payable or the Minimum Alternative Tax (âMATâ).
Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India adjusted in accordance with the provisions of the (Indian) Income Tax Act, 1961 Statutory income tax is charged at 30% plus a surcharge and education cess.
MAT is assessed on book profits adjusted for certain items as compared to the adjustments followed for assessing regular income tax under normal provisions. MAT for the fiscal year 2018-19 is 21.55%. MAT paid in excess of regular income tax during a year can be set off against regular income taxes within a period of fifteen years succeeding the fiscal year in which MAT credit arises subject to the limits prescribed.
Business loss can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period
There are certain income-tax related legal proceedings which are pending against the company. Potential liabilities, if any have been adequately provided for, and the company does not currently estimate any probable material incremental tax liabilities in respect of these matters.
A. Deferred tax liabilities (net)
Significant components of deferred tax assets/(liabilities) recognised in the financial statements are as follows:
The Company expects to utilize the MAT credit within a period of 15 years.
Deferred tax asset on long term capital losses of Rs. 203 crores and Rs. 2,025 crores expiring in fiscal year 2021-22 and 2024-25 respectively has not been recognised in the absence of probable future taxable capital gains.
Deferred tax asset on short term capital losses of Rs. 689 crores expiring in fiscal year 2024-25 has not been recognised in the absence of probable future taxable capital gains
5. The Company makes monthly contributions to provident fund managed by JSW Steel EPF Trust for qualifying Vijayanagar employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. During the year, the Company contributed Rs. 20 crores (FY 2017-18: Rs. 17 crores).
6. The Company maintains gratuity trust for the purpose of administering the gratuity payment to its employees (JSW Steel Group Gratuity Trust and JSW Steel Limited Employee Gratuity Fund). During the year, the Company contributed Rs. 3 crores (FY 2017-18: Rs. 13 crores).
7. In view of the uncertainty involved in collectability, revenue as interest income of Rs. 454 crores have not been recognised on loan provided to certain overseas subsidiaries.
8. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.
9. The remuneration includes perquisite value of ESOPs in the year it is exercised â Nil (previous year Rs. 32 crores). The Company has recognised an expenses of Rs. 4 crores (previous year Rs. 2 crores) towards employee stock options granted to Key Managerial Personnel. The same has not been considered as managerial remuneration of the current year as defined under Section 2(78) of the Companies Act, 2013 as the options have not been exercised.
10. Dividend paid to key management personnel is Rs.0.14 crores (previous year Rs. 0.09 crores), not included above.
11. The Independent Non-Executive Directors are paid remuneration by way of commission and sitting fees. The commission payable to the Non-Executive Directors is based on the number of meetings of the Board attended by them and their Chairmanship/Membership of Audit Committee during the year, subject to an overall ceiling of 1% of the net profits approved by the Members. The Company pays sitting fees at the rate of Rs. 20,000/- for each meeting of the Board and sub-committees attended by them. The amount paid to them by way of commission and sitting fees during FY 2018-19 is Rs. 3 crores (FY 2017-18 is Rs. 4 crores), which is not included above.
Terms and conditions Sales:
The sales to related parties are made on terms equivalent to those that prevail in armâs length transactions and in the ordinary course of business. Sales transactions are based on prevailing price lists and memorandum of understanding signed with related parties. For the year ended 31st March 2019, the Company has not recorded any impairment of receivables relating to amounts owed by related parties.
Purchases:
The purchases from related parties are made on terms equivalent to those that prevail in armâs length transactions and in the ordinary course of business. Purchase transactions are based on made on normal commercial terms and conditions and market rates.
Loans to overseas subsidiaries:
The Company had given loans to subsidiaries for general corporate purposes. The loan balances as at 31st March, 2019 was Rs. 8,116 crores (As on 31st March, 2018: Rs. 5,404 crores). These loans are unsecured and carry an interest rate ranging from LIBOR 400-530 basis points and repayable within a period of three years.
Guarantees to subsidiaries:
Guarantees provided to the lenders of the subsidiaries are for availing term loans and working capital facilities from the lender banks.
The transactions other than mentioned above are also in the ordinary course of business and at armsâ length basis.
The Company maintains gratuity trust for the purpose of administering the gratuity payment to its employees (JSW Steel Group Gratuity Trust and JSW Steel Limited Employee Gratuity Fund). As on 31st Marâ19, the fair value of plan assets was as Rs. 68 crores (As at 31st Marâ18: Rs. 65 crores).
a) Excise duty cases includes disputes pertaining to availment of CENVAT credit, valuation methodologies, classification of gases under chapter heading.
b) Custom duty cases includes disputes pertaining to import of Iron ore fines and lumps under wrong heading, utilisation of SHIS licences for clearance of imported equipment, payment of customs duty Steam Coal through Krishnapatnam Port and anti-dumping duty on Met Coke used in Corex.
c) Sales Tax/ VAT/ Special Entry tax cases includes disputes pertaining to demand of special entry tax in Karnataka and demand of cess by department of transport in Goa.
d) Service Tax cases includes disputes pertaining to availment of service tax credit on ineligible services, KKC amount paid but no credit not availed, denial of credit distributed as an ISD, service tax on railway freight not taken as per prescribed documents.
e) Income Tax cases includes disputes pertaining to transfer pricing, deduction u/s 80-IA and other matters.
f) Levies by local authorities - Statutory cases includes disputes pertaining to payment of water charges and enhanced compensation.
g) Levies relating to Energy / Power Obligations cases includes disputes pertaining to uninterrupted power charges by Karnataka Power Transmission Company Ltd., belated payment surcharge, claims for the set off of renewable power obligations against the power generated in its captive power plants and dues relating to additional surcharge imposed on captive consumption by Maharashtra State Electricity Distribution Company Ltd.
h) Miscellaneous cases includes provident fund relating to contractors.
i) Claims by Suppliers and other parties includes quality claims issues raised by suppliers and others.
j) There are several other cases which has been determined as remote by the Company and hence not been disclosed above.
In response to a petition filed by the iron ore mine owners and purchasers (including the Company) contesting the levy of Forest Development Tax (FDT) on iron ore on the ground that the State does not have jurisdiction to legislate in the field of major minerals which is a central subject, the Honourable High Court of Karnataka vide its judgement dated 3 December 2015 directed refund of the entire amount of FDT collected by Karnataka State Government on sale of iron ore by private lease operators and National Mineral Development Corporation Limited (NMDC). The Karnataka State Government has filed an appeal before the Supreme Court of India (âSCIâ). SCI has not granted stay on the judgement but stayed refund of FDT. The matter is yet to be heard by SCI. Based on merits of the case and supported by a legal opinion, the Company has not recognised provision for FDT of Rs. 1,043 crores (including paid under protest - Rs. 665 crores) and treated it as a contingent liability.
The State of Karnataka on 27 July 2016, has amended Section 98-A of the Forest Act retrospectively substituting the levy as Forest Development Fee (FDF) instead of FDT. In response to the writ petition filed by the Company and others, the Honourable High Court of Karnataka has vide its order dated 4 October 2017, held that the amendment is ultra-vires the Constitution of India and directed the State Government to refund the FDF collected. The State Government has filed an appeal before the SCI, and based on merits of the case duly supported by a legal opinion and a favorable order from the High Court, the Company has not recognised provision for FDF amount of Rs. 1,117 crores (including paid under protest - Rs.255 crores) pertaining to the private lease operators S NMDC and treated it as contingent liability.
(iii) Supreme Court (SC) passed a judgement dated 28 February 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the EPF Act. There are numerous interpretative issues relating to the Supreme Court (SC) judgement including the effective date of application. The Company continues to assess any further developments in this matter for the implications on financial statements, if any.
12. Financial guarantees
The Company has issued financial guarantees to banks on behalf of and in respect of loan facilities availed by its group companies.
Other commitments:
(a) The Company from time to time provides need based support to subsidiaries and joint ventures entity towards capital and other requirements.
(b) The Company entered a five year Advance Payment and Supply Agreement (âAPSAâ) agreement with Duferco S.A. (âDSAâ) for supply of Steel Products. Duferco S.A has provided an interest bearing advance amount of US $ 700 million under this agreement, secured by committed export of steel products to Duferco S.A .
(c) The Company has imported capital goods under the export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate. These benefits are subject to future exports within the stipulated year. Such export obligations at year end aggregate to
(d) The Company has given guarantees aggregating Rs. 127 crores (previous year Rs. 127 crores) on behalf of subsidiaries to Commissioner of Customs in respect of goods imported.
13. In assessing the carrying amounts of Investments in and loans / advances (net of impairment loss / loss allowance) to certain subsidiaries and a Joint Venture and financial guarantees to certain subsidiaries (listed below), the Company considered various factors as detailed there against and concluded they are recoverable.
(a) Investments aggregating to Rs. 259 crores (Rs. 259 crores as at March 31, 2018) in equity and preference shares of JSW Steel (Netherlands) B.V (âNBVâ), loans of Rs. 848 crores (Rs. 209 crores as at March 31, 2018), Rs. 5,332 crores (Rs. 4,361 crores as at March 31, 2018) and Rs. 739 crores (Rs. 678 crores as at March 31, 2018) to NBV, Periama Holdings LLC (âPHLâ) and JSW Panama Holdings Corporation respectively and the financial guarantees of Rs. 1,410 crores (Rs. 1,626 crores as at March 31, 2018) and Rs. NIL (Rs. 85 crores as at March 31, 2018) on behalf of PHL and JSW Steel (USA) Inc. respectively - Estimate of values of the businesses and assets by independent external valuers based on cash flow projections/implied multiple approach. In making the said projections, reliance has been placed on estimates of future prices of iron ore and coal, mineable resources, and assumptions relating to operational performance including significant improvement in capacity utilisation and margins based on forecasts of demand in local markets, and capacity expansion / availability of infrastructure facilities for mines.
(b) Equity shares of JSW Steel Bengal Limited, a subsidiary (carrying amount: Rs. 446 crores (Rs. 442 crores as at March 31, 2018)) - Evaluation of the status of its integrated Steel Complex (including power plant) to be implemented in phases at Salboni of district Paschim Medinipur in West Bengal by the said subsidiary and the plans for commencing construction of the said complex.
(c) Equity shares of JSW Jharkhand Steel Limited, a subsidiary (carrying amount: Rs. 88 crores as at March 31, 2019; Rs. 84 crores as at March 31, 2018) - Evaluation of the status of its integrated Steel Complex to be implemented in phases at Ranchi, Jharkhand by the said subsidiary and the plans for commencing construction of the said complex.
(d) Equity shares of Peddar Realty Private Limited (PRPL) (carrying amount of investments: Rs. 24 crores as at March 31, 2019; Rs. 24 crores as at March 31, 2018, and loans of Rs. 155 crores as at March 31, 2019; Rs. 155 crores as at March 31, 2018) -Valuation by an independent valuer of the residential complex in which PRPL holds interest.
(e) Investment of Rs. 4 crores (Rs. 4 crores as at March 31, 2018) and loan of Rs. 147 crores (Rs. 137 crores as at March 31, 2018) relating to JSW Natural Resources Mozambique Limitada and JSW ADMS Carvo Limitada (step down subsidiaries) - Assessment of minable reserves by independent experts based on the plans to commence operations after mining lease arrangements are in place for which application has been submitted to regulatory authorities, and infrastructure is developed.
(f) Equity shares of JSW Severfield Structures Limited, a joint venture (carrying amount: Rs. 198 crores as at March 31, 2019; Rs. 160 crores as at March 31, 2018) - Cash flow projections approved by the said JV which are based on estimates and assumptions relating to order book, capacity utilisation, operational performance, market prices of materials, inflation, terminal value, etc.
14.
a. On 15 June 2018, the Company completed acquisition of 100% equity stake in Acero Junction Holdings, Inc (Acero) for a cash consideration of Rs. 536 crores (USD 80.85 million). Acero, along with its wholly owned subsidiary JSW Steel USA Ohio, Inc (Formerly known as Acero Junction, Inc.).
b. Pursuant to the Corporate Insolvency Resolution process for Monnet Ispat S Energy Limited (âMIELâ) under the Insolvency Bankruptcy Code, 2016 initiated on 18 July 2017, the National Company Law Tribunal (âNCLTâ) on 24 July 2018 (Order date) approved (with modifications) the resolution plan submitted by the consortium of JSW Steel Limited and AION Investments Private II Limited. The consortium completed the acquisition of MIEL through their jointly controlled entity Creixent Special Steels Limited (âCSSLâ) on 31 August 2018. The Company has made an investment of Rs. 375 crores through equity and redeemable preference shares in CSSL to acquire joint control in MIEL and have an effective shareholding of 23.1% in MIEL.
c. The Resolution Plan submitted by the Company for Vardhman Industries Limited (VIL) was approved with some modifications, by the Honâble National Company Law Tribunal (NCLT) New Delhi, by its order dated April 16, 2019. The Company filed an appeal challenging the said NCLT Order before National Company Law Appellate Tribunal (NCLAT), in which an interim order was passed on April 30, 2019 suggesting that the Resolution Plan as approved by the Committee of Creditors may be implemented subject to the decision of the appeal. The Company further filed an Appeal before the Honâble Supreme Court against the interim order of NCLAT in which the Honâble Supreme Court vide an order dated May 10, 2019 has ordered status quo and the matter is posted for hearing before the NCLAT on May 28, 2019.
d. On 24 July 2018, the Company through its wholly owned subsidiary in Italy, JSW Steel Italy S.r.l, completed acquisition of 100% shares each of Aferpi S.p.A and Piombino Logistics S.p.A and 69.27% of the shares of GSI Lucchini S.p.A (collectively referred to as âTargetsâ) for a consideration of Rs. 489 crores (Euro 60.70 million) towards acquisition of equity shares and Rs. 100 crores (Euro 12.38 million) towards acquisition of loans provided by erstwhile shareholders of the targets.
e. On 23 October 2018, the Company has acquired an additional stake of 60.004% of the share capital of Dolvi Minerals and Metals Private Limited (âDMMPLâ), a subsidiary, for a cash consideration of Rs.109 crores. Pursuant to the acquisition of shares of DMMPL, DMMPL along with its wholly owned subsidiary Dolvi Coke Projects Limited (âDCPLâ), have become wholly owned subsidiaries of the Company.
15. The Board of Directors of the Company at their meeting held on 25 October 2018, considered and approved the Scheme of Amalgamation pursuant to sections 230 - 232 and other applicable provisions of the Companies Act, 2013, providing for the merger of its wholly owned subsidiaries, Dolvi Minerals and Metals Private Limited, Dolvi Coke Projects Limited, JSW Steel Processing Centre Limited, and JSW Steel (Salav) Limited with the Company. The said scheme has been filed with NCLT and the merger is subject to regulatory approvals.
16. Previous year figures have been re-grouped /re-classified wherever necessary
17. Subsequent Events (refer note 54 of the annual standalone financial statements)
a) The Company has raised US$ 500 million in April 2019 by the allotment of fixed rate senior unsecured notes (âNotesâ) in accordance with Regulation S of the U.S. Securities Act, 1933 as amended, and applicable Indian regulations. The Notes are listed on Singapore Exchange Securities Trading Limited.
b) On 24 May 2019 the board of directors recommended a final dividend of Rs. 4.10 per equity share be paid to shareholders for financial year 2018-19, which is subject to approval by the shareholders at the Annual General Meeting to be held on 25 July 2019. If approved, the dividend would result in a cash outflow of Rs. 1,195 crores inclusive of dividend distribution tax of Rs. 204 crores.
New Standard Ind AS 116 Leases
Ind AS 116 Leases was notified by MCA on 30 March 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of âlow-valueâ assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset.
Lessees will be also required to remeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognise the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.
Lessor accounting under Ind AS 116 is substantially unchanged from todayâs accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases.
The Company is in the process of evaluating the effect of these amendments on the financial statements. Amendments to other Ind AS
There are few amendments to other Ind AS such as Ind AS 109, Financial Instruments , Ind AS 12, Income Taxes Ind AS 19, Employee Benefits; Ind AS 28, Investments in Associates and Joint Ventures
The Company is in the process of evaluating the effect of these amendments on the financial statements.
Mar 31, 2018
Notes:
1. As the future liability for gratuity is provided on an actuarial basis for the company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.
2. The Company has accrued Rs, 2 crores (FY 2016-17: Rs, 1 crores) in respect of employee stock options granted to Key Managerial Personnel. The same has not been considered as managerial remuneration of the current year as defined under Section 2(78) of the Companies Act, 2013 as the options have not been exercised.
Terms and conditions Sales:
The sales to related parties are made on terms equivalent to those that prevail in arm''s length transactions and in the ordinary course of business. Sales transactions are based on prevailing price lists and memorandum of understanding signed with related parties. For the year ended 31st March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties.
Purchases:
The purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions and in the ordinary course of business. Purchase transactions are based on normal commercial terms and conditions and market rates.
Loans to Overseas Subsidiaries:
The Company had given loans to subsidiaries for general corporate purposes. The loan balances as at 31st March, 2018 was Rs, 5,403 crores (As on 31st March, 2017: Rs, 2,689 crores). These loans are unsecured and carry an interest rate ranging from LIBOR 400-530 basis points and repayable within a period of three years.
Guarantees to Subsidiaries:
Guarantees provided to the lenders of the subsidiaries are for availing term loans and working capital facilities from the lender banks.
Notes:
The Company maintains gratuity trust for the purpose of administering the gratuity payment to its employees (JSW Steel Group Gratuity Trust and JSW Steel Limited Employee Gratuity Fund). As on 31 March 2018, the fair value of plan assets was as Rs, 65 crores (31 March 2017: Rs, 53 crores).
9. Contingent liabilities
(refer note 45 of the annual standalone financial statements)
# Rs, 0.05 Crore
a) Excise duty cases includes disputes pertaining to a ailment of CENVAT credit, valuation methodologies, classification of gases under chapter heading.
b) Custom duty cases includes disputes pertaining to import of Iron ore fines and lumps under wrong heading, utilisation of SHIS licences for clearance of imported equipment, payment of customs duty on Steam Coal through Krishnapatnam Port and anti-dumping duty on Met Coke used in Corex.
c) Sales Tax/ VAT/ Special Entry tax cases includes disputes pertaining to demand of special entry tax in Karnataka and demand of cess by department of transport in Goa.
d) Service Tax cases includes disputes pertaining to a ailment of service tax credit on ineligible services, KKC amount paid but no credit not availed, denial of credit distributed as an ISD, service tax on railway freight not taken as per prescribed documents.
e) Income Tax cases includes disputes pertaining to deduction u/s 80-IA and other matters.
f) Levies by local authorities cases includes disputes pertaining to uninterrupted power charges by Karnataka Power Transmission Company Ltd., payment of water charges, belated payment surcharge, enhanced compensation and claims for the set off of renewable power obligations against the power generated in its captive power plants.
g) Miscellaneous cases include provident fund relating to contractors.
h) Claims by Suppliers and other parties includes quality claims issues raised by suppliers and others.
i) There are several other cases which has been determined as remote by the Company and hence not been disclosed above.
I n response to a petition filed by the iron ore mine owners and purchasers (including JSW Steel Limited [the Company]) contesting the levy of Forest Development Tax (FDT) on iron ore on the ground that the State does not have jurisdiction to legislate in the field of major minerals which is a central subject, the Honourable High Court of Karnataka vide its judgment dated 3 December 2015 directed refund of the entire amount of FDT collected by Karnataka State Government on sale of iron ore by private lease operators and National Mineral Development Corporation Limited (NMDC). The Karnataka State Government has filed an appeal before the Supreme Court of India ("SCI"). SCI has not granted stay on the judgment but stayed refund of FDT amounting to Rs, 1,517 crores. The matter is yet to be heard by SCI. Based on merits of the case and supported by a legal opinion, the Company has not recognized provision for FDT of Rs, 1,043 crores and treated it as a contingent liability.
The State of Karnataka on 27 July 2016, has amended Section 98-A of the Forest Act retrospectively substituting the levy as Forest Development Fee (FDF) instead of FDT. In response to the writ petition filed by the Company and others, the Honourable High Court of Karnataka has vide its order dated 4 October 2017, held that the amendment is ultra-vires the Constitution of India and directed the State Government to refund the FDF collected. The State Government has filed an appeal before the SCI, and based on merits of the case duly supported by a legal opinion and a favorable order from the High Court, the Company has not recognized provision for FDF amount of Rs, 756 crores (including paid under protest - '' 255 crores) pertaining to the private lease operators & NMDC and treated it as contingent liability.
3. Financial Guarantees
(refer note 46 of the annual standalone financial statements)
The Company has issued financial guarantees to banks on behalf of and in respect of loan facilities availed by its group companies.
Other commitments:
(a) The Company from time to time provides need based support to subsidiaries and joint ventures entity towards capital and other requirements.
(b) The Company has imported capital goods under the export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate. These benefits are subject to future exports within the stipulated year. Such export obligations at year end aggregate to
4. During the year a subsidiary of the Company has surrendered one of its iron ore mine in Chile considering its economic viability and accordingly the Company has reassessed the recoverability of the loans given to and investments made in subsidiaries and recognized an impairment provision of Rs, 234 crores which has been disclosed as an exceptional item.
(refer note 50 of the annual standalone financial statements)
5. I n assessing the carrying amounts of Investments in and loans / advances (net of impairment loss / loss allowance) to certain subsidiaries and a Joint Venture and financial guarantees to certain subsidiaries (listed below), the Company considered various factors as detailed there against and concluded they are recoverable.
(a) Investments aggregating to Rs, 259 crores (Rs, 295 crores as at March 31, 2017) in equity and preference shares of NBV, loans of Rs, 209 crores (Rs, 105 crores as at March 31, 2017), Rs, 4,361 crores (Rs, 1,922 crores as at March 31, 2017) and Rs, 678 crores (Rs, 840 crores as at March 31, 2017) to JSW Steel (Netherlands) B.V., Periama Holdings LLC and JSW Panama Holdings Corporation respectively and the financial guarantees of Rs, 1,626 crores (Rs, 3,177 crores as at March 31, 2017) and Rs, 85 crores (Rs, 199 crores as at March 31, 2017) on behalf of PHL and JSU respectively - Estimate of values of the businesses and assets by independent external valuers based on cash flow projections/implied multiple approach. In making the said projections, reliance has been placed on estimates of future prices of iron ore and coal, mineable resources, and assumptions relating to operational performance including significant improvement in capacity utilization and margins based on forecasts of demand in local markets, and availability of infrastructure facilities for mines.
(b) Equity shares of JSW Steel Bengal Limited, a subsidiary (carrying amount: Rs, 442 crores (Rs, 438 crores as at March 31, 2017)) - Evaluation of the status of its integrated Steel Complex (including power plant) to be implemented in phases at Salboni of district Paschim Medinipur in West Bengal by the said subsidiary, and the projections relating to the said complex considering estimates in respect of future raw material prices, foreign exchange rates, operating margins, etc. and the plans for commencing construction of the said complex.
(c) Equity shares of JSW Jharkhand Steel Limited, a subsidiary (carrying amount: Rs, 84 crores as at March 31, 2018; Rs, 80 crores as at March 31, 2017) - Evaluation of the status of its integrated Steel Complex to be implemented in phases at Ranchi, Jharkhand by the said subsidiary, and the projections relating to the said complex considering estimates in respect of future raw material prices, foreign exchange rates, operating margins, etc. and the plans for commencing construction of the said complex.
(d) Equity shares of Peddar Realty Private Limited (PRPL) (carrying amount of investments: Rs, 24 crores as at March 31, 2018; Rs, 24 crores as at March 31, 2017, and loans of Rs, 155 crores as at March 31, 2018; Rs, 157 crores as at March 31, 2017) -Valuation by an independent valuer of the residential complex in which PRPL holds interest.
(e) Investment ofRs, 4 crores (Rs, 4 crores as at March 31, 2017) and loan of Rs, 137 crores (Rs, 117 crores as at March 31, 2017) relating to JSW Natural Resources Mozambique Limitada and JSW ADMS Carvo Limitada (step down subsidiaries) - Assessment of minable reserves by independent experts and cash flow projections based on the plans to commence operations after mining lease arrangements are in place for which application has been submitted to regulatory authorities, and infrastructure is developed.
(f) Equity shares of JSW Sever field Structures Limited, a joint venture (carrying amount: Rs, 160 crores as at March 31, 2018; Rs, 115 crores as at March 31, 2017) - Cash flow projections approved by the said JV which are based on estimates and assumptions relating to order book, capacity utilization, operational performance, market prices of materials, inflation, terminal value, etc. (refer note 51 of the annual standalone financial statements)
6. Standards issued but not yet effective
(refer note 54 of the annual standalone financial statements)
In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) Amendment Rules, 2018, notifying Ind AS 115 ''Revenue from Contracts with Customers'' (New Revenue Standard), which replaces Ind AS 11 ''Construction Contracts'' and Ind AS 18 ''Revenue''. The core principle of the New Revenue Standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Some of the key changes introduced by the New Revenue Standard include additional guidance for multiple-element arrangements, measurement approaches for variable consideration, adjustments for time value of money etc. Significant additional disclosures in relation to revenue are also prescribed. The New Revenue Standard also provides two broad alternative transition options - Retrospective Method and Cumulative Effect Method - with certain practical expedients available under the Retrospective Method. The Company is in the process of evaluating the impact of the New Revenue Standard on the present and future arrangements and shall determine the appropriate transition option once the said evaluation has been completed.
Also Appendix B to Ind AS 21, foreign currency transactions and advance consideration was notified along with the same notification which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The Company is in the process of evaluating the effect of amendment on its financial statements.
Other amendments
Following amendments to other Ind AS which are issued but are not effective in FY 2017-18
(a) Amendments to Ind AS 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112.
(b) Amendments to Ind AS 12 Recognition of Deferred Tax Assets for Unrealised Losses
(c) Transfers of Investment Property â Amendments to Ind AS 40
(d) I nd AS 28 Investments in Associates and Joint Ventures - Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice
The Company is in the process of evaluating the effect of these amendments on the financial statements.
Mar 31, 2017
Notes:
1. To comply with the Companies (Accounting Standard) Rules, 2006, certain account balances have been regrouped as per the format prescribed under Division II of Schedule III to the Companies Act, 2013.
2. Finance lease arrangements:
In respect of certain long-term arrangements, existing at the date of transition and identified to be in the nature of finance lease where the Company is lessee, the underlying assets and corresponding finance lease obligation determined at the inception of respective arrangements have been recognized on the date of transition with the adjustment of difference, if any, in the opening retained earnings, resulting into increase in finance cost and depreciation charge and reduction in the cost of goods / services procured and valuation of underlying inventories. Such arrangements were recognized as per their legal form under the previous GAAP
3. Fair valuation of investments:
Investments in preference shares have been measured at fair value through profit or loss as against cost less diminution of other than temporary nature, if any, under the previous GAAP
Certain equity investments (other than investments in subsidiaries, joint ventures and associates) have been measured at fair value through other comprehensive income (FVTOCI).
The difference between the fair value and previous GAAP carrying value on transition date has been recognized as an adjustment to opening retained earnings / separate component of other equity.
4. Look through approach for employee welfare trust
Employee welfare trust, financed through interest free loan by the Company and warehousing the shares which have not vested yet, for distribution to employees of the Company, has been consolidated on line by line basis by reducing from equity share capital of the Company the face value of such treasury shares held by the trust and adjusting the difference, if any, into opening retained earnings.
5. Preference shares considered as borrowings:
Cumulative redeemable preference shares issued by the Company have been classified as borrowings and recognized at amortized cost on transition date as against part of Equity share capital under previous GAAP The difference on the transition date has been recognized in opening retained earnings net of related deferred taxes. Interest charge at effective interest rate on such borrowings has been recognized as finance cost in subsequent periods as against appropriation of dividend at coupon rate from reserves under the previous GAAP
6. Financial liabilities and related transaction costs:
Borrowings and other financial liabilities which were recognized at historical cost under previous GAAP have been recognized at amortized cost under IND AS with the difference been adjusted to opening retained earnings.
Under previous GAAP, transaction costs incurred in connection with borrowings were amortized equally over the tenure of the borrowings. Under IND AS, transaction costs are deducted from the initial recognition amount of the financial liability and charged over the tenure of borrowing using the effective interest method.
Difference in the un-amortized borrowing cost as per IND AS and previous GAAP on transition date has been adjusted to the cost of asset under construction or opening retained earnings, as applicable.
7. Financial assets at amortized cost:
Certain financial assets held on with an objective to collect contractual cash flows in the nature of principal and interest have been recognized at amortized cost on transition date as against historical cost under the previous GAAP with the difference been adjusted to the opening retained earnings.
8. Deferred tax as per balance sheet approach:
Under previous GAAP, deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profits for the period. Under IND AS, deferred tax is recognized following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional adjustments has also lead to recognition of deferred taxes on new temporary differences.
9. Dividend:
Under previous GAAP, dividends proposed by the board of directors after balance sheet date but before the approval of the financial statements were considered as adjusting events. However under IND AS, such dividends are recognized when the same is approved by the shareholders in the general meeting.
Accordingly the liability for proposed dividend recognized as on transition date has been reversed with corresponding adjustment to opening retained earnings and dividend in the subsequent period has been recognized in the year of approval in the general meeting.
10. Excise duty:
Under previous GAAP, revenue from sale of goods was presented net of excise duty whereas under IND AS the revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the Statement of Profit and Loss as part of expenses.
11. Defined benefit liabilities:
Under IND AS, Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined liability, are recognized in other comprehensive income instead of profit or loss in previous GAAP
12. Government grant:
Government grant outstanding as on transition date relating to the purchase of fixed asset and conditional upon fulfillment of future export obligations has been recognized as deferred income under Ind AS with the corresponding adjustment to the carrying amount of Property, plant and equipment (net of cumulative depreciation impact) and opening retained earnings.
13. Other comprehensive income:
Under IND AS, all items of income and expense recognized in the period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss and "other comprehensive income" includes remeasurements of defined benefit plans, foreign currency monetary item translation difference account, effective portion of gains and losses on cash flow hedging instruments and fair value gain or losses on FVCTOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP
Mar 31, 2016
1. CONTINGENT LIABILITIES:
a) Bills discounted with re-course Rs. Nil (previous year Rs. 144.98
crores).
b) i) Guarantees provided on behalf of subsidiaries Rs. 2,124.11
crores (previous year Rs. 1,273.97 crores).
ii) Standby letter of credit facility availed from resident Indian
Banks secured by specific fixed assets of the Company in relation to
overseas long-term borrowing by JSW Steel Holding (USA) Inc and JSW
Steel (Netherlands) B.V. (wholly owned subsidiaries of the Company) is
Rs. 2,653.32 crores (previous year Rs. 2,503.63 crores) and Rs. 530.66
crores (previous year Rs. 1439.59 crores) respectively.
iii) Provision of Rs. 957.85 crores (previous year Rs. Nil) has been
created against aforesaid guarantees and standby letter of credit
facilities (refer note 25(4)(a)).
c) Disputed claims/levies (excluding interest, if any), in respect of:
(i) Excise duty Rs. 305.39 crores (previous year Rs. 466.88 crores);
(ii) Custom duty Rs. 407.92 crores (previous year Rs. 437.03 crores);
(iii) Income tax Rs. 170.68 crores (previous year Rs. 170.68 crores);
(iv) Sales tax / Special entry tax Rs. 155.94 crores (previous year Rs.
155.94 crores);
(v) Service tax Rs. 142.06 crores (previous year Rs. 146.54 crores);
(vi) Miscellaneous Rs. 0.05 crores (previous year Rs. 0.05 crores);
(vii) Levies by local authorities Rs. 3.04 crores (previous year Rs.
3.04 crores); and
(viii) Claims by suppliers and other parties Rs. 109.98 crores
(previous year Rs. 350.80 crores)
d) Arrears of fixed cumulative dividend on preference shares (CPRS) Rs.
0.56 crores (previous year Rs. 0.51 crores).
e) Claims related to Forest Development Tax Rs. 966.98 crores (previous
year Rs. 909.38 crores). (including FDT amount paid under protest Rs.
665 crores (previous year Rs. 665 crores)). In 2008, the State
Government of Karnataka levied Forest Development Tax (FDT) treating
iron ore as forest produce. In response to writ petitions filed by
various stakeholders, the Hon''ble High Court of Karnataka granted
partial relief vide judgement dated December 3, 2015. In view thereof,
the State Government of Karnataka has stopped levying FDT with effect
from January 29, 2016. The State Government of Karnataka has filed an
appeal before the Hon''ble Supreme Court of India against the judgement.
The Hon''ble Supreme Court while hearing the petition on April 12, 2016
admitted the appeal, and granted an interim stay on refund of the FDT.
The matter is posted for final arguments in the month of August 2016.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 5,064.37 crores
(previous year Rs. 6,177.96 crores).
3. OTHER COMMITMENTS :
(a) The Company from time to time provides need based support to
subsidiaries and joint ventures entity towards capital and other
requirements.
(b) The Company has imported capital goods under the export promotion
capital goods scheme to utilise the benefit of a zero or concessional
customs duty rate. These benefits are subject to future exports within
the stipulated period. Such export obligations at year end aggregate to
Rs. 1,316.22 crores (previous year Rs. 628.25 crores).
4. EXCEPTIONAL ITEMS COMPRISE PROVISION TOWARDS :
a) (i) Rs. 982.37 crores (Rs. 333.75 crores for the year ended 31
March, 2015) for ''other than temporary'' diminution in value of
investments relating to JSW Steel USA Inc., JSW Panama Holding
Corporation, and Periama Holding LLC, subsidiaries of the Company; (ii)
Rs. 3,915.30 crores (Rs. nil for the year ended 31 March, 2015) for
loans to the said subsidiaries and interest thereon considered doubtful
of recovery; and (iii) Rs. 957.85 crores (Rs. nil for the year ended 31
March, 2015)*; towards certain guarantees for borrowings by the said
subsidiaries, which provisions are recognised based on estimate of
values of the businesses/ assets of the said subsidiaries by
independent External Valuers and based on cash flow projections. In
making the said projections, reliance has been placed on estimates in
respect of future prices of coal and iron ore, mineable resources, and
assumptions relating to operational performance including improvement
in capacity utilisation of the plants and margins, and availability of
infrastructure for mines.
* amount used/unused amount reversed during the period Rs. nil
b) Pursuant to the order of the Honourable Supreme Court dated 24
September 2014 regarding cancellation of the allotment of coal blocks,
the Company has made an assessment of investments in and loans and
advances to the subsidiaries, joint ventures and associates affected by
the said order and recognised provision of Rs. 4.19 crores (Rs. 21.20
crores for the year ended 31 March 2015) against carrying amount of
investments as Exceptional Item during the year considering the
principle of conservatism.
c) Based on careful evaluation of estimated projections, the management
has recognised provision for diminution of other than temporary nature
of Rs. 0.74 crores (Previous year Rs. 41.35 crores) in the carrying
amount of investment in certain subsidiaries as Exceptional Item during
the year.
5. In respect of certain investments/ loans and advances, following
basis/assumptions/estimates have been considered in concluding that
there is no further decline, other than temporary, in the value of the
investments and that the loans / advances are fully recoverable:
a) Equity shares of JSW Steel Bengal Limited, a subsidiary (carrying
amount: Rs. 436.15 crores (net of provision) as at March 31, 2016).
Evaluation of the status of its integrated Steel Complex (including
power plant) to be implemented in phases at Salboni of district Paschim
Medinipur in West Bengal by the said subsidiary, and the projections
relating to the said complex considering estimates in respect of future
raw material prices, foreign exchange rates, operating margins, etc.
and the plans for commencing construction of the said complex.
b) Equity shares of Peddar Realty Private Limited (PRPL) (carrying
amount of investments: Rs. 56.72 crores (net of provision) as at March
31, 2016), and recoverability of loans of Rs. 158.18 crores as at March
31, 2016.
Valuation by an independent valuer of the residential complex in which
PRPL holds interest.
c) Investment of Rs. 4.51 crores (net of provision) and loan of Rs.
112.42 crores as at March 31, 2016 relating to JSW Natural Resources
Mozambique Limitada and JSW ADMS Carvo Limitada (step down
subsidiaries).
Assessment of minable reserves by independent experts and cash flow
projections based on the plans to commence operations after mining
lease arrangements are in place for which application has been
submitted to regulatory authorities and infrastructure is developed.
d) Equity shares of JSW Severfield Structures Limited, a joint venture
(JV) (carrying amount: Rs. 115.44 crores as at March 31, 2016).
Cash fow projections approved by the said JV which are based on
estimates and assumptions relating to order book, capacity utilisation,
operational performance, market prices of materials, inflation,
terminal value, etc.
6. (a) Pursuant to the requirement under Schedule II to the Companies
Act, 2013 the Company has, based on the external technical advice,
effective 1 April, 2015, identified components (significant parts) of
the main asset having different useful lives as compared to the main
asset and consequently revised the estimated useful lives of Plant &
Machinery and Buildings. Accordingly, the depreciation charge for the
year ended 31 March 2016 is lower by Rs. 499.07 crores, and amount of
Rs. 109.98 crores (net of deferred tax) being effect of
componentization, where the remaining useful life of the asset was
determined to be nil, has been adjusted against the retained earnings
as per transitional provision in Note 7 (b) of Schedule II.
(b) Effective from 1 April 2014, the Company had re- worked
depreciation with reference to the estimated useful lives of fixed
assets prescribed under Schedule II to the Act or useful life of fixed
assets as per technical evaluation. As a result the charge for
depreciation was lower by Rs. 207.30 crores for the year ended March
31, 2015. Pursuant to the transition provisions prescribed in Schedule
II to the Companies Act, 2013, the Company had fully depreciated the
carrying value of assets, net of residual value, where the remaining
useful life of the asset was determined to be nil as on April 1, 2014,
and had adjusted an amount of Rs. 47.29 crores (net of deferred tax)
against the opening Surplus balance in the Statement of Profit and Loss
under Reserves and Surplus.
7. Trade receivables include Rs. 159.54 crores (previous year Rs.172.04
crores) recoverable from a customer towards supply of steel. The
Company recovered an amount of Rs. 12.50 crores from the customer
during the year ended 31 March 2016. Pursuant to the Consent Term,
fled by the Company and the customer with the Honorable Bombay High
Court and adopted by the Court as its order, the receivables of the
Company shall be secured by a first ranking pari-passu charge over the
fixed assets of the customer and shall be at par with other CDR
lenders. The process of creating charge by the Company over the
customer''s certain fixed assets has been completed and the charge
creation for the remaining fixed assets is under progress. Based on
these developments, the Company is reasonably confident about the
recoverability of the said amount.
8. DERIVATIVES:
a) The Company uses foreign currency forward contracts to hedge its
risks associated with foreign currency fluctuations relating to certain
firm commitments, highly probable forecast transactions and foreign
currency required at the settlement date of certain
receivables/payables. The use of foreign currency forward contracts is
governed by the Company''s strategy approved by the board of directors,
which provide principles on the use of such forward contracts
consistent with the Company''s risk management policy.
b) The Company also uses derivative contracts other than forward
contracts to hedge the interest rate and currency risk on capital
account. Such transactions are governed by the strategy approved by the
board of directors, which provide principles on the use of these
instruments, consistent with the Company''s risk management policy. The
Company does not use these contracts for speculative purposes.
9. RELATED PARTIES RELATIONSHIPS, TRANSACTIONS AND BALANCES :
A) LIST OF RELATED PARTIES
1 SUBSIDIARIES
JSW Steel (Netherlands) B.V.
JSW Steel (UK) Limited
Argent Independent Steel (Holdings) Limited (ceased w.e.f 17/11/2015)
JSW Steel Service Centre (UK) Limited
JSW Steel Holding (USA) Inc.
JSW Steel (USA) Inc.
Periama Holdings, LLC
Purest Energy, LLC
Meadow Creek Minerals, LLC
Hutchinson Minerals, LLC
R.C. Minerals, LLC
Keenan Minerals, LLC
Peace Leasing, LLC
Prime Coal, LLC
Planck Holdings, LLC
Rolling S Augering, LLC
Periama Handling, LLC
Lower Hutchinson Minerals, LLC
Caretta Minerals, LLC
JSW Panama Holdings Corporation
Inversiones Eroush Limitada
Santa Fe Mining
Santa Fe Puerto S.A.
JSW Natural Resources Limited
JSW Natural Resources Mozambique Limitada
JSW ADMS Carvo Lda
JSW Mali Resources SA (ceased w.e.f 18.06.2015)
JSW Steel Processing Centre Limited
JSW Bengal Steel Limited
JSW Natural Resources India Limited
Barbil Beneficiation Company Limited
Barbil Iron Ore Company Limited
JSW Jharkhand Steel Limited
JSW Steel East Africa Limited
Amba River Coke Limited
JSW Energy (Bengal) Limited
JSW Natural Resource Bengal Limited
JSW Steel Coated Products Limited
Peddar Realty Private Limited
Nippon Ispat Singapore (PTE) Limited
Erebus Limited
Arima Holding Limited
Lakeland Securities Limited
JSW Steel (Salav) Limited (w.e.f 31.10.2014)
Everbest Steel & Mining Holdings Limited (w.e.f. 13.02.2015) (ceased
w.e.f 04.12.2015)
2 ASSOCIATES
JSW Praxair Oxygen Private Limited
Dolvi Minerals & Metals Private Limited (w.e.f. 27.11.2014)
Dolvi Coke Projects Limited (w.e.f. 04.12.2014)
3 JOINT VENTURES
Vijayanagar Minerals Private Limited
Rohne Coal Company Private Limited
JSW Severfeld Structures Limited
Gourangdih Coal Limited
Toshiba JSW Power System Private Limited
MJSJ Coal Limited
GEO Steel LLC
JSW Structural Metal Decking Limited
JSW MI Steel Service Centre Private Limited
JSW Vallabh Tin Plate Private Limited (w.e.f. 07.04.2014)
4 KEY MANAGEMENT PERSONNEL (KMP)
Mr. Sajjan Jindal
Mr. Seshagiri Rao M V S
Dr. Vinod Nowal
Mr. Jayant Acharya
Mr. Rajeev Pai
Mr. Lancy Varghese
5 RELATIVE OF KEY MANAGERIAL PERSONNEL
Mr. Parth Jindal
6 ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL AND RELATIVES OF SUCH
PERSONNEL EXERCISE SIGNIFICANT INFLUENCE
JSW Energy Limited
Jindal Stainless Limited
JSW Realty & Infrastructure Private Limited
Jindal Saw Limited
Jindal Saw USA LLC
Jindal Steel & Power Limited
JSOFT Solutions Limited
Jindal Industries Private Limited
JSW Cement Limited
JSW Jaigarh Port Limited
Reynold Traders Private Limited
Raj West Power Limited
JSW Power Trading Company Limited
JSW Infrastructure Limited
South West Port Limited
JSW Techno Projects Management Limited
JSW Global Business Solutions Limited (Formerly known as Sapphire
Technologies Limited)
South West Mining Limited
JSL Architecture Limited
JSW Projects Limited
JSW Foundation
O P Jindal Foundation
Jindal Technologies & Management Services Private Limited
JSW Dharamatar Port Private Limited
Jindal Tubular (India) Limited
M/s Shadeed Iron & Steel Co. LLC
JSW Investment Private Limited
JSW IP Holdings Private Limited (w.e.f. 01.04.2015)
Epsilon Carbon Private Limited (Formerly known as AVH Private Limited)
JSW International Trade Corp PTE Limited
Heal Institute Private Limited
JSL Lifestyle Limited
Jindal Power Limited
Jindal Fittings Limited
Jindal Education Trust
10. OPERATING LEASE
A) AS LESSOR:
i. The Company has entered into lease arrangements, for renting :
- 2,279 houses (admeasuring approximately 1,410,997 square feet) at the
rate of Rs. 100/- per house per annum, for a period of 120 months.
- 9 houses (admeasuring approximately 9,027 square feet) at the rate of
Rs. 43/- per square feet per month per house, for a period of 60
months.
- Office premises (admeasuring approximately 1795 square feet) at the
rate of Rs. 146/- square feet for the period of 22 months.
The agreements are renewable at the option of the lessee after the end
of the lease term.
ii. Disclosure in respect of assets (building) given on operating
lease:
The agreements are executed for a period of 11 to 180 months with a
renewable clause and also provide for termination at will by either
party giving a prior notice period of 1 to 3 months.
(ii) The agreements for certain plant and equipment is on
non-cancellable basis for a period of 10-15 years, which are renewable
on expiry of the lease period at mutually acceptable terms.
11. THE COMPANY HAS THE FOLLOWING JOINT VENTURE INTEREST IN INDIA AS AT
31ST MARCH 2016: INTEREST AS VENTURER IN JOINTLY CONTROLLED ENTITIES
Vijayanagar Minerals Private Limited: Percentage of holding-40%
(previous year 40%) Rohne Coal Company Private Limited: Percentage of
holdingÂ49% (previous year 49%) JSW Severfield Structures Limited:
Percentage of holding-50% (previous year 50%) Gourangdih Coal Limited:
Percentage of holdingÂ50% (previous year 50%) JSW MI Steel Service
Center Private Limited: Percentage of holding-50% (previous year 50%)
JSW Vallabh Tinplate Private Limited: Percentage of holdingÂ50%
(previous year 50%)
INTEREST AS INVESTOR
MJSJ Coal Limited: Percentage of holdingÂ11% (previous year 11%)
Toshiba JSW Power Systems Private Limited: Percentage of holdingÂ2.48%
(previous year 2.48%)
15. FIGURES OF THE PREVIOUS YEAR ARE REGROUPED AND RECLASSIFIED
WHEREVER NECESSARY TO CORRESPOND TO FIGURES OF THE CURRENT YEAR.
Mar 31, 2014
Note 1
1. Contingent liabilities :
a) Bills discounted Rs. 3,285.56 crores (previous year Rs. 3,012.92
crores).
b) Guarantees provided to banks on behalf of subsidiaries Rs. 1,372.57
crores (previous year Rs. 1,223.95 crores).
c) Standby letter of credit facility availed from resident Indian Banks
secured / to be secured by specific fixed assets of the company in
relation to overseas long term borrowing by JSW Steel Holding (USA) Inc
and JSW Steel (Netherlands) B.V. (wholly owned subsidiaries of the
company) is Rs. 2,403.99 crores (previous year nil) and Rs. 480.80 crores
(previous year nil) respectively.
d) Disputed claims/levies (excluding interest, if any), in respect of:
(i) Excise duty Rs. 441.95 crores (previous year Rs. 199.82 crores); (ii)
Custom duty Rs. 460.12 crores (previous year Rs. 632.76 crores); (iii)
Income tax Rs. 1.74 crores (previous year Rs. 1.47 crores);
(iv) Sales tax / Special entry tax Rs. 223.37 crores (previous year Rs.
226.93 crores);
(v) Service tax Rs. 129.25 crores (previous year Rs. 98.10 crores);
(vi) Miscellaneous Rs. 0.05 crores (previous year Rs. 0.05 crores);
(vii) Levies by local authorities Rs. 3.04 crores (previous year Rs. 3.04
crores); and
(viii) Claims by suppliers and other parties (including for Forest
Development Tax of Rs. 669.54 crores (previous year Rs. 650.75 crores)) Rs.
1039.60 crores (previous year Rs. 872.79 crores)
In 2008, the State of Karnataka levied a Forest Development Tax (FDT)
treating iron ore as a forest produce. Writ petitions filed by various
stakeholders challenging the levy before Karnataka High Court are
pending disposal. The Management of the Company has been legally
advised that this is a fairly arguable case from the company''s
perspective and accordingly, the tax is considered as recoverable. Tax
payments made under protest in the earlier years (refer note 14) / tax
payable are considered as ''contingent liabilities''.
e) Arrears of fixed cumulative dividend on preference shares (CPRS) Rs.
0.46 crores.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 3,176.36 crores
(previous year Rs. 3,217.49 crores).
3. Other commitments :
(a) The Company from time to time provides need based support to
subsidiaries and joint ventures entity towards capital and other
requirements.
(b) The Company has imported capital goods under the export promotion
capital goods scheme to utilise the benefit of a zero or concessional
customs duty rate. These benefits are subject to future exports. Such
export obligations at year end aggregate to Rs. 3,817.11 crores (previous
year Rs. 10,903.50 crores) by the Company within the stipulated period.
4. On May 3, 2013 the Bombay High Court sanctioned a Composite Scheme
of Amalgamation and Arrangement (Scheme) under Sections 391 to 394 of
the Companies Act, 1956 amongst JSW Steel Limited, JSW Ispat Steel
Limited, JSW Building Systems Limited, JSW Steel Coated Products
Limited and their respective shareholders and creditors with July 1,
2012 being the appointed date. The certified copy of the scheme is
filed with the Registrar of Companies (RoC) on June 1, 2013.
Accordingly, effect of the scheme is considered in the financial
statements of the current year.
In terms of the scheme, effectively, from July 1, 2012:
- The Vasind and Tarapur units of JSW Steel Limited and the Kalmeshwar
unit of JSW Ispat Steel Limited were demerged and their businesses
transferred and vested to JSW Steel Coated Products Limited.
- The residual JSW Ispat Steel Limited was merged with JSW Steel
Limited.
- JSW Steel Coated Products Limited emerged as a subsidiary of JSW
Steel Limited.
- Accordingly, an amount of Rs. 341.95 crores for the period July 1, 2012
to March 31, 2013, have been debited to the reserve & surplus under
surplus in statement of profit and loss.
This amalgamation is an amalgamation in the nature of purchase as
defined by Accounting Standard 14 Â Accounting for Amalgamations
specified in the Companies (Accounting Standards) Rules 2006. Entries
have been passed in the books of account of the Company to give effect
to the scheme, as follows:
With effect from the appointed date,
(a) All the assets and liabilities of residual JSW Ispat and JSW
Building vest in and are transferred to the Company and recorded at
their respective fair values.
(b) 1,86,08,844 equity shares of Rs. 10 each at par are issued to the
equity shareholders of JSW Ispat in the ratio of 1 equity share of the
company for every 72 equity shares of JSW Ispat.
(c) 48,54,14,604 ,0.01% preference shares of Rs. 10 each are issued to
the preference shareholders of JSW Ispat in the ratio of 1 preference
share for every preference share of JSW Ispat.
(d) Inter-company investments and balances, between the company, JSW
Building and residual JSW Ispat stand cancelled.
(e) Assets and liabilities related to the Vasind and Tarapur units of
the company are transferred to and vested in JSW Steel Coated.
(f) The difference of Rs. 3,055.12 crores resulting from the above is
credited to the capital reserve account.
5. In view of the losses from operations of, JSW Steel USA Inc, a
subsidiary of the Company for last few years, the Company has
considered valuations of its fixed assets carried out by an independent
valuer and concluded that no provision is presently necessary against
the carrying amounts of investments and loans aggregating to Rs. 2,007.46
crores and with respect to financials guarantees of Rs. 2,752.57 crores
[included under contingent liabilities  note 26 (1) [(b) and (c)],
relating to the said subsidiary.
6. The carrying amount of investment in equity shares of JSW
Severfield, India, a joint venture (JV) of the Company, is Rs. 98.44
crores as at March 31, 2014. Having regard to its continued operating
losses and current external economic environment, the Management of the
Company has assessed whether the decline in the value of the said
investment is ''other than temporary'' in terms of Accounting Standard
(AS) 13, Investments. On a careful evaluation of the business plans of
the JV and expected profits based thereon, it has been concluded that
the decline is temporary and accordingly, no provision is required.
7. Trade receivable includes Rs. 184.02 crores (previous year Rs. 184.02
crores) recoverable from a customer towards supply of steel. The
customer has applied for corporate debt restructuring to CDR Cell and
mentioned JSW Steel as their "critical and essential supplier" whose
dues needs to be paid on priority basis. The scheme was approved by CDR
empowered group during the year. Based on these developments, the
Company is reasonably confident about the recoverability of the said
amount.
8. Exceptional items represents effect of significant movement and
volatility in the value of the Indian rupee against US dollar.
9. Derivatives:
a) The Company uses foreign currency forward contracts to hedge its
risks associated with foreign currency fluctuations relating to certain
firm commitments and highly probable forecast transactions. The use of
foreign currency forward contracts is governed by the Company''s
strategy approved by the Board of Directors, which provide principles
on the use of such forward contracts consistent with the Company''s Risk
Management Policy.
b) The Company also uses derivative contracts other than forward
contracts to hedge the interest rate and currency risk on capital
account. Such transactions are governed by the strategy approved by the
Board of Directors, which provide principles on the use of these
instruments, consistent with the Company''s Risk Management Policy. The
Company does not use these contracts for speculative purposes.
10. Employee benefits:
A) Defined contribution plan:
Company''s contribution to provident fund Rs. 29.10 crores. (previous year
Rs. 25.62 crores)
11. Segment reporting:
The company is primarily engaged in the business of manufacture and
sale of iron and steel products. The company has identified two primary
business segments, namely steel and power (used mainly for captive
consumption), which in the context of Accounting Standard 17 on
"segment reporting" constitute reportable segments.
12. Related parties disclosure as per Accounting Standard (AS)-18 :
Parties with whom the company has entered into transactions during the
period where control exists :
1 Subsidiaries
JSW Steel (Netherlands) B.V.
JSW Steel (UK) Limited
Argent Independent Steel (Holdings) Limited
JSW Steel Service Centre (UK) Limited
JSW Steel Holding (USA) Inc.
JSW Steel (USA) Inc.
Periama Holdings, LLC
Purest Energy, LLC
Meadow Creek Minerals, LLC
Hutchinson Minerals, LLC
R.C. Minerals, LLC
Keenan Minerals, LLC
Peace Leasing, LLC
Prime Coal, LLC
Planck Holdings, LLC
Rolling S Augering, LLC
Periama Handling, LLC
Lower Hutchinson Minerals, LLC
Caretta Minerals, LLC
JSW Panama Holdings Corporation
Inversiones Eroush Limitada
Santa Fe Mining
Santa Fe Puerto S.A.
JSW Natural Resources Limited
JSW Natural Resources Mozambique Limitada
JSW ADMS Carvo Lda
JSW Mali Resources SA (w.e.f 18.02.13)
JSW Steel Processing Centres Limited
JSW Bengal Steel Limited
JSW Natural Resources India Limited
Barbil Beneficiation Company Limited
JSW Jharkhand Steel Limited
JSW Steel East Africa Limited
Amba River Coke Limited
JSW Energy (Bengal) Limited
JSW Natural Resource Bengal Limited (w.e.f. 3.04.2012)
JSW Steel Coated Products Limited (w.e.f. 31.08.2012)
Peddar Realty Private Limited (w.e.f. 16.05.2012)
Nippon Ispat Singapore (PTE) Limited
EREBUS Limited
Arima Holding Limited
Lakeland Securities Limited
2 Associates
Jindal Praxair Oxygen Company Private Limited
JSW Ispat Steel Limited [Refer Note 26(4)]
3 Joint Ventures
Vijayanagar Minerals Private Limited
Rohne Coal Company Private Limited
JSW Severfield Structures Limited
Gourangdih Coal Limited
Toshiba JSW Power Systems Private Limited
MJSJ Coal Limited
GEO Steel LLC
JSW Structural Metal Decking Limited
JSW MI Steel Service Center Private Limited
4 Key Management Personnel (KMP)
Mr. Sajjan Jindal
Mr. Seshagiri Rao M V S
Dr. Vinod Nowal
Mr. Jayant Acharya
5 Relative of Key Managerial Personnel
Mr. Parth Jindal
6 Enterprises over which Key Management Personnel and Relatives of such
personnel exercise significant influence.
JSW Energy Limited
Jindal Stainless Limited
JSW Realty & Infrastructure Private Limited
Jindal Saw Limited
Jindal Steel & Power Limited
JSOFT Solutions Limited
Jindal Industries Limited
JSW Cement Limited
JSW Jaigarh Port Limited
Reynold Traders Private Limited
Raj West Power Limited
JSW Power Trading Company Limited
JSW Aluminim Limited (ceased from 15.10.2013)
O P Jindal Foundation
JSW Infrastructure Limited
South West Port Limited
JSW Techno Projects Management Limited
South West Mining Limited
JSL Architecture Limited
JSW Projects Limited
Sapphire Technologies Limited
Jindal Technologies & Management Services Private Limited
JITF Shipping & Logistics (Singapore) PTE Limited
JSW Foundation
JSW Bengaluru Football Club Private Limited
Shadeed Iron & Steel Co. LLC
15. Operating lease
a) As lessor:
i. The company has entered into lease arrangements, for renting :
2,279 houses (admeasuring approximately 1,410,997 square feet) at the
rate of Rs. 100/- per house per annum, for a period of 120 months.
9 houses (admeasuring approximately 9,027 square feet) at the rate of Rs.
43/- per square feet per month per house, for a period of 60 months.
The agreements are renewable at the option of the lessee after the end
of the lease term.
13. The company has the following joint venture interest in India as
at 31 March 2014: Interest as venturer
Vijayanagar Minerals Private Limited: Percentage of holding  40%
(previous year 40%) Rohne Coal Company Private Limited: Percentage of
holding  49% (previous year 49%)
JSW Severfield Structures Limited: Percentage of holding - 50 %
(previous year 50%)
Gourangdih Coal Limited: Percentage of holding  50 % (previous year
50%)
JSW MI Steel Service Center Private Limited: Percentage of holding -
50% (previous year 50%)
Interest as investor
MJSJ Coal Limited: Percentage of holding  11% (previous year 11%)
Toshiba JSW Power Systems Private Limited: Percentage of holding Â
2.54% (previous year 2.54%)
14. Interest includes Rs. 5.96 crores (previous year Rs. 2.89 crores) on
account of shortfall in payment of direct taxes.
15. Figures of the previous year are regrouped and reclassified
wherever necessary to correspond to figures of the current year.
Figures of the previous year are not comparable on account of Composite
Scheme of Amalgamation and Arrangement as referred to in Note 26 (4)
above.
Mar 31, 2013
1. Contingent Liabilities not provided for in respect of :
a) Bills Discounted Rs. 3,012.92 crores (Previous year Rs. 3,117.13
crores).
b) Guarantees provided to banks on behalf of subsidiaries Rs. 1,223.95
crores (Previous year Rs. 1,096.27 crores).
c) Disputed claims/levies (excluding interest, if any), in respect of:
(i) Excise Duty Rs. 199.82 crores (Previous year Rs. 200.27 crores);
(ii) Custom Duty Rs. 632.76 crores (Previous year Rs. 477.44 crores);
(iii) Income Tax Rs. 1.47 crores (Previous year Rs. 1.47 crores);
(iv) Sales Tax / Special Entry tax Rs. 226.93 crores (Previous year Rs.
170.30 crores);
(v) Service Tax Rs. 98.10 crores (Previous year Rs. 70.08 crores);
(vi) Miscellaneous Rs. 0.05 crores (Previous year Rs. 0.05 crores);
(vii) Levies by local authorities Rs. 3.04 crores (Previous year Rs.
3.04 crores); and
(viii) Claims etc. by suppliers and other parties (including for Forest
Development Tax) Rs. 872.79 crores (Previous year Rs. 509 crores)
In 2008, the State of Karnataka levied a Forest Development Tax (FDT)
treating iron ore as a forest produce. Writ Petitions challenging the
levy of FDT filed before Karnataka High Court by various stakeholders
are pending for disposal. Accordingly, the Company has disclosed in the
financial statements FDT paid under protest of Rs. 650.75 crores
(including under e auction) as an advance and Rs. 866.03 crores (above)
as a contingent liability.
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 3,217.49 crores
(Previous year Rs. 3,729.12 crores).
3. Other Commitments :
(a) The company has issued an undertaking to associate bankers for non
disposal of its investment of Rs. 2,357.11 crores (Previous year Rs.
2,357.11) in an associate till that entity repays its debts.
(b) The Company from time to time provides need based support to
subsidiaries and a joint venture entity towards capital and other
requirements.
(c) The company has imported capital goods under the Export Promotion
Capital Goods Scheme to utilise the benefit of a zero or concessional
customs duty rate. These benefits are subject to future exports. Such
export obligations at year end aggregate to Rs. 10,903.50 crores
(Previous year Rs. 16,912.59 crores) by the company within the
stipulated period.
4. On 3rd May 2013 the Bombay High Court sanctioned a Composite Scheme
of Amalgamation and Arrangement under sections 391 to 394 of the
Companies Act, 1956 amongst JSW Steel Limited, JSW ISPAT Steel Limited,
JSW Building Systems Limited, JSW Steel Coated Products Limited and
their respective shareholders and creditors with effect from 1 July
2012, being the appointed date. The certified copy of the Court Order
is awaited, on receipt of which the Company will initiate requisite
formalities to give effect to the Scheme. Accordingly therefore, the
accounting treatment laid out in the Scheme and consequential
adjustments that would arise will be dealt with by the Company in the
financial statements, once the Scheme is implemented.
5. In respect of the Company''s long term, strategic investment in one
of its subsidiaries, JSW Steel (USA) Inc., the Company periodically
reviews and assesses its business plans and expected future cash flows.
The company has also considered recent independent valuations of the
underlying fixed assets. Whilst the subsidiary may have a longer
gestation period than originally envisaged, the Company has concluded
that the decline is temporary and no provision against the carrying
amounts of investments and loans of Rs. 3,155.65 crores relating to the
subsidiary is presently necessary.
6. Due to the significant movement and volatility in the value of the
rupee against US dollar, the net foreign exchange loss has been
considered by the Company as exceptional in nature.
7. Derivatives:
a) The Company uses foreign currency forward contracts to hedge its
risks associated with foreign currency fluctuations relating to certain
firm commitments and highly probable forecast transactions. The use of
foreign currency forward contracts is governed by the Company''s
strategy approved by the Board of Directors, which provide principles
on the use of such forward contracts consistent with the Company''s Risk
Management Policy
b) The Company also uses derivative contracts other than forward
contracts to hedge the interest rate and currency risk on capital
account. Such transactions are governed by the strategy approved by the
Board of Directors, which provide principles on the use of these
instruments, consistent with the Company''s Risk Management Policy. The
Company does not use these contracts for speculative purposes.
11. Employee Benefits:
a) Defined Contribution Plan:
Company''s contribution to Provident Fund Rs. 25.62 crores. (Previous
Year Rs. 24 crores)
The Company expects to contribute Rs. 37.09 crores (previous year Rs.
23.66 crores) to its Gratuity Plan for the next year. In assessing the
Company''s Post Retirement Liabilities, the Company monitors mortality
assumptions and uses up-to-date mortality tables, the base being the
Indian Assured Lives Mortality (2006-08) Ultimate.
Expected return on plan assets is based on expectation of the average
long term rate of return expected on investments of the fund during the
estimated term of the obligations.
The estimates of future salary increase, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
(ii) Provident Fund:
The company makes monthly contributions to Provident Fund managed by
Trust for qualifying employees. Under the scheme, the company is
required to contribute a specified percentage of the payroll costs to
fund the benefits.
In keeping with the Guidance on Implementing Accounting Standard (AS)
15 (Revised) on Employee Benefits notified by the Companies (Accounting
Standards) Rules, 2006, employer established provident fund trusts are
treated as Defined Benefit Plans, since the Company is obliged to meet
interest shortfall, if any, with respect to covered employees.
According to the Defined Benefit Obligation of Interest rate Guarantee
on exempted Provident Fund in respect of employees of the company as at
31st March, 2013 works out to Rs. Nil (previous year Rs. Nil) and hence
no provision is required to be provided for in the books of accounts
towards the guarantee given for notified interest rates.
8. Segment Reporting:
The Company is primarily engaged in the business of manufacture and
sale of Iron and Steel Products. The Company has identified two primary
business segments, namely Steel and Power (used mainly for captive
consumption), which in the context of Accounting Standard 17 on
"Segment Reporting" constitute reportable segments.
9. Related Parties disclosure as per Accounting Standard (AS) - 18:
A) List of Related Parties
Parties with whom the Company has entered into transactions during the
period where control exists :
1 Subsidiaries
JSW Steel (Netherlands) B.V.
JSW Steel (UK) Limited
Argent Independent Steel (Holdings) Limited
JSW Steel Service Centre (UK) Limited
JSW Steel Holding (USA) Inc.
JSW Steel (USA) Inc.
Periama Holdings, LLC
Purest Energy, LLC
Meadow Creek Minerals, LLC
Hutchinson Minerals, LLC
R.C. Minerals, LLC
Keenan Minerals, LLC
Peace Leasing, LLC
Prime Coal, LLC
Planck Holdings, LLC
Rolling S Augering, LLC
Periama Handling, LLC
Lower Hutchinson Minerals, LLC
Caretta Minerals, LLC
JSW Panama Holdings Corporation
Inversiones Eroush Limitada
Santa Fe Mining
Santa Fe Puerto S.A.
JSW Natural Resources Limited
JSW Natural Resources Mozambique Limitada
JSW ADMS Carvo Lda
JSW Mali Resources SA (w.e.f. 18.02.2013)
JSW Steel Processing Centres Limited
JSW Bengal Steel Limited
JSW Natural Resources India Limited
Barbil Beneficiation Company Limited
JSW Jharkhand Steel Limited
JSW Building Systems Limited
JSW Steel East Africa Limited
Amba River Coke Limited
JSW Energy (Bengal) Limited
JSW Natural Resource Bengal Limited (w.e.f. 03.04.2012)
JSW Steel Coated Products Limited (w.e.f. 31.08.2012)
2 Associates
Jindal Praxair Oxygen Company Private Limited
JSW Ispat Steel Limited
JSW Energy (Bengal) Limited (upto 04.03.2012)
3 Joint Ventures
Vijayanagar Minerals Private Limited
Rohne Coal Company Private Limited
JSW Severfield Structures Limited
Gourangdih Coal Limited
Toshiba JSW Turbine and Generator Private Limited
MJSJ Coal Limited
GEO Steel LLC
JSW Structural Metal Decking Limited
JSW MI Steel Service Center Private Limited
4 Key Management Personnel (KMP)
Mr. Sajjan Jindal
Mr. Seshagiri Rao M V S
Dr. Vinod Nowal
Mr. Jayant Acharya
5 Relative of Key Managerial Personnel
Mrs. Savitri Devi Jindal
Mr. Parth Jindal
6 Enterprises over which Key Management Personnel and Relatives of such
personnel exercise significant influence.
JSW Energy Limited
JSL Limited
JSW Realty & Infrastructure Private Limited
Jindal Saw Limited
Jindal Steel & Power Limited
JSOFT Solutions Limited
Jindal Industries Limited
Jindal Aluminum Limited
JSW Cement Limited
JSW Jaigarh Port Limited
Reynold Traders Private Limited
Raj West Power Limited
JSW Power Trading Company Limited
JSW Aluminim Limited
O P Jindal Foundation
JSW Infrastructure Limited
South West Port Limited
JSW Techno Projects Management Limited
South West Mining Limited
JSL Architecture Limited
JSW Projects Limited
Sapphire Technologies Limited
Jindal Technologies & Management Services Private Limited
10. Operating Lease
a) As Lessor:
i. The Company has entered into lease arrangements, for renting :
2,279 houses (admeasuring approximately 1,410,997 square feet) at the
rate ofRs. 100/-perhouseperannum, for a period of 180 months.
684 houses (admeasuring approximately 350,103 square feet) at the rate
of Rs. 24/- per square feet per annum, for a period of 36 to 60 months.
9 houses (admeasuring approximately 9,027 square feet) at the rate of
Rs. 43/- per square feet per month per house, for a period of 60
months.
Office premises (part) admeasuring approximately 15,392 square feet at
the rate of Rs. 130 per square feet for a period of 11 months.
The agreements are renewable at the option of the lessee after the end
of the lease term.
11. The Company has the following Joint venture interest in India as at
31st March 2013:
Interest as Venturer
Vijayanagar Minerals Private Limited: Percentage of holding - 40%
(Previous year 40 %)
Rohne Coal Company Private Limited: Percentage of holding - 49%
(Previous year 49 %)
JSW Severfield Structures Limited : Percentage of holding - 50 %
(Previous Year 50%)
Gourangdih Coal Limited : Percentage of holding - 50 % (Previous Year
50 %)
JSW MI Steel Service Center Private Limited : Percentage of holding -
50% (Previous Year 50% )
Interest as Investor
MJSJ Coal Limited: Percentage of holding - 11% (Previous year 11 %)
Toshiba JSW Turbine and Generator Private Limited : Percentage of
holding - 2.54% (Previous year 3.67%)
12. Interest includes Rs. 2.89 crores (previous year Rs. 2.5 crores)
on account of shortfall in payment of Direct Taxes.
13. Comparative financial information (i.e. the amounts and other
disclosure for the preceding year) presented above, is included as an
integral part of the current year''s financial statements, and is to be
read in relation to the amounts and other disclosures relating to the
current year. Figures of the previous year are regrouped and
reclassified wherever necessary to correspond to figures of the current
year.
Mar 31, 2012
1.NOTES
Rights, preferences and restrictions attached to Equity shares
The company has a single class of equity shares. Each shareholder is
eligible for one vote per share held (other than the shares represented
by underlying GDRs which do not carry a voting right). The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders. In the event of liquidation, the equity shareholders are
eligible to receive the remaining assets of the company after
distribution of all preferential amounts, in proportion to their
shareholding.
26,00,938 (previous year 30,85,814) equity shares represent the shares
underlying outstanding Global Depository Receipts (GDRs). Each GDR
represents 1 underlying equity share.
Rights, preferences and restrictions attached to Preference shares
The company has a single class of preference shares. They are
redeemable at par in four equal quarterly installments commencing from
15 December 2017. The shares carry a right to receive 10% dividend
every year till redempton. In the event of liquidation, the preference
shareholders are eligible to receive the outstanding amount after
distribution of all other preferential amounts, in proportion to their
shareholding.
g Equity shares alloted as fully paid-up pursuant to contracts without
payment being received in cash during the period of five years
immediate preceding the date of the Balance Sheet are as under:
1,50,35,712 equity shares to the shareholders of the erstwhile Southern
Iron and Steel Company Limited pursuant to a scheme of Amalgamation.
Details of Security
(i) The 11% NCDs aggregating to Rs. 1,000 crores are secured / to be
secured by way of first pari passu charge on fixed assets related to
2.8 mtpa expansion project located at Upstream division and a fl at
atVasind situated in the state of Maharashtra.
(ii) The 10.25% NCDs aggregating to Rs. 500 crores are secured by way
of mortgage in respect of all immovable and movable properties both
present and future located at Tarapur Works and Vasind Works in the
State of Maharashtra.
(iii) The 10.60% NCDs aggregating to Rs. 350 crores are secured by:
- pari passu first charge by way of legal mortgage on land situated in
the State of Gujarat.
- pari passu first charge by way of equitable mortgage on fixed
assets of the new 5 mtpa Hot Strip Mill at Toranagallu village in the
State of Karnataka.
(iv) The 10.10 % NCDs aggregating to Rs. 1,000 crores are secured by:
- pari passu first charge by way of legal mortgage on all immovable
properties both present and future located at Tarapur Works and Vasind
Works in the State of Maharashtra.
- pari passu first charge on all immovable properties and movable
assets both present and future located at Salem Works in the State of
Tamil Nadu.
(v) The 11.82% NCDs aggregating to Rs. 23.04 crores are secured by:
- First charge on land situated in the State of Gujarat.
- Second charge on Fixed Assets situated at Salem Works in the state of
Tamilnadu.
(vi) The 11.82 % NCDs aggregating to Rs. 33.15 crores are secured by:
- pari passu first charge by way of legal mortgage on a flat situated
at Mumbai, in the State of Maharashtra.
- pari passu first charge by way of equitable mortgage of the
Companys immovable properties relating to the 100MW and 130MW Power
Plants at Toranagallu village in the State of Karnataka.
(vii) Rupee Term Loans from Banks aggregating to Rs. 18.75 crores,
Rupee Term Loan from financial Institution aggregating to Rs. 1.13
crores and Foreign Currency Term Loans from Banks aggregating to Rs.
51.16 crores are secured by:
- pari passu first charge by way of equitable mortgage in respect of
immovable properties of Upstream Division situated at Vaddu, Kurekuppe
and Toranagallu villages in the State of Karnataka and
- pari passu first charge by way of hypothecation of movable
properties of Upstream Division both present and future excluding
inventories and book debts.
(viii) Rupee Term Loans from Banks/Foreign Currency Term Loan from Bank
are secured / to be secured as under :
- Rupee Term Loans aggregating to Rs. 13.42 crores and Foreign Currency
Term Loans aggregating to Rs. 145.43 crores are secured by a first
charge supported by an equitable/ registered Mortgage of movable and
immovable properties and assets situated at Salem Works in the state of
Tamilnadu and a second pari passu charge on the current assets at Salem
Works.
- Rupee Term Loans aggregating to Rs. 176 crores and Foreign Currency
Term Loans aggregating to Rs. 290.95 crores by exclusive first charge
by way of equitable mortgage in respect of all movable and immovable
properties of Cold Rolling Mill Complex at Toranagallu village in the
State of Karnataka.
- Rupee Term Loans aggregating to Rs. 28.05 crores and Foreign Currency
Term Loans aggregating to Rs. 258 crores by exclusive first charge by
way of equitable mortgage in respect of all movable and immovable
properties both present and future of 2.8 mtpa expansion project at
Toranagallu village, in the State of Karnataka.
- Foreign Currency Term Loans aggregating to Rs. 805.71 crores by
exclusive first charge by way of equitable mortgage in respect of all
movable and immovable properties of Hot Strips Mill at Toranagallu
village in the State of Karnataka.
- Rupee Term Loans aggregating to Rs. 4,573.12 crores by pari passu
first charge by way of mortgage in respect of all movable and immovable
properties both present and future, first charge/Assignment of all the
assets and first charge on all the Bank Accounts of 3.2 mtpa expansion
project at Toranagallu village in the State of Karnataka.
- Rupee Term Loan aggregating to Rs. 40 crores by exclusive first
mortgage and charge on all movable and immovable properties both
present and future, and first charge on the Bank Accounts of the 300
MW Power Plant - CPP IV at Toranagallu village in the State of
Karnataka.
- Rupee Term Loan aggregating to Rs. 615 crores by first mortgage and
charge of all immovable properties both present and future, and a first
charge by way of hypothecation of all movable properties both
present and future of the Beneficiation Plant (6 x 500 tph) and Pellet
Plant (4.2 mtpa) at Toranagallu village in the State of Karnataka.
(ix) Rupee Term Loan from Financial Institution aggregating to Rs.
36.48 crores are secured by exclusive first charge by way of
hypothecation of Bombardier Challenger 300 aircraft.
Terms of Repayment/ Redemption/ Conversion
1. Terms of Conversion/ Redemption of Bonds/ Non-Convertible Debentures
( NCDs )
(i) The FCCBs are convertible into Equity Shares at the option of the
bondholders at any time on or after 7 August 2007 and prior to the
close of business on 21 June, 2012 at Rs. 40.28 = 1 USD$.
(ii) The 11% Secured NCDs of Rs. 10 lacs each aggregating Rs. 1,000
crores are redeemable as under with call and put option excersiable on
16.03.17 and 16.03.19 :
- Rs. 330 crores each from 16.3.2021
- Rs. 330 crores each from 16.3.2022
- Rs. 340 crores each from 16.3.2023
(iii) The 10.25% Secured NCDs of Rs. 10 lacs each aggregating Rs. 500
crores are redeemable in 3 equal annual installments of Rs. 166.67
crores each from 17.02.2016 to 17.02.2018.
(iv) The 10.60% Secured NCDs of Rs. 10 lacs each aggregating Rs. 350
crores are redeemable in two tranches as under :
- 8 half yearly installments of Rs. 21.875 crores each from 02.01.2016
to 02.07.2019.
- 8 half yearly installments of Rs. 21.875 crores each from 02.08.2016
to 02.02.2020.
(v) The 10.10% Secured NCDs of Rs. 10 lacs each aggregating Rs. 1,000
crores are redeemable in two tranches as under :
- 16 quarterly installments of Rs. 31.25 crores each from 04.02.2014 to
04.11.2017.
- 16 quarterly installments of Rs. 31.25 crores each from 15.06.2014 to
15.03.2018.
(vi) The 11.82% Secured NCDs of Rs. 10 lacs each aggregating Rs. 23.04
crores are redeemable in 11 quarterly installments of Rs. 2.09 crores
each from 01.07.2012 to 01.01.2015.
(vii) The 11.82% Secured NCDs of Rs. 10 lacs each aggregating Rs. 33.15
crores are redeemable in 17 quarterly installments of Rs. 1.95 crores
each from 15.04.2012 to 15.04.2016.
2. Terms of Repayment of Secured Term Loans
(A) Rupee Term Loan from Banks of :
(i) Rs. 18.75 crores is repayable in 4 monthly installments of Rs. 4.69
crores each from 28.4.2012 to 28.7.2012.
(ii) Rs. 176 crores is repayable in 11 monthly installment of Rs.16
crores each from 1.5.2012 to 1.3.2013.
(iii) Rs. 28.04 crores is repayable in 4 quarterly installment of Rs.
0.83 crores each from 30.4.2012 to 31.1.2013 and of 12 quarterly
installments of Rs. 2.06 crores each from 30.4.2013 to 31.1.2016.
(iv) Rs. 8.84 crores is repayable in 7 quarterly installment of Rs.
1.09 crores each from 30.6.2012 to 31.12.2013 and 1 quarterly
installment of Rs. 1.17 crores on 31.3.2014.
(v) Rs. 4.58 crores is repayable in 7 quarterly installments of Rs.
0.57 crores each from 30.6.2012 to 31.12.2013 and 1 quarterly
installment of Rs. 0.59 crores on 31.3.2014.
(vi) Rs. 2,935.74 crores is repayable as under :
- 4 quarterly installments of Rs.18.82 crores from
30.6.2012 - 31.3.2013.
- 8 quarterly installments of Rs.75.28 crores from
30.6.2013 - 31.3.2015.
- 8 quarterly installments of Rs.188.19 crores from 30.6.2015 -
31.3.2017.
- 2 quarterly installments of Rs.250.91 crores from 30.6.2017 -
30.9.2017.
- 1 quarterly installments of Rs.250.94 crores on 31.12.2017.
(vii) Rs. 1,250 crores is repayable as under :
- 2 quarterly installments of Rs. 15.63 crores each from 31.12.2012 -
31.3.2013.
- 4 quarterly installments of Rs. 7.81 crores each from 30.6.2013 -
31.3.2014.
- 8 quarterly installments of Rs. 31.25 crores each from 30.6.2014 -
31.3.2016.
- 12 quarterly installments of Rs. 78.13 crores each from 30.6.2016 -
31.3.2019.
(viii) Rs. 387.38 crores is repayable as under :
- 3 quarterly installments of Rs. 2.5 crores each from 1.7.2012 -
1.1.2013.
- 8 quarterly installments of Rs. 10 crores each from 1.4.2013 -
1.1.2015.
- 8 quarterly installments of Rs. 25 crores each from 1.4.2015 -
1.1.2017.
- 3 quarterly installments of Rs.33.32 crores each from 1.4.2017 -
1.10.2017.
(ix) Rs. 615 crores is repayable in 19 quarterly installments of Rs.
32.14 crores each from 1.1.2013 to 1.7.2017 and 1 quarterly installment
of Rs. 4.29 crores on 1.10.2017.
(x) Rs. 40 crores is repayable in 1 quarterly installment of Rs. 27.5
crores each on 1.10.2012 and 1 quarterly installment of Rs. 12.5 crores
on 1.1.2013.
(C) Rupee Term Loan from Financial Institutions of :
(i) Rs. 1.13 crores is repayable in 5 monthly installments of Rs. 0.22
crores each from 28.4.2012 to 28.8.2012.
(ii) Rs. 14.86 crores is repayable in 39 monthly installments of Rs.
0.38 crores each from 11.4.2012 to 11.6.2015.
(iii) Rs. 7.34 crores is repayable in 39 monthly installments of Rs.
0.19 crores each from 20.4.2012 to 20.6.2015.
(iv) Rs. 7.60 crores is repayable in 39 monthly installments of Rs.
0.195 crores each from 2.5.2012 to 02.7.2015.
(v) Rs. 6.68 crores is repayable in 39 monthly installments of Rs. 0.17
crores each from 15.4.2012 to 15.7.2015.
3 Terms of Repayment of Unsecured Term Loans
(A) Rupee Term Loan from Banks of Rs.900 crores is repayable in 6
monthly installments of Rs. 150 crores each from 1.8.2012 to 1.1.2013.
(B) Foreign Currency Term Loan from Banks of :
(i) Rs. 1,432.38 crores is repayable in 5 half yearly installments of
Rs. 286.48 crores each from 28.8.2015 to 27.8.2017.
(ii) Rs. 808.37 crores is repayable in 19 half yearly installments of
Rs. 42.55 crores each from 30.5.2012 to 31.3.2021.
(iii) Rs. 81.67 crores is repayable in 20 half yearly installments of
Rs. 4.08 crores each reckoned 6 months from the date of last drawdown.
(iv) Rs. 51.16 crores is repayable on 28.6.2012.
(v) Rs. 51.16 crores is repayable on 30.9.2012.
4 Long Term Advance from a Customer of Rs. 356.39 crores is repayable
as under :
- 6 monthly installments of Rs.18.17 crores each from
30.4.2012 to 30.9.2012.
- 6 monthly installments of Rs.19.82 crores each from 31.10.2012 to
31.3.2013.
- 5 monthly installments of Rs.21.47 crores each from
30.4.2013 to 31.8.2013.
- 1 monthly installment of Rs.21.14 crores on 1.9.2013.
5 Deferred Sales tax of Rs. 111.65 crores is repayable in 101 varying
monthly installments starting from 30.4.2013 to 31.8.2021.
(Repayments stated above are rounded off to the nearest crore)
Working capital loans of Rs. 162.89 crores and Foreign currency loan of
Rs. 153.46 crores are secured by :
- pari passu first charge by way of hypothecation of Stocks of Raw
Materials, Finished Goods, Work-in-Process, Consumable Stores and
Spares and Book Debts / Receivables of the Company, both present and
future.
- pari passu second charge on movable properties and immovable
properties forming part of the Fixed/Blocked assets of the company,
both present and future except such properties as may be specifically
excluded.
2. Contingent Liabilities not provided for in respect of
a) Bills Discounted Rs. 3,117.13 crores (Previous year Rs. 2,621.86
crores).
b) Guarantees provided to banks on behalf of subsidiaries Rs. 1,096.27
crores (Previous year Rs. 1,620.51 crores).
c) Disputed claims/levies (excluding interest, if any), in respect of:
(i) Excise Duty Rs. 200.27 crores (Previous year Rs. 179.70 crores);
(ii) Custom Duty Rs. 477.44 crores (Previous year Rs. 242.87 crores);
(iii) Income Tax Rs. 1.47 crores (Previous year Rs. 12.47 crores);
(iv) Sales Tax / Special Entry tax Rs. 170.30 crores (Previous year Rs.
72.36 crores);
(v) Service Tax Rs. 70.08 crores (Previous year Rs. 45.18 crores);
(vi) Miscellaneous Rs. 0.05 crores (Previous year Rs. 0.05 crores);
(vii) Levies by local authorities Rs. 3.04 crores (Previous year Rs.
3.04 crores); and
(viii) Claims by suppliers and other parties (including for Forest
Development Tax) Rs. 509 crores (Previous year Rs. 207.41 crores).
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 3,729.12 crores
(Previous year Rs. 3,865.45 crores).
4. Other Commitments :
(a) The Company has issued an undertaking to associate bankers for non
disposal of its investment of Rs. 2,357.11 crores (Previous year Rs.
Nil) in an associate till that entity repays its debts.
(b) The Company from time to time provides need based support to
subsidiaries and a joint venture entity towards capital and other
requirements.
(c) The Company has imported capital goods under the Export Promotion
Capital Goods Scheme to utilise the benefit of a zero or concessional
customs duty rate. These benefits are subject to future exports. Such
export obligations at year end aggregate to Rs. 16,912.59 crores
(Previous year Rs. 17,853.27 crores) by the company within the
stipulated period.
5. In respect of the Companys long term, strategic investment in one
of its subsidiaries, JSW Steel (USA) Inc., the Company has reviewed and
assessed its business plans and expected future cash flows. The
company has also considered an independent valuation of a significant
portion of the underlying tangible assets. Whilst the subsidiary may
have a longer gestation period than originally envisaged, the Company
has concluded that the decline is temporary and no provision against
the carrying amounts of the investment and loans of Rs. 1,948.41 crores
is presently necessary.
In view of estimation uncertainties, assumptions will be monitored on a
periodic basis by management and adjustments will be made in the event
of an other than temporary adverse effect on the recoverable amounts of
the assets.
6. Due to the unusual depreciation in the value of the rupee against
US dollar, the net foreign exchange loss for the year has been
considered by the Company as exceptional in nature.
7. Employee Share based Payment Plans:
b) Expenses arising from employees share- based payment plans-
Rs.10.68 crores (Previous year Rs. 8.12 crores).
8. Derivatives:
a) The Company uses foreign currency forward contracts to hedge its
risks associated with foreign currency fluctuations relating to
certain firm commitments and highly probable forecast transactions.
The use of foreign currency forward contracts is governed by the
Companys strategy approved by the Board of Directors, which provide
principles on the use of such forward contracts consistent with the
Companys Risk Management Policy. The Forward Exchange Contracts
entered into by the Company and outstanding are as under:
b) The Company also uses derivative contracts other than forward
contracts to hedge the interest rate and currency risk on capital
account. Such transactions are governed by the strategy approved by the
Board of Directors, which provide principles on the use of these
instruments, consistent with the Companys Risk Management Policy. The
Company does not use these contracts for speculative purposes.
9. Research and Development Activities:
Disclosure as required under Section 35(2AB) of the Income Tax Act,
1961.
b) The manufacturing and other expenses and depreciation include Rs.
9.28 crores (previous year Rs. 3.85 crores) and Rs. 3.52 crores
(previous year Rs. 1.38 crores), respectively, in respect of Research
and Development activities undertaken during the year.
10. Employee Benefits:
a) Defined Contribution Plan:
Companys contribution to Provident Fund Rs. 24 crores. (Previous Year
Rs. 17.05 crores)
The Company expects to contribute Rs. 23.66 crores (previous year Rs.
12.22 crores) to its Gratuity Plan for the next year.
In assessing the Companys Post Retirement Liabilities, the Company
monitors mortality assumptions and uses up-to-date mortality tables,
the base being the LIC 1994-96 ultimate tables.
Expected return on plan assets is based on expectation of the average
long term rate of return expected on investments of the fund during the
estimated term of the obligations.
The estimates of future salary increase, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
(ii) Provident Fund:
The company makes monthly contributions to Provident Fund managed by
Trust for qualifying employees. Under the scheme, the company is
required to contribute a specified percentage of the payroll costs to
fund the benefits.
In keeping with the Guidance on Implementing Accounting Standard (AS)
15 (Revised) on Employee Benefits notified by the Companies
(Accounting Standards) Rules, 2006, employer established provident fund
trusts are treated as Defined Benefit Plans, since the Company is
obliged to meet interest shortfall, if any, with respect to covered
employees. According to the actuarial Valuation, the Defined Benefit
Obligation of Interest rate Guarantee on exempted Provident Fund in
respect of employees of the company as at 31st March, 2012 works out to
Rs. Nil and hence no provision is required to be provided for in the
books of accounts towards the guarantee given for notified interest
rates.
11. Segment Reporting:
The Company is primarily engaged in the business of manufacture and
sale of Iron and Steel Products. The Company has identified two
primary business segments, namely Steel and Power (used mainly for
captive consumption), which in the context of Accounting Standard 17 on
"Segment Reporting" constitute reportable segments.
Notes :
1. Inter Segment transfer from the power segment is measured at the
rate at which power is purchased / sold from / to the respective
Electricity Board.
2. Inter Segment transfer from the steel segment is measured on the
basis of fuel cost.
12. Related Parties disclosure as per Accounting Standard (AS)-18: A
List of Related Parties
Parties with whom the Company has entered into transactions during the
period where control exists :
1 Subsidiaries
JSW Steel (Netherlands) B.V.
JSW Steel (UK) Limited
Argent Independent Steel (Holdings) Limited
JSW Steel Service Centre (UK) Limited
JSW Steel Holding (USA) Inc.
JSW Steel (USA) Inc.
Periama Holdings, LLC
Purest Energy, LLC
Meadow Creek Minerals, LLC
Hutchinson Minerals, LLC
R.C. Minerals, LLC
Keenan Minerals, LLC
Peace Leasing, LLC
Prime Coal, LLC
Planck Holdings, LLC
Rolling S Augering, LLC
Periama Handling, LLC
Lower Hutchinson Minerals, LLC
Caretta Minerals, LLC
JSW Panama Holdings Corporation
Inversiones Euroush Limitada
Santa Fe Mining
Santa Fe Puerto S.A.
JSW Natural Resources Limited
JSW Natural Resources Mozambique Limitada
JSW ADMS Carvo Lda
JSW Steel Processing Centres Limited
JSW Bengal Steel Limited
JSW Natural Resources India Limited
Barbil Beneficiation Company Limited
JSW Jharkhand Steel Limited
JSW Building Systems Limited
JSW Steel East Africa Limited (w.e.f 13.09.2011)
Amba River Coke Limited (w.e.f 4.10.2011)
JSW Energy (Bengal) Limited (w.e.f 5.03.2012)
2 Associates
Jindal Praxair Oxygen Company Private Limited
JSW Ispat Steel Limited
JSW Energy (Bengal) Limited (upto 4.03.2012)
3 Joint Ventures
Vijayanagar Minerals Private Limited
Rohne Coal Company Private Limited
JSW Severfield Structures limited
Gourangdih Coal Limited
Toshiba JSW Turbine and Generator Private Limited
MJSJ Coal Limited
GEO Steel LLC
JSW Structural Metal Decking Limited
JSW MI Steel Service Center Private Limited (w.e.f 19.09.2011)
4 Key Management Personnel (KMP)
Mr. Sajjan Jindal Mr. Seshagiri Rao M V S Dr. Vinod Nowal Mr. Jayant
Acharya
5 Relative of Key Managerial Personnel
Mrs. Savitri Devi Jindal
6 Enterprises over which Key Management Personnel and Relatives of such
personnel exercise significant influence.
JSW Energy Limited
JSL Limited
JSW Realty & Infrastructure Private Limited
Jindal Saw Limited
Jindal Steel & Power Limited
Jindal South West Holdings Limited
JSOFT Solutions Limited
Jindal Industries Limited
JSW Cement Limited
JSW Jaigarh Port Limited
JSW Investments Private Limited
Reynold Traders Private Limited
Raj West Power Limited
JSW Power Trading Company Limited
JSW Aluminium Limited
O P Jindal Foundation
JSW Infrastructure Limited
South West Port Limited
JSW Techno Projects Management Limited
South West Mining Limited
JSL Architecture Limited
JSW Projects Limited
Sapphire Technologies Limited
13. Operating Lease
a) As Lessor:
i. The Company has entered into lease arrangements, for renting :
- 2,279 houses (admeasuring approximately 1,410,997 square feet) at the
rate of Rs. 100/- per house per annum, for a period of 180 months.
- 648 houses (admeasuring approximately 326,703 square feet) at the
rate of Rs. 24/- per square feet per annum, for a period of 36 to 60
months.
- 1 house at the rate of Rs. 1.2 lacs per annum, for a period of 11
months.
- 9 houses (admeasuring approximately 9,027 square feet) at the rate of
Rs. 40/- per square feet per month per house, for a period of 60
months.
- 6 houses (approximately 5,529 square feet) at the rate of Rs. 125 per
square feet for a period of 12 months.
- Office premises (part) admeasuring approximately 4,760 square feet
at the rate of Rs. 110 per square feet for a period of 11 months.
- Office premises (part) admeasuring approximately 15,392 square feet
at the rate of Rs. 175 per square feet for a period of 11 months.
The agreements are renewable at the option of the lessee after the end
of the lease term.
ii. Disclosure in respect of assets (building) given on operating lease
:
The agreements are executed for a period of 11 to 60 months with a
renewable clause and also provide for termination at will by either
party giving a prior notice period of 1 to 3 months.
12. The Company has the following Joint venture interest in India as
at 31st March 2012:
Interest as Venturer
Vijayanagar Minerals Private Limited: Percentage of holding Ã
40% (Previous year 40 %)
Rohne Coal Company Private Limited: Percentage of holding Ã
49% (Previous year 49 %)
JSW Severfield Structures Limited : Percentage of holding Ã
50 % (Previous Year 50%)
Gourangdih Coal Limited : Percentage of holding à 50 %
(Previous Year 50 %)
JSW MI Steel Service Center Private Limited à 50% (Previous
Year Nil )
Interest as Investor
MJSJ Coal Limited: Percentage of holding à 11% (Previous year
11 %)
Toshiba JSW Turbine and Generator Private Limited à 5%
(Previous year 5 %)
13. Interest includes Rs. 2.5 crores (previous year Rs. 3.25 crores)
on account of shortfall in payment of Direct Taxes.
14. Comparative fi nancial information (i.e. the amounts and other
disclosure for the preceding year) presented above, is included as an
integral part of the current years fi nancial statements, and is to be
read in relation to the amounts and other disclosures relating to the
current year. Figures of the previous year are regrouped and reclassifi
ed wherever necessary to correspond to fi gures of the current year.
Mar 31, 2010
1. Contingent Liabilities not provided for in respect of :
a) Bills Discounted Rs. 1,275.88 crores (Previous year Rs. 977.32
crores).
b) Guarantees provided on behalf of subsidiaries (including step down
subsidiaries) and others Rs. 1,818.24 crores (Previous year Rs.
2,135.74 crores).
c) Disputed statutory claims/levies including those pending in courts
(excluding interest leviable, if any), in respect of:
(i) Excise Duty Rs. 96.67 crores (Previous year Rs. 90.01 crores);
(ii) Customs Duty Rs. 108.07 crores (Previous year Rs. 223.85 crores);
(iii) Income Tax Rs. 12.47 crores (Previous year Rs. 36.28 crores);
(iv) Sales Tax/Special Entry tax Rs. 0.35 crores (Previous year Rs.
0.35 crores);
(v) Service Tax Rs. 24.46 crores (Previous year Rs.31.27 crores);
(vi) Miscellaneous Rs. 0.05 crores (Previous year Rs. 0.24 crores); and
(vii) Levies by local authorities Rs. 3.04 crores (Previous year Rs.
15.28 crores).
d) Claims by Suppliers and other third parties not acknowledged as
debts Rs. 6.31 crores (Previous year Rs. 131.76 crores).
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 3,644.94 crores
(Previous year Rs. 4,660.30 crores).
3. Unlike the previous year which saw an unprecedented depreciation of
the rupee against major foreign currencies, the movement of the rupee
during the year is much less volatile. Accordingly, exchange
fluctuations for the year have not been considered as an Exceptional
item.
b) Expenses arising from employees share- based payment plans - Rs.
4.03 crores (Previous year Rs. 4.65 crores).
4. Derivatives:
a) The Company uses foreign currency forward contracts to hedge its
risks associated with foreign currency fluctuations relating to certain
firm commitments and highly probable forecast transactions. The use of
foreign currency forward contracts is governed by the Companys
strategy approved by the Board of Directors, which provide principles
on the use of such forward contracts consistent with the Companys Risk
Management Policy.
b) The Company also uses derivative contracts other than forward
contracts to hedge the interest rate and currency risk on capital
account. Such transactions are governed by the strategy approved by the
Board of Directors, which provide principles on the use of these
instruments, consistent with the Companys Risk Management Policy. The
Company does not use these contracts for speculative purposes.
5. Employee Benefits:
a) Defined Contribution Plan:
Companys contribution to Provident Fund Rs. 12.89 crores. (Previous
year Rs. 12.04 crores).
6. Segment Reporting:
The Company is primarily engaged in the business of manufacture and
sale of Iron and Steel Products. The Company has identified two primary
business segments, namely Steel and Power (used mainly for captive
consumption), which in the context of Accounting Standard 17 on
"Segment Reporting" constitute reportable segments.
7. Related parties disclosure as per Accounting Standard (AS) -18: A.
List of Related Parties
Parties with whom the Company has entered into transactions during the
year/where control exists :
1. Subsidiaries
JSW Steel (UK) Limited
JSW Steel Service Centre (UK) Limited
Argent Independent Steel (Holdings) Limited
JSW Natural Resources Limited
JSW Natural Resources Mozambique Limitada
JSW Steel (Netherlands) B.V.
JSW Steel Holding (USA) Inc
JSW Steel (USA) Inc
JSW Panama Holdings Corporation
Inversiones Eurosh Limitada
Santa Fe Mining
Santa Fe Puerto S.A.
JSW Steel Processing Centres Limited
JSW Jharkhand Steel Limited
JSW Bengal Steel Limited
Barbil Benefication Company Limited
JSW Building Systems Limited
2. Associates
Jindal Praxair Oxygen Company Private Limited
3. Joint Ventures
Vijayanagar Minerals Private Limited
Rohne Coal Company Private Limited
JSW Severfield Structures limited
Gourangdih Coal Limited
Toshiba JSW Turbine and Generator Private Limited
MJSJ Coal Limited
4. Key Management Personnel
Mrs. Savitri Devi Jindal
Mr. Sajjan Jindal
Mr. Seshagiri Rao M. V. S.
Dr. Vinod Nowal
Mr. Y. Siva Sagar Rao (Upto 15.05.2009)
Mr. Jayant Acharya (w.e.f. 7.05.2009)
5. Enterprises over which Key Management Personnel and Relatives of
such personnel exercise significant influence.
JSW Energy Limited
JSL Limited
JSW Realty & Infrastructure Private Limited
Jindal Saw Limited
Jindal Steel & Power Limited
Jindal South West Holdings Limited
Jsoft Solutions Limited
Jindal Industries Limited
JSW Energy (Ratnagiri) Limited
JSW Cement Limited
JSW Jaigarh Port Limited
Nalwa Sons & Investments Limited
JSW Investments Private Limited
Reynold Traders Private Limited
Raj West Power Limited
JSW Power Trading Company Limited
JSW Aluminium Limited
O P Jindal Foundation
JSW Infrastructure & Logistic Limited
South West Port Limited
8. Operating Lease:
a) As Lessor:
i. The Company has entered into lease arrangements, for renting:
2,279 houses (admeasuring approximately 1,410,997 square feet) at the
rate of Rs 100/- per house per annum, for a period of 180 months. 672
houses (admeasuring approximately 551,051 square feet) at the rate of
Rs. 24/- per square feet per annum, for a period of 36 to 60 months. 1
house at the rate of Rs. 0.60 lacs per annum, for a period of 11
months.
9. The Company has the following Joint venture interest in India as
at 31 March, 2010:
Interest as Venturer
Vijayanagar Minerals Private Limited: Percentage of holding - 40%
(Previous year 40%)
Rohne Coal Company Private Limited: Percentage Of holding - 49%
(Previous year 49%)
JSW Severfield Structures Limited: Percentage of holding - 50%
(Previous Year Nil)
Gaurangdih Coal Limited: Percentage of holding - 50% (Previous Year
Nil)
Interest as Investor
MJSJ Coal Limited: Percentage of holding -11% (Previous year 11%)
Toshiba JSW Turbine and Generator Private Limited - 5% (Previous year
Nil)
10. Previous years figures have been regrouped, wherever necessary,
to conform to current years presentation.