p) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by way of notes to the accounts.
Contingent Assets are neither recognized nor disclosed in the financial statement. Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.
q) Employee Benefits
Short Term Employee Benefits
Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.
Post-Employment Benefits Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company makes specified monthly contributions towards Provident Fund and Pension Scheme. The Company's contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Payment to defined contribution retirement benefit scheme, if any, is charged as expenses as they fall due.
Defined Benefit Plans
The Company pays gratuity to the employees whoever has completed five years of service with the Company at the time of resignation/superannuation. The gratuity is paid @ 15 days salary for every completed year of service as per the Payment of Gratuity Act 1972. The gratuity liability amount is contributed to the approved scheme of LIC formed exclusively for gratuity payment to the employees. The gratuity fund has been approved by respective IT authorities.
The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees' services.
Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.
r) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
s) Claims Recoverable
The claims in respect of fixed assets lost during the process of drilling (lost in hole) are recognised on the basis of invoices raised and correspondingly the depreciated value of the fixed assets lost in hole is charged off. Any deductions made from the claims raised are recognised on receipt of intimation in respect of the same.
t) Prepaid Expenses
Prepaid expense is not recognised in cases where total amount spent is Rs. 10,000/- or less. Such expenses are charged to statement of profit and loss.
u) Segment reporting:
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments.
v) Statement of cash flows:
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of:
i. changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;
ii. non-cash items such as depreciation, provisions, and unrealised foreign currency gains and losses etc.; and
iii. all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents comprise cash at banks and on hand, short-term deposits with an original maturity of three months or less and liquid investments, which are subject to insignificant risk of changes in value.
w) Event Occurring after the Balance Sheet Date
Events occurring after the Balance Sheet Date and till the date on which the Financial Statement are approved, which are material in the nature and indicate the need for adjustments are considered in the financial statement.
x) Key sources of estimation uncertainty and critical accounting judgements:
In the course of applying the policies outlined in all notes under point 2 below, the Company is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period, if the revision affects current and future period.
Key sources of estimation uncertainty:
i) Useful lives of property, plant and equipment:
The useful lives of property, plant and equipment are reviewed at least once a year. Such lives are dependent upon an assessment of both the technical lives of the assets, and also their likely economic lives based on various internal and external factors including relative efficiency, the operating conditions of the asset, anticipated technological changes, historical trend of plant load factor, historical planned and scheduled maintenance. It is possible that the estimates made based on existing experience are different from the actual outcomes and could cause a material adjustment to the carrying amount of property, plant and equipment.
ii) Provisions and Contingencies:
In the normal course of business, contingent liabilities arise from litigations and claims. Potential liabilities that are possible but not probable of crystallizing or are very difficult to quantify reliably are treated as contingent liabilities. Such contingent liabilities are disclosed in the notes but are not recognized. Potential liabilities that are remote are neither recognized nor disclosed as contingent liability. The management decides whether the matters needs to be classified as‘ remote,' ‘possible' or ‘probable' based on expert advice, past judgements, terms of the contract, regulatory provisions etc.
iii) Fair value measurements:
When the fair values of financial assets or financial liabilities recorded or disclosed in the Financial Statements cannot be measured based on quoted prices in active markets, their fair values are measured using valuation techniques including the Discounted Cash Flows model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility.
iv) Income taxes:
Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid / recovered for uncertain tax positions. In assessing the realizability of deferred tax assets arising from unused tax credits, the management considers convincing evidence about availability of sufficient taxable income against which such unused tax credits can be utilized. The amount of the deferred income tax assets considered realizable, however, could change if estimates of future taxable income changes in the future.
v) Defined benefit plans:
The present value of defined benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual development in the future. These include the determination of the discount rate, future salary escalations and mortality rates etc. Due to the complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
vi) Loss allowance assessment for a loan / guarantee given to subsidiary and a related party:
a) Assessment for loss allowance for a loan given to subsidiary involves assumptions relating to the valuation of it's underlying business. In considering the value in use, the Management has made assumption relating to timing of resumption of commercial operations of mining activity, mineable reserves / resources, annual production, yield, future prices of coal, renewal of mining licenses, operational margins and discount rate. Any subsequent changes in the assumptions could materially impact the carrying value of the assets.
b] Recoverability of loans given to and fair value of financial guarantee given on behalf of, a related party serving as a mine development operator for lignite mine of a joint venture entity is assessed on the basis of projected cash flows derived on the presumption that it will continue as the operator having regard to it being selected as the preferred bidder in the fresh competitive bidding process carried out as per the regulator's direction, its net worth and other external and internal sources of information.
vii) Expected credit loss:
The measurement of expected credit loss on financial assets is based on the evaluation of collectability and the management's judgement considering external and internal sources of information. A considerable amount of judgement is required in assessing the ultimate realization of the loans having regard to, the past collection history of each party and ongoing dealings with these parties, and assessment of their ability to pay the debt on designated dates
VIII) Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.
y) Recent Pronouncements :-
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 March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Group.
z) Rounding of amounts
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
Note 2: Estimates
The presentations of standalone financial statements is in conformity with the generally accepted accounting principles which requires estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognised in the year in which the results are known / materialized.
Note 30: Property, plant & equipment
The company adopted at initial and subsequent recognition of all of its property, plant and equipment at deemed cost method. Refer note 1(b) for depreciation method used, depreciation rate and useful life of PPE. Refer note 3 for gross carrying value, accumulated depreciation value, additions, deletions, depreciation for the period and other changes in PPE.
Property, Plant and Equipment are pledged/ hypothecated as collateral/security against the borrowings of the company.
Note 39 (A) : Trade Receivable, Loans & advances & Trade Payable
[i] a] “Trade Recoverable includes a sum of USD 14.77 Million [in Indian Rs. 6632.81 lakhs restated on 31.03.2011] as on
31.03.2017, which is outstanding from ONGC Ltd. For more than 7 Years. Since there has been no realization in this account, the outstanding amount of USD has not been restated after 31.03.2011.”
In 2008, ONGC withheld USD 14.77 Million from the amount payable to JDIL to recover its dues from Discovery Enterprises Private Limited [DEPL], claiming that DEPL is alter ego of JDIL. ONGC initiated arbitration to adjust the amount, receivable from DEPL from the amount payable to JDIL, making DEPL and JDIL as parties in the Arbitration proceedings.
JDIL objected to being included as a Party into the arbitration initiated by ONGC being a Non-signatory party to the signed contract between ONGC & DEPL, the said request was acceded by Hon'ble Tribunal. ONGC filed an appeal against the Order for deletion of JDIL before the Bombay High Court, which upheld the decision of Arbitrator. In October 2012, ONGC filed a Special Leave Petition [SLP] against the order of Bombay High Court.
JDIL had also initiated arbitration proceedings against ONGC and Arbitrator had given the award in favour of JDIL. ONGC filed an Appeal against this order in Single Bench, which was dismissed. Again they filed the appeal before the Double Bench of Bombay High Court. While, this Appeal was pending before Double Bench, ONGC moved an Application to Supreme Court to transfer this case to be tagged with SLP filed earlier. This case was transferred and tagged with earlier SLP.
JDIL filed execution of its award in Bombay High Court. ONGC made an Application in Supreme Court of India for stay of execution. Supreme of Court of India has given the stay after depositing the entire amount of Award of Rs.159 Crore in Supreme Court of India by ONGC. On Application being made by JDIL to Supreme Court of India to withdraw this amount against Bank Guarantee. Supreme Court of India has allowed to pay this amount to JDIL against Bank Guarantee of the equal amount.
Vide Supreme Court of India order dated 27th April 2022, Supreme Court of India has directed as under: -
• Dismissed the Arbitration Award and Appeal order in Bombay High Court with regard to Arbitration initiated by ONGC.
• To constitute a New Arbitration Tribunal between ONGC and JDIL.
• Arbitration Award and Bombay High Court order, in case of Arbitration initiated by JDIL to be kept in abeyance till the Award by the newly constituted Tribunal.
• This case was also transferred to Bombay High Court.
• JDIL has been asked to keep Bank Guarantee alive till the order of Arbitration Award.
According to the decision of Supreme Court of India, New Arbitration Tribunal was constituted. Proceedings of Tribunal is going on. Arbitrational Tribunal Members are: -
a] Retired Justice Mr. Swantanter Kumar, Presiding Arbitrator.
b] Retired Justice Mr. Naresh Patil, Arbitrator
c] Retired Justice Mr. Jayant Nath, Arbitrator
On the basis of a legal opinion taken from Law Firm, the Management is of the view that we have strong case for recovery of due from ONGC and hence not making any provision for doubtful debts.
b Trade receivable also includes a sum of USD 17.05 Lakhs [in Indian rupees Rs.1421.97 Lakhs] as deployment of rig Jindal Supreme with ONGC was delayed in 2020 on account of business disruption caused by COVID-19 pandemic. Thereafter, the mentioned amount was withheld by ONGC since 2020 against liquidated damages levied on the Company. In line with decision of Outside Expert Committee [OEC] to whom the matter was referred and to conclude this matter amicably, settlement agreement has been executed with ONGC. Consequently, USD 9.82 lakhs will be received in the FY2024-25 as per terms of settlement agreement. Balance amount of USD 7.23 Lakhs [In Indian rupees 602.41 lakhs] receivable from ONGC has been written off as bad debts during the financial year 2023-24.
[ii] The Loan and advance includes Rs. 891.44 Lakhs relate to Marine Oil Gas Private Limited [MOGL] in respect of which no realisation could be made. No interest income has been recognised since financial year 2011-12. The Company has initiated legal proceeding for recovery of the same by filing a civil suit in Hon'ble Delhi High Court in September 2013 against this company along with related persons and Ex-Managing Director of the company. However in view of Ind As 113, the company has made a provision of full amount of Rs.891.44 Lakhs in Financial Year 2020-21 under expected credit loss on MOGL loan.
[iii] Loans & Advances includes an interest free loan of Rs.518.00 Lakhs [Previous year Rs.473.06 Lakhs], paid to Jindal Drilling & Industries Limited Employee Welfare Trust, which had been formed with the sole objective of employee's welfare. The management is considering the same as good and fully recoverable. The amount of loan is discounted at 9.5% p.a. to arrive at fair value.
a] The company has entered into a lease contract for the unfurnished Jack up Rig - Jindal Star, effective from July 10th, 2023, with a contract period of three years. The total refurbishment costs incurred amount to Rs. 9,622.64 lakhs, which includes Rs.3,708.31 lakhs carried forward from the 2022-2023 financial year and Rs. 5,914.32 lakhs spent during the current year. These refurbishment expenses are to be amortized over the contract period. For the current year, Rs.2,138.91 lakhs have been charged to drilling operation expenses, while the remaining Rs.7,483.73 lakhs have been classified partly under other non-current assets and partly under other current assets.
b] The company has incurred a total of Rs.8,213.05 lakhs on the refurbishment of the Jack up Rig - Discovery-1. This amount includes Rs.3,767.34 lakhs brought forward from the previous financial year (2022-2023) and Rs.4,445.71 lakhs spent during the current year. The refurbishment expenses are to be amortized over a three-year contract period starting from May 23rd, 2023. During the current year, Rs.2,223.40 lakhs have been charged under drilling operation expenses. The remaining Rs.5,989.65 lakhs have been classified partly under other non-current assets and partly under other current assets.
c] The company has entered into a lease agreement for the unfurnished Jack up Rig - Virtue-1, effective October 27th, 2023, with a contract period of three years. The total refurbishment costs amount to Rs.8,544.01 lakhs, which includes Rs.215.64 lakhs carried forward from the previous financial year (2022-2023] and Rs.8,328.37 lakhs incurred during the current year. These refurbishment expenses will be amortized over the contract period. For the current year, Rs.1,216.12 lakhs have been charged to drilling operation expenses, while the remaining Rs.7,327.89 lakhs have been classified partly under other non-current assets and partly under other current assets.
The primary objective of the Company's capital management is to ensure availability of funds at competitive cost for its operational and development needs and maintain a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value.
The Company manages its capital structure and makes changes in view of changing economic conditions. No changes were made in the objectives, policies or process during the year ended 31.03.2024 and 31.03.2023. There have been no breaches of the financial covenants of any interest bearing loans and borrowings for the reported period.
financial assets, short term borrowings and other current financial liabilities approximate to their carrying amount largely due to the short term maturities of these instruments.
b) . Long term fixed rate and variable rate receivables / borrowings are evaluated by the Company based on
parameters such as interest rate, specific country risk factors, credit risk and other risk characteristics. Fair value of variable interest rate borrowings approximates their carrying values. For fixed interest rate borrowings fair value is determined by using Discounted Cash Flow (DCF) method using discount rate that reflects the issuer's borrowings rate. Risk of non-performance for the company is considered to be insignificant in valuation.
c) The fair value of derivatives are estimated by using pricing models, where the inputs to those models are based on readily observable market parameters basis contractual terms, period to maturity and market parameters such as interest rates, foreign exchange rates and volatility. These models do not contain a high level of subjectivity as the valuation techniques used do not require significant judgement and inputs thereto are readily observable from actively quoted market prices. Management has evaluated the credit and non-performance risks associated with its derivatives counterparties and believe them to be significant and warranting a credit adjustment.
Fair Value Hierarchy
The following table provides the fair value measurement hierarchy of Company's asset and liabilities grouped into Level 1 to Level 3 as described below:
Quoted prices / published Net Asset Value (NAV) in an active markets (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities and financial instruments like mutual funds for which NAV is published by mutual funds. This category consist mutual fund investments and equity share instrument of other companies / JV's.
Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (that is, unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumption that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
Credit risk is the risk that the counter party will not meet its obligation under a financial instruments or customer contract, leading to a financial loss. The Company is exposed to credit risk from its cash and cash equivalents, loans, investments at amortised cost and deposits with banks and financial institutions, as well as credit exposures to customers including outstanding receivables.
Credit risk for banks and financial institutions, only high rated banks/institutions are accepted.
For other financial assets, the company assesses and manages credit risk based on internal credit rating system. The finance function consists of a team who assess and maintain an internal credit rating system. The company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.
Market risk and sensitivity
Market risk is the risk that the fair value or future cash flow of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: currency rate risk and interest rate risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivatives financial instruments. Foreign currency risk is the risk that the fair value or future cash flows of financial instrument will fluctuate because of changes in foreign exchange rates. 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. This is based on the financial assets and liabilities held as at 31.03.2024 and 31.03.2023.
ill] Previous year's figures have been re-grouped/ re-arranged/ re-classified wherever considered necessary. iv] Event Occurring after Balance Sheet Date
On 21st May 2024, the board of directors recommended a final dividend of ' 0.50 per equity share of ' 5 each to be paid to the shareholder for the financial year 2023-24, which is subject to approval by the shareholders at the Annual General Meeting to be held on 28 August 2024. If approved, the dividend would result in cash outflow of Rs. 144.91 lakhs.
Note 52: Other Statutory Information
i] . The Company does not have any benami property, where any proceeding has been initiated or pending
against the Company for holding any benami property.
ii] The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
iii] The Company has not advanced or loaned or invested funds to any other person(s] or entity(ies], including foreign entities (Intermediaries] with the understanding that the Intermediary shall:
(a] directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries] or
(b] provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
iv] . The Company does not have any such transaction which is not recorded in the books of accounts that has been
surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
v] . The Company has complied with the number of layers prescribed under clause (87] of section 2 of the Act read
with the Companies (Restriction on number of Layers] Rules, 2017.
vi] . The Company is not declared willful defaulter by and bank or financials institution or lender during the year
vii] The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
viii] . Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in
agreement with the books of accounts
ix] . The Company has used the borrowings from banks and financial institutions for the specific purpose for which it
was obtained.
x] . The title deeds of all the immovable properties, (other than immovable properties where the Company is the les
see and the lease agreements are duly executed in favour of the Company] disclosed in the financial statements included in property, plant and equipment and capital work-in progress are held in the name of the Company as at the balance sheet date.
xi] . The Company does not have material transactions with struck off companies during the financial year.
xii] . The Company does not have any capital work in progress and intangible assets under development during the
financial year.
xiii] . The Company has not revalued its Property, Plant and equipment, Intangible, tangible assets ( including right of
use of assets] during the financial year .
The accompanying notes are an integral part of the Standalone Financial Statements.
Material accounting policies and notes on standalone financial statements
As per our report of even date For & on behalf of the Board of Directors
For Kanodia Sanyal & Associates RAGHAV JINDAL D.P. JINDAL
Chartered Accountants Managing Director Chairman
Firm's Registration No. 008396N DIN: 00405984 DIN: 00405579
PALLAV KUMAR VAISH PAWAN KUMAR RUSTAGI NARAYAN RAMASWAMY
Partner CFO CEO
Membership No. 508751 PAN: AACPR8012M PAN: AAUPR3856R
Place: New Delhi VIJAY KAUSHIK BINAYA KUMAR DASH
Date : 21st May, 2024 Director Company Secretary
DIN: 02249672 ACS: 17982
Place: New Delhi Date : 21st May, 2024
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