Employee Benefits:

i) Defined Contribution Plan:

Company's contribution to Provident Fund  Rs.1.88 Crore (Previous Year  Rs.1.58 Crore).

ii) Defined Benefit Plans - Gratuity:                                                                    

                                                                                                                      Rs. in Crore

Particulars	As at 31st March, 2017 Funded	As at 31st March, 2016 Funded
a. Changes in Present Value of obligations:
Opening Balance of brsent value of obligation	3.49	1.72
Acquisition adjustment	-	0.86
Service Cost	0.76	0.66
Interest Cost	0.28	0.15
Actuarial (gain)/loss on obligation	0.42	0.23
Benefits paid	(0.63)	(0.13)
Closing Balance	4.32	3.49
b. Changes in Fair Value of assets:
Opening Balance of  Fair Value of Plan Assets	1.86	1.14
Expected  Return on Plan assets less loss on  investments	0.16	0.09
Actuarial gain / (loss) on Plan Assets	0.10	0.03
Employers' Contribution	1.63	0.73
Benefits paid	(0.63)	(0.13)
Closing Balance	3.12	1.86
c. Net Asset/(Liability) recognised in the Balance Sheet:
Present Value of obligations	(4.32)	(3.49)
Fair Value of plan asset	3.12	1.86
Net Asset/(Liability) recognised in the Balance Sheet	(1.20)	(1.63)
d. Expenses during the Year:
Service cost	0.76	0.66
Interest cost	0.28	0.15
Expected Return on Plan assets	(0.16)	(0.09)
Actuarial (Gain)/Loss	0.32	0.04
Total	1.20	0.76
e. Break up of Plan Assets  as a percentage of total plan assets:
Insurer Managed Funds - Value (100%)	3.12	1.86
f. Principal actuarial assumptions:
Rate of Discounting	7.4% p.a.	8.0% p.a.
Rate of increase in salaries	6.0% p.a.	6.0% p.a.
Expected rate of return on plan assets	8.0% p.a.	8.5% p.a.
Attrition Rate	2.0% p.a.	2.0% p.a.

In assessing the Company's post retirement liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables. The base being the LIC Ultimate Tables   2006-08.

The Company has created irrevocable trust named “JSW Cement Employees’ Gratuity Trust” for providing gratuity benefits to the employees and current year contribution to the trust is Rs.1.63 Crore (Previous Year  Rs.0.73 Crore).

Other Disclosures:                                                                                                                  

                                                                                                                                                                           Rs. in Crore

Particulars	As at 31st March, 2017 Funded	As at 31st March, 2016 Funded	As at 31st March, 2015 Funded	As at 31st March, 2014 Funded	As on 31st March, 2013 Funded
Defined Benefit Obligation	4.32	3.49	1.72	1.27	1.18
Plan  Assets	3.12	1.86	1.14	0.97	0.75
Deficit	(1.20)	(1.63)	(0.58)	(0.30)	(0.43)
Experience Adjustments on Plan Liabilities-Loss/(Gain)	0.15	0.09	0.15	0.03	0.11
Experience Adjustments on Plan Assets-Loss/(Gain)	(0.10)	0.03	0.01	-	0.02

SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

a. The financial statements of the Company have been brpared in accordance with generally accepted accounting principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of Companies Act, 2013, read with Rule 7 of the Companies (Accounts)  Rules, 2014 read with amendment rules and the relevant provisions of the Companies Act,  2013 (“the 2013 Act”). The Company follows mercantile system of accounting and recognizes Income & Expenditure on accrual basis except dividend, which is accounted when the right to receive the same is established, and those with significant uncertainties and in accordance with the applicable accounting standards.

b. Use of Estimates

The brparation of financial statements in conformity with GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and reported amount of revenue and expenses for that year. Actual results can differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

c. Inventories

Inventories are valued after providing for obsolescence as follows:

i. Raw material, stores & spares, packing material and fuels are valued at lower of cost and net realisable value. However, these items are considered to be realisable at cost, if the finished products, in which they will be used, are expected to be sold at or above cost. Cost is determined on the weighted average basis.

ii. Work-in-progress and Finished Goods are valued at lower of cost and net realisable value. Cost of inventory comprises of costs of conversion and other costs incurred in bringing the inventories to their brsent location and condition and excise duty. Cost is determined on weighted average basis.

iii. Waste/Scrap inventory is valued at net realisable value.

iv. Obsolete, defective and unserviceable stock is duly provided for wherever applicable.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.

d. Property, Plant and Equipment

Fixed Assets (tangibles/intangibles) are stated at their cost of acquisition or construction less accumulated debrciation/amortisation/ impairment losses, if any. Cost comprises the purchase price, any other applicable cost and also includes borrowing cost as estimated to be attributable to the acquisition and construction of fixed assets upto the date of commencement of commercial production.

Spares parts, servicing equipment and standby equipment which can be used only in connection with a particular Plant & Equipment of the Company and use is expected to be regular, are capitalised at cost.

Losses/Gain arising from retirement/disposal of fixed assets, which are carried at cost, are recognised in the Statement of Profit and Loss.  

Capital Work In Progress

Cost of material consumed, erection charges thereon along with other related expenses incurred for the projects are shown as Capital Work-in-progress (“CWIP”) for capitalisation. Expenditure attributable to fixed assets are identified and allocated on a systematic basis to the cost of related assets. Interest during construction and expenditure (net) allocated to construction are apportioned to CWIP on the basis of the closing balance of specific assets or part of asset being capitalised. The balance if any, left after such capitalisation is kept as a separate item under CWIP schedule. Claims for price variation/ escalation in case of contracts are accounted for on acceptance of claims. Any other expenditure which is not directly or indirectly attributable to the construction of the project / fixed asset is charged off to the statement of profit and loss in the year in which they are incurred.

Apart from costs related directly to the construction of an asset, indirect expenses incurred up to the date of commencement of commercial production which are incidental and related to construction are capitalized as part of the construction cost. Income, if any, earned during the construction period is deducted from the indirect costs.

e. Debrciation and Amortisation

Debrciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Debrciation on tangible fixed assets has been provided on the straight-line method as per the useful life brscribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:

           

Sr. No.	Nature of Assets	Useful life of assets
1	Plant and Machinery	25 to 40
2	Factory Building	65
3	Non-Factory Building	65

Debrciation on additions to fixed assets is provided on a pro-rata basis from the date of installation and in the case of a new project from the date of commencement of commercial production. Debrciation on deductions / disposals is provided on pro-rata basis upto the date of deduction/disposal.

Spares, servicing equipment and standby equipment, which are capitalised, are debrciated over the useful life of the related fixed asset. The written down value of such spares is charged to statement of profit and loss, on issue for consumption.

Leasehold land is amortised on straight line basis over the period of the lease.

Capital assets whose ownership does not vest with the Company are amortised based on the estimated useful life as follows:

Switching substation - over a period of 35 years,  

Railway siding - over a period of 15 years and

Road - over a period of 30 years

Expenditure on software is amortised on Straight Line Method over the period of three years from the date it is put to use.

f. Revenue Recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Revenue from sale of goods is recognized, when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained. Sales are net of sales tax, discounts and returns, as applicable. Sales exclude self consumption. Excise duty recovered is brsented as a reduction from the gross turnover.

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognised when right to receive the same is established.

g. Foreign  Currency Transactions

 Transactions denominated in foreign currencies are recorded at the exchange rate brvailing on the date of transaction or that approximates the actual rate at the date of the transactions.

Monetary items denominated in foreign currencies at the balance sheet date are stated at year end rates. Non-monetary foreign currency items are carried at cost. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the brmium paid on forward contracts is recognised over the life of the contract.

Any income or expense on account of exchange difference either on settlement or on translation, including brmium/discount on forward exchange contracts is recognised in the statement of profit and loss except in case of long term liabilities, where they relate to acquisition of fixed asset, in which case, they are adjusted to the carrying cost of such assets.

h. Government grants and subsidies

Grants and subsidies from the government are recognized when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expense item, it is recognized as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset.

i. Investments

Investments are classified as current or long-term in accordance with Accounting Standard - 13 on “Accounting for Investments”. Investments which are intended to be held for one year or more are classified as long term investments and investments which are intended to be held for less than one year are classified as current investments.

Long term investments are stated at cost. Provision is made for diminution other than temporary in the value of such investments.

Current investments are carried at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investment. In case of investments in mutual funds, the net asset value of units declared by the mutual funds is considered as the fair value.

On disposal of an investment, the difference between the carrying amount and the disposal proceeds, net of expenses, is recognised in the Statement of Profit and Loss.

j. Employee Benefits

Employee benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the profit and loss account in the period in which the service is rendered or as and when they are incurred.

Employee benefits under defined benefit plans, such as gratuity and other long-term benefits such as compensated absences, which fall due for payment after a period of twelve months from rendering service or after completion of employment, are measured by the projected unit cost method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The Company’s obligations recognized in the balance sheet rebrsent the brsent value of obligations as reduced by the fair value of plan assets, wherever applicable.

Actuarial gains and losses are immediately taken to statement of the profit and loss account and are not deferred.

Long-term and short-term portion of the obligations under defined benefit plans and other long term benefits are brsented on the basis of actuary’s report.

k. Employee Share based payments

The compensation cost of stock options granted to employees is calculated using the fair value method of the stock options. The compensation expense is amortized uniformly over the vesting period of the option in accordance with the Guidance note on Share based payments issued by the Institute of Chartered Accountants of India

l. Borrowing Costs

Borrowing costs attributable to the acquisition and construction of qualifying assets, are capitalized as part of the cost of such asset up to the date when the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. The borrowing cost eligible for capitalization is being netted off against any income arising on temporary investment of those borrowings. The capitalization of the borrowing costs shall cease when substantially all activities necessary to brpare the qualifying asset for its intended use or sale are complete. Other borrowing costs are expensed in the year in which they are incurred.

m.Operating Lease

Operating lease payments are recognized as expenses on a straight-line basis over the lease term.

n. Earnings Per Share

The Company reports basic and diluted Earnings Per Share (“EPS”) in accordance with Accounting Standard 20 on Earnings Per Share. Basic EPS is computed by dividing the net profit or loss after tax for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

o. Taxation

Income tax expenses comprise current tax (i.e. amount of tax for the period determined in accordance with the Income Tax Law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income of the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed debrciation or carried forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

p. Minimum Alternate Tax (MAT)

MAT under the provisions of Income tax Act, 1961, where applicable, is recognised as current tax in the statement of Profit and Loss. The credit available under the Income Tax Act, 1961 is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in the Guidance Note issued by The Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and is shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.

q. Mines Reclamation Expenses

The Company provides for the expenses to reclaim the quarries used for mining. The total estimate of reclamation expenses is apportioned over the estimate of mineral reserves and a provision is made based on the minerals extracted during the year. Mines reclamation expenses are incurred on an ongoing basis and until the closure of the mine. The actual expenses may vary based on the nature of reclamation and the estimate of reclamation expenditure.

r. Impairment of assets

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets, when at Balance Sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount i.e. the higher of the asset’s net selling price and value in use. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss.

Impairment loss recognised in prior years is reversed when there is an indication that the impairment loss recognised for the asset no longer exists and has decreased.

s. Financial hedging transactions

In respect of forward contracts, gains / losses on settlement and losses on restatements are recognized in statement of profit and loss except in case where they relate to the acquisition or construction of fixed assets, in which case they are adjusted to the carrying cost of such assets.

t. Provisions and Contingencies

Provisions are recognised for the liabilities that can be measured only by using a substantial degree of estimation, if

i. the company has a brsent obligation as a result of a past event;

ii. the probable outflow of resources is expected to settle the obligation; and

iii. the amount of the obligation can be reliably estimated.

Where some or all the expenditure required to settle a provision is expected to be reimbursed by another party, such reimbursement is recognised to the extent of provision or contingent liability as the case may be, only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of:

i. a brsent obligation arising from a past event, when it is not probable that a outflow of resources will be required to settle the obligation.

ii. a possible obligation, unless the probability of outflow of resources is remote.

Overview of the Company

The Company is engaged in the business of manufacture and sale of cement, ground granulated blast furnace slag and clinker and trading of allied products. The Company is operating ~ 0.70 million tonne per annum grinding unit at Vijayanagar, Karnataka and ~ 4.40 million tonne per annum green field cement manufacturing unit at Bilkalguduru village near Nandyal, Andhra Pradesh and ~ 1.00 million tonne per annum grinding unit at Dolvi Maharashtra

Segment reporting:

The Company is primarily engaged in the business of manufacturing and sale of Cement and Cement related products. As per Accounting Standard-17 ”Segment Reporting” specified under section 133 of the Companies Act,2013, there are no other reportable business and geographical segment applicable to the Company.