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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 532286ISIN: INE749A01030INDUSTRY: Steel - Sponge Iron

BSE   ` 247.15   Open: 254.50   Today's Range 242.00
254.70
-4.55 ( -1.84 %) Prev Close: 251.70 52 Week Range 101.00
294.15
Year End :2017-03 

Note-

Project Loan of Rs, 7215.34 crore outstanding as on 30th Nov 2015 (including loan of Rs, 57.26 crore from IDBI Bank where documentation under 5/25 scheme of RBI is in progress as on balance sheet date) were elongated under the 5/25 Scheme (outstanding as on 31st March, 2017 Rs, 7,157.81 crore). The company is in process of execution of Joint Documentation with lenders to effect the sanctioned restructuring scheme. On completion of Joint Documentation, security against the stated loans along with debentures (refer para: ""Debenture""

i & ii, ""Term Loan from Bank"" i, iv, v and ""other Loans"") shall be modified to first charge on pari-passu basis over the movable and immovable fixed assets (ISP, DRI, CPP and other miscellaneous assets etc.) {including all the project contracts (including insurance policies, rights, titles etc.)} both present and future of Plant Phase 1A at Angul, Odisha of the company in favour of the Debenture Trustees/lenders.

External Commercial Borrowings

ECB from Mizuho Bank Limited of Rs, 113.47 crore (Previous year Rs, 149.24 crore) repayable in a period of 2 years, in 9 quarterly installments starting from March 30, 2016 are secured (Charge to be created) by way of a first pari passu charge on all the present movable and immovable fixed assets of 1.5 MTPA Integrated Steel Plant including 1.2 MTPA Plate Mill project ,

1.8 MTPA DRI facility, 810 MW Captive Power Plant at Angul including movable plant & machinery, spares, tools and accessories, furniture, fixtures and the miscellaneous fixed assets of the plant phase 1A at Angul.

Buyer's credit

Loans Rs, 660.10 crore ( Previous Year Rs,798.10 crore) are secured by First ranking pari-passu charge by way of hypothecation over all of the company's current assets, including aggregate rupee value of the company's cash and bank balances, investments (of which return of principal is guaranteed), advance paid, raw materials, finished and semi-finished goods, consumable stores, spares, stock in progress, bills of lading, airways bills, railways receipt (RR), good receipt (GR), motor transport receipts (MTR) or such other receipts (issued by approved carrier carrying consignment of raw material/consumable spares), irrevocable letter of credit, receivables, book debts and consumable stores (including those stored at company's work at Raigarh and Raipur, Chhattisgarh) and include any money owing to it and payable on demand or within 1 (one) year from the date of computation, in whatsoever currency denominated or as otherwise defined/classified by guidelines of the RBI from time to time in force or any other applicable law and all other current assets which are required to be classified as such as per applicable law, both present and future and second ranking pari passu charge (charge created/ to be created) over the entire fixed assets, both movable & immovable of the company [except the fixed assets related to 1x368 tonnes per day, 2x380 tonnes per day (both at Raigarh) and 2x1200 tonnes per day (at Angul) Oxygen Plants of the Company]. The Company is availing the buyer's credit for capex as per the guidelines of RBI.

The interest rate for the above term loans from banks and others (excluding penal interest) varies from 10.50% to 13% p.a The interest rate for the above External Commercial Borrowings is 3.24%.p.a The weighted average rate of interest for buyers credit is 1.59%p.a.

Debentures

1. Debentures of ' NIL (Previous Year Rs, 300 crore) placed initially with HDFC Bank Limited on private placement basis are redeemable at par at the end of 3 years from the date of allotment i.e. 05.04.2013.

2. Debentures of Rs, 300 crore (Previous Year Rs, 300 crore) placed initially with ICICI Bank Limited on private placement basis are redeemable at par at the end of 5 years from the date of allotment i.e. 11.08.2014.

3. Debentures ofRs, 1000 crore (Previous Year Rs, 1000 crore) placed initially with Kotak Mahindra Bank on private placement basis are redeemable at par in 3 installments, Rs, 330 crore at the end of 4 years, Rs, 330 crore at the end of 5 years and Rs, 340 crore at the end of 6 years from the date of allotment i.e. 18th December, 2014.

4. Debentures of Rs, 750 crore (Previous Year Rs, 750 crore) placed initially with HDFC Bank Limited on private placement basis are redeemable at par at the end of 6 years from the date of allotment i.e. 11.03.2015.

External Commercial Borrowings

1. ECA from Credit Agricole CIB of Rs, 1.51 crore (Previous Year Rs, 4.92 crore) at year end rate repayable in 14 half yearly installments starting from October 21, 2010.

2. ECA from Credit Agricole CIB of Rs, 23.28 crore (Previous Year Rs, 50.50 crore) at year end rate repayable in 16 half yearly installments starting from May 25, 2010.

3. ECA from Credit Agricole CIB of Rs, 69.53 crore (Previous Year Rs, 84.83 crore) at year end rate repayable in 20 half yearly installments starting from March 9, 2011.

4. ECA from Credit Agricole CIB of Rs, NIL (Previous Year Rs, 3.77 crore) at year end rate repayable in 14 half yearly installments starting from June 21, 2010.

5. ECB from ICICI Bank Limited of Rs, 107.14 crore (Previous Year Rs, 145.56 crore) at year end rate repayable in 15 half yearly installments starting from March 11, 2011.

Cash Credit from Bank and Buyer's Credit

i) First ranking pari-passu charge by way of hypothecation over all of the company's current assets, including aggregate rupee value of the company's cash and bank balances, investments (of which return of principal is guaranteed), advance paid, raw materials, finished and semi-finished goods, consumable stores, spares, stock in progress, bills of lading, airways bills, railways receipt (RR), good receipt (GR), motor transport receipts (MTR) or such other receipts (issued by approved carrier carrying consignment of raw material/consumable spares), irrevocable letter of credit, receivables, book debts and consumable stores (including those stored at company's work at Raigarh and Raipur, Chhattisgarh) and include any money owing to it and payable on demand or within 1 (one) year from the date of computation, in whatsoever currency denominated or as otherwise defined/classified by guidelines of the RBI from time to time in force or any other applicable law and all other current assets which are required to be classified as such as per applicable law, both present and future and second ranking pari passu charge (charge created/ to be created) over the entire fixed assets, both movable & immovable of the company [except the fixed assets related to 1x368 tonnes per day, 2x380 tonnes per day (both at Raigarh) and 2x1200 tonnes per day (at Angul) Oxygen Plants of the Company]. The cash credit is repayable on demand.

ii) Loans of Rs, 562.50 crore (Previous year Rs, 562.50 crore) are secured by subservient charge by way of hypothecation of current assets of the Company comprising of book debts and stocks.

Note

The weigthed average rate of interest for cash credit is 10.90% p.a.

The weigthed average rate of interest for secured short term loans is 12.00 % p.a.

The weigthed average rate of interest for Other Loans from Bank (Buyer's Credit) is 1.64 % p.a.

The average rate of interest for Inter Corporate Deposit is 10.05% p.a.

The weigthed average rate of interest for unsecured short term loans is 10.89 % p.a.

1. As per Ind AS 108 Operating Segment, segment information has been provided in notes to consolidated financial statements.

2. Pursuant to the Judgment dated 25.08.2014 read with Order dated 24.09.2014 passed by the Hon'ble Supreme Court the allocation of the coal blocks, Gare Palma IV/1 (operational); Utkal B-1, Amarkonda Murgadangal, Gare Palma IV/6, Ramchandi, Urtan North and Jitpur (non-operational) to the Company/its joint ventures stand de-allocated. Prior to the said de-allocation by the Hon'ble Supreme Court, the Government had invoked bank guarantees provided by the Company to the extent of Rs, 153.55 crore with respect to Ramchandi, Amarkonda Murgadangal and Jitpur Coal Blocks. These matters, besides the matters with respect to Urtan North and Gare Palma IV/6 coal blocks, were contested by the Company at various levels and the invocation of the said bank guarantees had been stayed by the respective Hon'ble High Courts. Bank guarantees amounting to ' 155.00 crore have been provided by the Company for the above mentioned non-operational coal blocks.

Pursuant to the said de-allocation by the Hon'ble Supreme Court and pending the decision/s of the Ministry of Coal on the show cause notices issued by the Ministry of Coal calling upon the Company to show cause as to why the delay in the development of the non-operational coal blocks should not be held as violation of the terms and conditions of the allocation letters of the said coal blocks, the respective Hon'ble High Courts have required the Company to keep the said Bank Guarantees alive pending the decision of the Government (Ministry of Coal) in individual case. The High Courts have restrained the Ministry of Coal to act in furtherance of its subsequent decision/s, to invoke the bank guarantee/s, for a further period of two weeks' time from the date of the communication of such decision/s in order to enable the Company to challenge such decision/s of the Ministry of Coal. In the meantime, the invocation of the bank guarantees has been stayed by the Hon'ble High Courts.

The Company believes that it has good case in respect to this matter and hence no provision is considered necessary.

The Company's interests in the above Joint Ventures is reported as Non-Current Investments (Note-8(a)) and stated at cost. However, the Company's share of assets, liabilities, income and expenses, etc. (each without elimination of the effect of transactions between the Company and the joint ventures) related to its interest in the Joint Ventures are:

Fair value hierarchy

The Company uses the following hierarchy for fair value measurement of the company's financial assets and liabilities :

Level 1: Quoted prices/NAV (unadjusted) in active markets for identical assets and liabilities at the measurement date.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data. The following table provides the fair value measurement hierarchy of Company's asset and liabilities, grouped into Level 1 to Level 3:

During the year ended March 31, 2017 and March 31, 2016, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements.

Fair valuation of financial guarantees

Financial guarantees issued by the company on behalf of its overseas subsidiaries have been measured at fair value through profit and loss account. Fair value of said guarantees as at March 31, 2017, March 31, 2016 and April 1, 2015 have been considered at nil as estimated by the management and an independent professional.

Fair valuation techniques

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

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

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

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

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

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

3. Financial Risk Management

The Company's principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to manage finances for the Company's operations. The Company's financial assets comprise investments, loan and other receivables, trade and other receivables, cash, and deposits that arise directly from its operations.

The Company's activities are exposed to market risk, credit risk and liquidity risk. In order to minimize adverse effects on the financial performance of the Company, derivative financial instruments such as forward contracts are entered into to hedge foreign currency risk exposure. Derivatives are used exclusively for hedging purposes and not as trading and speculative purpose.

I. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments. The sensitivity analysis in the following sections relate to the position as at 31st March 2017 and 31st March 2016. The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions. The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. The Company uses derivative financial instruments such as foreign exchange forward contracts of varying maturity depending upon the underlying contract and risk management strategy to manage its exposures to foreign exchange fluctuations.

(a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regard to interest income and interest expenses and to manage the interest rate risk, the Company performs a comprehensive corporate interest rate risk management by balancing the proportion of the fixed rate and floating rate financial instruments in its total portfolio .

The Assumed movement in basis point for interest rate sensitivity analysis is based on currently observable market environment

(b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company transacts business primarily in Indian Rupees and US dollars. The Company has obtained foreign currency loans and has foreign currency trade payables and receivables and is therefore exposed to foreign exchange risk. Certain transactions of the Company act as a natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining expore to foreign exchange risk the Company adopts a policy of selective hedging based on risk perception of the management. Foreign exchange contracts are carried at fair value. The Company hedges its exposure to fluctuations by using foreign currency forwards contracts on the basis of risk perception of the management.

The assumed movement in exchange rate sensitivity analysis is based on the currently observable market environment by the management.

(c) Commodity Price Risk

Commodity Price Risk is the risk that future cash flow of the Company will fluctuate on account of changes in market price of key raw materials.

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

Credit risk

Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial loss to the Company. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. The Company considers the probability of default upon initial recognition of assets and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is significant increase in credit risk, it considers reasonable and supportive forward looking information such as:

(i) Actual or expected significant adverse changes in business.

(ii) Actual or expected significant changes in the operating results of the counterparty.

(iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligation

(iv) Significant increase in credit risk and other financial instruments of the same counterparty

(v) Significant changes in the value of collateral supporting the obligation or in the quality of third party guarantees or credit enhancements.

III. Liquidity Risk

Liquidity risk refers to risk of financial distress or extra ordinary high financing cost arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and require financing. The Company's objective is to maintain at all times optimum levels of liquidity to meet its cash and collateral requirements. Processes and policies related to such risk are overseen by senior management and management monitors the Company's net liquidity position through rolling forecast on the basis of expected cash flows.

4. Capital Risk Management

The Company manages its capital structures and makes adjustment in light of changes in economic conditions and requirements of financing covenants. To this end the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The primary objective of the Company's Capital Management is to maximize the shareholder value by maintaining an efficient capital structure and healthy ratios and safeguard Company's ability to continue as a going concern. The Company also works towards maintaining optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies, process during the year ended 31st March, 2017 and 31st March, 2016.

Notes-

(i) Debt is defined as long-term and short-term borrowings including current maturities (excluding derivatives and financial guarantee contracts) as described in notes 23 and 27.

(ii) Equity includes all capital and reserves of the Company that are managed as capital.

5. Related Party disclosures as per Ind AS 24

A. List of Related Parties and Relationships

a) Subsidiaries, Step down Subsidiaries

I. Subsidiaries

1 Jindal Power Limited

2 Jindal Steel Bolivia SA

3 Jindal Steel & Power (Mauritius) Limited

4 Skyhigh Overseas Limited

5 Everbest Steel and Minings Holdings Limited

6 Jindal Angul Power Limited

7 JB FabInfra Limited

8 Trishakti Real Estate Infrastructure and Developers Limited

9 Raigarh Pathalgaon Expressway Ltd. [w.e.f. 18th 0ctober,2016

II. Subsidiaries of Jindal Power Limited

1 Attunli Hydro Electric Power Company Limited

2 Etalin Hydro Electric Power Company Limited

3 Jindal Hydro Power Limited

4 Jindal Power Distribution Limited

5 Ambitious Power Trading Company Limited

6 Jindal Power Transmission Limited

7 Jindal Power Ventures (Mauritius) Limited

8 Kamala Hydro Electric Power Co. Limited

9 Kineta Power Limited

10 Uttam Infralogix Limited

11 Jindal Realty Private Limited [w.e.f. 31st March 2017]

12 Panther Transfreight Limited, a subsidiary of Uttam Infralogix limited

III. Subsidiary of Skyhigh Overseas Limited

1 Gas to Liquids International S.A

IV. Subsidiary of Jindal Power Ventures (Mauritius) Limited

1 Jindal Power Senegal SAU

V. Subsidiary of JB FabInfra Private Limited

1 All tech Building System Limited

VI. Subsidiaries of Jindal Steel & Power (Mauritius) Limited

1 Blue Castle Ventures Limited

2 Brake Trading (Pty) Limited

3 Enduring Overseas Inc

4 Fire Flash Investments (Pty) Limited

5 Harmony Overseas Limited

6 Jin Africa Limited

7 Jindal (BVI) Limited

8 Jindal Africa Investments (Pty) Limited

9 Jindal Africa Liberia Limited

10 Jindal Africa SA

11 Jindal Botswana (Pty) Limited

12 Jindal Investimentos LDA

13 Jindal Investment Holding Limited.

14 Jindal KZN Processing (Pty) Limited

15 Jindal Madagascar SARL

16 Jindal Mining & Exploration Limited

17 Jindal Mining Namibia (Pty) Limited

18 Jindal Steel & Minerals Zimbabwe Limited

19 Jindal Steel & Power (BC) Limited

20 Jindal Steel and Power(Australia) Pty Limited

21 Jindal Tanzania Limited

22 Jindal Zambia Limited

23 JSPL Mozambique Minerais LDA

24 Jublient Overseas Limited

25 Landmark Mineral Resources (Pty) Limited

26 Osho Madagascar SARL

27 PT Jindal Overseas

28 Jindal Shadeed Iron & Steel L.L.C

29 Sungu Sungu Pty Limited

30 Trans Asia Mining Pte. Limited

31 Vision Overseas Limited

32 Wollongong Coal Limited

33 Jindal Steel DMCC

34 Jindal Mauritania SARL

VII. Others

1 Belde Empreendimentos Mineiros LDA, a subsidiary of JSPL Mozambique Minerais LDA

2 Eastern Solid Fuels (Pty) Limited, a subsidiary of Jindal Mining

& Exploration Limited

3 PT BHI Mining Indonesia, a subsidiary of Jindal Investment Holding Limited

4 PT Sumber Surya Gemilang, a subsidiary of PT.BHI Mining Indonesia

5 PT Maruwai Bara Abadi, a subsidiary of PT.BHI Mining Indonesia

6 Jindal Mining SA (Pty) Limited, a subsidiary of Eastern Solid Fuels (Pty) Limited

7 Bon-Terra Mining (Pty) Limited,a subsidiary of Jindal (BVI) Limited

8 CIC (Barbados) Holding Corp,a subsidiary of Jindal (BVI) Limited

9 CIC Energy (Bahamas) Limited,a subsidiary of Jindal (BVI) Limited

10 Jindal Energy (Botswana) Pty Limited,a subsidiary of Jindal (BVI) Limited

11 Jindal Energy (SA) Pty Limited, a subsidiary of Jindal (BVI) Limited

12 CIC Transafrica (Barbados) Corp,a subsidiary of Jindal (BVI) Limited

13 Jindal Resources (Botswana) Pty Limited,a subsidiary of CIC Transafrica (Barbados) Corp

14 Trans Africa Rail (Pty) Limited, a subsidiary of CIC Transafrica (Barbados) Corp

15 Sad-Elec (Pty) Limited, a subsidiary of Jindal Energy (SA) Pty Limited

16 CIC (Barbados) Mining Corp, a subsidiary of CIC (Barbados) Holding Corp

17 CIC (Barbados) Energy Corp,a subsidiary of CIC (Barbados) Holding Corp

18 Meepong Resources (Mauritius) (Pty) Limited, a subsidiary of CIC (Barbados) Mining Corp

19 Meepong Resources (Pty) Limited, a subsidiary of Meepong Resources (Mauritius) (Pty) Limited

20 Meepong Energy (Mauritius) (Pty) Limited, a subsidiary of CIC (Barbados) Energy Corp

21 Meepong Energy (Pty) Limited, a subsidiary of Meepong Energy (Mauritius) (Pty) Limited

22 Meepong Service (Pty) Limited, a subsidiary of Meepong Energy (Pty) Limited

23 Meepong Water (Pty) Limited, a subsidiary of Meepong Energy (Pty) Limited

24 Peerboom Coal (Pty) Limited ,a subsidiary of Jindal Africa Investment (Pty) Limited

25 Shadeed Iron & Steel Company Limited, a subsidiary of Jindal Shadeed Iron & Steel LLC

26 Southbulli Holding Pty Limited, a subsidiary of Wollongong Coal Limited

27 Oceanic Coal Resources NL, a subsidiary of Wollongong Coal Limited

28 Wongawilli Coal Pty Limited, a subsidiary of Oceanic Coal Resources NL

29 Koleko Resources (Pty) Limited, a subsidiary of Jindal Africa Investment (Pty) Limited

30 Legend Iron Limited, a subsidiary of Jindal Mining & Exploration Limited

31 Cameroon Mining Action (CAMINA) SA, a subsidiary of Legend Iron Limited

32 Enviro Waste Gas Services Pty Ltd., a subsidiary of Wollongong Coal Limited

b) Associates

1 Nalwa Steel & Power Limited

2 Prodisyne (Pty) Limited

3 Thuthukani Coal (Pty) Limited

c) Joint Ventures

1 Jindal Synfuels Limited

2 Shresht Mining and Metals Private Limited

3 Urtan North Mining Private Limited

d) Other Significant influences

1 OPJ Trading Private Limited

e) Key Managerial person

1 Shri Naveen Jindal (Chairman )

2 Shri Ravi Uppal (Managing Director & Group CEO )

3 Shri D.K. Saraogi (Wholetime Director)

4 Shri Rajeev Bhadauria (Wholetime Director)

5 Shri Rajesh Bhatia (Chief Financial Officer w.e.f 22 Nov 2016)

6 Shri K Rajagopal (Group Chief Financial Officer till 21 Nov 2016)

7 Shri Murli Manohar Purohit (Company Secretary w.e.f 10 Oct 2016)

8 Shri Jagdish Patra (Company Secretary till 11 Jul 2016)

f) Enterprises over which Key Management Personnel and their relatives excercise significant influence and with whom transactions have taken place during the year

1 Jindal Stainless Ltd

2 Jindal Industries Limited

3 Bir Plantation Limited

4 India Flysafe Aviation Limited

5 Minerals Management Service (India) Pvt. Ltd.

6 Jindal Saw Limited

7 JSW Steel Limited

8 Rohit Tower Building Limited

9 JSW Energy Limited

10 JSW Projects Limited

11 JSW Steel Coated Product Ltd.

12 JSW Severfield Structures Ltd.

13 Jindal Realty Private Limtied (Upto 30 March 2017, subsidiary wef 31 March 2017)

g) Post-Employment Benefit entity

1 Jindal Steel & Power Ltd EPF Trust

6. Impairment Review

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

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

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

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

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

Key assumptions used in value-in-use calculations:

- Operating margins (Earnings before interest and taxes)

- Discount Rate

- Growth Rates

- Capital expenditures

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

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

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

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

7. The Hon'ble Supreme Court of India by its Order dated 24 September 2014 cancelled number of coal blocks allocated to the Company by Ministry of Coal, Government of India and directed to pay an additional levy of Rs, 295 per MT on gross coal extracted. The Company has paid under protest such levy on coal extracted during the period from 1993 to 31 March 2015 of Rs, 2,082.23 crore. The management based on legal opinion has charged to the statement of profit and loss ,as exceptional item during the year 2014-15 for Rs, 807.77 crore computed on net extraction (run of mines less shale, rejects and ungraded middling) of coal by the Company. The balance amount of Rs, 1,274.46 crore has been shown as recoverable from the Government Authority since the entire amount of additional levy has been paid under protest.

8. The Company has net book value of investment made in mining assets including land, infrastructure and clearance etc. of Rs, 425 crore and filed claim for the same pursuant to directive vide letter dated 26 December , 2014 given by the Ministry of Coal on such mines . Meanwhile the Ministry of Coal has made interim payment to the Company of Rs, 22.72 crore towards the same. Pending final settlement of the aforesaid claim, this amount has been accounted for as advance.

9. The Company has filed legal suits /notices or in the process of filing legal case /sending legal notices / making efforts for recovery of debit balances of Rs, 218.62 crore (P.Y. 2015 16 Rs, 498.64 crore) plus interest wherever applicable, which are being carried as long term /short term advances, trade receivables and other recoverable. Pending outcome of legal proceedings/Company 's efforts for recovery and based on legal advice in certain cases , the Company has considered aforesaid amounts as fully recoverable. Hence, no provision has been made in respect of these balances.

10. Subject to customary regulatory approvals and other conditions precedent(s), the Board of Directors at its meeting held on 3rd May,2016 has approved the agreement for divestment of 1,000 MW Power unit of Jindal Power Limited (a subsidiary of the Company (JPL)), located in Chhattisgarh into a separate purpose vehicle (SPV), for the purpose of transferring the same to JSW Energy Limited through sale of the entire share capital and other securities of the aforesaid entity in terms of the share purchase agreement for an enterprise value of Rs, 6,500 crore plus the value of Net Current Assets as on the Closing Date. The valuation may vary based upon the achievement of PPA's before the closing date 30th June, 2018 and as prescribed in the Agreement subject to minimum of Rs, 4,000 crore plus the value of Net Current Assets as on the Closing Date. The Company has received advance of Rs, 373.00 crore from JSW Energy against the same.

In order to streamline cash flows of the group and create SPV amenable for, the Board of Directors of the Company and JPL have in principle approved the restructuring involving parent Company and JPL and formed a committee of directors ("Restructuring Committee"), to explore and evaluate various restructuring options available including a scheme of arrangement. The restructuring will entail that 1000 MW Power Plant owned by JPL is hived off into an separate purpose vehicle, being subsidiary of the parent company, creation of other SPV amenable for monetization by way of divestments as well as achieve better synergy across the parent company and its subsidiaries, and to ensure that the businesses of these entities are operated in the most efficient and cost effective manner, including by pooling of technical, distribution and marketing skills, creating optimal utilization of resources, better administration and cost reduction. Upon completion of evaluation of the possible arrangement options, the Restructuring Committee is to submit its recommendations to the Board of Directors and to such other committee(s) of the Board, including the Audit Committee, shareholders as may be required by applicable laws.

11. During the previous financial year, the Board of Directors of the Company approved sale of certain captive power plants (CPP) to Jindal Power Limited (JPL) a subsidiary company situated at Angul, Odisha (6x135 MW) and at Raigarh, Chattisgarh (2x55 MW) aggregating to 920 MW at a fair market value determined by independent valuer appointed by the Board of Directors amounting to Rs, 5,275 crore; which is subject to necessary approvals to be arranged by the Company. The Company has received interest free advance against above of Rs, 2,854 crore.

12. The company has considered fair value of Property plant and equipment (fair value as assessed by independent valuer) i.e. Land, Building and plant & machinery (PPE) in accordance with stipulation of Ind AS 101 with resulted impact been given and accounted for in reserves, Accordingly on fair value of assets as cost on transition date (1st April 2015) as per option available in Ind AS and being increase in value (net) in PPE of Rs, 16,520.53 crore and useful life (as assessed and estimated by the management and a technical valuer), depreciation reflected in statement of profit & loss of current year is higher by Rs, 590.52 crore for the year ended 31st March 2017 and to that extent loss is higher.

13. Hon'ble Supreme Court of India, in its recent judgment has upheld constitutional validity of entry tax levied by the different State Governments and referred the same to divisional/ regular benches for testing and determination of validity of state legislation vis a vis the Article 304 (a) of the constitution and left open levy of entry tax on goods entering the landmass of India from another country to be determined in appropriate proceedings. Full provision has been made in this regard except in case of import of goods from outside India, where part amount (' 55.83 crore) of entry tax has been deposited (shown under loans and advances) based on the Order of High Court in other assessor’s case and as advised by an expert (against amount calculated till 31.03.2017 of Rs, 113.96 crore). As advised, no material provision is required to be made on this account . Further Rs, 0.64 crore has been paid subsequent to balance sheet date.

14. Balances of certain advances, creditors and receivables are in process of confirmation/reconciliation.

15. Information related to Consolidated financial

The company is listed on stock exchanges in India. The Company has prepared consolidated financial statements as required under Ind AS 110, Sections 129 of Companies Act, 2013 and listing requirements. The consolidated financial statements are available on the Company's website for public use.

16. Transition to Ind AS

These Financial Statements, for the year ended 31st March 2017 are the first, the Company has prepared in accordance with Ind AS.

Accordingly, the Company has prepared its financial statement to comply with the Ind AS for the year ending 31st March,

2017, together with the comparative data as at and for the year ended 31st March, 2016, as described in note no. 2. In preparing these financial statements, the Company's opening balance sheet was prepared as at 1st April, 2015, the date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April, 2015 and the financial statements as at and for the year ended 31st March, 2016.

Exemptions Applied

Ind AS 101 First time adoption of Indian Accounting Standards allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS, effective for 1st April 2015 opening balance sheet. The Company has applied the exemptions which have been explained below:

1 Deemed Cost of Property, Plant & Equipment

The Company has elected to measure items of Property, Plant & Equipment (PPE) at the date of transition to Ind AS at their fair value. The Company has used the fair value of PPE, which is considered as deemed cost on transition. Fair valuations are assessed as on 1st April, 2015.

2 Fair value of financial assets and liabilities

The Company has financial receivables and payables that are non-derivative financial instruments. Under previous GAAP, these were carried at transactions cost less allowances for impairment, if any. Under Ind AS, these financial assets and liabilities are initially recognized at fair value and subsequently measured at mortised cost, less allowance for impairment, if any. For transactions entered into on or after the date of transition to Ind AS, the requirement of initial recognition at fair value is applied prospectively.

3 Long Term Foreign Currency Monetary items

The Company has opted to continue the policy adopted for accounting for exchange differences arising from translation of long term foreign currency monetary items recognized in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP, accordingly the Company has continued the capitalization of foreign exchange gain/loss on long term loan outstanding on the date of transition i.e April 1st 2015 and such capitalized amount is mortised over the remaining useful life of the asset.

4 Investments in Subsidiaries, joint ventures and associates

The Company has elected to apply previous GAAP carrying amount of its investment in equity shares in subsidiaries, associates and joint ventures as deeemed cost as on the date of transition to Ind AS. However, the debt instruments in subsidiaries, associates and joint ventures are recognized at amortized cost.

5 Leases

The Company has applied the transition provision in Appendix C of Ind AS 17, "Determining whether an arrangement contains a Lease", and has assessed all arrangement as at the date of transition.

Estimates

The estimates at 1st April, 2015 and at 31st March, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences if any, in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss method.

- Investment in debt instruments carried at Amortized Cost.

- Investment in equity instruments carried at Fair value through profit or loss

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at the transition date and as of 31st March, 2016.

Exceptions to retrospective application of Ind AS

1 Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exists at the date of transition to Ind AS.

2 Derecognistion of financial assets & financial liabilities

The Company has elected to apply the derecognition requirements for financial assets & financial liabilities in accordance with Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

Impact of transition to Ind AS

The following is a summary of the effects of the differences between Ind AS and Indian GAAP on the Company's total equity shareholders' funds and profit and loss for the financial period for the periods previously reported under Indian GAAP following the date of transition to Ind AS.

17. Notes to the reconciliation of equity as at 1st April 2015 and 31st March 2016 and total comprehensive income for the year ended 31st March 2016

Property, Plant and Equipments carried at deemed cost

The Company has considered fair value as deemed cost of Property Plant and Equipments i.e Land, building and Plant & machinery and re assessed useful life (as assessed and estimated by the management & technical valuer) as on the date of transition to Ind AS i.e 1st April 2015 and impact of Rs, 16520.53 crore in accordance with said stipulations with resulted impact being accounted for in reserves. The depreciation as per Ind AS has been accounted on fair value and on revised useful life.

Investments

Investments other than investment in subsidiaries, joint ventures and associates has been considered at fair value through profit & loss. Investments in subsidiaries, joint ventures and associates: (i) in equity shares has been considered at carrying value as deemed cost;

(ii) other than equity shares has been considered at mortised cost. Difference between the instruments carrying value and mortised cost as at the date of transition has been recognized in retained earnings.

Defined benefit obligation

The impact of change in actuarial assumption and experience adjustments for defined benefit obligation is accounted in Other Comprehensive Income with reversal in profit & loss.

Deferred Tax

The Company has accounted for deferred tax on various adjustment between Indian GAAP and Ind AS as well as on temporary differences between the carrying amount of assets and liabilities in the balance sheet and corresponding tax bases at the tax rate at which they are expected to be reversed. Corresponding net impact has been recognized in retained earnings/profit & loss/Other Comprehensive Income as applicable.

Excise Duty

Under Ind AS, Excise duty on sale of goods is separately presented as expenses. Thus sale of goods under Ind AS for the year ended 31st March 2016 has increased by Rs, 1,996.90 crore with a corresponding increase in other expense.

Foreign currency translation

Under Ind AS, translation difference which were earlier shown as part of equity has been transferred to retained earnings as at 1st April 2015 with reclassification from profit & loss for the year ended 31st March 2016.

Financial assets and Financial Liabilities

Financial assets and financial liabilities have been classified as per Ind AS 109 read with Ind AS 32.

Statement of Cash Flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

Discounts

Under Indian GAAP, discounts were recognized as expenses which has been adjusted against the revenue under Ind AS during the year ended 31st March 2016.

Standards issued but not effective yet

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, 'Statement of cash flows' and Ind AS 102, 'Share-based payment.' These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, 'Statement of cash flows' and IFRS 2, 'Share-based payment,' respectively. The amendments are applicable to the Company from April 1, 2017.

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.

The Company has an Employee Share Purchase Scheme namely JSPL ESPS 2013; however the said amendment does not have any possible impact on the financials of the Company..

18. Previous year figures have been regrouped/ rearranged / recast, wherever considered necessary to conform to current year's classification. Figures less than 50000 have been shown as absolute number.

19. Notes 1 to 68 are annexed to and form an integral part of the financial statements.