Consolidated financial statement of JSW S.A. Capital Group for 2012

2.21. Revenues

Revenues on sales are shown at fair value of the received or due payment on account of sale of products, merchandise, materials or services in the ordinary course of the Group’s operations, taking into account the rebates granted and other sales price reductions, after elimination of intra-Group sales.

The Group recognizes revenues when the amount of the revenues can be reliably determined, the costs incurred to obtain the revenues can be reliably measured when the Group transferred to the buyer significant risk and benefits resulting from the ownership rights and when it is probable that the Group will obtain economic benefits in the future. It is recognized that the value of revenues cannot be reliably measured until all contingent events associated with the sale are clarified. The Group bases its estimates on historical results, taking into account the customer type, transaction type and details of specific agreements.

a. Revenues on the sales of products, merchandise and materials

Revenues on the sales of products, merchandise and materials, in particular coal and coke, are recognized upon delivery of the products by the Group to the recipient. Delivery takes place at the time of transferring significant risk and benefits resulting from the ownership rights to the products, merchandise and materials to the buyer, pursuant to the terms and conditions of the deliveries set forth in the sales agreements. Revenues on sales are presented on the basis of the prices specified in sales agreements, after reduction by estimate rebates and other sales decreases.

b. Revenues on the sale of services

Revenues on the sale of services are recognized if a service has been provided as at the date ending the reporting period.

c. Interest income

Interest income is recognized pro rata to the elapse of time, using the effective interest rate method. Interest income on granted loans which have been impaired are recognized according to the original effective interest rate in the remaining income.

d. Dividend income

Dividend income is recognized at the time of determining the shareholders’ rights to receive the dividends and is presented in other income.