g) The Company has capitalised certain assets amounting to I 372 crores (31 March 2024: I 477 crores) with respect to storage facilities availed on lease, for which the Company has entered into Memorandum of Understanding. The assets amounting to I 122 croes (31 March 2024: I 109 crores) are on third party premises, however the Company holds the title.
h) Pursuant to the Build Own Operate and Transfer agreement entered into on 5 April 2011 with JSW Projects Limited (JPL), JPL built and operated an integrated DRI unit, CDQ unit and a captive power plant (together referred to as the "BOOT facilities") till 31 March 2023 and transferred it to the Company during the previous year at a consideration of I 858 crores. Since the agreement met the lease recognition criteria, the Company had recognised ROU assets and also the corresponding lease liabilities in the earlier years and amortised the same over the life of the asset.
During the previous year, consequent to the purchase, the Company had transferred ROU assets amounting to I 1,280 crores to property, plant and equipment.
i) During the current year, leasehold land amounting to I 38 crores (2,420 acres) has been converted into freehold land and accordingly transferred from ROU assets to PPE.
j) During the year ended 31 March 2025, pursuant to the Shareholders approval dated 16 January 2025, JSW Utkal Steel Limited, a wholly owned subsidiary of the Company, transferred its under construction slurry pipeline undertaking to JSW Infrastructure Limited (JSWIL) on a slump sale basis by way of a business transfer agreement. Simultaneously, the Company also entered into a long term take or pay agreement with JSWIL for the transportation of iron ore from its captive Nuagaon mine to its proposed facility in Jagatsinghpur in the State of Odisha, using the aforesaid under construction slurry pipeline. Accordingly, in accordance with the requirements of accounting standard, the necessary accounting for right of use assets and the resulting lease liabilities would be carried out on the commencement of lease period i.e. on completion of the said slurry pipeline.
b) Pursuant to the Build Own Operate and Transfer agreement entered into on 5 April 2011 with JSW Projects Limited (JPL), JPL built and operated an integrated DRI unit, CDQ unit and a captive power plant (together referred to as the "BOOT facilities") till 31 March 2023 and transferred it to the Company during the previous year at a consideration of I 858 crores. Since the agreement met the lease recognition criteria, the Company had recognised ROU assets and also the corresponding lease liabilities in the earlier years and amortised the same over the life of the asset.
During the previous year, consequent to the purchase, the Company had transferred ROU assets amounting to I 1,280 crores to property, plant and equipment.
a) The recoverable amount of steel plant is determined based on a value in use calculation which uses cash flow projections based on financial budgets approved by the directors, and a pre-tax discount rate of 13.8% per annum. The discount rate commensurate with the risk specific to the projected cash flow and reflects the rate of return required by an investor.
Cash flow projections during the budget period are based on estimated steel production till FY 2029-30 and future prices of steel prices. The projections do not consider growth rate in production and price in terminal year. Considering past trend of movement in steel prices, the management believes that the following changes in these key estimates would result into carrying amount exceeding the recoverable amount:
? Decrease in steel prices by 1% would result into change in recoverable value by I 319 crores.
? Decrease in production quantities by 5% would result into change in recoverable value by I 324 crores.
b) Mining Assets includes:
i) Acquisition cost incurred for mines such as stamp duty, registration fees and other such costs have been capitalised as Intangible assets.
ii) Restoration liabilities estimated through a mining expert and accordingly the Company recognised/ derecognised assets and corresponding liability (refer note 22(a)).
c) I ntangible assets under development include expenditure incurred on development of mining rights and other related costs for mines which are yet to be made operational and expenditure towards software upgrades.
d) Projects has been grouped into various heads basis nature of the projects.
a) 4,80,99,99,994 shares (31 March 2024: 5,07,99,99,994 shares) are pledged to the Piombino Steel Limited's banker.
b) Pursuant to a Scheme of Arrangement under section 230-232 of the Companies Act, 2013, subsidiaries namely Vardhaman Industries Limited (VIL) and JSW Vallabh Tinplate Private Limited (JVTPL) got merged with JSW Coated Products Limited (JSWCPL) as per NCLT order dated 19 May 2023, with appointed date being 1 April 2022 and accordingly, 4,19,42,949 equity shares of JSWCPL were issued by the Company pursuant to its equity holding of 99.99% in VIL and 76.45% in JVTPL.
c) These represent fair value gain of investments in Mivaan Steel Limited of I 590 crores, acquired pursuant to amalgamation of Creixent Special Steels Limited (CSSL) & CSSL's Subsidiary JSW Ispat Special Products Limited (JSWISPL) with the Company.
letter to the Principal Secretary (Energy) requesting an exemption for ED based on the Eligibility Certificate for Phase II. The matter is currently under review by the Joint Secretary (Energy). To date, the Company has paid the duty on exempted portion and has recorded these payments as "under protest." Further basis legal opinion obtained, reading of the PSI 2007 scheme and eligibility certificate, the Company is eligible for ED exemption. Accordingly, the amount of I 789 crores has been recorded as non-current assets under prepayment and others.
a) The Company has provided interest bearing security deposit to Sapphire Airlines Private Limited (operator) for availing charter hire services in future. The security deposit carries an interest rate of 10%. Maximum amount outstanding during the year is I 711 crores (31 March 2024: I 530 crores).
b) Out of the balance of deposit amount, certain portion will be repaid once the operator is able to obtain loan from lenders and balance deposit amount along with cumulative interest accrued (upto the date of repayment of the entire loan from the lenders) will be paid in 36 equal monthly instalments to the Company. The repayment will start from the month succeeding the month in which the entire loan amount obtained by the operator from the lenders is repaid.
a) Value of inventories above is stated after write down to net realisable value by I 75 crores (31 March 2024: I 395 crores). These were recognised as an expense during the year and included in changes in inventories of finished goods and semi-finished, work-in-progress and stock-in-trade.
b) Provision for slow-moving and obsolete items of Production consumables and stores and spares amounting I 73 crores (31 March 2024: I 1 crores) These were recognised as an expense during the year.
c) I nventories have been pledged as security against certain bank borrowings, details relating to which has been described in note 20 and note 25.
a) Maharashtra Electricity Regulation Commission (MERC) had approved levy of additional surcharge of I 1.25/kWh w.e.f. 1 September 2018 to all the consumers sourcing power from Captive power plants. Company had contested the demand and got a favorable judgement from Appellate Tribunal for Electricity ('APTEL') in March 2019. MERC then filed special leave petition ('SLP') in the Honourable Supreme Court against APTEL's decision. The Honourable Supreme Court passed an order in favour of the Company on 10 December 2021 confirming that the captive users are not liable to pay the additional surcharge leviable under Section 42(4) of the Electricity Act, 2003. The Company has been adjusting the amount paid under dispute towards 50% of the monthly transmission charges payable by the Company.
Accordingly, I 84 crores (31 March 2024: I 73 crores) has been classified as current and remaining I 336 crores (31 March 2024: I 429 crores) has been classified as non-current assets.
b) The Company had received a demand from Maharashtra State Electricty Distribution Co. Limited ('MSEDCL') for Electricity Duty (ED), covering the payment of principal arrears for the recovery of ED from August 2019 to June 2023, which includes both the non-exempted portion and the exempted portion of ED. The Company submitted a
a) The credit period on sales of goods ranges from 7 to 120 days with or without security. The Company charges interest on receivable beyond credit period in case of certain customers.
b) Before accepting any new customer, the Company uses various parameters to assess the potential customer's credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed once a year. Credit risk management regarding trade receivables has been described in note 43.7.
c) The Company does not generally hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Company to the counterparty.
d) Trade receivables have been given as collateral towards borrowings details relating to which has been described in note 20 and note 25.
e) Trade receivables from related parties' details has been described in note 44.
f) Trade receivables does not include any receivables from directors and officers of the Company.
a) Note for shares held under ESOP Trust:
The Company has created an Employee Stock Ownership Plan (ESOP) for providing share-based payment to its employees.
ESOP is the primary arrangement under which shared plan service incentives are provided to certain specified employees of the Company and its subsidiaries in India. For the purpose of the scheme, the Company purchases shares from the open market under ESOP trust. The Company treats ESOP trust as its extension and shares held by ESOP trust are treated as treasury shares.
For the details of shares reserved for issue under the Employee Stock Ownership Plan (ESOP) of the Company refer note 39.
b) Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares having par value of Re. 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
e) Shares allotted as fully paid-up pursuant to contracts without payment being received in cash during the year of five years immediately preceding the date of the balance sheet is as under:
During the year ended 31 March 2024, 282,33,526 fully paid up equity shares were allotted to the then shareholders of the CSSL and CSSL's subsidiary JSWISPL (other than JSW Steel Limited) pursuant to a Composite Scheme of Arrangement for amalgamation of CSSL and JSWISPL with the Company.
f) The Company has 3,95,00,00,000 authorised preference shares of K 10 each amounting to K 3,950 crores as on 31 March 2025 (31 March 2024: I 3,950 crore).
Nature and purpose of reserve (i) General reserve
Under the erstwhile Indian Companies Act 1956, a general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable reserves for that year.
Consequent to introduction of Companies Act 2013, the requirement of mandatory transfer of a specified percentage of the net profit to general reserve has been withdrawn and the Company can optionally transfer any amount from the surplus of profit and loss to the General reserves. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.
(ii) Retained Earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders. Retained earnings includes re-measurement loss / (gain) on defined benefit plans, net of taxes that will not be reclassified to Statement of Profit and Loss. Retained earnings is a free reserve available to the Company.
(iii) Equity Instruments through other comprehensive income
The Company has elected to recognise changes in the fair value of certain investment in equity instrument in other comprehensive income. This amount will be reclassified to retained earnings on derecognition of equity instrument.
(iv) Effective portion of cash flow hedges
Effective portion of cash flow hedges represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges, which shall be reclassified to profit and loss only when the hedged transaction affects the profit and loss, or included as a basis adjustment to the non-financial hedged item, consistent with the Company accounting policies.
(v) Equity settled share-based payment reserve
The Company offers Employee Stock Ownership Plan (ESOP), under which options to subscribe for the Company's share have been granted to certain employees and senior management of JSW Steel and its subsidiaries. The share-based payment reserve is used to recognise the value of equity settled share-based payments provided as part of the ESOP scheme.
(vi) Capital reserve
Reserve is primarily created on amalgamation as per statutory requirement. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.
(vii) Capital redemption reserve
Reserve is created for redemption of preference shares as per statutory requirement. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.
(viii) Securities Premium
Securities Premium is credited when shares are issued at premium including non-cash transaction. This reserve is utilised in accordance with the specific provisions of the Companies Act 2013.
During the year ending 31 March 2024, the Company had elected to exercise the option permitted under Section 115BAA of the Income Tax Act, 1961 to pay corporate income tax at 22% plus surcharge and cess (aggregating to tax rate of 25.17%) from the financial year 2022-23. Accordingly, the Company has re-measured its current tax and deferred tax charge for the year ended 31 March 2023 basis the new tax regime and tax provision for earlier years includes a non-cash tax charge of I 1031 crores pertaining to the earlier year mainly representing write-off of MAT credit not availed and change in tax rate on deferred tax asset of the Company. In view of this exercise of the option to transition to the new regime, the Company has recognised provision for current tax and deferred tax for the year ended 31 March 2024 and 31 March 2025 at the tax rate of 25.17%.
A reconciliation of income tax expense applicable to accounting profit before tax at the statutory income tax rate to recognised income tax expense for the year indicated are as follows:
a) During the year ended 31 March 2025, the Company has trued up the tax balances with the tax records which has resulted in reversal of tax liabilities amounting to I 218 crores (31 March 2024: I 18 crores).
b) Wherever the Company has a present obligation and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation, such amounts have been adequately provided for, and the Company does not currently estimate any probable material incremental tax liabilities in respect of these matters (refer note 45).
a) Acceptances are availed in foreign currency from offshore branches of Indian banks at weighted average interest rate of 3.88% p.a. The tenure of these acceptances ranges from 180 days to 360 days from the date of draw down. Acceptances backed by Standby Letter of Credit issued under unsecured working capital facilities sanctioned by domestic banks.
b) Working capital loans from banks is NIL as on 31 March 2025 (31 March 2024: NIL) are secured by:
i) pari passu first charge by way of hypothecation of stocks of raw materials, finished goods, work-in-progress, consumables (stores and spares) and book debs / receivables of the Company, both present and future.
ii) pari passu second charge on movable properties and immovable properties forming part of the property, plant and equipment of the Company, both present and future except such properties as may be specifically excluded.
c) The quarterly returns/ statements filed by the Company with the banks are in agreement with the books of account.
The management has evaluated the impact of other conditions imposed and has obtained legal advice on the tenability of these changes in the said scheme. Based on such legal advice, the Company has also made the representation to GOM and believes that said Incentives would continue to be made available to the Company under the GST regime, since the new conditions are not tenable legally and will contest these changes appropriately.
c) Deferred Income GST government
The Company's Vijayanagar unit in Karnataka is eligible for VAT/CST incentives under the New Industrial Policy 200914. As per the Government of Karnataka's notification dated 13 March 2018, these incentives continue under the GST regime, with benefits now linked to the SGST rate in place of VAT. Accordingly, the Company has recognized the NPV of interest-free loans corresponding to SGST collected and paid up to 31 March 2025.
Under the scheme, the Company is entitled to interest-free loans of 75% of eligible gross VAT for the first 10 years and 50% for the next 10 years, based on gross VAT paid on intra-state sales to end consumers. During the year, the Company received the sanction letter for FY 2022-23, where Rs. 148 crore was set aside, as SGST paid by buyers was lower than that paid by the Company, indicating consumption occurred outside Karnataka.
The management has reviewed the scheme criteria, obtained internal legal evaluation, and made representations to the Government of Karnataka. Based on this assessment, the Company believes the incentives remain valid and claim is recoverable.
a) Intercompany sale transactions netoff
During the year, the Company has netted of sales amounting to I 865 crores (31 March 2024: NIL) against purchases of value added products from the same party to reflect the commercial substance of such transactions.
b) Grant income recognised under PSI 1993 and 2007 scheme
The Company units at Dolvi in Maharashtra is eligible for incentives under the respective State Industrial Policy and have been availing incentives in the form of VAT deferral / CST refunds historically. The Company currently recognises income for such government grants based on the State Goods & Service Tax rates instead of VAT rates, in accordance with the relevant notifications issued by the State of Maharashtra post implementation of Goods & Services Tax (GST).
The Company is eligible for claiming incentives for investments made under the Industrial Policy of the Government of Maharashtra under PSI Scheme 2007. The Company completed the Phase 1 expansion of 3.3 MTPA to 5 MTPA at Dolvi, Maharashtra in May 2016 and has also received the eligibility certificate for the same. Further, the Company completed the second phase of expansion from 5 MTPA to 10 MTPA at Dolvi Maharashtra during the financial year 2021-22 and the Company has also received Eligibility Certificate for this investment relating to Phase 2 capacity expansion from 5 MTPA to 10 MTPA in FY 2022-23. Accordingly, the Company has recognised the cumulative grant income amounting to I 659 crores for the year ended 31 March 2025.
The State Government of Maharashtra (GOM) vide its Government Resolution (GR) dated 20 December 2018 issued the modalities for sanction and disbursement of incentives, under GST regime, and introduced certain new conditions / restrictions for accruing incentive benefits granted to the Company.
e) Ind AS 115 Revenue from Contracts with Customers
The Company recognises revenue when control over the promised goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
The Company has assessed and determined the following categories for disaggregation of revenue in addition to that provided under segment disclosure (refer note 40):
39. Employee share based payment plans
ESOP scheme 2016
The Board of Directors of the Company at its meeting held on 29 January 2016, formulated the JSWSL EMPLOYEES STOCK OWNERSHIP PLAN 2016 ("ESOP Plan"). At the said meeting, the Board authorised the ESOP Committee for the superintendence of the ESOP Plan.
ESOP 2016 is the primary arrangement under which shared plan service incentives are provided to certain specified employees of the Company and its' subsidiaries in India.
Three grants were made under ESOP plan 2016 to eligible employees on the rolls of the Company on 1 April 2016, 1 April 2017 and 1 April 2018.
During the earlier years, the Company also made supplementary grants under the JSWSL Employees Stock Ownership Plan 2016 to its permanent employees who were on the rolls of the Company and its Indian subsidiaries as on 5 December 2019 as approved by the ESOP committee in its meeting held on 5 December 2019.
The maximum value and share options that can be awarded to eligible employees is calculated by reference to certain percentage of individuals fixed salary compensation. 50% of the grant vested at the end of the third year and 50% of the grant vested at the end of the fourth year with a vesting condition that the employee is in continuous employment with the Company till the date of vesting.
The exercise price was determined by the ESOP Committee at a certain discount to the primary market price on the date of grant.
A total of 2,86,87,000 options were available for grant to the eligible employees of the Company and a total of 31,63,000 options were available for grant to the eligible employees of the Indian subsidiaries of the Company under the ESOP Plan.
These options are equity settled and are accounted for in accordance with the requirement applying to equity settled transactions.
ESOP PLAN 2021
The Board of Directors of the Company at its meeting held on 21 May 2021, formulated the Shri OP Jindal Employees Stock Ownership Plan ("OPJ ESOP Plan"). At the said meeting, the Board authorised the ESOP Committee for the superintendence of the ESOP Plan. Subsequently, the Board at its meeting held on 17 May 2024 authorised the Nomination and Remuneration Committee ('Committee') in place of ESOP Committee for superintendence of the ESOP Plan.
ESOP is the primary arrangement under which shared plan service incentives are provided to certain specified employees of the Company and its' subsidiaries in India.
Three grants would be made under OPJ ESOP plan 2021 to eligible present and future employees on the rolls of the Company as at date of the grant.
The maximum value and share options that can be awarded to eligible employees is calculated by reference to certain percentage of individuals fixed salary compensation. 25% of the grant would vest at the end of the first year, 25% of the grant would vest at the end of the second year and 50% of the grant would vest at the end of the third year with a vesting condition that the employee is in continuous employment with the Company till the date of vesting.
The exercise price is determined by the Committee at I 1 per share.
A total of 47,00,000 options are available for grant to the eligible employees of the Company and a total of 3,00,000 options would be available for grant to the eligible employees of the Indian subsidiaries of the Company under the ESOP Plan.
I n addition to the above, a total of 60,00,000 would also be available to the eligible employees of the Company out of which upto 20,00,000 options would be available for grant to the eligible employees of the Indian Subsidiaries of the Company. If such 20,00,000 options are not utilised by the subsidiaries, the Committee may at its discretion, grant such options to the employees of the Company.
These options are equity settled and are accounted for in accordance with the requirement applying to equity settled transactions.
SAMRUDDHI PLAN 2021
The Board of Directors of the Company at its meeting held on 21 May 2021, formulated the Shri OP Jindal Samruddhi Plan ("OPJ Samruddhi Plan"). At the said meeting, the Board authorised the ESOP Committee for the superintendence of the ESOP Plan.
Samruddhi plan is the primary arrangement under which shared plan service incentives are provided to certain specified employees of the Company and its' subsidiaries in India.
Single grants would be made under OPJ ESOP plan 2021 to eligible employees on the rolls of the Company as at date of the grant.
The maximum value and share options that can be awarded to eligible employees is calculated by reference to certain percentage of individuals fixed salary compensation. 25% of the grant would vest at the end of the second year, 25% of the grant would vest at the end of the third year and 50% of the grant would vest at the end of the fourth year with a vesting condition that the employee is in continuous employment with the Company till the date of vesting.
The exercise price is determined by the ESOP committee at I 1 per share.
A total of 67,00,000 options are available for grant to the eligible employees of the Company and a total of 13,00,000 options would be available for grant to the eligible employees of the Indian subsidiaries of the Company under the ESOP Plan.
These options are equity settled and are accounted for in accordance with the requirement applying to equity settled transactions.
40. Segment reporting
The Company is in the business of manufacturing steel products having similar economic characteristics, primarily with operations in India and regularly reviewed by the Chief Operating Decision Maker ('CODM') for assessment of Company's performance and resource allocation.
The information relating to revenue from external customers and location of non-current assets of its single reportable segment has been disclosed as below
41. Employee benefits
a) Defined contribution plan
The Company operates defined contribution retirement benefit plans for all qualifying employees. Under these plans, the Company is required to contribute a specified percentage of payroll costs.
The Company's contribution to provident fund & family pension scheme recognised in statement of profit and loss of I 79 crores (31 March 2024: I 74 crores) (included in note 33).
b) Defined benefit plans
The Company sponsors funded defined benefit plans for all qualifying employees. The level of benefits provided depends on the member's length of service and salary at retirement age.
The gratuity plan is covered by The Payment of Gratuity Act, 1972. Under the gratuity plan, the eligible employees are entitled to post-retirement benefit at the rate of 15 days' salary for each year of service until the retirement age of 58,60 and 62, without any payment ceiling. The vesting period for gratuity as payable under The Payment of Gratuity Act, 1972 is 5 years.
The fund is managed by JSW Steel limited Employee Gratuity Trust and it is governed by the Board of trustees. The Board of trustees are responsible for the administration of the plan assets and for defining the investment strategy.
The plans in India typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
g) The Company expects to contribute I 79 crores (31 March 2024: I 56 crores) to its gratuity plan for the next year.
h) The average duration of the defined benefit plan obligation at the end of the reporting period is 7 years (31 March 2024: 7 years)
i) Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations after considering several applicable factors such as the composition of plan assets, investment strategy, market scenario, etc.
j) The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
k) The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.
Sensitivity Analysis:
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and attrition. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting year, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting year, which is the same as that applied in calculating the defined benefit obligation recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Each year an Asset-Liability-Matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles.
ii) Other long term benefits:
a) Compensated Absences
Under the compensated absences plan, leave encashment is payable to certain eligible employees on separation from the company due to death, retirement, superannuation or resignation. Employees are entitled to encash leave while serving the company at the rate of daily salary, as per current accumulation of leave days.
The company also has leave policy for certain employees to compulsorily encash unavailed leave on 31st December every year at the current basic salary .
b) Long Service Award
The Company has a policy to recognise the long service rendered by employees and celebrate their long association with the Company. This scheme is called - Long Association of Motivation, Harmony & Excitement(LAMHE). The award is paid at milestone service completion years of 10, 15, 20 and 25 years.
42. Financial Instruments
42.1 Capital risk management
The Company being in a capital intensive industry, its objective is to maintain a strong credit rating, healthy capital ratios and establish a capital structure that would maximise the return to stakeholders through optimum mix of debt and equity.
The Company's capital requirement is mainly to fund its capacity expansion, repayment of principal and interest on its borrowings and strategic acquisitions. The principal source of funding of the Company has been, and is expected to continue to be, cash generated from its operations supplemented by funding from bank borrowings and the capital markets. The Company is not subject to any externally imposed capital requirements.
The Company regularly considers other financing and refinancing opportunities to diversify its debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely monitors its judicious allocation amongst competing capital expansion projects and strategic acquisitions, to capture market opportunities at minimum risk.
43. Fair value hierarchy of financial instruments
The carrying amounts of trade receivables, trade payables, capital creditors, cash and cash equivalents, other bank balances, other financial assets and other financial liabilities (other than those specifically disclosed) are considered to be the same as their fair values, due to their short term nature.
A significant part of the financial assets is classified as Level 1 and Level 2. The fair value of these assets is marked to an active market or based on observable market data. The financial assets carried at fair value by the Company are mainly investments in equity instruments, debt securities and derivatives, accordingly, any material volatility is not expected.
43.1 Financial risk management
The Company has a Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company's risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the
Company's activities to provide reliable information to the Management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.
The risk management policies aims to mitigate the following risks arising from the financial instruments:
- Market risk
- Credit risk; and
- Liquidity risk
- Equity price risk
43.2 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market prices. The Company is exposed in the ordinary course of its business to risks related to changes in foreign currency exchange rates, commodity prices and interest rates.
The Company seeks to minimise the effects of these risks by using derivative and non-derivative financial instruments to hedge risk exposures. The use of financial derivatives and non-derivative financial instruments is governed by the Company's policies approved by the Board of Directors, which provide written principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the Management and the internal auditors on a continuous basis. The Company does not enter into or trade financial instruments, including derivatives for speculative purposes.
43.3 Foreign currency risk management
The Company's functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company's revenue from export markets and the costs of imports, primarily in relation to raw materials. The Company is exposed to exchange rate risk under its trade and debt portfolio.
Adverse movements in the exchange rate between the Rupee and any relevant foreign currency result's in increase in the Company's overall debt position in Rupee terms without the Company having incurred additional debt and favourable movements in the exchange rates will conversely result in reduction in the Company's receivables in foreign currency.
In order to hedge exchange rate risk, the Company has a policy to hedge cash flows up to a specific tenure using forward exchange contracts, options and other non-derivative financial instruments like long-term foreign currency borrowings and acceptances. At any point in time, the Company hedges its estimated foreign currency exposure in respect of forecast sales over the following 6 months using derivative instruments. Forecasted sales beyond the period of 6 months are hedged using non-derivative financial instruments basis the tenure of the specific long term foreign currency borrowings. In respect of imports and other payables, the Company hedges its payables as when the exposure arises. Short term exposures are hedged progressively based on their maturity.
All hedging activities are carried out in accordance with the Company's internal risk management policies, as approved by the Board of Directors, and in accordance with the applicable regulations where the Company operates.
The Company has also considered the effect of changes, if any, in both counterparty credit risk and own credit risk while assessing hedge effectiveness and measuring hedge ineffectiveness. The Company continues to believe that there is no impact on effectiveness of its hedges.
The following table details the Company's sensitivity to a 1% increase and decrease in the INR against the relevant foreign currencies net of hedge accounting impact. 1% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where INR strengthens 1% against the relevant currency. For a 1% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity, and the balances below would be negative.
43.4Commodity price risk:
The Company's revenue is exposed to the market risk of price fluctuations related to the sale of its steel products. Market forces generally determine prices for the steel products sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sale of its steel products.
The Company is subject to fluctuations in prices for the purchase of iron ore, coking coal, ferro alloys, zinc, scrap and other raw material inputs. The Company purchased primarily all of its iron ore and coal requirements at prevailing market rates during the year ended 31 March 2025.
The Company aims to sell the products at prevailing market prices. Similarly, the Company procures key raw materials like iron ore and coal based on prevailing market rates as the selling prices of steel prices and the prices of input raw materials move in the same direction.
Commodity hedging is used primarily as a risk management tool to secure the future cash flows in case of volatility by entering into commodity forward contracts.
Hedging commodity is based on its procurement schedule and price risk. Commodity hedging is undertaken as a risk offsetting exercise and, depending upon market conditions hedges, may extend beyond the financial year. The Company is presently hedging maximum up to 100% of its consumption.
The following table details the Company's sensitivity to a 5% movement in the input price of iron ore and coking coal. The sensitivity analysis includes only 5% change in commodity prices for quantity sold or consumed during the year, with all other variables held constant. A positive number below indicates an increase in profit or equity where the commodity prices decrease by 5% and vice-versa.
43.5 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. The Company is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees and US dollars with a mix of fixed and floating rates of interest. The Company hedges its US dollar interest rate risk through interest rate swaps to reduce the floating interest rate risk. The Company has exposure to interest rate risk, arising principally on changes in base lending rate and LIBOR rates. The Company uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like non-convertible bonds and short term loans. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.
The sensitivity analyses below have been determined based on the exposure to interest rates for floating rate liabilities, after the impact of hedge accounting, assuming the amount of the liability outstanding at the year-end was outstanding for the whole year.
If interest rates had been 100 basis points higher / lower and all other variables were held constant, the Company's profit for the year ended 31 March 2025 would decrease / increase by I 381 crores (31 March 2024: decrease / increase by I 298 crores). This is mainly attributable to the Company's exposure to interest rates on its variable rate borrowings.
The following table details the nominal amounts and remaining terms of interest rate swap contracts to hedge against fluctuations in fair value of borrowing outstanding at the year-end.
Interest rate benchmark reform
The company has transitioned its existing LIBOR denominated borrowings to Alternative Reference Rates (ARRs) during the year. The transition was necessitated in view of the cessation of the LIBOR as a reference benchmark for borrowings in international markets.
Derivative contract: There were no LIBOR linked derivative contract as of 31 March 2025.
43.6 Equity Price risk:
The Company is exposed to equity price risk arising from equity investments (other than subsidiaries and joint ventures, which are carried at cost).
Equity price sensitivity analysis:
The sensitivity analysis below has been determined based on the exposure to equity price risk at the end of the reporting period.
If equity prices of the investments increase/ decrease by 5%, other comprehensive income for the year ended 31 March 2025 would increase/ decrease by I 230 crores (31 March 2024: I 277 crores).
43.7 Credit risk management:
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Company is exposed to credit risk for trade receivables, cash and cash equivalents, investments, other bank balances, loans, other financial assets, financial guarantees and derivative financial instruments.
Moreover, given the diverse nature of the Company's business trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer (other than the Group Companies) accounted for 10% or more of the trade receivables in any of the years presented. The history of trade receivables shows a negligible provision for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of non-performance by any of the Company's counterparties. The assessment is carried out considering the segment of customer, impact seen in the demand outlook of these segments and the financial strength of the customers in respect of whom amounts are receivable. Basis this assessment, the allowance for doubtful trade receivables is considered adequate.
quality and prevailing market conditions. The Company based on past experiences does not expect any material loss on its receivables and hence no provision is deemed necessary on account of expected credit loss ('ECL').
The credit quality of the Company's customers is monitored on an ongoing basis and assessed for impairment where indicators of such impairment exist. The Company uses simplified approach (i.e., lifetime expected credit loss model) for impairment of trade receivables/ contract assets. The solvency of the debtor and their ability to repay the receivable is considered in assessing receivables for impairment. Where receivables have been impaired, the Company actively seeks to recover the amounts in question and enforce compliance with credit terms.
For all other financial assets, if credit risk has not increased significantly, 12-month expected credit loss is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime expected credit loss is used.
43.8 Liquidity risk management
Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for long term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short term investments provide liquidity in the short-term and long-term. The Company has acceptances in line with supplier's financing arrangements which might invoke liquidity risk as a result of liabilities being concentrated with few financial institutions instead of a diverse group of suppliers. The Company has established an appropriate liquidity risk management framework for the management of the Company's short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
The following tables detail the Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment Years and its non-derivative financial assets. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.
To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting year. The contractual maturity is based on the earliest date on which the Company may be required to pay.
For current investments, counterparty limits are in place to limit the amount of credit exposure to any one counterparty. This, therefore, results in diversification of credit risk for Company's mutual fund and bond investments. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions.
The carrying value of financial assets represents the maximum credit risk. The maximum exposure to credit risk was I 44,492 crores as at 31 March 2025 and I 38,433 crores as at 31 March 2024, being the total carrying value of trade receivables, balances with bank, bank deposits, current investments, loans, derivative assets and other financial assets.
In respect of financial guarantees provided by the Company to banks and financial institutions, the maximum exposure which the Company is exposed to is the maximum amount which the Company would have to pay if the guarantee is called upon. Based on the expectation at the end of the reporting period, the Company considers that it is more likely than not that such an amount will not be payable under the guarantees provided.
Receivables are deemed to be past due or impaired with reference to the Company's normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer's credit
The amount of guarantees/standby letter of credit given on behalf of subsidiaries included in Note 46 represents the maximum amount the Company could be forced to settle for the full guaranteed amount. Based on the expectation at the end of the reporting year, the Company considers that it is more likely than not that such an amount will not be payable under the arrangement.
Collateral
The Company has pledged part of its trade receivables, short term investments and cash and cash equivalents in order to fulfil certain collateral requirements for the banking facilities extended to the Company. There is obligation to return the securities to the Company once these banking facilities are surrendered. (refer note 20 and 25).
d. In view of the uncertainty involved in collectability, revenue as interest income of I 134 crores (31 March 2024: I 110 crores) have not been recognized on loan provided to certain overseas subsidiaries.
e. During the previous year, the Company has transferred land to JSW Foundation by way of a gift amounting to I 0.82 crores for no consideration.
f. The Company has during the year, extended the date of Memorandum of Understanding entered into in previous year with JSW Jaigarh Port Limited for execution of land lease (refer note 4(g)).
g. During the previous year, the Company has extended the redemption dates of investment in preference shares of a subsidiary amounting to I 188 crores.
h. During the previous year, the scheme of Amalgamation pursuant to Section 230-232 and other applicable provisions of the Companies Act 2013, providing for amalgamation of its Joint Venture, Creixent Special Steels Limited ("CSSL") and CSSL's subsidiary JSW Ispat Special Products Limited ("JISPL") with the Company became effective. (refer note 49)
i. Pursuant to amendment in related party transaction definition as per SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015, as amended, payment of dividend is not shown as related party transaction with effect from 1 April 2022.
a. As the future liability for gratuity is provided on an actuarial basis for the Company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.
b. The Company has recognised an expenses of I 4 crores (31 March 2024: I 4 crores) towards employee stock options granted to Key Managerial Personnel. The same has not been considered as managerial remuneration of the current year as defined under Section 2(78) of the Companies Act, 2013 as the options have not been exercised.
c. The Independent Non-Executive Directors are paid remuneration by way of commission and sitting fees. The commission payable to the Non-Executive Directors (in case of Nominee Director, the commission is paid to the respective institution to which the Nominee Director represents) is based on the number of meetings of the Board attended by them and their Chairmanship/Membership of Audit Committee during the year, subject to an overall ceiling of 1% of the net profits approved by the Members. The Company pays sitting fees at the rate of I 50,000 for meeting of the Board, Audit, Nomination & Remuneration Committee, Hedging and Project Review-committees and I 25,000 for meetings of the other committees attended by them. The amount paid to them by way of commission and sitting fees during current year is I 6 crores (31 March 2024: I 4 crores), which is not included above.
Terms and conditions Sales:
The sales to related parties are made on terms equivalent to those that prevail in arm's length transactions and in the ordinary course of business. Sales transactions are based on prevailing price lists and memorandum of understanding signed with related parties. For the year ended 31 March 2025, the Company has not recorded any impairment of receivables relating to amounts owed by related parties.
Purchases:
The purchases from related parties (including services) are made on terms equivalent to those that prevail in arm's length transactions and in the ordinary course of business. Purchase transactions are made on normal commercial terms and conditions and market rates.
Payment of brand fees
The Company makes branding fees payment to a related party for use of its brand @ 0.25% of annual turnover subject to actual expenditure incurred by the related party towards brand development, promotion and other related cost. The terms of the arrangement are those that prevail in arm's length transactions and in ordinary course of business. The royalty agreement requires the Group to make payment in 10 days from receipt of the invoice.
Loans to overseas subsidiaries:
The Company had given loans to subsidiaries for general corporate purposes. The loan balance as on 31 March 2025 was I 11,201 crores (31 March 2024: I 9,485 crores). These loans are unsecured and carry an interest rate ranging from LIBOR 500-565 basis points (in case of floating interest rate) and 6.3% to 7.5% (in case of fixed interest rate) and repayable within a period of one to five years. The loan has been utilized by the subsidiary for the purpose it was obtained. For the year ended 31 March 2025, the Company has recorded impairment on loans due from the overseas subsidiaries amounting to I 3,758 crores (31 March 2024: I 743 crores).
Loans to domestic subsidiaries:
The Company had given loans to subsidiaries for general corporate purposes. The loan balance as on 31 March 2025 was I 5,021 crores (31 March 2024: I 4,773 crores). These loans are unsecured and carry an interest rate ranging from 9.15% to 11.14% and repayable within a period of one to ten years. The loan has been utilized by the subsidiary for the purpose it was obtained. For the year ended 31 March 2025, the Company has not recorded any impairment on loans due from the domestic subsidiaries.
Guarantees to subsidiaries/joint venture:
Guarantees provided to the lenders of the subsidiaries/joint venture are for availing term loans and working capital facilities from the lender banks.
The transactions other than mentioned above are also in the ordinary course of business and at arms' length basis.
|
45. Contingent liabilities:
(i) Disputed claims/levies (excluding interest, if any) in respect of:
|
|
(I in crores)
|
|
Particulars
|
As at
|
As at
|
|
31 March 2025
|
31 March 2024
|
|
Excise Duty
|
335
|
315
|
|
Custom Duty
|
465
|
412
|
|
Income Tax
|
141
|
141
|
|
Sales Tax / VAT / Special Entry tax/ Electricity duty/ Goa Rural cess
|
1,658
|
1,550
|
|
Service Tax/ Goods S Service tax
|
148
|
341
|
|
Levies by local authorities - Statutory
|
75
|
75
|
|
Levies relating to Energy / Power Obligations
|
40
|
40
|
|
Claims by suppliers, other parties and Government
|
287
|
778
|
|
Total
|
3,149
|
3,652
|
Notes:
a) Excise duty cases includes disputes pertaining to availment of CENVAT credit, valuation methodologies, classification of gases under different chapter heading.
b) Custom duty cases includes disputes pertaining to import of Iron ore fines and lumps under different chapter headings, utilisation of SHIS licenses for clearance of imported equipment, payment of customs duty Steam Coal through Krishnapatnam Port and anti-dumping duty on Met Coke used in Corex.
c) Sales Tax/ VAT/ Special Entry tax/ Electricity duty/ Goa Rural cess cases includes disputes pertaining to demand of special entry tax in Karnataka and demand of cess by department of transport in Goa.
d) Service Tax/ Goods & Service tax cases includes disputes pertaining to availment of service tax credit on ineligible services, denial of credit distributed as an ISD, service tax on railway freight not taken as per prescribed documents.
e) Income Tax cases includes disputes pertaining to transfer pricing and other matters.
f) Levies by local authorities - Statutory cases includes disputes pertaining to payment of water charges and enhanced compensation.
g) Levies relating to Energy / Power Obligations cases includes disputes pertaining to uninterrupted power charges by Karnataka Power Transmission Company Ltd., belated payment surcharge, claims for the set off of renewable power obligations against the power generated in its captive power plants and dues relating to additional surcharge imposed on captive consumption by Maharashtra State Electricity Distribution Company Ltd.
h) Claims by Suppliers, other parties and Government includes quality/ shortfall claims issues raised by suppliers and others.
i) There are several other cases which has been determined as remote by the Company and hence not been disclosed above.
j) The Deputy Commissioner of GST State Tax (Enforcement Unit, Orissa) had issued show cause notice (SCN) in the previous years for the period upto March 2022, alleging that the Company has wrongfully and illegally transferred the unutilised Input Tax Credit to the Company's ISD registration in Mumbai. The Company filed its reply to the SCN, however, the GST Authorities (Department) raised demand for tax of I 3,004 crores including interest and penalty thereon. The Company filed an appeal before the Additional Commissioner of State Tax (First Appellate Authority) and the First Appellate Authority has confirmed the order passed by the GST Authorities and disposed off, two of the three appeals. Aggrieved by the said appellant order, the Company has submitted a letter of Intent to file appeal before the Appellate Tribunal. The Company, basis the legal opinion obtained, has evaluated the matter and concluded that the outflow of resources is remote and accordingly, no provision is made in the financial statement. Interest of I 217 crores is considered possible and included above.
In response to a petition filed by the iron ore mine owners and purchasers (including the Company) contesting the levy of Forest Development Tax (FDT) on iron ore on the ground that the State does not have jurisdiction to legislate in the field of major minerals which is a central subject, the Honourable High Court of Karnataka vide its judgement dated 3 December 2015 directed refund of the entire amount of FDT collected by Karnataka State Government on sale of iron ore by private lease operators and National Mineral Development Corporation Limited (NMDC). The Karnataka State Government has filed an appeal before the Supreme Court of India ("SCI"). SCI has not granted stay on the judgement but stayed refund of FDT. The matter is yet to be heard by SCI. Based on merits of the case and supported by a legal opinion, the Company has not recognised provision for FDT of I 1,043 crores (including paid under protest - I 665 crores) and treated it as a contingent liability.
The State of Karnataka on 27 July 2016, has amended Section 98-A of the Forest Act retrospectively substituting the levy as Forest Development Fee (FDF) instead of FDT. In response to the writ petition filed by the Company and others, the Honourable High Court of Karnataka has vide its order dated 4 October 2017, held that the amendment is ultra-vires the Constitution of India and directed the State Government to refund the FDF collected. The State Government has filed an appeal before the SCI, and based on merits of the case duly supported by a legal opinion and a favorable order from the High Court, the Company has not recognised provision for FDF amount of I 4,290 crores (including paid under protest - I 255 crores) pertaining to the private lease operators & NMDC and treated it as contingent liability.
46a. Financial guarantees
The Company has issued financial guarantees to banks on behalf of and in respect of loan facilities availed by its group companies. Guarantees given have a markup over and above the loan amount whereas it is recognised only to the extent of outstanding loans.
46b. Letter of Comfort (LOC)
The Company has issued Letter of Comforts (LOC) to various banks / financial institutions in relation to credit facilities availed by certain subsidiaries and joint venture aggregating to I 21,556 crores as at 31 March 2025. The LOC does not contain any legal obligation on the Company to make any payments with respect to these credit facilities availed by the subsidiaries and joint venture.
Other commitments:
(a) The Company from time to time provides need based support to subsidiaries and joint ventures entity towards capital and other requirements.
(b) The Company has imported capital goods under the export promotion capital goods scheme to utilise the benefit of a zero or concessional customs duty rate. These benefits are subject to future exports within the stipulated year. Such export obligations at year end aggregate to
48. In assessing the carrying amounts of Investments in and loans / advances (net of impairment loss / loss allowance) to certain subsidiaries and a joint ventures and financial guarantees to certain subsidiaries (listed below), the Company considered various factors as detailed there against and concluded they are recoverable.
The Company has performed sensitivity analysis on the assumptions used and based on current indicators of future economic conditions, the Company expects to recover the carrying amount of these assets.
(c) The Company has given guarantees aggregating I 1,049 crores (31 March 2024: I 1,051 crores) on behalf of subsidiaries to Commissioner of Customs in respect of goods imported and against EPCG Licences
(d) The Company has entered into annual purchase agreements with its overseas subsidiary wherein the Company has committed purchase of certain quantities of raw materials. The prices for such contracts are linked to underlying commodity indices. and the Company may incur penalties incase of shortfall in purchases against such committed quantities.
(e) The Company in the normal course of business, has entered into long term commercial agreements with certain suppliers wherein the Company has committed purchase of certain quantities of material/ avail certain services/ utilities which are in the nature of minimum take or pay (MTOP). As per the terms and conditions of the contract provisions if any, are recognized in the financial statements in case the minimum guarantee of offtake are not fulfilled. However, in case of a supplier, the company has carried an assessment of these shortfall in offtake quantities during year and concluded that no provision is required to be recognised in the books of accounts based on precedence that the waiver has been received in the earlier years.
(f) On 29th March 2023, the Company had entered Coal Mine development Production Agreement (CMDPA) for Parbatpur Central Coal Mine, Sitanala Coal Mine in Jharkhand and Banai & Bhalamuda in Chhattisgarh under 16th Tranche of CM(SP) Act, 2015
The above provision / reversal of provisions for impairment have been recognised based on the estimate of the values of businesses and assets by independent external valuer determined basis the cash flow projections. In making said projections, reliance has been placed on estimates of assumptions relating to discount rate, increase in operational performance on account of committed capital expenditures, improvement in the capacity utilization and margins based on the forecast of demand in local markets.
Estimate of values of the businesses and assets by independent external values based on cash flow projections/ implied multiple approach. In making the said projections, reliance has been placed on estimates of future prices of iron ore and coal, mineable resources, and assumptions relating to discount rate, future margins, increase in operational performance on account of committed capital expenditure and significant improvement in capacity utilisation and margins based on forecasts of demand in local markets and availability of infrastructure facilities for mines.
(b) Equity shares of JSW Bengal Steel Limited, a subsidiary (carrying amount of investments - 31 March 2025: I 508 crores (31 March 2024: I 508 crores) - Evaluation of the status of its integrated Steel Complex (including power plant) to be implemented in phases at Salboni of district Paschim Medinipur in West Bengal by the said subsidiary, evaluation of Land and the plans for commencing construction of the said complex.
(c) Equity shares of JSW Jharkhand Steel Limited, a subsidiary (carrying amount - 31 March 2025: I 103 crores; 31 March 2024: I 102 crores) - Evaluation of the status of its integrated Steel Complex to be implemented in phases at Ranchi, Jharkhand by the said subsidiary underlying valuation of Land and the plans for commencing construction of the said complex.
(d) I nvestment (carrying amount - 31 March 2025: I NIL; 31 March 2024: I 4 crores) and loan (carrying amount - 31 March 2025: I 177 crores; 31 March 2024: I 221 crores) relating to JSW Natural Resources Mozambique Limitada and JSW ADMS Carvo Limitada (step down subsidiaries) - Assessment of minable reserves by independent experts based on the plans to commence operations after mining lease arrangements are in place for which application has been submitted to regulatory authorities, and infrastructure is developed.
The Company has during the year recognised impairment provision of I 82 crores (impairment provisioning on equity investment I 4 crores (31 March 2024: NIL); and loans given I 78 crores (31 March 2024: NIL)).
(e) Preference shares of JSW Realty & Infrastructure Private Limited, a subsidiary (carrying amount - 31 March 2025: I 212 crores; 31 March 2024: I 195 crores) and loans (Carrying amount - 31 March 2025: I 138 crores; 31 March 2024: I 130 crores) . Preference Shares are Fair Valued Through Profit and loss based on Valuation by independent expert.
49. In accordance with the Share Subscription agreement entered into with JSW Paints Limited (formerly known as JSW Paints Private Limited) on 23 July 2021, the Company had agreed to invest I 750 crores in JSW Paints Limited . The Company has invested I 750 crores and has been allotted 29,482,565 equity shares upto 31 March 2025. The total equity investment approximates to 12.85% (previous year 12.85%) of the issued and paid-up equity capital of JSW Paints Limited. Pursuant to the Company's shareholding exceeding 10% of the equity capital of JSW Paints Limited, it has become an associate of the entity w.e.f. 22 August 2023 and the classification of investment has changed from investment in others at Fair value through Other Comprehensive income to investment in associates at deemed cost.
The fair value of the investment appearing in the books of account as on 22 August 2023 of I 844 crores is considered as the deemed cost of acquisition and the fair value changes of I 190 crores (net of tax) previously recognized through other comprehensive income are transferred to retained earnings. As per IND AS 103, purchase consideration has been allocated basis the fair value of the acquired assets and liabilities carried out by an independent valuation expert which includes goodwill of I 898 crores.
50. The Company does not have material transactions with the struck off companies during the current & previous year.
51. Previous year figures have been re-grouped /re-classified wherever necessary including those as required in keeping with revised Schedule III amendments.
Exceptional items for the year ended 31 March 2025 includes -
i. The Company had submitted a notice for surrender of Jajang iron ore mining lease located in the district of Keonjhar, Odisha due to un-economic operations. Pursuant to the approval of the Final Mine Closure Plan by Indian Bureau of Mines (IBM), Ministry of Mines on 9 October 2024, the Company had submitted an application for surrender of Jajang Iron ore Block. Accordingly, the Company had recognised a net provision amounting to I 342 crores, pertaining to the underlying carrying value of assets, inventory (excluding net impact of net realisable value provided for on planned dispatches) and site restoration liability. An implementation certificate of the Final Mine Closure Plan was issued by IBM on 7 April 2025, which, as a process of surrender, has been submitted to the Govt. of Odisha on 10 April 2025.
ii. The Company pursuant to a detailed feasibility study concluded that the Banai and Bhalumuda Coal Block was not suitable from the techno-commercial perspective and decided not to go ahead with the investment to develop the Coal Block. The coal block was terminated by Ministry of Coal. Accordingly, the bid security forfeiture and related expenditure amounting to I 103 crores were charged off to the Statement of Profit and Loss.
iii. During the year ended 31 March 2025, the Company transferred its Salav unit having a Direct Reduced Iron (DRI) capacity of 0.9 MTPA to JSW Green Steel Limited (JSW Green), a wholly owned subsidiary of the Company, at a cash consideration of I 2,233 crores determined by an independent expert resulting into a gain of I 1,449 crores and has also entered into a job work arrangement with JSW Green for a period of one year for conversion of iron ore lumps/ pellets into DRI (transaction). This has resulted into the entire transaction being classified as a sale and leaseback. Considering the management plans to set up a green steel facility at JSW Green by expanding capacity from existing 0.9 MTPA to 4 MPTA in phases in line with Company's growth strategy, Company estimate that the job work arrangement may continue for a period of 3 years and has accordingly recognised right of use assets and lease liability of I 55 crores and I 184 crores, respectively.
iv. includes gain recorded of I 1,454 crores pursuant to buyback of shares by Piombino Steel Limited, a subsidiary of the Company.
v. includes impairment provision of I 3,762 crores (31 March 2024: I 1,279 crores) towards loans given to subsidiaries in US and in Mauritius based on recoverability assessment carried out for respective underlying businesses.
vi. For the year ended 31 March 2024, includes a reversal of impairment provision of I 1,039 crores for loans given and financial guarantees provided to a subsidiary in Netherlands mainly on account of significant improvement in the business of its Italian subsidiaries.
vii. Pursuant to the merger of Creixent Special Steels Limited ('CSSL') and JSW Ispat Special Products Limited ('JSWISPL') becoming effective on 31 July 2023, (refer note 8) the existing investments of the Company in CSSL as on 31 July 2023 have been fair valued as required by IND AS 103 Business Combinations and a resultant gain of I 590 crores have been recognised as an exceptional gain.
viii. The State of Goa enacted "The Goa Cess on Products and Substances Causing Pollution (Green Cess) Act 2013 ("Green Cess Act") and thereby levied a cess on the handling or utilisation or consumption or combustion or movement or transportation etc of certain products / substances (including coal and coke) causing pollution in the state of Goa ("Green Cess") at the rate of 0.5% of the sale value. In the present case, the Company imports certain varieties of coal / coke into Mormugao Port, Goa, which are handled at berths operated by South West Port Limited ("SWPL") and SWPL has in turn challenged the legislative competence of the state of Goa to enact the Green Cess Act by way of a writ petition before the Hon'ble High Court of Bombay, Goa Bench. The Hon'ble High Court of Bombay, Goa Bench, vide its judgement dated 14 September 2023 ("Writ Judgement"), dismissed the writ petition and upheld the constitutional validity of the Green Cess Act and held that the state of Goa had competence to legislate the Green Cess Act and levy the Green Cess. In light of the aforesaid development, the Company has recognised a provision towards Green Cess amounting to I 389 crores for the period from 2013 till September 2023. SWPL and the Company have filed a special leave petition before the Hon'ble Supreme Court challenging the Writ Judgement, in which the Hon'ble Supreme Court, vide its order dated 7 December 2023 ("Interim Order"), issued notice on the SLPs and directed the state of Goa to carry out assessments and issue demand notices to petitioners, upon which the petitioners would be liable to deposit 50% of the assessed demand. The Company has complied with the Interim Order passed by the Hon'ble Supreme Court and paid the necessary deposit in accordance with the demand raised by the authorities.
55. There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company. Further, amounts aggregating to I 0.11 crore (31 March 2024: I 0.11 crore), is held in abeyance due to dispute/ pending legal cases.
56. Events occurring after balance sheet:
a) On 23 May 2025, the board of directors recommended a final dividend of I 2.80 (Rupees Two and paise eighty only) per equity share of I 1 each to be paid to the shareholders for the financial year 2024-25, which is subject to approval by the shareholders at the Annual General Meeting to be held on 25 July 2025. If approved, the dividend would result in cash outflow of I 685 crores.
b) The Hon'ble Supreme Court pronounced the judgment dated 2 May 2025 rejecting Company's resolution plan for Bhushan Power & Steel Limited ("BPSL"), a subsidiary of the Company, and directing the refund to the Company of amounts, paid to financial creditors, operational creditors of BPSL and equity contribution made in BPSL, basis the Hon'ble Supreme Court Order dated 6 March 2020. The Hon'ble Supreme Court also directed that liquidation proceedings be initiated by National Company Law Tribunal ("NCLT") for BPSL under Section 33(1) of Insolvency Bankruptcy Code ("IBC").
The Company through its subsidiary Piombino Steel Limited ("PSL") had invested in BPSL and the carrying amount of its investments in and loans given to PSL aggregates to I 9,215 crores as at 31 March 2025. Further, the Company has carried out a recoverability assessment, considering the Hon'ble Supreme Court Order dated 6 March 2020 and the judgement dated 2 March 2025, the ESCROW Agreement with erstwhile lenders of Committee of Creditors and legal opinion obtained by the Company, and concluded that the recoverable amount is sufficient enough to cover the carrying values in the books and hence no provision is required to be made for the investments in and loans given to PSL as on 31 March 2025. The Company, in consultation with its legal advisors, is in the process of evaluating all options to finalise the legal remedies including Review of judgement dated 2 May 2025 of the Hon'ble Supreme Court. Pending the outcome of such actions, no adjustments have been made since the Company believes that there is no adverse material impact on the Standalone Financial Statement as on and for the year ended 31 March 2025.
57. The Company has been maintaining its books of accounts in the SAP which has feature of recording audit trail of each and every transaction, creating an edit log of each change made in books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled, throughout the year as required by proviso to sub rule (1) of rule 3 of The Companies (Accounts) Rules, 2014 known as the Companies (Accounts) Amendment Rules, 2021. However, the audit trail feature is not enabled for direct changes to data in the underlying database in relation to certain users pertaining to SAP HR - Payroll application, which has been enabled subsequently post the year ended 31 March 2025.
Additionally, the audit trail of prior year has been preserved by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded in the respective year.
58. Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company's financial statements are disclosed below. The Company will adopt this new and amended standard, when it become effective.
Lack of exchangeability - Amendments to Ind AS 21
The Ministry of Corporate Affairs notified amendments to Ind AS 21 The Effects of Changes in Foreign Exchange Rates to specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entity's financial performance, financial position and cash flows.
The amendments are not expected to have a material impact on the Company's financial statements.
59. Application of new and amended standards
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2025, MCA has notified Ind AS 117 Insurance Contracts and amendments to Ind AS 116 Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. 1 April 2024. The Company has reviewed the new pronouncements and based on its evaluation has determined that it does not have any material impact in its financial statements.
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