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Jindal Stainless Ltd.

BSE: 532508 Sector: Metals & Mining
NSE: JSL ISIN Code: INE220G01021
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OPEN 119.75
PREVIOUS CLOSE 119.65
VOLUME 173218
52-Week high 126.00
52-Week low 22.00
P/E 31.75
Mkt Cap.(Rs cr) 5,097
Buy Price 111.10
Buy Qty 284.00
Sell Price 0.00
Sell Qty 0.00
OPEN 119.75
CLOSE 119.65
VOLUME 173218
52-Week high 126.00
52-Week low 22.00
P/E 31.75
Mkt Cap.(Rs cr) 5,097
Buy Price 111.10
Buy Qty 284.00
Sell Price 0.00
Sell Qty 0.00

Jindal Stainless Ltd. (JSL) - Director Report

Company director report

TO

THE MEMBERS

Your Directors have pleasure in presenting the 35th Annual Report on the business andoperations of your Company together with the Audited Statement of Accounts for thefinancial year ended 31st March 2015.

Financial Results

Your Company’s performance for the financial year ended 31st March 2015 is statedbelow:

(Rs. in Crores)

Particulars Standalone Consolidated
Year Ended 31.03.2015 Year Ended 31.03.2014 Year Ended 31.03.2015 Year Ended 31.03.2014
Revenue from operations (Gross) 6459.54 12966.67 7396.55 13869.80
Less: Excise Duty on sales 448.60 1019.69 448.60 1000.74
Revenue from Operations (Net) 6010.94 11946.98 6947.96 12869.07
Profit before other Income Finance Cost Depreciation Exceptional Items Tax & Amortization (EBIDTA) 304.00 879.60 368.41 1010.05
Add: Other Income 52.79 46.12 54.16 45.23
Less: Finance Costs 915.81 1234.70 942.49 1295.13
Less: Depreciation / Amortization 392.55 687.66 411.11 728.39
Profit /(Loss)Before Tax & Exceptional Items (951.56) (996.64) (931.04) (968.24)
Add: Exceptional Items – Gain/(Loss) 1173.20 (416.90) 1184.16 (418.74)
Profit/(Loss) Before Tax 221.63 (1413.54) 253.12 (1386.98)
Less: Tax Expenses (1.45) (23.45) 0.01 (20.67)
Net Profit /(loss) after Tax 223.08 (1390.09) 253.11 (1366.30)
Share in Profit / (Loss) of Associate - - - (0.37)
Minority Interest - - (0.28) (1.56)
Net Profit / (Loss) (After Adjustment for Associate & Minority Interest) 223.08 (1390.09) 252.83 (1368.24)
Add / Less:
Add: As per last year account - - - -
Less: Depreciation adjusted to Retained Earnings 3.53 - 3.53 -
Less: Loss on cessation / liquidation/ disposal of Subsidiaries (Net) - - (102.28) -
Add: Debenture Redemption Reserve written back 1.87 3.14 1.87 3.14
Amount available for Appropriation 221.42 (1386.95) 353.45 (1365.10)
Less: Transferred to General Reserve - - - 0.42
Less: Being deficit Set off from General Reserve (956.74) 430.21 (1044.60) 320.92
Net surplus/(deficit) in statement of Profit & Loss (735.32) (956.74) (691.14) (1044.60)

The above financial results of the Company for the year ended 31st March 2015 are notcomparable with the financial results for the year ended 31st March 2014 as the financialresults for FY 2014-15 have been reopened and revised to give effect to the terms ofSection I and II of the Composite Scheme of Arrangement ("Scheme") amongst theCompany and its three wholly owned subsidiary companies viz. Jindal Stainless (Hisar)Limited Jindal United Steel Limited and Jindal Coke Limited which was approved by theHon’ble High Court of Punjab and Haryana at Chandigarh vide its order dated 21stSeptember 2015 (as modified on 12th October 2015). The certified true copy of the saidorder was filed with the office of Registrar of Companies on 1st November 2015 andaccordingly Section I and II of the Scheme have become operative with effect from theAppointed Date 1 i.e. close of business hours before midnight of 31st March 2014.

On pre-recast basis during the year the net Revenue from operations of your Companyon standalone basis has increased by 7.16% at Rs. 12802.47 crore as compared to Rs.11946.98 crore during previous financial year 2013-14. The Profit before other incomeFinance Cost Depreciation Exceptional Items Tax & Amortisation on standalone basisstood at Rs. 1040.76 crore as compared to ` 879.60 crore during previous year.

Further during the year the consolidated net Revenue from operations on pre recastbasis of your Company has increased by 7.22% at Rs. 13798.75 crore as compared to Rs.12869.07 crore during previous financial year 2013-14. Consolidated Profit before otherincome Finance Cost Depreciation Exceptional Items Tax & Amortization stood at Rs.1146.93 crore as compared to Rs. 1010.06 crore during previous year.

The financial results of the Company during the year 2014-15 continued to remain understress on account of various factors viz. subdued economic environment increase inimports (especially cheaper imports from China) increasing raw material pricesunfavorable duty structure and adverse foreign exchange fluctuation.

Operations

As per the terms of the Scheme the Ferro Alloys Division of the Company comprising ofFerro Alloy manufacturing facility located at Jindal Nagar Kothavalasa Distt.Vizianagaram Andhra Pradesh and the Mining Division comprising of Chromites Mines havebeen demerged and vest with Jindal Stainless (Hisar) Limited. Further the businessundertaking relating to Hisar Unit of the Company has been transferred to Jindal Stainless(Hisar) Limited on slump sale basis. Consequent upon the filing of the Court order withthe office of the ROC this part i.e. Section I and II of the Scheme has become effectivewith effect from the Appointed Date 1 i.e. close of business hours before midnight of 31stMarch 2014. The other part i.e. Section III and IV of the Scheme pertaining to transferof Hot Strip Mill to Jindal United Steel Limited and Coke Oven Plant to Jindal CokeLimited shall become effective with effect from the Appointed Date 2 i.e. close ofbusiness hours before midnight of 31st March 2015 upon receipt of necessary approvalsfrom Orissa Industrial and Infrastructure Development Corporation Limited (OIIDCO).

With the above presently the Company is left with only one manufacturing facilitylocated at Jajpur Odisha.

The performance of Jajpur Odisha improved as compared to last year. During thefinancial year 2014-15 Steel Melting Shop produced 448476 MT as compared to 413863 MTin the last year Hot Strip Mill produced 440360 MT against 400930 MT in the lastyear Plate Finishing Shop produced 32143 MT against 35658 MT and facilities in CRMproduced 382949 MT against 332433 MT produced in last year.

The production at Ferro Alloys during the year was 1 07596 MT against 134559 MTproduced last year due to scarcity of raw material.

Performance of Coke Oven unit during FY 2014-15 improved producing 231370 MT of Cokeagainst 217193 MT produced in last year.

Both the power plants (2X125MW) generated 1486.241 million units (net) of power ascompared to 1190.925 million units (net) in the last year. Out of the total generation393.508 million units were wheeled to Hisar plant (since transferred to Jindal Stainless(Hisar) Limited under the Composite Scheme of Arrangement) and 24.461 million units soldthrough exchange.

Jajpur plant is in receipt of Quality Management System (ISO 9001:2008) for its CokeOven Unit facility. With this the entire plant is certified for IMS consisting of QMS EMSand OHSAS. The Odisha unit has also received REACH/RoHS certification for various 300& 400 series stainless steel grades. Scope of Construction Product Directive (CEMarking) certification is expanded to include 316 Ti and 321 grades. This has enabled yourCompany to be the preferred and certified manufacturers of stainless for constructionfield in European market.

In addition the Jajpur unit has successfully undergone ISI mark/ BIS certificationaudit for Stainless Steel grades – 304 (304S1 as per IS 6911) 304L(304S2 as per IS6911) and 316L grades and is in receipt of license for 304S1 grade. License for othergrades is expected to be received shortly. As part of product development new SS gradeadded at Jajpur plant in FY 2014-15 includes 201L 201LN 310S 439 441 & 446. YourCompany’s products are approved by many reputed organizations viz. BHEL Trichy for400 series and for new application developments which includes Grade 430 – forutensil application Grades 304 & 409L – for tubing application Grade 409L– for fabrication application. Jajpur plant has also successfully catered Grade 304Lto Indira Gandhi Centre for Atomic Research for its nuclear application requirements. HSMfacility is in receipt of ISI mark/ BIS certification license for various carbon steelgrades like Hot Rolled Steel Strips in coils (Grade 1 & 2 Si – Al Killed) and HRStrips in coil form (Grade E 250 Quality – A BR Killed/ Semi Killed excludingsuitable for impact test requirements).

Asset Monetization and Business Reorganization Plan (AMP) and Composite Scheme ofArrangement

On account of the operations of the Company remaining under strain due to variousexternal factors the ability of the Company to meet its repayment obligations/ liabilitiesunder the facilities availed by it from the Lenders was adversely affected and it hadrequested the Lenders to restructure such facilities to support the Company. Accordinglythe Company was referred to the Corporate Debt Restructuring forum for the efficientrestructuring of corporate debt (hereinafter referred to as the "CDR")and a CDR package for the Company was approved by the Empowered Group of CDR (CDR EG("Approved CDR Package").

Despite the above restructuring the operations of the Company did not improve asenvisaged due to various external factors pertaining to the economy and industry. As aresult the ability of the Company to meet its repayment obligations/ liabilities underthe facilities was adversely affected and the Company approached the CDR-EG for a reworkedCDR package which was approved by the CDR-EG at their meeting held on August 24 2012 anda letter of approval dated September 18 2012 ("Reworked CDR Package").The Company after having various rounds of discussions with the CDR Lenders has nowfinalized a comprehensive plan of Asset Monetization cum Business Reorganisation Plan("AMP"). The AMP was approved by the CDR EG vide its letter datedDecember 26 2014 ("CDR EG Approval") which entails monetization ofidentified business undertaking(s) of the Company through demerger/slump sale(s) andutilization of the proceeds of the slump sale(s) in reduction of debt of the Company byan amount of ~ ` 5500 Crore (from ~ ` 8894 Crore (outstanding as at March 31 2014) to ~Rs. 3394 Crore).

As a part of the above said AMP the Board of Directors of the Company in their meetingheld on 29th December 2014 approved a Composite Scheme of Arrangement between the Companyand its three wholly owned subsidiary companies viz. Jindal Stainless (Hisar) LimitedJindal United Steel Limited and Jindal Coke Limited and their respective creditors andshareholders. NOC from Stock Exchanges to the said Scheme in compliance with theprovisions of Clause 24(f) of the Listing Agreement was received on 20th March 2015.Thereafter as directed by the Hon’ble High Court of Punjab and Haryana atChandigarh meetings of the Shareholders Secured Creditors and Unsecured Creditors wereheld on 16th May 2015 and the proposal of Scheme was approved through overwhelmingmajority. The Company also obtained approval from public shareholders through e-voting asper direction of the Stock Exchanges.

Thereafter the Company filed second motion petition before the Hon’ble High Courtof Punjab and Haryana at Chandigarh on 20th May 2015.

The Hon’ble High Court of Punjab and Haryana at Chandigarh vide its order dated21st September 2015 (as modified on 12th October 2015) has approved the ‘CompositeScheme of Arrangement’ (Scheme) among Jindal Stainless Limited (JSL) JindalStainless (Hisar) Limited (JSHL) Jindal United Steel Limited (JUSL) and Jindal CokeLimited (JCL) and their respective shareholders and creditors. Certified true copy of thesaid Order was received on 20th October 2015 and was filed on 1st November 2015 withthe office of Registrar of Companies NCT of Delhi and Haryana.

As per the terms of the Scheme upon filing of the aforesaid Order with the Office ofthe Registrar of Companies NCT of Delhi and Haryana Section I and II of the Scheme(pertaining to transfer of Demerged Undertakings comprised of Ferro Alloys Manufacturingfacility at Kothavalasa Distt. Vizianagaram Andhra Pradesh and Chromite Mines andBusiness Undertaking 1 comprised of manufacturing facility at Hisar from JSL to JSHL) havebecome operative from the Appointed Date 1 i.e. close of business hours before midnight of31st March 2014. Section III and IV of the Scheme with respect to JUSL and JCLrespectively shall become operative from Appointed Date 2 i.e. close of business hoursbefore midnight of 31st March 2015 after receipt of approval from Orissa Industrial andInfrastructure Development Corporation Limited (OIIDCO) with respect to the use of land byJUSL and JCL for which the Company has already made necessary application.

Dividend

The Board considering the Company’s performance and financial position for theyear under review has not recommended any dividend on equity shares of the Company forthe financial year ended 31st March 2015.

Transfer to Reserves

The Board considering the Company’s performance and financial position for theyear under review has not proposed to transfer any amount to reserves.

Share Capital

As on 31st March 2014 the paid up share capital of the Company was Rs. 462370890/-divided into 215375005 equity shares of `2/- each and 15810440 Cumulative CompulsoryConvertible Preference Shares (CCCPS) of face value of `2/- each.

On 19th December 2014 and 25th September 2015 the Company has allotted 11000000and 4810440 equity shares of `2/- each respectively upon conversion of 15810440Cumulative Compulsory Convertible Preference Shares (CCCPS) of face value of `2/- each toJSL Overseas Limited a member of promoter group. Consequently as on the date of thisreport the paid up share capital of the Company stands at Rs. 462370890/- divided into231185445 equity shares of Rs. 2/- each.

Management Discussion and Analysis Report

Management Discussion and Analysis Report as required under the listing agreement withthe stock exchanges forms part of this Annual Report.

Transfer to Investor Education and Protection Fund

The Company has transferred unclaimed and unpaid amounts aggregating to `3085286/- toInvestor Education and Protection Fund of Government of India during the year 2014-15.

Employees Stock Option Scheme

During the year under review 560625 stock options were vested in eligible employees.The disclosure under Regulation 14 of Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 is set out in Annexure – I to thisReport.

Information Technology

During the year the Company’s IT and SAP department has further modified the SAPECC 6.0 landscape with enhanced business integration functionalities for Businessbenefits. This integrated SAP Business Support mechanism is assisting management in makinginformed decisions through MIS which is aligned towards achieving goals and throughreal-time transactions processing. The SAP team will also play a critical role in enablingthe Company’s Re-Structuring exercise by re-aligning the current SAP Landscape. TheIT team has also been successful in providing secure and non-disruptive IT (HardwareNetwork Software etc) services to the Company throughout the year. Various initiativeslike an upgraded e-mail solution enhanced and secure firewalls bar-coding and ManagementAnalytics etc. were planned & delivered during the year. The IT and SAP departmentplans to rollout further Business Enhanced support & solutions to the Company in thecoming year as well.

Consolidated Financial Statements

In accordance with the Companies Act 2013 and Accounting Standard (AS) – 21 onConsolidated Financial Statements read with AS-23 on Accounting for investments inAssociates and AS-27 on Financial Reporting of interests in Joint Ventures the AuditedConsolidated Financial Statements are provided in the Annual Report.

Subsidiary Companies / Joint Ventures / Associate Companies

As per the terms of the Scheme six domestic subsidiary companies of the Company viz.JSL Lifestyle Limited Jindal Stainless Steelway Limited JSL Architecture Limited GreenDelhi BQS Limited JSL Media Limited and JSL Logistics Limited have been transferred toJindal Stainless (Hisar) Limited through slump sale. Consequent thereto as on 31st March2015 the Company has been left with 11 direct and step down subsidiaries namely (i)Jindal Stainless UK Limited; (ii) Jindal Stainless FZE Dubai; (iii) PT Jindal StainlessIndonesia; (iv) Jindal Stainless Italy S.r.l.; (v) Jindal Stainless Madencilik Sanayi VETicaret A.S. Turkey (vi) JSL Group Holdings Pte. Ltd. Singapore; (vii) JSL Ventures Pte.Ltd. Singapore; (viii) Jindal Aceros Inoxidables S. L. Spain; (ix) Iberjindal S.L.Spain; (x) Jindal United Steel Limited; and (xi) Jindal Coke Limited. Further the Companyhas an associate company namely J.S.S. Steelitalia Ltd. and two joint ventures with MJSJCoal Limited and Jindal Synfuels Limited.

During the financial year ended 31st March 2015 two subsidiary companies namely JSLEurope SA and JSL Minerals and Metals SA were closed down. Further Jindal Stainless(Hisar) Limited (JSHL) Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL)were made the wholly-owned subsidiary companies of the Company. Post sanction of theScheme JSHL has ceased to be subsidiary of the Company. The other two companies viz. JUSLand JCL shall also cease to be subsidiary companies of the Company post receipt ofapproval from OIIDCO and induction of new investors in the said companies. However thesewill continue to remain associate companies of the Company.

The members if they desire may write to Company Secretary at O.P. Jindal Marg Hisar– 125005 (Haryana) to obtain the copy of the annual report of the subsidiarycompanies.

A statement containing the salient features of the financial statement of thesubsidiaries and associate companies in the prescribed Form AOC - 1 is attached alongwithfinancial statement. The statement also provides the details of performance financialposition of each of the subsidiaries and associate company.The Policy for determiningmaterial subsidiaries as approved may be accessed on the Company’s website at thelink: http://jindalstainless.com/images/ Policy%20on%20Material%20Subsidiaries.pdf.

Directors & Key Managerial Personnel

The Board of Directors has appointed Maj. Gen. Kanwaljit Singh Thind VSM (Retd.) andMs. Ishani Chattopadhyay as Additional Directors with effect from 1st October 2014. TheBoard has also appointed Mr. Subrata Bhattacharya as Additional Director in the capacityof Whole Time Director with effect from 6th November 2015. The requisite resolutions forthe appointments of the aforesaid Directors will be placed before the shareholders fortheir approval.

The Board of Directors has also appointed Mr. Vipin Agarwal as the Chief FinancialOfficer and Mr. Raajesh Kumar Gupta as the Company Secretary and Compliance Officer w.e.f.30th May 2015. The Board has also designated them as the Key Managerial Personnel (KMPs)of the Company.

Mr. Jitender P. Verma Executive Director (Finance) resigned from the Board ofDirectors of the Company w.e.f. 25th March 2015 and as the Chief Financial Officer of theCompany w.e.f. closing of working hours on 31st March 2015. Mr. Jitendra Kumar CompanySecretary and Compliance Officer of the Company resigned w.e.f. closing of working hourson 31st March 2015. Mr. Vipin Agarwal tendered his resignation as Chief Financial Officerof the Company w.e.f. closing of working hours on 19th October 2015. The Board places onrecord its sincere appreciation for the valuable contributions made by them during theirtenure.

Mr. Rajinder Parkash Jindal who retires by rotation at the ensuing Annual GeneralMeeting under the provisions of the Companies Act 2013 and being eligible offers himselffor reappointment. Brief resumes of the abovementioned Directors nature of theirexpertise in specific functional areas details of Directorship in other companies and themembership / chairmanship of committees of the board as stipulated under Clause 49 of thelisting agreement with the stock exchanges are given in the Notice forming part of theannual report.

All Independent Directors have given declaration to the Company that they meet thecriteria of independence as provided in Section 149(6) of the Companies Act 2013.

The Company has also devised a Policy on Familiarization Programme for IndependentDirectors which aims to familiarize the Independent Directors with the Company nature ofthe industry in which the Company operates business operations of the Company etc. Thesaid Policy may be accessed on the Company’s website at the link:http://jindalstainless.com/images/ Policy%20on%20Familiarisation%20Programme.pdf.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board of Directors has approved the criteria for performance evaluation ofall Directors the Committees of Directors and the Board as a whole on the Recommendationof the Nomination and Remuneration Committee of the Company. An annual performanceevaluation of all Directors the Committees of Directors and the Board as a whole wascarried out during the year. For the purpose of carrying out performance evaluationassessment questionnaires were circulated to all Directors and their feedback was obtainedand recorded.

Policy on Directors’ Appointment and Remuneration Policy

Pursuant to the provisions of Section 178 of the Companies Act 2013 and Clause 49 ofthe Listing Agreement the Board of Directors has approved the (i) Policies for nominationand selection of Independent Directors and Non-Executive Non-Independent Directors and(ii) Remuneration Policy on the Recommendation of the Nomination and RemunerationCommittee of the Company. The aforesaid policies are attached to this Report at Annexure– II (A) and Annexure – II (B) respectively.

Fixed Deposits

The Company has stopped accepting / renewing deposits from 1st April 2014. During theyear the Company filed a petition to the Company Law Board ("CLB") underSection 74(2) of the Companies Act 2013 ("Act") praying that it should beallowed to make repayment of Deposits accepted before the commencement of the Act alongwith interest thereon as and when they fall due or as and when any depositor approaches itfor premature payment instead of repaying the same on or before 31st March 2015.

The CLB vide its Order dated 6th May 2015 allowed extension of time up to 30th June2016 for repayment of the aforesaid Deposits along with interest due thereon and alsodirected the Company to make payments to those depositors who approach the Company before30th June 2016.

The Company has total outstanding Deposits of Rs. 21.41 Crore (including unclaimeddeposits) as on 31st March 2015.

The details relating to deposits covered under Chapter V of the Companies Act 2013are provided hereunder:

(a) accepted during the year: Nil

(b) remained unpaid or unclaimed as at the end of the year: ` 6191000/-

(c) whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved-

(i) at the beginning of the year: Not Applicable

(ii) maximum during the year: Not Applicable

(iii) at the end of the year: Not Applicable

The details of deposits not in compliance with the requirements of Chapter V of theAct: Nil

Particulars regarding the Conservation of Energy Technology Absorption ForeignExchange Earnings and Outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as Annexure –III forming part of this Report.

Particulars of Employees

In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules areattached as Annexure –IV.

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in Annexure – V.

Auditors and Auditors’ Report

M/s. Lodha & Co. and M/s. S.S. Kothari Mehta & Co. Joint Statutory Auditors ofthe Company were appointed by the Shareholders at the 34th Annual General Meeting of theCompany held on 22nd September 2014 for a period of three consecutive years until theconclusion of the 37th Annual General Meeting of the Company. Pursuant to the provisionsof Section 139 of the Companies Act 2013 the matter relating to the appointment of theaforesaid Joint Statutory Auditors shall be placed for ratification by members at theensuing Annual General Meeting of the Company. The Notes on financial statement referredto in the Auditors’ Report are self-explanatory and do not call for any furthercomments. The Auditors’ Report does not contain any qualification reservation oradverse remark.

Cost Auditors

In accordance with the provisions of Section 148 of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2014 as amended vide Companies (Cost Records andAudit) Amendment Rules 2014 vide notification dated 31st December 2014 your Company isrequired to get its cost accounting records audited by a Cost Auditor and has accordinglyappointed M/s. Ramanath Iyer & Co. Cost Accountants for this purpose for FY 2015-16.The Cost Audit for FY 2014-15 was completed within specified time and report was filedwith the Central Government. The remuneration of the Cost Auditors shall be placed forratification by members in terms of Section 148 of the Companies Act 2013 read with Rule14 of the Companies (Audit and Auditors) Rules 2014.

Secretarial Auditors

The Board has appointed Ms. Shipra Chattree Practicing Company Secretary (COPno.13539) to conduct Secretarial Audit for the financial year 2014-15. The SecretarialAudit Report for the financial year ended March 31 2015 is annexed herewith marked as Annexure– VI to this Report. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark.

Corporate Social Responsibility

The Corporate Social Responsibility Committee has formulated and recommended to theBoard a Corporate Social Responsibility Policy ("CSR Policy") indicating thefocus areas of Company’s CSR activities.

In line with the CSR philosophy and the focus areas the Company has plannedinterventions in the fields of education & vocational training integrated healthcare women empowerment social projects rural infrastructure development environmentsustainability sports preservation of art and culture business of human rights anddisaster management. The Disclosure as per Rule 9 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed to this Report at Annexure - VII.

The CSR Policy can be accessed on the Company’s website at the link:http://jindalstainless.com/images/JSL%20CSR%20Policy.pdf.

Internal Financial Controls

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.

Sexual Harassment cases

The Company has in place a policy on prevention of sexual harassment at workplace inaccordance with the provisions of Prevention Prohibition and Redressal of SexualHarassment of Women at Workplace Act 2013 which came into effect from 9th December2013. The policy aims at prevention of harassment of employees and lays down theguidelines for identification reporting and prevention of sexual harassment. There is anInternal Complaints Committee (ICC) which is responsible for redressal of complaintsrelated to sexual harassment and follows the guidelines provided in the policy.

During the year ended 31st March 2015 no complaints were recieved pertaining tosexual harassment.

Audit Committee

The Audit Committee comprises of the following four Directors out of which three areIndependent Directors:

Sl. No. Name Status
1 Mr. Suman Jyoti Khaitan Chairman
2 Mr. T.S. Bhattacharya Member
3 Mr. Gautam Kanjilal Member
4 Mr. Kanwaljit Singh Thind Member

All the recommendations made by the Audit Committee during the financial year 2014-15were accepted by the Board.

CSR Committee

The CSR Committee comprises of the following three Directors out of which one isIndependent Director:

Sl. No. Name Status
1 Mr. Ratan Jindal Chairman
2 Mr. Rajinder Parkash Jindal Member
3 Mr. Girish Sharma Member

Stock Exchanges where the shares are listed

National Stock Exchange of India Ltd. BSE Ltd.
Exchange Plaza 5th Floor Plot No. C/1 Phiroze Jeejeebhoy
G – Block Bandra-Kurla Complex Towers Dalal Street
Bandra (E)Mumbai – 400 051 Mumbai – 400 001

The annual listing fee was paid to both the stock exchanges. No shares of the Companywere delisted during the financial year 2014-15.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as Annexure –VIII.

Number of Board Meetings

The Board of Directors met 5 (five) times during the financial year ended on 31stMarch 2015. The details of Board Meetings and the attendance of the Directors areprovided in the Corporate Governance Report forming part of this Annual Report.

Whistle Blower Policy / Vigil Mechanism

Pursuant to the provisions of Section 177(9) read with Companies (Meetings of Board andits Powers) Rules 2014 of the Companies Act 2013 and Clause 49 of the Listing Agreementthe Company has a Vigil Mechanism namely Whistle Blower Policy for directors employeesand business partners to report genuine concerns about unethical behavior actual orsuspected fraud or violation of the Company’s code of conduct or ethics policy. TheWhistle Blower Policy is posted on the website of the Company and can be accessed at thelink: http://jindalstainless.com/whistleblower.php.

Particulars of loans guarantees or investments by the Company under section 186

The particulars of loans guarantees or investments by the Company under section 186are stated in Notes to Accounts forming part of this Annual Report.

Contracts or Arrangements with Related Parties

The Company has entered into contracts / arrangements with the related parties in theordinary course of business and on arm’s length basis.

Your Directors draw attention of the members to Note 53 to the financial statementwhich sets out related party disclosures. Based on the recommendations of the AuditCommittee your Board of Directors had approved the Policy on Related Party Transactionsin accordance with Clause 49 of the Listing Agreement and as per the provisions of theCompanies Act 2013. The Policy on materiality of related party transactions and dealingwith related party transactions as approved by the Board may be accessed on theCompany’s website at the link:http://www.jindalstainless.com/images/Policy%20on%20dealing%20with%20Related%20Party%20Transactions.pdf In terms of Clause 49 of the ListingAgreement all transactions with related parties which are of material in nature aresubject to the approval of the Members of the Company. The requisite resolution in orderto comply with the aforesaid requirements of Clause 49 of the Listing Agreement asdetailed at Item No. 15 of the Notice and relevant Explanatory Statement is commended forthe members’ approval.

Risk Management

The Company has laid down procedures to inform Board members about the risk assessmentand minimization procedures. These procedures are periodically reviewed to ensure thatexecutive management controls risk through means of a properly defined framework. TheCompany has also devised a Risk Management Policy for identification of elements of risksand procedures for reporting the same to the Board.

The change in the nature of business if any

There has been no change in the nature of Company’s business during the financialyear ended on 31st March 2015.

Material Changes and Commitments if any affecting the financial position of theCompany

During the half year ended 30th September 2015 the Company has achieved total incomeof Rs. 3262.13 Crores with EBIDTA of ` 308.86 Crores. The Company incurred net loss ofRs. 388.59 Crores during this period. This has resulted into erosion in the net worth ofthe Company. However with the impending implementation of Section III and IV of theScheme and proposed conversion of Funded Interest Term Loan of around Rs. 1000 Crores bythe CDR Lenders into Equity Share Capital and CRPS / OCRPS the net worth of the Companyis expected to improve substantially. Further the optimism on changing market conditionsis also expected to improve financial position of the Company.

Any significant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company’s operations in future

During the financial year there is no such significant material orders passed by theregulators or courts or tribunals impacting the going concern status and company’soperations in future.

Directors’ Responsibility Statement

Pursuant to the requirement under section 134(5) of the Companies Act 2013 withrespect to directors’ responsibility statement it is hereby confirmed that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2015 and of the profitand loss of the Company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and were operating effectively;and

(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance

A separate section on Corporate Governance and a certificate from the practicingCompany Secretary regarding compliance of conditions of Corporate Governance as stipulatedunder Clause 49 of the Listing Agreement with the stock exchanges form part of thisAnnual Report.

Acknowledgement

Your Directors would like to express their gratitude for the valuable assistance andco-operation received from shareholders banks government authorities customers andvendors. Your Directors also wish to place on record their appreciation for the committedservices of all the employees of the Company.

For and on behalf of the Board of Directors
Place: New Delhi Ratan Jindal
Date : 6th November 2015 Chairman and Managing Director

Annexure - I to Directors’ Report

Disclosures with respect to Employees Stock Option Scheme of the Company for the yearended 31.3.2015:

Statement Pursuant to Regulation 14 ‘Disclosure by the Board of Directors’ ofSEBI (Share Based Employee Benefits) Regulations 2014 The Shareholders at their meetingheld on 4th September 2009 approved "Employee Stock Option Scheme 2010"(hereinafter referred to as "ESOP Scheme". The Remuneration and CompensationCommittee of the Directors have not granted any Stock Options during the financial year2014-15. The details of the Stock Option granted under the ESOP Scheme are given below: A.Relevant disclosures has been made in terms of the ‘Guidance note on accountingfor employee share-based payments’ issued by ICAI or any other relevant accountingstandards as prescribed from time to time.

B. Diluted Earnings per Share (EPS) on issue of Ordinary Shares on Exercise ofOptions calculated in accordance with Accounting Standard (AS) 20 ‘Earning PerShare’ is Rs. 7.24

C. Details related to ESOP

Sr. No. Description Remarks
(i) a) Date of Shareholders’ approval : 4th September 2009
b) Total number of options approved under the Scheme : Upto 4000000
c) Vesting Requirements : Options granted under the ESOP Scheme would vest not less than one year and not more than five years from the date of grant of such options.
d) Exercise Price or Pricing formula : The options will be granted at either of the following exercise prices as decided by the Compensation Committee:
1) At a price upto maximum of 75% discount to the average of the closing market price (at a stock exchange as determined by the Compensation Committee) in the 30 trading days immediately preceding the date of grant of options.
2) At a price equal to the market price being latest available closing price prior to the date of the meeting of the Board of Directors in which options are granted/ shares are issued on the stock exchange on which the shares of the company are listed. If the shares are listed on more than one stock exchange then the stock exchange where there is highest trading volume on the said date shall be considered; or
3) At a price equal to the average of the closing market price (at a stock exchange as determined by the Compensation Committee) in the 30 trading days immediately preceding the date of grant.
e) Maximum term of options granted : Upto three years from the date of vesting
f) Source of share (primary secondary or combination) : Primary
g) Variation in terms of options : Nil
(ii) Method used to account for ESOS : Based on intrinsic value method
(iii) Difference between the employee compensation cost so computed at (ii) above and the employee compensation cost that shall have been recognized if it had used the fair value of the Options. : The employee compensation cost would have increased by Rs. (1.29) Crore
The impact of this difference on Profits and on EPS of the Company : The effect of adopting the fair value method on the net income and earnings per share is presented below:

 

Net Income as reported 223.08
Add: Intrinsic Value Compensation Cost (0.81)
Less: Fair value Compensation Cost (Black Scholes Model) 0.48
Adjusted Net Income 221.79

 

Earning per share Basic (`) Diluted (`)
As reported 10.21 7.24
As adjusted 10.15 6.95

 

(iv) Option movement during the year
Number of options outstanding at the beginning of the period : 1608881
Number of options granted during the year : 0
Number of options forfeited / lapsed during the year : 329754
Number of options vested during the year : 560625
Number of options exercised during the year : Nil
Number of shares arising as a result of exercise of options : Nil
Money realized by exercise of options (INR) if scheme is implemented directly by the company : Nil
Loan repaid by the Trust during the year from exercise price received : N.A.
Number of options outstanding at the end of the year : 1279127
Number of options exercisable at the end of the year : 1279127
(v) Weighted average exercise price and weighted average fair value of Options granted for Options whose exercise price either equals or exceeds or is less than the market price of the stock. : N.A.
(vi) Details of Options granted to :

 

i) Senior managerial personnel : NIL N.A.
ii) Any other employees who received a grant in any one year of Options amounting to 5% or more of the Options granted during that year. : Name No. of options
Nil N.A
iii) Identified employees who were granted Options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. : Name No. of options
Nil N.A

 

(vii) A description of the method and significant assumption used during the year to estimate the fair values of Options: The fair value of each options estimated using the Black Scholes Options Pricing Model after applying the following key assumptions
(i) Risk free interest rate N.A.
(ii) Expected life N.A.
(iii) Expected volatility N.A.
(iv) Expected dividend N.A.
(v) The price of the underlying shares in market at the time of option grant N.A.

Annexure - II(A) to Directors’ Report

Policy Framework for Nomination and Selection of Independent Directors on the Board ofthe Company

This document presents the policy for selection of Independent Directors on the Boardof Jindal Stainless Limited. The policy contains detailed requirements under the CompaniesAct 2013 and Clause 49 of the Listing Agreement. This policy serves as conformation toSection 178(3) of the Companies Act 2013 and other applicable provisions under the ListingAgreement.

Section 1: Qualitative Guidelines

While detailed requirements from a regulatory standpoint are outlined in the latterpart of the policy the following qualifications positive attributes and other qualitiesshall form the basis of this selection policy for Independent Directors:

1) The director should :

i. possesses appropriate skills and knowledge in one or more fields of finance lawmanagement sales marketing administration research corporate governance technicaloperations or other disciplines related to the company’s business through formaleducation and/or relevant experience.

ii. have a sound record of success in his/her own profession.

iii. be able to understand the vision & mission socio-political environment of thecompany and see business as a whole including company’s market Customers andcompetitions.

iv. meet the all criteria of independence as prescribed under various laws andregulations.

v. maintain independent judgment at all times about various issues that are brought forBoard and /or Committee deliberations engage in value adding dialogues on substantiveissues and also with respect to the management.

vi. be able to participate constructively in reaching concurrence on strategy andevaluation of top management.

vii. be able to ensure appropriate control in audit and performance including strategyexecution.

viii. be able to bring up any potential conflict of interest real or perceived.

ix. take initiative to counsel other directors and the CEO as appropriate in andoutside the Board/Committee meetings.

x. have required time at hand to study the issues and provide independent andconstructive opinions help make Board dynamics positive and effective help the Board andthe management confront reality be able to see through complex issues and ask incisivequestions be a team player be of high integrity and maintain high ethical standards.

Section 2: Regulatory Guidelines

This policy framework provides the regulatory guidelines for the selection ofIndependent directors on the Board of the Company based on the conditions laid out in theCompanies Act 2013 (specifically Chapter XI – Appointment and Qualification ofDirectors Section 178(2) Section 178(3) of the Act) Companies (Appointment andQualifications of Directors) Rules 2014 and Clause 49 of the Listing Agreement issued bythe Securities and Exchange Board of India (SEBI). As per this policy framework:

I. Composition of the Board: Appointment of a director on the Board of JindalStainless Limited (JSL) shall be within the permissible limits provided under Section 149of The Companies Act 2013 and Clause 49 of the Listing Agreement read with Articles ofAssociation of the Company. JSL Board shall constitute minimum 3 directors and maximum 15directors. Any appointment of director on the Board which makes the total number ofdirectors on the Board exceeds 15 directors shall be done only after passing a specialresolution.

New Companies Act mandates that the Board of JSL shall have at least one woman directoron the Board of the Company. In the event of any intermittent vacancy of a woman directorthe same shall be filled in by the Board before the next Board meeting or within 3 monthsfrom the date of vacancy whichever is later.

II. The Company’s Board at any point in time shall have at least one residentdirector who has stayed in India for a total period of not less than 182 days in theprevious calendar year.

III. The JSL Board shall have minimum one-half of the total number of directors on theBoard as independent directors if the company has an Executive Chairman or a Non-ExecutiveChairman who is promoter of the company or is related to any promoter or person occupyingmanagement positions at the Board level or at one level below the Board. In any other casewhereby the company has an Non-Executive Chairman the Board shall have at least one-thirdof the total number of directors in the Board as independent directors. In the event ofany intermittent vacancy of an independent director the same shall be filled in by theBoard before the next Board meeting or 3 months from the date of vacancy whichever islater. An independent director shall mean a director other than the managing directorwhole-time director or a nominee director and;

a) Who in the opinion of the Board is a person of integrity and possesses relevantexpertise and experience.

b) Who is or was not a promoter of the company or its holding subsidiary or associatecompany and who is not related to promoters or directors in the company its holdingsubsidiary or associate company.

c) Apart from receiving director’s remuneration has or had no pecuniaryrelationship with the company its holding subsidiary or associate company or theirpromoters or directors during the two immediately preceding financial years or during thecurrent financial year.

d) None of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to 2% or more of its gross turnover or total income or INR 50 lakh or suchhigher amount as prescribed by the Act whichever is lower during the two immediatelypreceding financial years or during the current financial year.

e) Who neither himself or any of his relatives –

i. Holds or has held the position of key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed.

ii. Is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of –

1. A firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or

2. Any legal or a consulting firm that has or had any transaction with the company itsholding subsidiary or associate company amounting to 10% or more of the gross turnover ofthe Company.

iii. Holds together with his relatives 2% or more of the total voting power of thecompany; or

iv. Is a Chief Executive or director by whatever name called of any non-profitorganization that receives 25% or more of its receipts from the company any of itspromoters directors or its holding subsidiary or associate company or that holds 2% ormore of the total voting power of the company

v. Is a material supplier service provider or customer or a lessor or lessee of thecompany

f) Who possesses appropriate skills experience and knowledge in one or more fields offinance law management sales marketing administration research corporate governancetechnical operations or other disciplines related to the company’s business.

g) Who is not less than 21 years of age.

IV. Every independent director shall at the first meeting of the Board in which he orshe participates as a director and thereafter in first meeting of the Board in everyfinancial year or whenever there is any change in the circumstances which may affecthis/her status as an independent director give a declaration that he meets the criteriaof independence as provided in point # III above.

V. Every independent director selected in the Board of JSL shall adhere to thefollowing guidelines of professional conduct. An independent director shall:

a) Uphold ethical standards of integrity and probity.

b) Act objectively and constructively while exercising his duties.

c) Exercise his responsibilities in a bona fide manner in the interest of thecompany.

d) Devote sufficient time and attention to his professional obligations for informedand balanced decision making.

e) Not allow any extraneous considerations that will vitiate his/her exercise ofobjective independent judgment in the paramount interest of the company as a whole whileconcurring in or dissenting from the collective judgment of the Board in its decisionmaking.

f) Not abuse his/her position to the detriment of the company or its shareholders orfor the purpose of gaining direct or indirect personal advantage or advantage for anyassociated person.

g) Refrain from any action that would lead to loss of his/her independence.

h) Where circumstances arise which make an independent director lose his/herindependence the independent director must immediately inform the Board accordingly.

i) Assist the company in implementing the best corporate governance practices.

VI. Every independent director shall perform the following Roles and functions. Anindependent director shall:

a) Help in bringing an independent judgment to bear on the Board deliberationsespecially on issues of strategy performance risk management resources and standardsof conduct.

b) Bring an objective view in the evaluation of performance of the Board andmanagement.

c) Scrutinize the performance of management in meeting agreed goals and objectives andmonitor the reporting of performance.

d) Satisfy themselves on the integrity of financial information and that financialcontrols and the systems of risk management are robust and defensible.

e) Safeguard the interest of all stakeholders particularly the minority shareholdersf) Balance the conflicting interest of stakeholders g) Moderate and arbitrate in theinterest of the company as a whole in situations of conflict between management andshareholder’s interests.

VII. Every independent director shall have the following duties.

An independent director shall:

a) Undertake appropriate induction and regularly update and refresh their skillsknowledge and familiarity with the company.

b) Seek appropriate clarification or amplification of information and where necessarytake and follow appropriate professional advice and opinion of outside experts at theexpense of the company. c) Strive to attend all meetings of the Board of Directors and ofthe Board committees of which he/she is a member and also the general meetings of thecompany.

d) Participate constructively and actively in the committees of the Board in which theyare chairpersons or members.

e) Where they have concerns about the running of the company or a proposed actionensure that these are addressed by the Board. f) Keep themselves well informed about thecompany and the external environment in which it operates g) Not to unfairly obstruct thefunctioning of an otherwise proper Board or committee of the Board

h) Pay sufficient attention and ensure that adequate deliberations are held beforeapproving related party transactions and assure themselves that the same are in theinterest of the company

i) Ascertain and ensure that the company has an adequate and functional vigil mechanismand to ensure that the interests of a person who uses such mechanism are not prejudiciallyaffected on account of such use

j) Report concerns about unethical behavior actual or suspected fraud or violation ofthe company’s code or conduct of ethics policy

k) Acting within his/her authority assist in protecting the legitimate interests ofthe company shareholders and its employees

l) Not to disclose confidential information including commercial secretstechnologies advertising and sales promotion plans unpublished price sensitiveinformation unless such disclosure is expressly approved by the Board or required by law.

VIII. Appointment procedure for Independent Directors:

a) Appointment process of independent directors shall be independent of the companymanagement; while selecting independent directors the Board shall ensure that there isappropriate balance of skills experience and knowledge so as to enable the Board todischarge its functions and duties effectively.

b) An independent director may be selected from a data bank containing names addressand qualifications of persons who are eligible and willing to act as independentdirectors maintained by any body institute or association as may be notified by theCentral Government having expertise in creation and maintenance of such data bank and outon their website for the use by the company making the appointment of such directors.However the company shall take responsibility to exercise its own due diligence beforeselecting a person from the data bank as an independent director.

c) The appointment of independent director shall be approved by the company in generalmeeting and the explanatory statement annexed to the notice of the general meeting calledto consider the said appointment shall indicate the justification for choosing theappointee for appointment as independent director.

d) No person shall be appointed as a director of a company unless he has been allottedthe Director Identification Number (DIN) under Section 154 of the Companies Act 2013.

e) Every person proposed to be appointed as a director by the company in generalmeeting or otherwise shall furnish his DIN and a declaration that he/she is notdisqualified to become a director under Companies Act 2013.

f) A person appointed as a director shall not act as a director unless he gives hisconsent to hold the office as director and such consent has been filed with the Registrarof Companies within 30 days of his/her in such manner as prescribed in the Companies Act2013.

g) In the case of appointment of independent director in the general meeting anexplanatory statement for such appointment annexed to the notice of the general meetingshall include a statement that in the opinion of the Board he or she fulfils theconditions specified in the Companies Act 2013 for such appointment.

h) The appointment of independent directors shall be formalized through a letter ofappointment which shall set out:

i. The term of appointment

ii. The expectation of the Board from the appointed director; the Board levelcommittee(s) in which the director is expected to serve and its tasks

iii. The fiduciary duties that come with such an appointment and along withaccompanying liabilities

iv. Provision for Directors and Officers (D&O) insurance if any

v. The code of business ethics that the company expects its directors and employees tofollow.

vi. List of actions that a director should not do while functioning as such in thecompany.

vii. The remuneration mentioning periodic fees reimbursement of expenses forparticipation in the Board’s and other meetings and profit related commissions ifany. An independent director shall not be eligible for any stock options.

i) The terms and conditions of appointment of independent directors shall be open forinspection at the registered office of the company by any member during the normalbusiness hours.

j) The terms and conditions of appointment of independent directors shall also beposted on the company’s website.

IX. An independent director shall hold office for a term up to 5 years on the Board ofthe company but shall be eligible for re-appointment on passing of a special resolutionby the company and disclosures of such appointment in the Board’s report. However noindependent director shall hold the office for more than 2 consecutive terms but suchindependent director shall be eligible for appointment after the expiration of 3 years ofceasing to become an independent director. An independent director shall not during thesaid period of 3 years be appointed in or be associated with the company in any othercapacity either directly or indirectly. Further if a person has already served as anindependent director for 5 years or more on JSL Board as on October 1 2014 he or sheshall be eligible for appointment on completion of his or her present term for one moreterm up to 5 years only. An independent director who has completed his or heraforementioned term shall be eligible for appointment as an independent director on JSLBoard only after expiration of 3 years of ceasing to be an independent director in thecompany.

X. As per this policy and provisions of the Companies Act 2013 no director shall beselected if he/she holds office as a director including any alternate directorship in 20or more companies at the same time and number of directorships held in public companies is10. For the limit on public companies directorship in private companies that are eitherholding or subsidiary company of a public company shall be considered. Further as per theClause 49 of the listing agreement a person shall not be selected on the JSL Board if heor she is serving as independent director in seven listed companies and if the said personis whole time director in any listed company and is serving as an independent director in3 companies.

XI. No person shall be selected as director

(i) if he or she is disqualified to be a director as per Section 164 of the CompaniesAct 2013;

(ii) if he or she is declared as proclaimed offender by any Economic Offence Court orJudicial Magistrate Court or High Court or any other Court.

XII. The removal of a director shall be as per the provisions of Section 169 of theCompanies Act 2013

Policy Framework for Nomination and Selection of Non-Executive Non-IndependentDirectors on the Board of the Company

This document presents the policy for selection of Non-Executive Non-IndependentDirectors on the Board of Jindal Stainless Limited. The policy contains detailedrequirements under the Companies Act 2013 and Clause 49 of the Listing Agreement which isapplicable to listed companies in India. This policy serves as conformation to Section178(3) of the Companies Act 2013.

Section 1: Qualitative Guidelines

While detailed requirements from a regulatory standpoint are outlined in the latterpart of the policy the following qualifications positive attributes and other qualitiesshall form the basis of this selection policy for Non-Executive Non-Independent Directors:

1) The director should possesses appropriate skills and knowledge in one or more fieldsof finance law management sales marketing administration research corporategovernance technical operations or other disciplines related to the company’sbusiness through formal education and/or relevant experience

2) Should be able to understand the vision & mission of the company and seebusiness as a whole

3) Should be able to understand company’s market customers and competition

4) Should be able to understand the socio-political environment of the business

5) Should be able to engage in value adding dialogues on substantive issues

6) Should be able to participate constructively in reaching concurrence on strategy andevaluation of top management

7) Should be able to ensure appropriate control in audit and performance includingstrategy execution

8) Should be able to bring up any potential conflict of interest real or perceived

9) Should take initiative to counsel other directors and the CEO as appropriate in andoutside the Board/Committee meetings

10) Should have required time at hand to study the issues and provide constructiveopinions

11) Help make Board dynamics positive and effective

12) Should help the Board and the management confront reality

13) Should be able to see through complex issues and ask incisive questions

14) Should be a team player

15) Should be of high integrity and maintain high ethical standards

Section 2: Regulatory Guidelines

This policy framework provides the regulatory guidelines for the selection ofNon-Executive Non-Independent directors on the Board of the Company based on theconditions laid out in the Companies Act 2013 (specifically Chapter XI – Appointmentand Qualification of Directors Section 178(2) Section 178(3) of the Act) Companies(Appointment and Qualifications of Directors) Rules 2014 and Clause 49 of the listingagreement issued by the Securities and Exchange Board of India (SEBI). As per this policyframework:

I. Composition of the Board: The selection of director on the Board of JindalStainless Limited (JSL) shall be within the structural guidelines provided under Section149 of The Companies Act 2013 and Clause 49 of the listing agreement.

JSL Board shall constitute minimum 3 directors and maximum 15 directors Any appointmentof director on the Board which makes the total number of directors on the Board exceed 15directors shall be done only after passing a special resolution. This policy also mandatesthat the JSL Board of shall have at least one woman director on the Board of the Companyand not less than 50% of the Board of Directors shall comprise of Non-Executive directors.In the event of any intermittent vacancy of a woman director the same shall be filled inby the Board before the next Board meeting or 3 months from the date of vacancy whicheveris later

II. The Company’s Board at any point in time shall have at least one director whohas stayed in India for a total period of not less than 182 days in the previous calendaryear.

III. The JSL Board shall have minimum one-half of the total number of directors on theBoard as independent directors if the company has an Executive Chairman or a Non-ExecutiveChairman who is promoter of the company or is related to any promoter or person occupyingmanagement positions at the Board level or at one level below the Board.

In any other case whereby the company has a Non-Executive Chairman the Board shallhave at least one-third of the total number of directors in the Board as independentdirectors.

IV. As per this policy and provisions of the Companies Act 2013 no director shall beselected if he/she holds office as a director including any alternate directorship in 20or more companies at the same time and number of directorships held in public companies is10. For the limit on public companies directorship in private companies that are eitherholding or subsidiary company of a public company shall be considered. Further as per theClause 49 of the listing agreement a person shall not be selected on the JSL Board if heor she is serving as independent director in seven listed companies and if the said personis whole time director in any listed company and is serving as an independent director in3 companies.

V. Non-executive Non-Independent directors should have Director Identification Number(DIN).

VI. No person shall be selected as director if he or she is disqualified to be adirector as per Section 164 of the Companies Act 2013.

VII. The removal of a director shall be as per the provisions of Section 169 of theCompanies Act 2013.

Remuneration Policy

1.0 Introduction

1.1 Remuneration at Jindal Stainless Limited ("the Company") is based on theprinciples of performance equitableness and competitiveness. This Remuneration Policy hasbeen designed to reflect these principles and to attract motivate and retain qualitymanpower for driving the Company successfully.

1.2 This Remuneration Policy is based on the requirements of Section 178 of theCompanies Act 2013 and the revised Clause 49 of the Listing Agreement (effective from 1stOctober 2014) and has been recommended by the Nomination and Remuneration Committee tothe Board of Directors and approved by the Board of Directors of the Company at itsmeeting held on 8th August 2014.

1.3 This Remuneration Policy applies to the Board of Directors Key ManagementPersonnel (KMPs) and Senior Management Personnel of the Company.

1.4 This Remuneration Policy shall be effective from 8th August 2014.

2.0 Objectives

2.1 The objectives of this Remuneration Policy are:

(a) Formulation of the criteria for determining qualifications positive attributes ofDirectors KMPs and Senior Management Personnel and also independence of IndependentDirectors;

(b) Aligning the remuneration of Directors KMPs and Senior Management Personnel withthe Company’s financial position remuneration paid by its industry peers etc.;

(c) Performance evaluation of the Board its Committees and Directors includingIndependent Directors;

(d) Ensuring Board diversity;

(e) Identifying persons who are qualified to become Directors and who may be appointedin senior management in accordance with the criteria laid down.

(f) Directors’ induction and continued training;

3.0 Definitions

3.1 "Act" means the Companies Act 2013.

3.2 "Board" means Board of Directors of the Company.

3.3 "Director" means Director as defined under Section 2(34) of theCompanies Act 2013.

3.4 "Committee" means Nomination and Remuneration Committee of theCompany as constituted or reconstituted by the Board from time to time in accordance withthe provisions of Companies Act 2013 and Clause 49 of the Listing Agreement.

3.5 "Company" means Jindal Stainless Limited (JSL).

3.6 "Independent Director" means a director referred to in Section 149(6)of the Companies Act 2013 read with Clause 49 of the Listing Agreement.

3.7 "Key Managerial Personnel" means :

(i) the Chief Executive Officer or the Managing Director or the Manager; (ii) theCompany Secretary; (iii) the Whole-Time Director; (iv) the Chief Financial Officer; and(v) such other officer as may be prescribed under the Companies Act 2013.

3.8 "Senior Management" means personnel of the company who are membersof its core management team excluding Board of Directors comprising all members ofmanagement one level below the executive directors including the functional heads.

4.0 Guiding Principles

4.1 The Company shall follow the following guiding principles in order to attractmotivate and retain talent in the Company: (a) the level and composition of remunerationis reasonable and sufficient to attract retain and motivate directors of the qualityrequired to run the company successfully; (b) relationship of remuneration to performanceis clear and meets appropriate performance benchmarks; and (c) remuneration to DirectorsKMPs and Senior Management Personnal involves a balance between fixed and incentive payreflecting short and long-term performance objectives appropriate to the working of theCompany and its goals.

5.0 General

This Policy is divided in five parts:

Part-A covers criteria for determining qualifications positive attributes ofDirectors KMPs and Senior Management Personnel and also independence of IndependentDirectors.

Part-B covers Induction and Training of Directors.

Part-C covers Performance Evaluation of Board its Committees and Directors includingIndependent Directors.

Part-D covers Remuneration of Directors KMPs and Senior Management Personnel.

Part-E covers Board Diversity.

6.0 PART – A

Criteria for determining qualifications positive attributes of Directors KMPs andSenior Management Personnel and also independence of Independent Directors

1. The Nomination and Remuneration Committee shall identify and ascertain theintegrity qualifications expertise and experience of the person for appointment asDirector KMP or Senior Management Personnel and recommend to the Board his / herappointment.

2. A person should possess adequate qualifications expertise and experience for theposition he/she is considered for appointment as a Director. The Committee has discretionto decide whether qualifications expertise and experience possessed by a person aresufficient / satisfactory for the concerned position and are in accordance with theprovisions of the Act and Clause 49 of the Listing Agreement.

3. The Committee shall ensure that a person proposed to be appointed as an IndependentDirector satisfies the criteria laid down under the Act read with Clause 49 of the ListingAgreement.

4. The appointment and tenure of Directors Independent Directors and KMPs shall be inaccordance with the provisions of the Act read with Clause 49 of the Listing Agreement.

7.0 PART-B

Induction and Training of Directors

1. On appointment Directors shall receive a Letter of Appointment setting out indetail the terms of appointment duties roles and responsibilities. Each newly appointedDirector will be taken through a formal induction programme.

2. The induction process should be designed to familiarize them with the Company theirroles rights responsibilities in the Company nature of industry in which the Companyoperates business model of the Company etc.

3. It shall be ensured that the Directors are updated as and when required of theirroles responsibilities and liabilities.

4. The Company may organize site visits for Directors from time to time.

8.0 PART-C

Performance Evaluation of Board its Committees and Directors

The evaluation of the performance of the Board its Committees and Directors shall becarried out on an annual basis. The performance of the Board and Committees thereof shallbe evaluated against their terms of reference. Evaluation of the performance of Directorsshall include consideration of their skills performance and contribution to the BoardCompany strategy and Board Committees their availability and attendance at Board andCommittee Meetings.

9.0 PART-D

Remuneration of Directors KMPs and Senior Management Personnel

1. The remuneration of the Executive Directors KMPs and Senior Management Personnelshould be based on Company’s financial position industrial trends remuneration paidby peer companies. The remuneration should be reasonable and sufficient to attract retainand motivate the aforesaid persons.

2. Remuneration to Executive Directors shall be paid by way of salary (including fixedpay and variable pay) perquisites and retirement benefits based on recommendation of theCommittee and approval of the Board and Shareholders. The overall managerial remunerationshall be within the ceilings stipulated under Section 197 read with Schedule V of the Act.

3. The Non-executive directors shall be paid remuneration by way of sitting fee forattending the meetings of the Board and Committees thereof.

4. The KMPs shall be paid remuneration approved by the Board of Directors. The SeniorManagement Personnel shall be paid remuneration in line with the Company’s internalHR policy.

5. Increments in the existing remuneration of Executive Directors and KMPs shall beapproved the Committee within the limits prescribed under the Act. Increments in theremuneration of Senior Management Personnel shall be as per Company’s HR policy.

10.0 PART-E

Board Diversity

Board appointments will be based on merit and candidates will be considered on thebasis of their skills knowledge experience and background gender and otherdistinguishing qualities having due regard to the effectiveness of the Board. It will beensured that the Board possesses a balance of skills appropriate for the requirements ofthe business of the Company. The Directors should have a mix of finance legal academicand management backgrounds that taken together provide the Company with considerableexperience in a range of activities including varied industries education governmentbanking investment and other professions.

11.0 Applicability of the Remuneration Policy

This Remuneration Policy shall apply to all future appointments of Directors KMPs andSenior Management Personnel.

12.0 Amendment

Any modification / amendment in this Remuneration Policy may be carried out by theBoard on the recommendation of the Nomination and Remuneration Committee. This policy willbe subject to change as per amendment in the Companies Act 2013 the Listing Agreementor any other applicable Rules Regulations and Guidelines.

13.0 Dissemination

The key features of this Remuneration Policy shall be published in the Annual Reportand uploaded on the website of the Company in accordance with the Companies Act 2013 andthe revised Clause 49 of the Listing Agreement (effective from 1st October 2014).

Annexure III to Directors’ Report

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOPURSUANT TO PROVISIONS OF SECTION 134 OF THE COMPANIES ACT 2013 READ WITH THE COMPANIES(ACCOUNTS) RULES 2014.

(A) Conservation of energy—

(i) The steps taken for conservation of energy

1. Steel Melt Shop Energy Conservation

(a) A step towards excellence has been taken in maximizing liquid Fe Cr consumptionwhich for current fiscal being 8.2% on qualified production surpassing the previousachievement by 1.1%. This reduces electrical energy consumption by 15% compared tostainless steel production using solid ferro chrome route.

2. Hot Strip Mill Energy Conservation

(a) Installation of lower flow combustion blower which reduced power consumption from500 KW/Hr to 160 KW/ Hr during rolling of Ferritic Grades & also during idle hours offurnace.

(b) Heat retention covers were installed on roller tables to reduce temperature rundown of transfer bar to finishing mill. This also enabled stable rolling of thinner gaugeHR coils.

3. Cold Rolling Mill Energy Conservation

(a) Capacitor bank of capacity 3.24 MVAR installed at CAPL which resulted in improvedpower factor and decreased power consumption.

4. Ferro Alloy Plant Energy Conservation

(a) Replacement of Shell cooling cold well pump motors of high capacity with lowcapacity replacement of root blowers of higher capacity with lower capacity &modification in secondary cooling circuit at pump house.

5. Coke Oven & By-Product Plant Energy Conservation

(a) Capacitor bank was installed and this increases the power factor and reduces lossesand hence reduces the power consumption.

(b) Cooling tower impeller was modified and this reduced the power consumption.

6. Captive Power Plant Energy Conservation

(a) Hydro coupling of ID fan is being replaced by Shaft coupling thereby enablingsavings in substantial electrical energy.

(b) De-staging of ash water recovery pumps resulted in reduced energy consumptionwithout affecting the process.

Other effective energy saving initiative taken includes modification in the compressedair line interconnection of fuel oil discharge header etc.

FORM OF DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION

1) Specific areas in which the Company carried out Research and DevelopmentDevelopment of new products:

- Successful processing of developmental grade 201LN for cryogenic applications.

- Successful processing of developmental grade 310S for high temperature applications.

- Development of 439 grade for use in elevator segments.

- Development of 441 grade for bunker structure manufacturing in thermal power station& auto sector.

- Development of 446 grade in No.1/2E finish for manufacturing boiler parts.

- Successful processing of 204Cu with 2%Ni for re-rolling & polishing application.

- Successfully catering of Grade 304L to Indira Gandhi Centre for Atomic Research forits nuclear application requirements

- Successful use of Grade 430 for utensil application.

- Successfully produced hot-rolled duplex stainless steel UNS 31805 down to 7 mmthickness.

Process Improvement:

- In domestic market for tube manufacturing successful use of EN 1.4301 in 2E finishprocessed through HAPL with Skin pass in place of 2B finish.

- Use of roller side guide during hot rolling to control edge defect in 400 series.

- Successful use of Grade 409L in 2E finish for fabrication application.

- Successful use of 409L in 2B finish in critical tube flaring/ tube bending operation.

Cost Reduction:

- Modification of chemistry and process parameters of 204Cu JSLU DD JSLU SD JT and304/304L 409L to reduce cost.

- Improvement in grinding practice of ferritic stainless steel grades leading to costsaving

2) Benefits derived:

- More value added products in JSL basket

- Cost reduction through different initiatives

- Improvement of product quality for customised applications

- More supply of materials to auto component manufacturers.

3) Future plan of action

- Improvement in yield through modification of grinding practice

- Energy conservation by warm charging of slabs

- Development of value added products

- Input cost reduction by optimizing addition of fluxes deoxidisers and scraps.

4. Expenditure on R & D

(` in Lacs)
2014-15 2013-14
a) Capital NIL NIL
b) Revenue NIL 64.63
Total NIL 64.63
c) Total R&D expenditure as a percentage of turnover NIL 0.005%

5. Technology Absorption adaptation and innovation

A. Cold Rolling Mill

I. Efforts made in brief towards technological absorption adaptation and innovation:

CRM plant is a state of the art manufacturing facility incorporating the very latesttechnology in cold rolling and finishing of the entire range of stainless steel flatproducts. India’s only DRAP (Direct Rolling & Annealing Pickling) lines capableof catering world class product quality. The technology has been not only adoptedefficiently by training local people on the process and practices but also modified tomake it users friendly with lean process route. Gelling further with the technology tooptimize the better environment cost effectiveness & safe working environment thisyear also many add on facility are being added.

• Waste Acid recovery system

• Waste Paper recovery system

• Material Handling systems

• Safety & firefighting Equipments based on risk analysis assessment

• Surveillance Systems CCTV

II. Benefits derived as a result of the above efforts:

Unlike prevailing SS production facilities CRM Complex consolidates its technologicalsuperiority with a more advanced cold-rolling and annealing-pickling process with higherproductivity & yield with reduced carbon foot-print & energy consumption. Theapparent cost advantage ensures operating cost is competitive. A robust IntegratedManagement System (QMS EMS & OHSAS) safeguards both process and product standards.

Further to this certain Improvement in Operation Practices through many small EnergySaving Projects:

• LPG is being replaced by COG on the DRAP Line

• Add on Installation of Capacitor Bank at CAPL and HAPL to optimize the PowerFactor

• Installation of light Energy Saving panels to reduce the power & life oflights.

• LED Lighting initiated

• Energy saving Campaigns

B. Steel Melting Shop

I. Efforts made in brief towards technological absorption adaptation and innovation:

Steel Melt Shop is equipped with modern state of the art facilities which form thebasis for being one the most cost competitive and international quality stainless steelmanufacturer in India. With the challenge to match the rated capacity of 1 MTPA a majorcapacity augmentation has been carried out at EAF by replacing small shell (120 MT tappingcapacity) by bigger shell (140 MT tapping capacity). Significant efforts have been madetowards quality improvements of slabs through continuous R&D thereby minimizingresource waste. This manifested itself in reduction of loss during conditioning of thesuperficial defects to as low as 0.49% from 1.21%. M/s HARSCO metal has started itsoperation in Mar’15 and has successfully completed its performance test. This stateof the art facility shall recover metal from slag thus strengthening our commitmenttowards resource saving and re-utilization. Alongside production our commitment toenvironment and safety has been of highest order. Over and above global average of 60%recycle content we took up the challenge to maintain more than 70% on stainless steelproduced thus contributing positively towards energy conservation and recycling.

Continual improvements towards safe working technologies has also been recognized andappreciated – Technological improvements made at EAF "To reduce CO levels toeliminate chance of explosion" have fetched prestigious ISSF Safety Award for JSL asa part of international recognition.

II. Benefits derived as a result of the above efforts:

The capacity augmentation shall increase our productivity by 40%. With the introductionof big shell the challenges shall be 18 heats per day with 150 MT qualified production perheat with monthly production of 83300 MT. Already on the task we have produced 15 heatsin the day in the month of Apr 2015 & 55400 MT in Sept 2015 – thus giving apositive start in achieving the goal. With the current productivity level capacityutilization increased by 13.83% compared to last fiscal. Significant improvements havebeen observed in converter life (14%) ladle life (4%) with EAF life (115%) being theforerunner. With ever fluctuating elemental prices and varied sourcing challenge remainedin conversion of the same in cost effective manner by achieving high metallic yield andelemental recoveries. The trends of improvements on such factors have been positivethereby ensuring the organization to be more sustainable than before.

C. Hot Strip Mill

I. Efforts made in brief towards technological absorption adaptation and innovation:

Process of rolling of thinner gauge HR coils having thickness less than 2.0 mm in 200Series was stabilized.

II. Benefits derived as a result of the above efforts:

This thinner gauge rolling has enabled company to produce final CR thickness of 0.5 mmby single rolling process. Better quality parameters of Ferritic grades such as 409 L& 410 DB were achieved so that large share of market in these segments could becaptured.

D. Coke Oven & By-product Plant

I. Efforts made in brief towards technological absorption adaptation and innovation:

Coke Oven Gas quality improved by reducing the impurities of H2S from 0.08 g/Nm3 to0.006 g/Nm3 through modification in canopy of desulphurization unit. Tar fog from 0.1g/Nm3 to 0.006 g/Nm3. Also Ammonia content in gas is reduced from 4.0 g/Nm3 to 1.0 g/Nm3.

Cheaper quality of coking coal with high volatile matter content is used in the blend.

Modification of the Phenolic Effluent Treatment Plant (PETP) has been undertaken toeffectively reduce the Phenolic content in the used water. System has been developed toutilize wastage water for plant activities.

Modification of Ammonium Sulphate plant has been done by replacing corroded steel pipesand valves by PPH pipes and valves to make the system working efficiently.

II. Benefits derived as a result of the above efforts:

Due to reduced H2S content in Coke Oven Gas and improved quality Coke Oven Gas isbeing used in HSM for rolling of 200 series steel replacing propane.

Due to cheaper quality coal being used cost of coal reduced by 10%. Also high volatilematter content in coal results in higher production of Coke Oven Gas.

Modification of PETP has resulted in effective reduce of Phenolic content below theCPCB accepted norms. Usage of wastage water has resulted in decreased fresh waterconsumption.

More effective and consistent ammonia removal after the Ammonium Sulphate plantmodification will improve COG quality. Longevity of the Ammonium sulphate plant as well asCOG line will also increase.

E. Ferro Alloys

I. Efforts made in brief towards technological absorption adaptation and innovation:

A dedicated team was engaged to do a very coordinated approach and system improvementsto optimise the liquid Ferro Chrome transfer to SMS.

Process wastes generated in various units are being melted in the furnace by convertingthem into briquettes through a dedicated briquetting unit & a SAF.

II. Benefits derived as a result of the above efforts:

The transfer of liquid Ferro Chrome to SMS maximised i.e. 36% of production fromSAF-1&2 against 33% of previous year which is 74% of the requirement of SMS.

Various process wastes carrying certain percentage of metallic generated in SMS HSM& CRM are used & the recovered metal is again being used for steel production.

F. Captive Power Plant

I. Efforts made in brief towards technological absorption adaptation and innovation:

One of the main reasons for heat loss in boiler is soot deposition inside the boiler.Existing conventional steam soot blower has some disadvantages owing to its limitedoperating time and huge steam consumption which leads to another loss. Sonic soot blowingsystem operated by compressed air has been adopted.

During rainy season coal pipe and bunker choking occurs more frequently which leads toloss of power generation oil consumption and unpredictability of power and even trippingof power plant. In the previous year loss due to this was estimated to around Rs. 80lacs. Air blasters are adopted to effectively prevent choking of the moist coal inside thecoal pipe and bunker.

II. Benefits derived as a result of the above efforts:

Sonic soot blowing system is advantageous because of three reasons-1) very little costof compressed air compared to high temperature steam 2) remains active throughout theday keeping boiler surface clean and improves heat absorption lowering heat loss and 3)no manpower is required compared to huge manpower involvement in conventional steam sootblower. Coal consumption reduced by approx. 92 T for one boiler.

No such choking of coal pipe or bunker is reported after the adaptation of airblasters. As a result huge saving of money happened almost no generation loss no unittripping no oil consumption.

G. Railway Siding

I. Efforts made in brief towards technological absorption adaptation and innovation:

The activities for commissioning of the railway siding is in full swing and it isestimated to be commissioned by Nov 2015. As a result transportation of Coal quartzmolasses containerised import & export cargo and slabs from RSP will be done directlyinside the Plant through Rail.

II. Benefits derived as a result of the above efforts:

Operations of railway siding will result in substantial savings on freight handlinglosses turnaround time and will further reduce congestion inside and outside the Plant.

H. Utilisation of Coke Oven Gas in HAPL replacing Propane:

I. Efforts made in brief towards technological absorption adaptation and innovation:

Currently Coke Oven has the capacity to generate around 22000 Nm3/ hr of COG wherein11000 Nm3/hr will be utilized internally within Coke Oven and balance 11000 Nm3/hr canbe supplied to other facilities externally. During normal operations HSM can consume allof 11000 Nm3/ hr but as HSM run intermittently due to its higher capacity it consumesonly 3000 Nm3/hr in a continuous basis during idle heating. So the balance 8000 Nm3/ hrof COG gets flared while HSM is not running.

In order to ensure economic utilization of remaining COG gas and to avoid flaring aproject has been initiated at CRM to utilize COG in HAPL furnace replacing Propane gas.Technology and supply of equipments had been finalised with Bao Steel China. This Projectis expected to get commissioned by November 2015.

II. Benefits derived as a result of the above efforts:

This will result in continuous usage of available Coke Oven Gas at HAPL thus avoidingflaring of the COG during idle hours of HSM. Replacement of Propane at HAPL will bring insubstantial savings on fuel cost of CRM Complex.

Foreign Exchange Earnings & Outgo (Rs.in Crore)
Foreign Exchange Earnings 1956.20
Foreign Exchange Outgo 3171.53

Annexure IV to Directors’ Report

Particulars of employees as per Section 197 of the Companies Act 2013 read with Rule 5of Companies (Appointment and Remuneration of Managerial Remuneration) Rules 2014annexed to and forming part of the Directors’ Report for the year ended 31st March2014 A) Employed throughout of the year under review and were in receipt of remunerationaggregating to not less than Rs.6000000/-

Sr. No. Name Designation Remuneration – Annual Rs.) Nature of Employment (Contractual or otherwise) Qualification Experience (No. of years) Age Date of commencement of Employment Last employment held % of equity shares held by the Employee (alongwith his spouse and dependant children) Relationship (if any) with any director or manager
1 Mr. Jitender P. Verma Executive Director (Finance) 22374340 Contractual B.Com CA 27 50 28-Nov-2011 Thainox Nil N.A.
2 Mr. S. K. Jain Director & Unit Head 11080932 Other PGD (IR) 32 56 1-Feb-1991 BHEL 900 N.A.
3 Mr. R Ganesh Director (Sourcing) 12989460 Other C.A. 29 50 29-Oct-2007 Global Steel Nil N.A.
4 Mr. Tarun Kumar Khulbe Chief (S.S. Operations) 10853844 Other B.E. MBA 29 50 16-Oct-2004 Thyseenkrupp 827 N.A.
5 Mr. Rajiv Rajvanshi Sr.Vice President (Corprate Strategy) 10548876 Other BSc MBA 28 51 21-June-1999 J K Corp Ltd Nil N.A.
6 Mr. Amitabh Akhauri Sr. Vice President (Hr) 7988208 Other PGDPM (XISS) 27 50 11-July-2013 Jai Prakash Associates Ltd Nil N.A.
7 Mr. Pankaj Mittal Sr. Vice President (Business Excellence) 7479468 Other B.Tech (Metallurgy) DIM – XLRI 30 52 1-Aug-2013 TCS Nil N.A.
8 Mr. Vijay Kumar Sharma Vice President (Marketing & Sales) 9493283 Other BE(Prod.) MBA CCEM 29 52 20-Nov-2000 Escorts Ltd Nil N.A.
9 Mr. Jagmohan Sood Vice President (Cold Rolling) 7668156 Other M. Tech.(Met.) 25 48 2-Jan-1995 SAIL 294 N.A.
10 Mr. R S Vaidya Vice President (Hsm) 6743580 Other B. Tech. (Mech.) 32 54 19-Apr-2007 Hindalco Nil N.A.
11 Mr. Suresh Kumar Agarwal Unit Head - Jajpur 6500040 Other C.A. 25 52 11-Oct-2006 SKS Ispat Ltd Nil N.A.

B) Employed for part of the year and were in receipt of remuneration aggregating to notless than Rs.500000/- per month

Sr. No. Name Designation Remuneration – Annual Rs.) Nature of Employment (Contractual or otherwise ) Qualification Experience (No. of years) Age Date of commencement of Employment Last employment held % of equity shares held by the Employee (alongwith his spouse and dependant children) Relationship (if any) with any director or manager
1 Mr. Subrata Bhattacharya Director- Operations And Market / Product Development 9054981 Other M. Tech (Metallurgy) 32 53 22-July-2014 Viraj Profiles Ltd. 10 N.A.
2 Mr. Rohit Nanda Head – Business Finance 6476634 Other CA 21 42 11-Sept-2008 (till 13-March- 2015) SRF Ltd. Nil N.A.

C) Employed throughout the FY or part of FY receipt of remuneration in aggregate wasin excess of MD or WTD or Manager and holds alongwith his spouse and dependant childrennot less than 2% of the equity shares of the Company

Sr. No. Name Designation Remuneration – Annual Rs.) Nature of Employment (Contractual or otherwise) Qualification Experience (No. of years) Age Date of commen -cement of Employment Last employment held % of equity shares held by the Employee (alongwith his spouse and dependant children) Relationship (if any) with any director or manager

NIL

Annexure - V to Directors’ Report

I. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director Whole-time Directors and/or Manager:

Sl. No. Particulars of Remuneration Name of MD / WTD / Manager
1. Gross Salary Mr. Ratan Jindal* Mr. Jitender P. Verma Mr. Rajinder Parkash Jindal Total Amount (in Rs.)
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act 1961 NIL 6166164 1920000 8086164
(b) Value of perquisites u/s 17(2) of Income-tax Act 1961 NIL 15468232 1494504 16962736
(c) Profits in lieu of salary u/s 17(3) of Income-tax Act 1961 NIL NIL NIL NIL
2. Stock Option NIL NIL NIL NIL
3. Sweat Equity NIL NIL NIL NIL
4. Commission
- as % of profit NIL NIL NIL NIL
- others NIL NIL NIL NIL
5. Others NIL 739944 NIL 739944
Total (A) NIL 22374340 3414504 25788844
Ceiling as per the Act** NIL NIL NIL NIL

* Mr. Ratan Jindal has received salary of Rs. 91800000 from Jindal StainlessFZE in the capacity of Director and Rs. 30600000 from Jindal Stainless UK Ltd. in thecapacity of Managing Director during the financial year 2014-15. Jindal Stainless FZE andJindal Stainless UK Ltd. are the subsidiary companies of Jindal Stainless Limited.

** Since the Company did not have profit as per Section 198 of the CompaniesAct 2013 during the financial year 2014-15 and there were defaults in repayment of debtsand interest payable thereon for a continuous period of thirty days the Company requiredapproval of Central Government for payment of remuneration to the managerial personnel.The Company has already obtained approval in respect of Mr. Rajinder Parkash Jindal.Further the Company’s application to Central Government for approval on payment ofremuneration to Mr. Jitender P. Verma was rejected and keeping in view the fact that Mr.Jitender P. Verma has already ceased to be director of the Company approval ofshareholders is being sought to approach Central Government for waiver of recovery.

B. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTD

Sl. No. Particulars of Remuneration Key Managerial Personnel
Mr. Jitender P. Verma Mr. Jitendra Kumar Total Amount (in Rs.)
1. Gross Salary
(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act 1961 6166164 1156692 7322856
(b) Value of perquisites u/s 17(2) of Income-tax Act 1961 15468232 2882692 18350924
(c) Profits in lieu of salary u/s 17(3) of Income-tax Act 1961 NIL NIL NIL
2. Stock Option NIL NIL NIL
3. Sweat Equity NIL NIL NIL
4. Commission
- as % of profit NIL NIL NIL
- others NIL NIL NIL
5. Others 739944 138804 878748
Total 22374340 4178188 26552528

Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

i. Ratio of the remuneration of each Executive Director to the median remuneration ofthe employees of the company for the financial year 2014 – 15.

Sl. No. Name of Director Designation Ratio of Remuneration of each director to the median remuneration
1 Mr. Jitender P. Verma* Executive Director (Finance) 53.43:1
2 Mr. Rajinder Parkash Jindal Executive Director 8.15:1

* Resigned from Directorship of the Company w.e.f. 25th March 2015

ii Percentage increase in Remuneration of the Chief Executive Officer Chief FinancialOfficer and other Executive Director and Company Secretary during the financial year2014-15.

Sl. No. Name of Director/KMP Designation Percentage increase in the Remuneration in the financial year 2014-15
1 Mr. Jitender P. Verma* Executive Director (Finance) NIL
2 Mr. Rajinder Parkash Jindal Executive Director 7.55%
3 Mr. Jitendra Kumar** Company Secretary 11.50%

* Resigned from Directorship of the Company w.e.f. 25th March 2015

** Resigned from the Company w.e.f. 31st March 2015

iii The percentage increase in the median remuneration of Employees in the financialyear 2014-15 was 8.12%

iv There were 1727 permanent employees on the rolls of the Company as on 31st March2015.

v Relationship between average increase in remuneration and Company’s performance:

Towards fostering the efforts and commitment of employees a transparent and structured"Performance Linked Incentive Scheme (PLIS)" has been formulated. This Systemencompasses the ratings and the increase in the remuneration of employees and is totallyreliant on the individual and Company’s performance in the last financial year. TheCompany philosophy is to reward its employees as per the market competitiveness and theIndustry standards. The final decision on the average increase in remuneration isdependent on these factors and the business affordability. The same approach is used inlast financial year as well to appraise the employees remuneration i.e. the salaryincrease during the financial year 2014-15 were in line with the Company’sperformance as well as the other factors mentioned.

vi Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:

Given the business performance and the performance rating of the Key ManagerialPersonnel appropriate reward by way of merit increase in the payout have been awarded tothe Key Managerial Personnel for the current year in line with their appointment terms.During the year the Company’s turnover grew by 7.22%. Profit before other incomeinterest depreciation exceptional item and tax (EBIDTA) grew by 18.32%.

vii The Market Capitalization of the Company as on 31st March 2015 was Rs. 786.65Crores as compared to Rs. 773.20 Crores as on 31st March 2014. The closing share price ofthe Company at NSE Limited on 31st March 2015 was Rs. 34.75/- per equity share of facevalue of Rs. 2/- each.

viii The average percentage increase in the last financial year 2014-15 made in thesalaries of employees other than the managerial personnel was 8.12 %. The averagepercentage increase in the salaries is an outcome of the individual as well asCompany’s performance and other factors mentioned above.

Sl. No. Name of Director Designation Percentage increase in Remuneration in the financial year
1 Mr. Jitender. P. Verma Executive Director (Finance) 7.55 %
2 Mr. Rajinder Parkash Jindal Executive Director NIL

ix. The revenue growth during financial year 2014-15 over financial year 2013-14 was 7%and Profit before other income interest depreciation exceptional item and tax (EBIDTA)grew by 18.32%. The average aggregate increase in salary for KMP’s was 7.59% infinancial year 2014-15 over financial year 2013-14. This was as per the appointment termsto revise the remuneration as per industry benchmark.

x The key parameters for any variable component of remuneration : Our remunerationstructure consist of variable component namely Incentive Payments. A structuredperformance & production linked scheme has been designed to facilitate these payments.The Incentive amount is directly linked with the business performance and the performanceof all the employees assessed against the targets drawn from the business plan.

xi The ratio of the remuneration of the highest paid Director to that of the employeeswho are not Directors but receive remuneration in excess of the highest paid Directorduring the year : Nil

xii It is hereby affirmed that the remuneration paid during the year is as per theRemuneration policy of the Company.

Annexure VI to Directors’ Report

SECRETARIAL AUDIT REPORT

For The Financial Year Ended On 31st March 2015

(Pursuant to section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014)

To

The Members

JINDAL STAINLESS LIMITED

CIN: L26922HR1980PLC010901 O.P. JINDAL MARG

HISAR-125005 HARYANA

We have conducted the Secretarial audit of the compliances of applicable statutoryprovisions and the adherence to good corporate practices by Jindal Stainless Limited(hereinafter called "the Company"). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon. Based on our verification of theCompany’s books papers minute books forms and returns filed and other recordsmaintained by the Company and also the information provided by the Company its officersagents and authorized representatives during the conduct of secretarial audit We herebyreport that in our opinion the Company has during the audit period covering thefinancial year ended on 31st March 2015 complied with the statutory provisions listedhereunder and also that the Company has adequate Board processes and compliance mechanismin place to the extent in the manner and subject to reporting made hereinafter: We haveexamined the books papers minute books forms and returns filed and other recordsmaintained by Jindal Stainless Limited for the financial year ended on 31st March2015 according to the provisions of:

(i) The Companies Act 1956 to the extent applicable The Companies Act 2013 and therules made there under;

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA) and the rules madethere under;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;

(v) The Regulations and Guidelines prescribed under the Securities and Exchange Boardof India Act 1992 (‘SEBI Act’) viz.:

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(d) The Securities and Exchange Board of India (Employees Stock Option Scheme andEmployees Stock Purchase Scheme) Guidelines 1999;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations. 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (not applicable to the Company during the audit period); and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 (not applicable to the Company during the audit period).

We further report that having relied on the systems and mechanism framed by theCompany for compliances under the other applicable Acts Laws and Regulations to theCompany and on examination of the relevant documents and records in pursuance thereof ontest check basis the Company has complied with the following Acts Laws Rules andRegulations applicable to the Company:

(a) Factories Act 1948;

(b) Industries (Development and Regulation) Act 1951;

(c) Acts prescribed relating to mining activities;

(d) Labour Laws and other incidental laws related to labour and employees appointed bythe Company either on its payroll or on contractual basis as related to wages gratuityprovident fund ESIC compensation etc.;

(e) Acts prescribed under prevention and control of pollution;

(f) Acts prescribed under Environment protection;

(g) Acts prescribed under Direct Tax and Indirect Tax;

(h) Land Revenue laws of respective States;

(i) Labour Welfare Act of respective States;

(j) Laws relating to Establishment – O&M of respective States;

(k) Local laws as applicable to various offices warehouses and plants.

We have also examined compliance with the applicable clauses of the following: TheListing Agreements entered into by the Company with BSE Limited and National StockExchange of India Limited.

The Secretarial Standards issued and notified by the Institute of Company Secretariesof India were not applicable for the financial year under review and were only optional.Therefore we have not commented on the said compliances.

During the period under review the Company has complied with the provisions of theActs Rules Regulations Guidelines Standards etc. mentioned above.

We further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting. Decisions at Board /Committee meetings were carried out unanimously as recorded in the minutes of the meetingsof the Board of Directors or Committee of Directors as the case may be. We further reportthat there are adequate systems and processes in the Company commensurate with the sizeand operations of the Company to monitor and ensure compliance with applicable lawsrules regulations and guidelines.

We further report that during the Audit Period these specific events have taken placein the Company:

- Composite Scheme of Arrangement ("Scheme") among Jindal Stainless Limitedand Jindal Stainless (Hisar) Limited and Jindal United Steel Limited and Jindal CokeLimited and their respective Shareholders and Creditors as approved by the ShareholdersSecured Creditors and Unsecured Creditors of Jindal Stainless Limited at separate meetingsconvened as per Order of Hon’ble High Court of Punjab and Haryana at Chandigarh("Hon’ble High Court") held on 16th May 2015 as well as by the PublicShareholders through Postal Ballot on 16th May 2015 is in process at the"Hon’ble High Court and the next date of hearing is 10th August 2015.

- In view of the amendments made in respect of the provisions relating to creation ofsecurity to secure the repayment of the borrowings under the Companies Act 2013 freshconsent of the shareholders by way of special resolution in terms of Section 180(1)(a) ofthe Companies Act 2013 was obtained through postal ballot on 30th September 2014.Earlier approval was through ordinary resolution under Section 293(1)(a) of the CompaniesAct 1956.

Shipra Chattree
Practising Company Secretary
COP No.: 13539
Delhi
21st JULY 2015

Annexure – VII to Directors’ Report

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY

1. A brief outline of the company’s CSR policy including overview of projects orprograms proposed to be undertaken and a reference to the web- link to the CSR policy andprojects or programs.

A brief outline of the Company’s CSR Policy is given in the Directors’Report. Web-link: http://jindalstainless.com/images/JSL%20CSR%20Policy.pdf

2. The composition of the CSR Committee:

Mr. Ratan Jindal - Chairman of the Committee
Mr. Girish Sharma - Member
Mr. Rajinder Parkash Jindal - Member

3. Average net profit of the company for last three financial years: Rs. Nil **

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): NotApplicable

5. Details of CSR spent during the financial year.

a. Total amount to be spent for the financial year: Not Applicable

b. Amount unspent if any: Not Applicable

c. Manner in which the amount spent during the financial year is detailed below.

(1) (2) (3) (4) (5) (6) (7) (8)
Sl. No. CSR project or activity identified Sector in which the project is covered Projects or programs (1) Local area or other (2) Specify the state and district where projects or programs was undertaken Amount outlay(budget) project or programs wise Amount spent on the project or programs Sub –heads: (1) Direct expenditure on projects or programs (2) Overheads Cummulative expenditure upto the reporting period Amount spent: Direct or through implementing agency
NIL

6. In case the company has failed to spend the 2% of the average net profit of the last3 financial years or any part thereof the reasons for not spending the amount: NotApplicable

7. A responsibility statement of the CSR Committee of the company that theimplementation and monitoring of CSR Policy is in compliance with the CSR Objectives andPolicy of the company: It is hereby stated that the implementation and monitoring of theCSR Policy is in compliance with CSR objectives and the Policy of Jindal StainlessLimited.

* For the purpose of Section 135 "average net profit" shall becalculated in accordance with the provisions of section 198 of the Companies Act 2013

** The Company did not have net profits during the preceding threefinancial years hence the average net profit has been shown as NIL.