Jindal Steel & Power Limited (“the Company”) is one of the India’s leading steel producers with significant presence in sectors like mining and power generati on. It is listed on the National Stock Exchange of India and Bombay Stock Exchange in India. Its business is spread across India and overseas. The registered office is situated in the state of Haryana, the corporate office is situated in New Delhi and the manufacturing plants in India are in the states of Chhaffisgarh, Odisha, Jharkhand etc. The Company has global presence through subsidiaries, mainly in Australia, Botswana, Cameroon, Dubai, Indonesia, Liberia, Mauritania, Mauritius, Mozambique, Madagascar, Namibia, South Africa, Sultanate of Oman, Tanzania and Zambia and representative office in China. There are several business initiatives running simultaneously across continents.
These financial statements were approved and adopted by the Board of Directors of the Company in their meeting held on 09th May, 2018.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared in accordance with accounting standards as prescribed under Section 133 of the Companies Act, 2013 (the ‘Act’) read with Companies (Accounts) Rules, 2015 (Indian Accounting Standards(IND AS)). The Company has consistently applied the accounting policies used in the preparation of its financial statements.
The standalone financial statements provide comparative information in respect of previous year.
The significant accounting policies used in preparing the financial statements are set out in Note no. 3 of the Notes to the Standalone Financial Statements.
The preparation of the financial statements in conformity with Indian Accounting Standards (Ind AS) requires management to make judgments, esti mates and assumpti ons that affect the reported amounts of revenues, expenses, assets and liability es, and the accompanying disclosures at the date of the financial statements. The judgments, estimates and underlying assumpti ons are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years and, if material, their effects are disclosed in the notes to the financial statements. Actual results could vary from these estimates. (Refer Note no. 4 on critical accounting estimates, assumptions and judgments).
3. CRITICAL ACCOUNTING ESTIMATES,ASSUMPTIONS AND JUDGEMENTS
3.1 Property, plant and equipment
External advisor and/or internal technical team assess the remaining useful life and residual value of property, plant and equipment. Management believes that the assigned useful lives and residual values are reasonable.
Internal technical and user team assess the remaining useful lives of Intangible assets. Management believes that assigned useful lives are reasonable. All Intangibles are carried at net book value on transition.
3.3 Mine restoration obligation
In determining the cost of the mine restoration obligation the Company uses technical estimates to determine the expected cost to restore the mines and the expected timing of these costs.
3.4 Liquidated damages
Liquidated damages payable or receivable are estimated and recorded as per contractual terms/management assertion; estimate may vary from actuals as levy by customer/vendor.
3.5 Other estimates
The Company estimates the un-collectability of accounts receivable by analyzing historical payment patterns, customer concentrations, customer credit-worthiness and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required. Similarly, the Company provides for inventory obsolescence, excess inventory and inventories with carrying values in excess of net realizable value based on assessment of the future demand, market conditions and specific inventory management initiatives. In all cases inventory is carried at the lower of historical cost and net realizable value.
3.6 Standards issued but not effective
On March 28, 2018 the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract and Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the company from April 01, 2018.
a) Issue of Ind As 115 - Revenue from Customers and Contracts
Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts, and the related interpretations. Ind AS 115 provides a single model of accounti ng for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
b) Amendment to existing issued Ind As
The MCA has also carried out amendments of the following accounting standards:
i) Ind AS 21 - The effect of changes in Foreign Exchange Rates
ii) Ind AS 40 - Investment Property
iii) Ind AS 12 - Income Taxes
iv) Ind AS 28 - Investment in Associates and Joint Ventures, and
v) Ind AS 112 - Disclosure of Interest in other entities.
Application of above standards is not expected to have any significant impact on the Company’s Financial Statements.
During the year the company has issued equity shares of Rs.1 each as follows :
14,20,000 equity shares at issue price of Rs.140.31 each (including premium of Rs.139.31 per share) to the promoter group company and 5,15,02,145 equity shares of Rs.1 each at issue price of Rs.233 each (including premium of Rs.232 per share) by way of Qualified Institutions Placement (QIP).
b) Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of Rs.1 per share. Each holder of equity share is entitled to one vote per share. The Company declares dividend in Indian Rupees. The dividend, if any, proposed by the Board of Directors is subject to approval of the Shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company after payment of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.
c) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:
In accordance with Section 77 of the Companies Act, 1956 and buy back regulations of SEBI, the Company during the financial year 2013-14 bought back and extinguished 19,959,584 equity shares of Rs.1 each and created a Capital Redemption Reserve of Rs.2.00 Crore out of surplus in the Statement of Profit and Loss. The premium on buy back of Rs.498.80 Crore had been utilised from Securities Premium Account Rs.122.96 Crore and out of surplus in Statement of Profit and Loss Rs.375.84 Crore.
During the five years immediately preceding 31st March, 2018, the Company has not allotted any equity shares as bonus shares and also not issued any share for consideration other than cash.
In addition the Company allotted 1,50,000 equity shares during the preceding five years under its various Employees Stock Option Schemes / Employee Stock Purchase Scheme
d) Details of shareholders holding more than 5% shares in the Company
As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
e) Employees Stock purchase Scheme
In accordance with SEBI (Share Based Employees Benefits) Regulations 2014 and pursuant to JSPL ESPS 2013 Scheme, the Nomination and Remuneration Committee has vide its resolution dated 27.01.2017 offered and the Corporate Management Committee of the Board vide its resolution dated 03.02.2017 allotted 1,20,434 nos. equity shares of Rs.1 each at a premium of Rs.81.20 each to Mr Ravi Uppal, the then Managing Director & Group CEO during previous year. Out of total offered 150000 nos. equity shares so far, the Company had during the earlier years allotted 29,566 nos. equity shares of Rs.1 each.
f) Employees Stock Option Scheme
The Board of Directors in its meeting held on 8th August, 2017 approved the JSPL Employee Stock Option Plan 2017(JSPL ESOP Scheme-2017) and the same was approved by the shareholders in the Annual General Meeting held on 22nd September 2017, in accordance with SEBI (Share Based Employee Benefits) Requlations 2014.
Pursuant to the JSPL ESOP Scheme-2017, the Company may grant upto 4,50,00,000 options convertible into equal number of equity shares of Rs.1 each.
The Nomination and Remuneration Committee of the Board in its meeting held on 5th January, 2018 granted 51,21,735 options convertible into equal number of equity shares of the Company, to the eligible employees of the Company and its subsidiaries, at an exercise price of Rs.244.55 per option. As per JSPL ESOP Scheme-2017 the vesting period shall not be less than one year and maximum period will be three years. The employee shall exercise his options within a period of six months from respective vesting. No options have been vested/ exercised as on date. 28,934 options have lapsed as on 31st March, 2018.
(i) On account of substantial investment made by the Company in seffing up/ expansion of industrial unit(s) at Raigarh (Chhattisgarh), including investment in acquisition of capital assets, one of the Company’s unit is eligible for sales tax exemption under the State Industrial Policy which aims towards industrialization of the State and development of backward areas. The Company had earlier treated the amount relating to sales tax exemption as capital receipt and credited the same to “Sales tax subsidy / Capital reserve” shown under the head “Reserve and Surplus” up to the Financial year ended 31st March, 2015. During the previous year Rs.316.70 Crore as stated above was credited to and considered as part of “other operating revenue”.
(ii) Securities Premium Reserve represents the amount received in excess of par value of securities issued by the company. This reserve is utilised in accordance with provisions of the act.
(iii) The Company is required to create Debenture Redemption Reserve out of the profits which is available for the purpose of redemption of debentures.
(iv) Capital Redemption Reserve represents the statutory reserve created on buy back of shares. It is not available for distribution.
(v) During the year, the company has issued 4,80,00,000 converti ble warrants at issue price of Rs.140.31 each to a promoter group company on preferential basis. These warrants are convertible into equal number of fully paid equity shares of Rs.1 each upon exercise of the option of conversion of the warrants held by the holder(s), within a period of 18 months from the date of allotment of warrants. Out of Rs.168.37 Crore (i.e. 25% of the total consideration of Rs.673.49 Crore) received, Rs.4.80 Crore has been shown as ‘Money Received against Share Warrants’ and balance amount of Rs.163.57 Crore has been included under ‘Securities premium account.
i) Balance amount of debentures of Rs.650 Crore (net of Rs.100 Crore redeemed during the year) (March 31, 2017 NIL) placed initially with HDFC Bank Limited on private placement basis are redeemable at par on 11.03.2021 as unsecured. During the year, the company has created security by way of first and exclusive pledge, in favour of Debenture trustee, over 5,78,05,714 nos. equity shares of Jindal Power Limited held by the Company.
ii) Debentures of Rs.1000 Crore (March 31, 2017 Rs.1000 Crore) placed initially with Life Insurance Corporation of India on private placement basis are redeemable at par in 2 equal annual instalments at the end of 9.5 and 10.5 years from the date of respective allotments i.e. Rs.100 Crore (12.10.2009), Rs.150 Crore (22.10.2009), Rs.150 Crore (24.11.2009), Rs.150 Crore (24.12.2009), Rs.150 Crore (25.01.2010), Rs.150 Crore (19.02.2010) and Rs.150 Crore (26.03.2010). The debentures are to be secured (charge to be modified) by way of first ranking pari passu charge over the both movable and immovable fixed assets, both present & future, and other related miscellaneous assets etc.of the Angul Phase 1A Plant (Angul Phase 1A plant means collectively the Angul Integrated Steel Plant (ISP) and Plate Mill (PM) Project, the Angul Direct Reduced Iron (DRI) Project and the Angul Captive Power Plant (CPP) Project) at Angul, Odisha of the Company in favour of the Debenture Trustees.
iii) Debentures of Rs.500 Crore (March 31, 2017 Rs.500 Crore) placed initi ally with Life Insurance Corporation of India on private placement basis are redeemable at par in 2 equal annual instalments at the end of 9.5 and 10.5 years from the date of respective allotments i.e. Rs.100 Crore (24.08.2009), Rs.80 Crore (08.09.2009), Rs.80 Crore (08.10.2009), Rs.80 Crore (09.11.2009), Rs.80 Crore (08.12.2009) and Rs.80 Crore (08.01.2010). The debentures are secured on pari-passu charge basis by way of hypothecati on of movable fixed assets of the Company (excluding assets charged on exclusive basis) in favour of the Debenture Trustees. In addition a first pari passu mortgage on a part of immovable property pertaining to unit located at Kharsia Road, Raigarh and a part of the immovable property pertaining to unit located at 13 KM Stone, G E Road, Mandir Hasaud, Raipur in favour of the Debenture Trustees.
iv) Debentures of Rs.1000 Crore (March 31, 2017 NIL) placed initi ally with Kotak Mahindra Bank on private placement basis are redeemable at par in 3 instalments, 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 as unsecured. During the year, the Company has created security by way of first and exclusive pledge, in favour of Debenture trustee, over 7,70,74,285 nos. equity shares of Jindal Power Limited held by the Company.
v) Balance amount of debentures of Rs.49.60 Crore (March 31, 2017 Rs.62 Crore) placed initially with SBI Life Insurance Company Limited on private placement basis are redeemable at par in 4 equal annual instalments. The debentures are to be secured (charge to be modified) by way of first ranking pari passu charge over the both movable and immovable fixed assets, both present & future, and other related miscellaneous assets etc. of the Angul Phase 1A Plant (Angul Phase 1A plant means collectively the Angul ISP and PM Project, the Angul DRI Project and the Angul CPP Project) at Angul, Odisha of the company in favour of the Debenture Trustees.
Term Loans from Banks
i) Loans of Rs.5,983.03 Crore (March 31, 2017 Rs.6,118.22 Crore) are repayable in 71 quarterly instalments are to be secured by way of first ranking pari passu charge over the both movable and immovable fixed assets, both present & future, and other related miscellaneous assets etc. of the Angul Phase 1A Plant (Angul Phase 1A plant means collectively the Angul ISP and PM Project, the Angul DRI Project and the Angul CPP Project) at Angul, Odisha of the Company. The next instalment is due on 30th June, 2018.
ii) a. Loans of Rs.1,508.72 Crore (March 31, 2017 Rs.1,559.61 Crore) repayable in 27 quarterly instalments are secured by way of a first charge on pari passu basis over all the movable and immovable fixed assets (plate mill & ISP facility, DRI, Captive Power Plant and other misc. assets etc.), both present and future, of plant phase 1A at Angul, Odisha. The next instalment is due on 30th June, 2018.
b. Loans of Rs.475.00 Crore (March 31, 2017 Rs.500.00 Crore) repayable to HDFC bank in 27 quarterly instalments are secured by way of a first charge on pari passu basis over all movable fixed assets (plate mill & ISP facility, DRI, CPP and other misc. assets etc.), both present and future, of phase 1A at Angul, Odisha. Further, charge in favor of HDFC Bank in respect of said loan by way of a first charge on immovable fixed assets, both present and future, of Phase 1A at Angul, Odisha is to be created. The next instalment is due on 30th June, 2018.
iii) Loans of Rs.1055.05 Crore (March 31, 2017 Rs.1,340 Crore) initi ally taken from ICICI bank on bilateral basis are repayable by way of ballooning instalments in two tranches. An amount of Rs.190.05 Crore shall be repayable in 3 quarterly instalment and an amount of Rs.865 Crore shall be repayable in 23 quarterly instalments; the next instalment is due on 15th April, 2018.
Loans of Rs.799.95 Crore (March 31, 2017 Rs.956.24 Crore) initially taken from HDFC Bank on bilateral basis are repayable in 16 quarterly instalments; the next instalment is due on 30th June, 2018.
Loans of Rs.1,274.66 Crore (March 31, 2017 Rs.1,465.94 Crore) from State Bank of India are repayable in 24 quarterly instalments; the next instalment is due on 30th June, 2018.
Above loans are secured by way of a first pari passu charge on all the present movable Fixed Assets of units located at Balkudra, Patratu, District Ramgarh, Jharkand; 13 KM Stone, G E Road, Mandir Hasaud, Raipur; 201 to 204, Industrial Park SSD, Punjipatra, Raigarh, Chhattisgarh; Bhikaji Cama Place, New Delhi; and all movable Fixed Assets (present as well as future) located at Kharsia Road, Raigarh, Chhattisgarh. In addition a first ranking mortgage and pari passu charge on immovable property pertaining to unit located at Kharsia Road, Raigarh and a part of the immovable property pertaining to unit located at 13 KM Stone, G E Road, Mandir Hasaud, Raipur.
iv) Loans of Rs.366.86 Crore (March 31, 2017 Rs.360.22 Crore) are repayable in 71 quarterly instalments and are to be secured by way of first ranking pari passu charge over both the immovable and movable assets, both present and future, (including related rights, titles claims and demands in the contracts etc.) of Dongamahua Captive Power Plant (CPP) Project A. (Dongamahua CPP Project A means the 2*135 MW (Phase -1) captive power plant situated at village Dongamahua, Chaffisgarh). The next instalment is due on 30th June, 2018.
v) Loans of Rs.472.53 Crore (March 31, 2017 Rs.483.16 Crore) are repayable in 71 quarterly instalments and are to be secured by way of a first ranking pari passu charge over both the immovable and movable assets, both present and future, (including related rights, titles claims and demands in the contracts etc.) of the Dongamahua CPP Project B. (Dongamahua CPP Project B means the 2*135 MW (Phase -2) captive power plant situated at village Dongamahua, Chattisgarh). The next instalment is due on 30th June, 2018.
Other loan of Rs.191.91 Crore (March 31, 2017 Rs.196.21 Crore) is repayable in 71 quarterly instalments and are to be secured by way of first ranking pari passu charge over the both movable and immovable fixed assets, both present & future, and other related miscellaneous assets etc. of the Angul Phase 1A Plant. (Angul Phase 1A plant means collectively the Angul ISP and PM Project, the Angul DRI Project and the Angul CPP Project) at Angul, Odisha of the Company.
Project Loan of Rs.7215.34 Crore outstanding as on 30th Nov 2015 were elongated under the 5/25 Scheme (outstanding as on 31st March 2018 Rs.7014.33 Crore). The Company has executed Joint Documentation with lenders to effect the sanctioned restructuring scheme. Security against some of the stated loans along with debentures (refer para: “Debenture” ii & v, “Term Loan from Banks” i and “other Loans”) is to be modified to first ranking pari passu charge over the both movable and immovable fixed assets, both present & future, and other related miscellaneous assets etc. of the Angul Phase 1A Plant (Angul Phase 1A plant means collectively the Angul ISP and PM Project, the Angul DRI Project and the Angul CPP Project) at Angul, Odisha of the Company in favour of the debenture trustees/ security trustee and security against other stated loans (refer para; “term loan from banks” iv & v) is to be modified by way of first ranking pari passu charge over both the immovable and movable assets, both present and future, of the Dongamahua CPP project A and project B respectively (including related rights, titles claims and demands in the contracts etc.). (Dongamahua CPP Project A means the 2*135 MW (Phase-1) captive power plant and Dongamahua CPP project B means the 2*135 MW (Phase-2) captive power plant; both situated at village Dongamahua, Chaffisgarh). Security against loans pertaining to Dongamahua CPP project A is to be modified in favor of security trustee and security pertaining to Dongamahua CPP project B is to be modified in favour of the Lender.
Loans Rs.592.12 Crore (Previous Year Rs.660.10 Crore) are secured by first ranking pari-passu charge by way of hypothecation over all of the Company’s current assets, 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, both present and future.
The interest rate for the above term loans from banks and others (excluding penal interest) varies from 9.75% to 13% p.a The weighted average rate of interest for buyers’ credit is 2.00%p.a.
In respect of certain loan, charges are in process of satisfaction/modification
Debentures of Rs.300 Crore (Previous Year Rs.300 Crore) placed initi ally 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.
@Shown as secured during the year (previous year unsecured)
External Commercial Borrowings
The balance amount of ECA from Credit Agricole CIB of Rs.50.59 Crore (Previous Year : ECA of Rs.94.32 Crore from Credit Agricole CIB and ECB of 107.14 Crore from ICICI Bank Limited) repayable in 5 half yearly instalments. The next instalment is due on 9th September, 2018.
Repayments and Interest rates for the above Unsecured Debenture & External Commercial Borrowings are as follows:
i) Loan of Rs.562.50 Crore (Previous year Rs.562.50 Crore) is secured by subservient charge by way of hypothecation of current assets of the Company comprising of book debts and stocks.
Cash Credit from Bank and Buyer’s Credit
These are secured by first ranking pari-passu charge by way of hypothecation over all of the Company’s current assets, 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, both present and future. The cash credit is repayable on demand.
The Weighted average rate of interest for Cash credit is 10.94% p.a.
The Weighted average rate of interest for WCDL loan is 10.15% p.a.
The Weighted average rate of interest on Buyer’s credit is 2% p.a.
The Weighted average rate of interest for Secured term loan is 12.50% p.a.
The Weighted average rate of interest for Unsecured term loan from bank is 11.52% p.a.
The Weighted average rate of interest for Unsecured term loan from others is 10.88% p.a.
The Weighted average rate of interest for Loan from related parties is 9.73%
5. CSR Expenses
In view of the losses in previous three years the Company is not required to spend on corporate social responsibility (CSR) as per section 135 of the Companies Act, 2013. However company has voluntarily spend following amount on CSR expenses:-
“Provision during the year” for asset retirement obligation is after considering the impact of change in discount rate.
The expected outflow of provisions for asset retirement obligation is 45 to 47 years.
6. ‘Employee Benefits’, in accordance with Accounting Standard (Ind AS-19) :
A. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days’ salary (last drawn salary) for each completed year of service.
B. The actuary has provided a valuation of Provident Fund Liability and based on the below assumptions made a provision of Rs.12.35 Crore as at 31st March, 2018 (Previous Year Rs.13.88 Crore).
C. The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the balance sheet for the respective plans.
The above sensitivity analysis is based on a change in an assumption while holding all other assumption constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumpti ons the same method (projected unit credit method has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet.
7. As per IND AS 108 Operating Segment, segment information has been provided in notes to consolidated financial statements.
8. 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 (previous year 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 Rs.155 Crore (previous year Rs.155 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.
9. Interest in Joint Ventures:
The Company’s interest as a venturer, in jointly controlled entities (Incorporated Joint Ventures) is as under:
The Company’s interests in the above Joint Ventures is reported as Non-Current Investments (Note-8(c)) 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:
i) All Inter corporate deposits are given to unrelated corporate entities at an interest ranging from 7.65% to 13.25% p.a.
ii) All the loans are provided for business purpose of respective entities, repayable on demand with repayment option to the borrower.
b) Investment Made:
There are no investment made by the Company other than those stated under note 8 in the financial statements
d) Securities given
There are no securities given during the year
10. Financial and Derivative Instruments:
a) The Company uses foreign currency forward and Interest rate swap contracts to manage some of its transactions exposure. The details of derivative financial instruments are as follows:
b) The principal component of monetary foreign currency loans/debts and payable amounting to Rs.2021.76 Crore (Previous year Rs.2457.69 Crore) and receivable amounting to Rs.970.36 Crore (Previous year Rs.950.51 Crore) not hedged by derivative instruments.
11. Fair value of financials assets and liabilities
Class wise compositi on of carrying amount and fair value of financial assets and liabilities that are recognised in the financials statements is given below:
Fair value hierarchy
The Company uses the following hierarchy for fair value measurement of the company’s financials 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.
During the year ended March 31, 2018 and March 31, 2017, 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, 2018 and March 31, 2017 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 judgement, 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.
12. 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 liabiliti es 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 minimise 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, 2018 and 31st March, 2017.
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 fluctuati ons by using foreign currency forwards contracts on the basis of risk perception of the management.
The carrying amounts of the Company’s net foreign currency exposure (net of forward contracts) denominated monetary assets and monetary liabilities at the end of the reporting period as follows:
Foreign currency sensitivity
5% increase or decrease in foreign exchange rates vis- a -vis Indian Rupees, with all other variables held constant, will have the following impact on profit before tax and other comprehensive income:
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 internati onal 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.
II. 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.
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments:
13. 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, 2018.
(i) Debt is defined as long-term and short-term borrowings including current maturiti es (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.
14. Related Party Disclosures as per Ind AS 24
A. List of Related Parties and Relationships
a) Subsidiaries, Step down Subsidiaries
1 Jindal Power Limited
2 Jindal Steel Bolivia SA
3 Jindal Steel & Power (Mauritius) Limited
4 Skyhigh Overseas Limited
5 Everbest Steel and Mining Holdings Limited
6 Jindal Angul Power Limited
7 JB Fabinfra Limited
8 Trishakti Real Estate Infrastructure and Developers Limited
9 Raigarh Pathalgaon Expressway Ltd
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 Limited
III Subsidiary of Skyhigh Overseas Limited Gas to Liquids International S.A
IV Subsidiary of Jindal Power Ventures (Mauritius) Limited Jindal Power Senegal SAU
V Subsidiary of Uttam Infralogix Limited Panther Transfreight Limited
VI Subsidiary of Jindal Realty Limited
Jagran Developers Private Limited (w.e.f. January 11, 2018)
VII Subsidiary of JB Fabinfra Pvt Limited
All Tech Building System Limited (ceased to be subsidiary w.e.f. October 1, 2017)
VIII Subsidiaries of Jindal Steel & Power (Mauritius) Limited
1 Blue Castle Ventures Limited
2 Brake Trading (Pty) Limited
3 Enduring Overseas Inc (ceased to be subsidiary w.e.f. June 26, 2017)
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 SA
10 Jindal Botswana (Pty) Limited
11 Jindal Investimentos LDA
12 Jindal Investment Holding Limited.
13 Jindal KZN Processing (Pty) Limited
14 Jindal Madagascar SARL
15 Jindal Mining & Exploration Limited
16 Jindal Mining Namibia (Pty) Limited
17 Jindal Steel & Minerals Zimbabwe Limited
18 Jindal Steel & Power (BC) Limited
19 Jindal Steel & Power (Australia) Pty Limited
20 Jindal Tanzania Limited
21 Jindal Zambia Limited
22 JSPL Mozambique Minerals LDA
23 Jublient Overseas Limited
24 Landmark Mineral Resources (Pty) Limited
25 Osho Madagascar SARL
26 PT Jindal Overseas
27 Jindal Shaded Iron & Steel L.L.C
28 Sungu Sungu Pty limited
29 Trans Asia Mining Pty. Limited
30 Vision Overseas limited
31 Wollongong Coal Limited
32 Jindal Steel DMCC
33 Jindal Mauritania SARL
34 Jindal Africa Liberia Limited
1 Belde Empreendimentos Mineiros LDA, a subsidiary of JSPL Mozambique Minerals 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 Energy SA (Pty) Limited
8 Jindal (Barbados) Holding Corp, a subsidiary of Jindal (BVI) Limited
9 Jindal 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 Africa Investments (Pty) Limited
12 Jindal Transafrica (Barbados) Corp, a subsidiary of Jindal (BVI) Limited
13 Jindal Resources (Botswana) Pty Limited, a subsidiary of Jindal Transafrica (Barbados) Corp
14 Trans Africa Rail (Pty) Limited, a subsidiary of Jindal Transafrica (Barbados) Corp
15 Sad-Elec (Pty) Limited, a subsidiary of Jindal Energy (SA) Pty Limited
16 Jindal (Barbados) Mining Corp, a subsidiary of Jindal (Barbados) Holding Corp
17 Jindal (Barbados) Energy Corp, a subsidiary of Jindal (Barbados) Holding Corp
18 Meepong Resources (Mauritius) (Pty) Limited, a subsidiary of Jindal (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 Jindal (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., Subsidiary of Wollongong Coal Limited
1 Nalwa Steel & Power Limited (ceased to be associate w.e.f. March 27, 2018)
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 OPJ Trading Private Limited
e) Key Managerial person
1 Shri Naveen Jindal (Chairman)
2 Shri Ravi Uppal (MD & CEO) Upto September 30, 2017
3 Shri D.K. Saraogi (Wholetime Director)
4 Shri Rajeev Bhadauria (Wholetime Director)
5 Shri Rajesh Bhatia (Chief Financial Officer) Upto June 27, 2017
6 Shri Deepak Sogani (Chief Financial Officer) w.e.f. December 19, 2017
7 Shri Murli Manohar Purohit (Company Secretary Upto May 31, 2017)
8 Shri Jagdish Patra (Company Secretary w.e.f. August 8, 2017)
f) Enterprises over which Key Management Personnel and their relatives exercise significant influence and with whom transaction have taken place during the year
1 Jindal Stainless Limited
2 Jindal Industries Limited
3 Bir Plantation Limited
4 India Flysafe Aviation Limited
5 Minerals Management Services (India) Private Limited
6 Jindal Saw Limited
7 JSW Steel Limited
8 Rohit Tower Building Limited
9 JSW Projects Limited
10 JSW Energy Limited
11 JSW Steel Coated Product Limited
12 JSW Severfield Structures Limited
13 JSW International Tradecorp Pte Limited
14 Jindal Coke Limited
15 Jindal Stainless Steelway Limited
16 Ambitious Power Trading Company Limited
17 Jindal United Steel Limited
18 JSW Steel Processing Centres Limited
19 JSW Cement Limited
20 Opelina Finance & Investment Limited
21 Nalwa Steel & Power Limited (w.e.f. March 27, 2018)
g) Post Employment Benefit Entity Jindal Steel & Power Ltd EPF Trust
15. Stock of work in progress (note 13) includes Stock of Iron Ore/ Fines of 12.22 Million MT lying with third party. The value of such stock is Rs.2,310.94 Crore as per Management on the basis of valuation report of Independent Valuer.
16. 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 adopti on 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 respecti ve 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.
17. 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 31st 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.
18. 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 26th 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.
19. The Company has filed legal suits /notices or in the process of filing legal case /sending legal noti ces / making efforts for recovery of debit balances of Rs.180.28 Crore (P.Y. 2016-17 Rs.218.62 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 advise in certain cases, the Company has considered aforesaid amounts as fully recoverable. Hence, no provision has been made in respect of these balances.
20. 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 Chhaffisgarh into a separate purpose vehicle (SPV), for the purpose of transferring the same to JSW Energy Limited through sale of the enti re share capital and other securiti es 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.381.13 Crore (previous year Rs.373 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 opti ons 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, creati on of other SPV amenable for monetizati on 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 utilisation 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.
21. 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 (previous year Rs.2854 Crore).
22. Exceptional items:
i) During the year, the Company divested its oxygen plant assets at its integrated steel plants at Raigarh (Chattisgarh) and Angul (Odisha), resulting in loss of Rs.149.72 Crore, which has been included in exceptional items.
ii) Pursuant to the judgement of the Hon’ble Supreme Court of India in Common Cause Vs Union of India and others dated 2.8.2017, the Company was again heard on 14.12.2017 and directed to pay additional compensation of Rs.137.82 Crore for its iron ore mines at Tensa, which has been included in exceptional items.
iii) The Company had been making payment of royalty on iron ore fines at the rate of royalty applicable on iron ore lumps (differential royalty). In view of the adverse judgment dated 16.12.2015 of the Hon’ble Odisha High Court in the case of Mideast Integrated Steel Co. Ltd. Vs. State of Odisha (W.P.(C) No. 17403 of 2012) taking a contrary view, against which they (MESCO) had filed Special Leave Petition in Hon’ble Supreme Court. The Company is also facing similar issue and thus intervened in the above petition filed by MESCO which is currently sub judice. The Company has thus charged the demand raised on account of differential royalty by the Mining Authority of Rs.223.70 Crore to the profit and loss account as an exceptional item.
iv) The Rajasthan High Court in the case of Udaipur Chambers of Commerce and Industry & Ors. Vs. The Union of India & Anr (Civil Writ Petition No. 14578 / 2016) vide order dated 24.10.2017 has held that service tax is applicable on amount of royalty payable on mining of natural resources. Special Leave Petition against the said judgment are presently pending before the Hon’ble Supreme Court. The company has been advised in view of adverse judgment of the Rajasthan High Court, unless reversed/ set aside by the Supreme Court, the Company shall be required to pay service tax of Rs.14.87, which had accordingly been charged to the profit and loss account as exceptional item.
v) Pursuant to the judgement of the Hon’ble Supreme Court dated 9.10.2017, the Company has paid/ provided for entry tax on import of goods in the state of Odisha. The amount of entry tax Rs.67.31 Crore (including interest Rs.42.07) has been included in the exceptional items.
vi) During the year, the Company sold its entire stake in M/s. Nalwa Steel & Power Limited, an Associate Company and the profit on its sale amounting to Rs.249.40 Crore is included under exceptional item.
23. Revenue from operations for the period up to 30th June, 2017 includes excise duty, which is discontinued effective from 1st July 2017 upon implementation of Goods and Services Tax (GST). In accordance with IND AS-18, Revenue Recognition, GST is not included in the revenue from operations during the period 1st July, 2017 to 31st March, 2018. The revenue for the year ended 31st March, 2017 is inclusive of excise duty. In view of the aforesaid change, revenue form operation for the year ended 31st March, 2018 is not comparable with previous year.
24. During the year Blast furnance and Coke Oven Plant at Angul, Odisha have been commissioned.
25. Operating lease commitments
The company has divested its oxygen plant assets at its interegated steel plant at Raigarh (Chaffisgarh) and Angul (Odisha). The company has also entered into lease back agreement for operating lease with the buyer of the oxygen plant assets for continued operation by the company for manufacturing of steel at respective plants. The Future minimum lease payment are as follows:-
On expiry of lease term the Company will have option to renew the agreement, or purchase the equipment at fair value or return the equipment to the lessor.
In case of renewal of the agreement the rent shall be mutually agreed with the lessor.
26. Balances of certain advances, creditors and receivables are in process of confirmation/reconciliation.
27. The Company has raised Rs.1200 Crore (Rs.11,99,99,99,785) by way of Qualified Institutions Placement (QIP) of 5,15,02,145 equity shares of Rs.1 each fully paid up at issue price of Rs.233 each (including premium of Rs.232 per share). The net proceeds of the issue have been utilised for the purposes for which the issue was made and unutilised amount of Rs.482 Crore has been parked in working capital.
28. 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.
29. 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.
30. Notes 1 to 70 are annexed to and form an integral part of the financial statements.