File_2012_Document1

202 Jindal Steel & Power LimitedBusiness Leadership Sustainable Operations Excellent Governance Robust FinancialsAnnual Report 2011-12203ConsolidatedNOTES to the consolidated financial statements as at and for the year ended 31st March, 2012 NOTES to the consolidated financial statements as at and for the year ended 31st March, 2012B. PROVIDENT FUNDThe Company contributed/provided ` 22.97 crore and ` 7.83 crore towards provident fund during the year ended31st March, 2012 & 31st March, 2011 respectively.The Guidance on Implementing AS 15, Employee Benefits (Revised 2005) issued by Accounting Standards Board (ASB)of the ICAI states that benefits involving employer established provident funds, which require interest shortfalls to berecompensed are to be considered as defined benefit plans. The Actuarial Society of India has issued the final guidancefor measurement of provident fund liabilities. The actuary has accordingly provided a valuation and based on the belowassumptions made a provision of ` 10.38 crore as at 31st March, 2012 (Previous Year ` Nil).The details of fund and plan assets position are given below:Particulars As at 31.03.2012Provident FundInterest guaranteePlan assets at period end, at fair value 172.63 -Present value of benefit obligation at period end 172.63 10.38Assumptions used in determining the present value obligation of the interest rate guarantee under Deterministic Approach:Particulars As at 31.03.20122011-12 2013 and thereafterExpected Return on assets of exempted provident fund 8.20% 8.20%Expected guaranteed interest rate 8.60% 8.60%Discount rate 8.50%36 The Company has over the years, expanded its steel power & mining businesses, both in India and internationally. The Companyhad expanded its diamond exploration business by making business investment in the diamond mines in the DemocraticRepublic of Congo, so as to be part of global production & marketing hub in Africa. Since the diamond exploration business wasmaking continuous losses and the business investment(s) made by the Company had impaired, it was decided to dispose offsuch investment(s), in order to prevent any further business losses. Accordingly, an amount of ` 93.62 crore has been disclosedas “Loss arising from Business investment(s)”, under Note no. 28 Other Expenses in the Statement of Profit & Loss. The amountof Loss is net of Operating losses incurred in the past and included in Statement of Profit and Loss in the relevant year in theconsolidated financial statements.37 Disclosures as required by Accounting Standard (AS–17) ‘Segment Reporting’:The primary reportable segments are the business segments namely Iron & Steel and Power. The secondary reportablesegments are geographical segments which are based on the sales to customers located in India and outside India and theassets and liabilities located in respective territories.Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specificaccounting policies have been followed for segment reporting:a) Segment revenue includes sales and other income directly identifiable with/allocable to the segment including intersegmentrevenue.b) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment results.c) Expenses/Incomes which relates to the Company as a whole and not allocable to segments are included under OtherUn-allocable Expenditure (net of Un-allocable Income).d) Segment assets and liabilities include those directly identifiable with respective segments. Un-allocable assets andliabilities represent the assets and liabilities that relate to Company as a whole and not allocable to any segment.(` in Crore)Particulars Current Year Previous YearI. Primary Segments ( Business Segments)1. Segment Revenuea) Iron & Steel 15,893.21 10,420.82b) Power 4,464.32 4,317.46c) Others 539.75 230.06Sub –Total (Gross) 20,897.28 14,968.34Less : Inter-segment Revenue 1,280.82 969.39Net Segment Revenue 19,616.46 13,998.952. Segment Results (Profit(+) / Loss(-) before Tax and interestfrom each segment)a) Iron & Steel 3,923.22 2,887.51b) Power 2,653.53 2,937.77c) Others (173.63) (6.32)Sub –Total 6,403.12 5,818.96Less: Interest, financial expenses and lease rent 529.61 335.58Other un-allocable expenditure (net of un-allocable income) 684.91 496.33Profit before Tax 5,188.60 4,987.05Provision for Taxation– Income Tax 999.87 1,023.03– Deferred Tax 186.47 160.01Profit for the year after tax 4,002.26 3,804.013. Other InformationI Segment Assetsa) Iron & Steel 17,059.49 15,380.02b) Power 11,505.38 9,763.94c) Others 2,956.59 1,659.54d) Un-allocated Assets* 13,486.08 9,285.40Total Assets 45,007.54 36,088.90II Segment Liabilitiesa) Iron & Steel 2,411.60 1,994.40b) Power 427.13 21.85c) Others 166.06 371.72d) Un-allocated Liabilities 6,493.76 5,384.35Total Liabilities 9,498.54 7,772.32III Capital Expenditure (Including Capital work in Progress)a) Iron & Steel 3,530.29 4,486.91b) Power 2,819.34 3,867.35c) Others 258.01 36.88Total 6,607.64 8,391.14