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Jindal Steel & Power Ltd.

May 26 BSE 393.90 (+ 12.70 3.33%)
Volume545044
Prev. Close 381.20
Open Price 380.85
Today's Low / High
371.35 397.00
B. Price (Qty.)0.00 (0)
O. Price (Qty.) 0.00 (0)
52 Wk Low / High 340.10
577.70
May 26 NSE 394.25(+ 12.95 3.40%)
Volume12425196
Prev. Close 381.30
Open Price 378.95
Today's Low / High
371.25 396.80
B. Price (Qty.)0.00 (0)
O. Price (Qty.) 0.00 (0)
52 Wk Low / High
340.00 577.80

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

ISIN No INE749A01030 Market Cap. ( in Cr. ) 40216.97 P/BV 1.26 Book Value ( ) 311.88
BSE Code 532286 52 Week High/Low ( ) 578/340 FV/ML 1/1 P/E(X) 11.07
NSE Code JINDALSTELEQ Book Closure 19/03/2022 EPS ( ) 35.62 Div Yield (%) 0.00
Year End :2021-03 

Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of ' 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.

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 68 of the Companies Act, 2013 and buy back regulations of SEBI, the Company has not buy back any equity shares during the five years immediately preceding 31st March, 2021.

During the five years immediately preceding 31st March, 2021, 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 41,90,026 equity shares during the preceding five years under its various Employees Stock Option Schemes / Employee Stock Purchase Scheme.

Employees Stock purchase Scheme

The Board of Directors in its meeting held on 25th January, 2018 approved the JSPL Employee Stock Purchase Scheme 2018 (JSPL ESPS Scheme-2018) and the same was approved by the shareholders in the Annual General Meeting held on 28th September 2018, in accordance with SEBI (Share Based Employee Benefits) Regulations 2014. In accordance with SEBI (Share Based Employees Benefits) Regulations 2014 and pursuant to Jindal Steel & Power Limited Employee Stock Purchase Scheme-2018, the Company has on 23rd March 2019 and on 27th April 2019 granted 20,32,007 nos. and 20,56,704 nos. equity shares of ' 1 each at an exercise price of ' 166.65/- per share and ' 175.15/- per share respectively under Jindal Steel & Power Limited Employee Stock Purchase Scheme- 2018 to the employees of the Group (Jindal Steel & Power Limited and its subsidiaries). Subsequently the Company allotted 20,15,597 Equity shares of '1/- each on May 13, 2019 (out of options granted on 23rd March, 2019) to the eligible employees and allotted 20,53,995 Equity shares of '1/- each on July 06, 2019 (7,677 shares out of options granted on 23rd March, 2019 and 20,46,318 shares out of options granted on 27th April, 2019) to the eligible employees.

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) Regulations 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 ' 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 ' 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. 50,45,222 options have been surrendered/lapsed and balance outstanding is 76,513 options as on 31st March, 2021.

(i) Securities Premium Reserve represents the amount received in excess of par value of securities issued by the Company. This reserve is utilised/to be utilised in accordance with provisions of the act.

(ii) The Company is required to create Debenture Redemption Reserve out of the profits which is available for the purpose of redemption of debentures.

(iii) Capital Redemption Reserve represents the statutory reserve created on buy back of shares. It is not available for distribution.

(iv) During the previous year the Company has allotted 4,80,00,000 nos. fully paid up equity shares of ' 1/- each at issue price of ' 140.31 per share (including premium of ' 139.31 per share), on exercise of option (against equal number of warrant held), to a promoter group company on receipt of balance 75% amount of ' 505.12 crores. Money received have been fully utilized for the purpose the issue was made.

(v) Share Option Outstanding Account relate to stock option granted by the Company to employee under JSPL employee stock option plan, 2017 of ' 0.22 crore (31st March-20'0.32 crore). This reserve is transferred to retained earning on cancellation of vested option. (Refer note 20(f)).

(vi) Other Comprehensive income reserve represents the balance in equity for items to be accounted in classified into i) Items that will not be reclassified to profit & loss ii) Items that will be reclassified to profit & loss (read with note 62).

I. Pooled Security

The Company has entered into a pooling agreement with all the Secured Lenders and Security Trustee on 26th February'2020, whereby the following security structure was agreed upon in terms of sanctioned facilities:

a) first pari passu charge over the immovable fixed assets (except immovable properties at Tensa mines and immovable leasehold properties having aggregate area of 551.49 acres at Patratu, Jharkhand) & movable fixed assets (Bank of Baroda has exclusive charge on movable fixed assets of 4.5 MTPA Pellet Plant- II situated at Barbil, Odisha upto 125% of ' 81.95 crores Bank Guarantee facility. Other lenders will have pari passu charge on these assets which will be subservient to the charge of Bank of Baroda) and second pari passu charge on the current assets, both present & future, of the Company in favour of the Term Loan Lenders; and

b) second pari passu charge over the immovable fixed assets (except immovable properties at Tensa mines and immovable leasehold land admeasuring 551.49 acres at Patratu, Jharkhand) & movable fixed assets (Bank of Baroda has exclusive charge on movable fixed assets of 4.5 MTPA Pellet Plant- II situated at Barbil, Odisha upto 125% of ? 81.95 crores Bank Guarantee facility. Other lenders will have pari passu charge on these assets which will be subservient to the charge of Bank of Baroda) and first pari passu charge on the current assets, both present & future, of the Company in favour of the Working Capital Lenders.

The above security constitutes as "Pooled Security"

II. Debentures

Security

a) Debentures of? Nil (March 31,2020 ? 500 crore) were placed

initially with Life Insurance Corporation of India on private placement basis.

b) Debentures of ? Nil (March 31,2020 ? 160 crore) were placed initially with Life Insurance Corporation of India on private placement basis.

c) Balance amount of debentures of ? 12.40 Crore (March 31, 2020 ? 24.80 crore) placed initially with SBI Life Insurance Company Limited on private placement basis is redeemable at par on 29 December 2021.

Above debentures are secured by Pooled Security as described in Note 22(I)(a).

III. Term Loans from Banks

a) Loans of? 11, 295.03 crores (March 31,2020 ? 11,463.30 crore) are secured by Pooled Security as described in Note 22(I)(a). Repayment schedule of these loans is as follows:

Loan of ' 999.60 crores is repayable in 62 quarterly instalments and the next instalment is due on 30th June, 2021.

Loans of ' 5,810.45 crores is repayable in 61 quarterly instalments and the next instalment is due on 30th June, 2021.

Loans of? 1,250.89 crores is repayable in 17 quarterly instalments and the next instalment is due on 30th June, 2021.

Loans of ? 851.30 crores is repayable in 14 quarterly instalments and the next instalment is due on 30th June, 2021.

Loan of ? 465.50 crores is repayable in 16 quarterly instalments and the next instalment is due on 30th June, 2021.

Loan of ? 686.92 crores is repayable in 13 quarterly instalments and the next instalment is due on 30th June, 2021.

Loans of ' 735.67 crores is repayable in 13 quarterly instalments and the next instalment is due on 15th April, 2021.

Loans of ' 93.76 crores is repayable in 6 quarterly instalments and the next instalment is due on 27th June, 2021.

Loans of ' 277.36 crores is repayable in 6 quarterly instalments and the next instalment is due on 30th June, 2021.

Loans of ' 123.58 crores is repayable in 2 quarterly instalments and the next instalment is due on 30th June, 2021.

b) Loans of' 1,352.35 crores (March 31, 2020'1,315.63 crore) are secured by Pooled Security as described in Note 22(I) (a) with priority over cash flows under TRA agreement and security in case of liquidation. Loan is repayable in 30 quarterly instalments and the next instalment is due on 30th June, 2021.

c) Loans of' 2,537.23 crores (March 31, 2020 ' Nil ) are secured through following:

(a) first pari passu charge over the immovable fixed assets (except immovable properties at Tensa mines and immovable leasehold properties having aggregate area of 551.49 acres at Patratu, Jharkhand) & movable fixed assets (Bank of Baroda has exclusive charge on movable fixed assets of 4.5 MTPA Pellet Plant- II situated at Barbil, Odisha upto 125% of ' 81.95 crores Bank Guarantee facility. Lenders will have pari passu charge on these assets which will be subservient to the charge of Bank of Baroda)

(b) first pari passu charge on the current assets, both present & future, of the Company.

Repayment schedule of these loans is as follows:

(i) Loans of ' 300.00 crores is repayable in 28 quarterly instalments and the next instalment is due on 30th June, 2021.

(ii) Loans of ' 767.25 crores is repayable in 27 quarterly instalments and the next instalment is due on 30th June, 2021.

(iii) Loans of ' 489.99 crores is repayable in 26 quarterly instalments and the next instalment is due on 30th June, 2021.

(iv) Loans of ' 979.99 crores is repayable in 26 quarterly instalments and the next instalment is due on 30th April 2021 *

*The company has further provided security by way of pledge over 40,46,40,000 nos. and Non Disposal Undertaking ("NDU") over 6,74,40,000 nos. of equity shares of Jindal Power Limited (subsidiary) ("JPL") held by the Company as an interim security till the completion of full tie up of corporate loan of '2800 crores in favour of SBICAP Trustee Company Limited for the benefit of State Bank of India in respect of corporate loan of ' 979.99 crores outstanding as on 31st March 2021. The company has complied with the necessary compliances to release the above mentioned interim security and charge satisfaction is in process.

IV. Other Loans

a) Other Loan of ' 191.24 crores (March 31, 2020 ' 185.00 crores) is secured by Pooled Security as described in Note 22(I)(a). Loan is repayable in 61 quarterly instalments and the next instalment is due on 30th June, 2021.

b) Other Loans of ' 225 crores (March 31, 2020 ' Nil ) are secured through following:

(a) first pari passu charge over the immovable fixed assets (except immovable properties at Tensa mines and immovable leasehold properties having aggregate area of 551.49 acres at Patratu, Jharkhand) & movable fixed assets (Bank of Baroda has exclusive charge on movable fixed assets of 4.5 MTPA Pellet Plant- II situated at Barbil, Odisha upto 125% of ' 81.95 crores Bank Guarantee facility. Lenders will have pari passu charge on these assets which will be subservient to the charge of Bank of Baroda)

(b) first pari passu charge on the current assets, both present & future, of the Company.

I t is repayable in 28 quarterly instalments and the next instalment is due on 31st May, 2021.

V. Secured Term Loan Lenders & Debenture holders mentioned in Note No. 22(1) and Working Capital Lenders mentioned in Note No. 26(1) are further secured by way of pledge over 4.31 crore equity shares of Jindal Steel & Power Limited held by OPJ Trading Private Limited (The Promoter Company).

VI. The Company has also created Non Disposal Undertaking (NDU) over 9.13 crore equity shares of Jindal Steel & Power Limited (JSPL) held by Opelina Sustainable Services Limited (Promoter Company) in favour of State Bank of India, the Lead Bank for the benefit of all the Secured Term Loan Lenders & Debentureholders mentioned in Note No. 22(1) and Working Capital Lenders mentioned in Note No. 26(1).

VIII. I n terms of RBI Circular No. DOR.No.BP.BC. 47/21.04.048/2019-20 dated March 27, 2020 & Circular No. DOR.No.BP.BC.71/21.04.048/2019-20 dated May 23, 2020, the Company has availed moratorium for its term loan, NCD and working capital facilities. Accordingly, interest of '709.83 Crores for the period March 2020 to August 2020 on the term loan facilities has been capitalised with the term loans .Also the instalment of term loan due for payment of '632.70 Crores from 27th March, 2020 to 31st August, 2020 has been deferred and all the subsequent repayment schedule and due date has been shifted across the board.

Others

It is not possible to predict the outcome of the pending litigations with accuracy, the Company believes, based on legal opinions received and/or internal assessment, that it has meritorious defences to the claims. The management believe the pending actions will not require outflow of resources embodying economic benefits and will not have a material adverse effect upon the results of the operations, cash flows or financial condition of the Company.

Duty saved on import of raw material under Advance License pending fulfilment of export obligation is amounting to ' 52.43 crore (Previous year ' 65.08 crore). The Management is of the view that considering

the past export performance and future prospects there is certainty that pending export obligation under advance licenses, will be fulfilled before expiry of the respective advance licenses.

* also refer note 46

** excluding corporate guarantee amount which is pending for execution/ RBI approval.

@Subsequent to the Balance Sheet date, the Company has remitted ' 1770.72 crore (USD 241.18 million) to the lenders of Jindal Steel & Power (Mauritius) Limited ('1752.28 crore) and Jindal Steel & Power (Australia) Limited ('18.44 crore) against the invocation of corporate guarantees given by the Company pursuant to extension of time and waiver of conditions.

44. '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 Provident Fund Liability of ' 6.91 Crore as at 31st March, 2021 (Previous Year ' 4.55 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 estimate of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotions and other relevant factors. The above information has been certified by the actuary and has been relied upon by the auditors.

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

46. 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 ' 155 crore with respect to Ramchandi, Amarkonda Murhadangal, Urtan north and Jitpur Coal Blocks. These matters 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 (Previous year ' 155 crore) have been provided by

the Company for the above mentioned four 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 nonoperational 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.

49. One of the subsidiary Company Jindal Steel & Power (Mauritius) Limited ('JSPML') is having negative net worth of ' 401.95 crore as at 31st March 2021 (' 1,710.16 crore as at 31st March 2020) and has significant direct and indirect investments in companies. As per audited financial statements of JSPML for the year ended 31st March 2021, it has investment in mining and other assets in various overseas investments mainly in Australia, South Africa, Mozambique, etc. During the year coal mines in South Africa and Mozambique are operating on EBITDA positive basis and the subsidiary M/s Wollongong Coal Limited in Australia, has now received approval to start mining. As stated above and committed financial support from JSPL (the Holding Company) to meet its financial obligation as and when due, the management of JSPML has prepared the accounts on going concern basis. Also, in the opinion of the management of the Company (JSPL), the outstanding unsecured loan (including interest) from the Company to JSPML of ' 4,423.20 crore and investment in JSPML of ' 575.73 crore, are good and these are fully recoverable/ realisable.

b) Foreign Currency Exposure:-The principal component of monetary foreign currency loans/debts and payable amounting to ' 2,648.26 crore (March 2020'2,529.32 crore) and receivables (including Loans to WOS amounting to ' 4423.2 crore) amounting to '5,746.69 crore (March 2020 '2,746.53 crore). The net amount of monetary foreign currency loans/debts and payable is ' 2,648.26 crores (March 2020 ' 1,703.71 crore net of forward contract import of ' NIL (March 2020'825.61 crores).

During the year ended March 31, 2021 and March 31, 2020, 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, 2021 is ' 8.53 Crore (March 31, 2020 NIL) have been considered 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.

52. 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 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. Further, this to be read with Note 50a.

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 2021 and 31st March 2020.

The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other postretirement 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.

(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 exposure 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.

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.

The Company makes provision against credit impairment of trade receivable based on expected credit loss (ECL) model.

The ageing analysis of the trade receivables (gross) has been considered from the date the invoice falls due:

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.

(a) Managerial remuneration excludes provision for gratuity and compensated absences, since these are provided on the basis of an actuarial valuation for the Company as a whole.

(b) Managerial Remuneration paid/ provided (to director) of ' 26.09 crore is subject to the approval of members by special resolution.

55. The Hon'ble Supreme Court of India allowed the Company to lift and transport its legally procured, royalty and taxes paid stock of iron ore lump/fines vide order dated 30.01.2020 in CA No. 850 of 2020. This Stock of work in progress (note 12) includes stock of Iron Ore/Fines Nil (Previous year 11.11 Million MT) lying with a third party amounting to Nil ( Previous year ' 133.61 Crore). The estimated realisable value of such stock is Nil (Previous Years ' 1,950.15 Crore) as per Management, on the basis of valuation report of an independent Valuer. The management has lifted entire stock during financial year 2020-21.

56. 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 assets except as disclosed in exceptional item(Refer Note 65).

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.

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.

57. ASSETS HELD FOR SALE

The Company has identified certain assets for disposal. The management is in discussions with potential buyers. Based on preliminary discussions with potential buyers/ external valuation, the carrying value of these assets has been considered as fair value:-

The management is confident about the recoverable value of the assets stated above.

58. During the year 2014-15, Hon'ble Supreme Court of India had cancelled number of coal blocks in India including allocated to the Company by the Ministry of Coal, Government of India. During the year ended 31st March 2021, the Company has made necessary provision against its investment in mining assets in respect of above cancelled mines of ' 171.81 crore (Exceptional Item). However, in earlier years, the Company has filed claim for its investment in mining assets with Ministry of Coal. In respect of above claim, the Company has received ' 22.72 crore towards the same. Pending for final settlement of the aforesaid claim, this amount received has been accounted for as an advance.

59. 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 ' 212.38 Crore (Previous year 2019-20'236.36 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.

60. Subsequent to the Balance Sheet date, the Board of Directors of the Company, at its meeting held on April 26, 2021, approved the divestment by way of sale, by the Company of up to its entire equity interest in Jindal Power Limited (JPL) (representing 96.42% of paid-up equity share capital of JPL) to Worldone Private Limited, a promoter group company, for a total consideration of ' 3,015 crore against carrying cost of equity investment of ' 867.05 crore. The proposed sale is subject to necessary approvals of the shareholders of the Company, regulatory approvals, approvals of lenders of the Company and JPL, contractual approvals and such other approvals,

consents, permissions and sanctions as may be necessary in line with extant relevant guidelines.

61. 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 ' 6,500 Crore plus the value of Net Current Assets was terminated on 30th June 2019 mutually by all parties to the agreement. Accordingly, the Advance received of ' 331.13 crore has become payable to JSW Energy Limited and the amount outstanding as on 31st March 2021 is Nil (Previous Year ' 261.13 crore).

62. During the financial year 2020-21 subsidiary Jindal Power Limited (JPL) has allotted to the Company (JSPL) fully paid up Redeemable Preference Shares (RPS) of ' 6,803.01 crore (Redeemable in maximum 20 years) as Bonus Shares by way of capitalization of retained earnings (390,17,25,000 nos. of 5% Cumulative, NonConvertible RPS of face value of ' 10/- each and 290,12,82,692 nos. of 5% Non-cumulative, Non-convertible RPS), impact of above has been accounted for as per the IND AS 109 and accordingly ' 2,315.05 crore and ' 648.87 crore has been credited to Other Comprehensive Income and Other Income respectively (Deferred Tax ' 529 crore and ' 148.46 crore respectively).

63. The company has paid advance to one of the vendor against purchase of Raw Material, who has been allowed to operate it's mine by virtue of order dated 15.01.2020 passed by the Hon'ble Supreme Court of India in W.P(C) 114 of 2014. The company has now started lifting raw material from the vendor and advance has started adjusting accordingly. The outstanding amount as on March 31, 2021 is ' 1122.77 crore (Previous year ' 1252.45 crore). In the opinion of the management, the amount is good and fully recoverable.

66. Subsequent to the Balance Sheet date, on 26th April 2021, the Company has entered into a loan agreement with Jindal Power Limited, a subsidiary company ('JPL'), to convert the existing capital advances amounting to ' 28,54,00,00,000/- (refer note no. 62) and intercorporate deposits amounting to ' 1532,28,55,824/- availed by the Company from JPL (total aggregating to ' 4386,28,55,824/-) into 9.7% p.a. unsecured loan for a period of 7 years, repayable in 3 equal instalment 5th, 6th and 7th year. The stated Loan Agreement is subject to the necessary approvals of shareholders of the Company, lenders of the Company and JPL and such other approvals, consents, permissions and sanctions as may be necessary.

67. During the earlier year, the Board of Directors of the Company had approved the sale of certain captive power plants (CPP) to Jindal Power Limited (JPL) subsidiary company situated at Angul, Odisha (6 X 135 MW) and at Raigarh, Chhattisgarh (2 X 55 MW) aggregating to 920 MW at a fair market value determined by independent valuer appointed by the Board of Directors amounting to ' 5,275 crore; which is subject to necessary approvals to be arranged by the Company. The company had received advance against above of ' 2,854 crore (Previous year ' 2,854 crore) and Interest provided for on stated advance ' 276.83 crore(previous period ' 276.96 crore) .

68. The tax expenses for the year ended 31st March, 2020 are not comparable due to one-time adjustment made during previous year, arising on account of exercise of lower tax rate under Section 115BAA of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 2019.

69. Impact of COVID-19:- In March 2020, the WHO declared COVID-19 outbreak as a pandemic. The Company has assessed the possible impact of COVID-19 on its standalone financial statements based on the internal and external information available and concluded that no adjustment is required in these financial statements. However, subsequent to the Balance Sheet date, the Second wave of COVID again continues to spread across the country. The management has considered the future cash flows, current expansion and future plans, evaluated the operations of the Company, order booking and revenue, assets and liabilities

and factored in the impact of it up to the date of approval of these financial statements on the carrying value of its assets and liabilities and no major change in the financial performance of the Company on long term basis. The impact of this pandemic may be different from that estimated as at the date of approval of these standalone financial statements and the Company will continue to closely monitor any material changes to future economic conditions.

70. The Code on Social Security, 2020 ('Code') has been notified in the Official Gazette in September 2020 which could impact the contribution by the Company towards certain employment benefits. The effective date from which the changes and rules would become applicable is yet to be notified. Impact of the changes will be assessed and accounted in the relevant period of notification of relevant provisions.

71. Balances of certain advances, creditors (including MSME) and receivables are in process of confirmation/reconciliation. Management believe that on reconciliation/confirmation there will not be any material impact on statement of financial statements.

72. The company is in the process of reconciling the data of GSTR 2A with GSTR 3B. In the view of the management, on final reconciliation the impact will not be material.

73. Information related to Consolidated financial

The company is listed on stock exchange in India, the Company has prepared consolidated financial as required under IND AS 110, Sections 129 of Companies Act, 2013 and listing requirements. The consolidated financial statement is available on company's web site for public use.

74. Previous year figures have been regrouped/ rearranged/ recast, wherever considered necessary to conform to current year's classification. Figures less than 50,000 have been shown as absolute number.

75. Notes 1 to 75 are annexed to and form an integral part of financial statements.