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Jindal Steel & Power Ltd.

BSE: 532286 Sector: Metals & Mining
NSE: JINDALSTEL ISIN Code: INE749A01030
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OPEN 254.50
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VOLUME 859557
52-Week high 294.15
52-Week low 92.15
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Mkt Cap.(Rs cr) 22,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 246.45
Sell Qty 500.00
OPEN 254.50
CLOSE 251.70
VOLUME 859557
52-Week high 294.15
52-Week low 92.15
P/E
Mkt Cap.(Rs cr) 22,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 246.45
Sell Qty 500.00

Jindal Steel & Power Ltd. (JINDALSTEL) - Director Report

Company director report

Dear Members

The Board of Directors are pleased to present the Company's 38th Annual Report alongwith the Audited Financial Statements both standalone and consolidated for the FinancialYear ended March 31 2017.

FINANCIAL RESULTS

The Company's financial the year ended March 31 2017 is summarized below:

( Rs in crore)

Standalone

Consolidated

Particulars 2016-17 2015-16 2016-17 2015-16
Total Income 15502.49 14716.81 22706.23 20524.82
EBITDA 2441.08 1552.05 4658.03 3436.87
Profit/(Loss) before tax after exceptional items (1456.98) (2330.07) (3042.90) (3963.71)
Less: Provision of Tax 470.53 911.54 502.68 877.46
Profit/(Loss) after tax (986.45) (1418.53) (2540.22) (3086.25)
Balance brought forward from previous year 20112.44 21768.51 28254.16 32049.18
Surplus carried to Balance Sheet (983.76) (1407.69) (2662.42) (3831.54)

INDIAN ACCOUNTING STANDARDS

Ministry of CorporateAffairs (MCA) has vide its notification dated February 16 2015notified the applicability of Indian Accounting Standards ("Ind AS") to beapplicable on listed companies and certain class of companies for the Accounting periodbeginning from April 1 2016 with comparatives to be provided for the period ended onMarch 31 2016.

The Company has adopted Indian Accounting Standard (‘Ind AS') with effect fromApril 1 2016 and accordingly these financial results along with thecomparativeshavebeenpreparedinaccordance ation Process (CGP). Gasific with the recognitionand measurement principles stated therein prescribed under Section133 of the CompaniesAct 2013 read with the relevant rules issued thereunder.

MATERIAL CHANGES AFFECTING FINANCIAL POSITION

There have been no material change(s) and commitment(s) affecting the financial yearand date of this Report. There has been no change in the nature of business of theCompany.

OPERATIONAL HIGHLIGHTS

Your Company has always aspired to enhance its participation in the socio- economicdevelopment of the nation and will continue to dream bigger with continuously workingtowards building a nation of our dreams. In May 2017 your Company dedicates to the nation6 MTPA Integrated Steel Plant at Angul Odisha.

Sale of Steel Productinthedomestic of steel making. The economies of scaleimparted by marketwas28.41LakhsMT as compared to 30.59 Lakhs MT in the previousyear showing a decrease of 7% and total export was 5.09 Lakhs MT as compared to 2.35 LakhsMT in the previous year showing an increase of 117%.

The Company completed all major iron and steel making installations at the 6 MTPAIntegrated Steel Plant at Angul Odisha.

It comprises :

- India's largest 4 MTPA Sinter Plant 4554 cum Blast Furnace and 0.9 MTPA Coke Oven.

- World's first 1.8 MTPA Direct Reduced Iron (DRI) Plant based on Coal

- World' largest 225000 Nm3/ Hr Coal Gasification Plant for Steel making.

- Steel Melting Shop (SMS) with 250 T EAF.

- A 1.4 MTPA Bar Mill.

- India's most advanced 1.2 MTPA Plate Mill capable of producing plates upto 5 Meterwidth.

- World's fastest 2.3 MTPA Billet Castor (capacity speedthefinancialpositionoftheCompanybetweenthe end of 3.6 Meters/ Minute).

- A 810 MW Captive Power Plant. - Air Separation Unit (2x1200 TPD) - Lime DolomitePlant (2x500 TPD) in - Coal Washery (6 MTPA) and

- Process Boilers (3x1800 TPH)

The completion of the 4554 cum Blast Furnace was done at a significantly lower capitalinvestment as compared to projects of similar scale. The capacity addition would furtherthe efficiencies capacity additions and their optimum utilization would effectuateCompany's debt reduction roadmap.

PRODUCTION HIGHLIGHTS

Steel: Production of finished Steel products during the year under review was 29.71Lakh MT as against 29.48 Lakh MT in the previous year whereas production of semi steelproducts was 34.75 Lakh MT as against 34.65 Lakh MT in the previous year.

Power: During the year under review 5465 million Kwh of Power was generated asagainst 5882 million Kwh of power in the previous year.

Sponge Iron: Production of Sponge Iron during the year under review was 17.66 LakhMT as against previous year's production of 19.94 Lakh MT.

Pellet: 64.63 Lakh MT of Pellets were produced during the year under review asagainst 45.89 Lakh MT in the previous year.

Machinery: Machinery division in Raipur unit produced 998 MT of and has doneproduction of 11317 MT as against 1931 MT castings respectiv in the previousyear.and13966MT

Mining: The Mining of sized ore and fines ely as against previous respectiv 5.96Lakh Tonand 21.27 LakhTon year mining of 6.22Lakh Tonand 23.01Lakh Tonrespectively.Detailed discussion on the operations have been given elsewhere in the report.

PROJECTS COMPLETED

Steel Plant at Angul Odisha- Phase- l

Your Company has completed following operational facilities under Phase - l of 6 MTPAintegrated Steel plant at Angul in the state of Odisha:

a) Steel Melting Shop:Your Company has 250 T capacity Electric Arc Furnace is oneof the largest in India. This art of technology Steel melt shop is equipped with Laddlefurnace RH VD Billet Caster and Slab Caster facility which can produce most of thegrades available in the world.

b) Direct Reduced Iron Plant (DRI) and Coal Gasification Plant: The 1.8 MTPA DRIPlant is unique one in the world which utilizes Syngas (Gas produced from Non coking coalthrough Coal Gasification Plant) for reduction process and has facilities for dischargingHot DRI as well as Cold DRI.

c) Plate Mill: Your Company has one of the widest plate mill (5mtrs. wide) plantswith 1.2 MTPA capacity. This plate mill has various certificationfor such as Defense WindMill Ship Building Sour Application Pipe Lines Yellow Goods etc. Plate mill hassuccessfully developed number of different are very few manufacturers available in theworld who can produce similar kind of grade plates.

These plants are supported by 810MW(6x135 MW) Air Separation Unit (2x1200 TPD) LimeDolomite Plant (2x500 TPD) Coal Washery (6 MTPA) and Process Boilers (3x1800 TPH).

Steel Plant at Angul Odisha -Phase lB

Your Company is expanding the steel plant (Phase IB) at Angul at brisk pace from thepresent 1.5 MTPA to 6 MTPA through the conventional integrated steel plant route i.e CokeOven and by product plant sinter plant blast furnace steel melting shop - II bar milland other allied units.

Following operational facilities under Phase IB were commissioned during the FY2016-17: a) Bar Mill: State of the art 1.4 Million Ton per annum Bar Mill withIntegrated Hot Charging Billet arrangement which can produce Rebar's from 8mm to 40 mm. Itwas commissioned on July 9 2016.

b) Coke Oven: 1st Battery of 2 MTPA Coke Oven was commissioned on February 16 2017and being set up with latest technology supplied by Sinosteel Equipment & EngineeringCo. Ltd. China. The technology is suitable of handling Coal blend VM up-to 29- 30% andmaximum Sulphur of 1.2%. This will help in reducing the cost of Blend and provide us withwider options for coal sourcing.

Also India's biggest Blast Furnace (4554 M3) along with Sinter Plant and 2nd Coke OvenBattery Plant have been commissioned in May 2017.

Your Company is in advance stage of completion for our BOF Plant and expected to becompleted in September 2018.

Steel Plant at Raigarh Chhattisgarh

To enhance the plant's productivity and output your Company has completed thefollowing new project in Raigarh during the financial year under review:

Rail Head Hardening project for producing rail of high speed application and metrorails and for export market . The technology has been supplied by SMSdifferentgradesofPlatesforsectors Meer of Germany.

MachineryDivision Raipur

Your Company has implemented following facilities during the financial year underreview:

1. Installed shield (steel door) to safeguard the welding process Division . attime of

2. Installed new 90 degree attachment for Sanco Machine in Machine Shop to cater toburgeoning requirements of Machinery Equipment Division customers.

3. Sewage Treatment plant (of capacity 500 KLD) has been installed at MachineryDivision Raipur. The treated water is utilized for Green belt development in and aroundthe unit.

4. Enhanced capability of Quality Lab by procuring equipment such as 360 degree LaserMachine.

5. Enhanced capability of Paint Shop by procuring equipment to carry out Saltcontamination test and Dolly test.

Shadeed Iron & Steel Oman Rolling Mill:

Jindal Shadeed Iron & Steel LLC Oman a Subsidiary Company has started commercialproduction of the world's largest and most modern state-of-the-art 1.4 MTPA Rebar Millfrom May 1 2016 to supply finishedsteels the first time in its five-year-history withimminent production of Rebar's for the construction industry to cater mainlytodomesticandeast countries. middle

Highlights:

Total productionof Steel Melting Shop (SMS) increased from 10.54 lakh tons in FY2015-16 to 13.26 lakh tons in FY 2016-17; Upgradation of Rail Finishing Facility at RUBMfor Capacity and Productionof value added grade rounds increased from 0.83 lakh tons in FY2015-16 to 1.43 lakh in FY 2016-17;

Highest monthly production in SMS was recorded in March 2017 at 143831 tons whereashighest monthly production end of FY 2015-16 was 126311 tons;

• Rejection in SMS reduced from 0.93% in FY 2016-17;

• Rebar mill started commercial production total production was4.54 lakh tons inFY 2016-17;

• Rebar mill has received product

Dubai Commercial Laboratories (DCL) SASO and BIS which enables rebar product toqualify for prestigious command premium in the market;

Highest monthly production in Rebar mill was recorded in March 17 at 71302 ton.Jindal Shadeed has established itself as Oman's largest rebar producer and seller in Q4 FY2016-17;

DRI Production decreased slightly from 15.09 lakh tons in FY 2015-16 to 14.39 lakh tonsin FY 2016-17. This was due to sharing of allocated natural gas quota with Rebar mill;

Cut & Bend Plant of 3000 tons per month capacity commissioned in February 2017.

Patratu Jharkhand

Successfully completed "Railway Overhead Electrification Project" fromBhurkunda to Plant premises resulting in reduction by 8

PGP plant fully completed (automation jobs). All the 10 asifiers successfullycommissioned and both mill furnaces are successfully fed by Producer Gas.

WRM furnace maintenance carried out in 28 days against a plan of 35 days with in-housefabrication posts. Modification of burners for feeding producer gas also completed duringthe same period.

Coil straightening and cutting centre which resulted in increase in production

PROJECTS UNDER IMPLEMENTATION

Steel Plant at Raigarh Chhattisgarh theYour Company has the following projectsunder implementation with a view to increase the efficiency of steel plants at Raigarh:

1. Installationof new reheating

Beam Mill to increase the output. The furnace shall be using Blast Furnace gas toreduce the fuel cost.

2. dispatch Enhancement.

Machinery Division at Raipur Chhattisgarh

In order to enhance the capacity and productivity of the division your Company hasplanned the following additional equipment/ till facilities:

Plate Bending Machine for Higher Thickness bending of plates upto 90 mm (Thk) &3100 mm (Wid) in FY 2015-16to0.54%

DIVIDEND inApril2016 and

The Board of Directors of your Company had approved the Dividend DistributionPolicy inline with the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations fromCaresU.K. 2015. The Policy is uploaded on the Company'swebsite at http:// www.jindalsteelpower.com.projects and

The Board of Directors of your Company has not recommended any Dividend during the yearin view of losses.

The unclaimed dividend of Rs 9357733/- (Rupees Ninety Three

Lakh Fifty Seven Thousand Seven Hundred and Thirty Three Only) pertaining to theFinancial Year 2008-09 has been transferred to the Investor Educationand Protection Fund(IEPF) Government of India. The details including last date for claiming of unclaimed /of the unpaid dividend amount are given at the end of the Notice Annual General Meeting.

CREDIT RATING

Your Company's domestic creditratingis "D" for the long-termdebt/facilities/non-convertible debentures short term Analysis facilities includingworking capital facilities & Research Ltd. (CARE) CRISIL and ICRA Limited.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of your Company for the Financial Year 2016-17is prepared in compliance with the applicable provisions of the Companies Act 2013Indian Accounting Standards (Ind AS) and SEBI (LODR) Regulations 2015.

SHARE CAPITAL

The policy may be accessed

The Authorised Share Capital of the Company is Rs 2000000000/- (Rupees Two HundredCrore only) divided into 2000000000 (Two Hundred Crore) equity shares of Rs 1/- (RupeeOne) each.

As the Company is exploring various possibilities of raising funds including issuanceof capital through various means and modes the

Board of Directors of your Company has recommended to increase the Authorised ShareCapital from Rs 2000000000/- (Rupees Two Hundred Crore only) divided into 2000000000(Two Hundred Crore) equity shares of Rs 1/-(Rupee One) each to Rs 3000000000 (RupeesThree Hundred Crore only) comprising 2000000000 (Two Hundred Crore) equity shares of Rs1/-(Rupee One) each and 10000000 (One Crore) Preference Shares of Rs 100/- (Rupees OneHundred) each.

Necessary resolutionsin this regard have been included in the notice convening theensuing Annual General Meeting of the Company.

During the year the paid up share capital of the Company has increased from Rs914903800/- (Rupees Ninety One Crore Forty Nine Lakh Three Thousand and Eight Hundredonly) comprising of 914903800 (Ninety One Crore Forty Nine Lakh Three Thousand andEight Hundred) equity shares of Rs 1/- (Rupee One) each to Rs 915024234/- (RupeesNinety One Crore Fifty Four Thousand Two Hundred and Thirty Four only) comprising of915024234 (Ninety One Crore Fifty Two Hundred and Thirty Four) equity shares of Rs 1/-(Rupee One) each. arious countries.

Your Company has an Employee Share purchase Scheme namely JSPL

ESPS 2013. Relevant disclosures pursuant to Securitiesand Exchange Board of India(Share Based Employee Benefits) Regulation 2014 are given as Annexure A to thisreport.

NON-CONVERTIBLE DEBENTURES

The aggregate outstanding amount of Non-Convertible (NCDs) of the Company as on March31 2017 was Rs 3612 crore.

During the year under review NCDs amounting toRs 300 crore have been redeemed and paidon due date. There are delays in servicing the interest on ncds The Company had paid allthe dues including interest on the NCDs during the financial year 2016-17. Necessarydisclosures in this connection under SEBI (LODR) Regulations 2015 have been made to theStock Exchanges where the shares of the Company are listed.

DEPOSITS

The Company has not accepted/received any deposits during the year under report fallingwithin the ambit of Section 73 of the

Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

RELATED PARTY TRANSACTIONS

In terms of Section 188 of the Companies Act 2013 read with rules framed thereunderand Regulation 23 of SEBI (LODR) Regulations 2015 your Company has a Related Party Policyin dealing with under related party transactions. on the website at the following link:corporategovernancesection

http://www.jindalsteelpower.com/img/admin/report/pdf/RPT_ Policy.pdf

Particulars of Contracts or arrangements entered into by the Company with the relatedparties referred to in Section188(1) of the Companies Act 2013 read with Regulation 23 ofSEBI (LODR) Regulations 2015inprescribed Form AOC - 2 is attached herewith as Annexure- B.

All the related party transactions that were entered and executed during the year underreview were on arm's length basis and in the ordinary course of business and within thepermissible framework of Section 188 of the Companies Act 2013 and Rules made thereunderread with Regulation 23 of SEBI (LODR) Regulations 2015.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees Securities and Investments covered under the provisionsof Section186 of the Companies Act 2013 are given in the Notes to the FinancialStatements.

SUBSIDIARIES ASSOCIATES AND JOINT VENTURES Lakh Twenty

Your Company follows its global ambition to build a premium brand name for its qualitysteel solutions expertise and with a view of LakhTwentyFourThousand expansion anddiversification; it has created multiple subsidiaries domestic and abroad associates andjoint ventures for facilitating theseoperationsin

A separate statement containing salient features of Financial Statements ofSubsidiaries Associates and Joint Ventures of your Company forms part of the ConsolidatedFinancial Statements in terms of Section 129 of the Companies Act 2013.

Name of the Companies which have become or ceased to be its subsidiaries jointventures or associate companies have been mentioned in the notes to the accounts.

The Financial Statements of Subsidiary Companies are kept open for inspection by theshareholders at the Registered Office of your Company during business hours on all daysexcept Saturdays Sundays and public holidays upto the date of the Annual General Meeting(AGM) as required under Section 136 of the Companies Act 2013. Any member desirous ofobtaining a copy of the said financial statements Office or Corporate Office. The inancialtatements including consolidated inancial tatements and all other documents required to beattached to this report have been uploaded on the website of your Company viz.www.jindalsteelpower.com

Your Company has framed a policy for determining "Material Subsidiary" interms of Regulation 16(c) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The policy on Material Subsidiary has been uploaded on the Company'swebsite at the following link:

http://www.jindalsteelpower.com/img/admin/report/pdf/Policy_on_determining_material_subsidiary.pdf

The details of business operations / performance of major subsidiaries are as below:

JINDAL POWER LIMITED

Jindal Power Limited a subsidiary company (JPL) is operating 3400 MW power plant atTamnar Chhattisgarh.

During the year under review :

- 1000 MW (4x250 MW) power plant generated 4483 million units of power representing51.17% Plant Load Factor (PLF) as against 5169 million units of power representing 58.85%PLF in the previous year.

- 600 MW of the 2400 MW (4X600 MW) thermal power plant generated 4694 million units ofpower in FY 2016-17.

Jindal Power Limited (JPL) 258 km 400 kV double-circuit transmission line is beingused as an interstate transmission line belonging to the Western Region InterstateTransmission System. The Central Electricity Regulatory Commission (CERC) has granted atransmission license to the Company for carrying on business activity and has fixedprovisional tarifffor its use. During the year under review JPL has earned transmissionincome of Rs 45.44 crore from this line.

Total revenue of JPL during the year under review was Rs 3516.27 crore and the lossafter tax was Rs 667.84 crore.

SHADEED IRON & STEEL LLC OMAN

Shadeed Iron & Steel LLC Oman a subsidiary of Jindal Steel & Power Ltd. isoperating 1.5 MTPA Brigutted Iron plant and Steel Melt Shop. It has recorded sales of Rs3487.50 crore in the Financial Year 2016- 17 and earned a profit after taxof Rs 191.57crore.

JINDAL MINING SA (PTY) LIMITED SOUTH AFRICA

The operating coal mine recorded sales of Rs 202.75 crore in Financial Year 2016-17and incurred a loss of Rs 13.75 crore.

JSPL MOZAMBIQUE MINERALS LDA MOZAMBIQUE

The operating coal mine recorded sales of Rs 129.84 crore in maywritetotheCompanyatitsRegistered Financial Year 2016-17 and incurred a loss of Rs 2.45 crore.

WOLLONGONG COAL LIMITED (FORMERLY GUJARAT NRE COKING COAL AUSTRALIA LIMITED)

The operating coal mine recorded sales ofRs 181.44 crore in Financial Year 2016-17 andincurred a loss of Rs 290.46 crore. With a view to ensure availability of coal and otherraw materials the Company has through its other subsidiaries acquired exploration /mining interests in Botswana Indonesia Madagascar Namibia Liberia Mauritania Zambiaand Tanzania.

DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT/RE- APPOINTMENT

Directors

The Board of Directors of your Company co-opted: i. Mr. Deepak Sood (DIN: 02331191) asNominee Director of IDBI Bank Limited w.e.f. December 8 2016.

ii. Mr. Anjan Barua (DIN: 01191502) as a Nominee Director of State Bank of Indiaw.e.f. February 14 2017

iii. Dr. Amar Singh (DIN: 07800513) as an Additional the category of IndependentDirector w.e.f. April 25 2017

iv. Mr. Kuldip Chander Sood (DIN: 01148992) as an Additional Director in the categoryof Independent Director w.e.f. April 25 2017

Wholetime Directors

On the recommendation of the Nomination & Remuneration Committee and in terms ofSections 196 197 198 and 203 read with Schedule V and all other applicable provisions ofthe Companies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Board of Directors of your Company recommends there-appointment of :

i. Mr. Naveen Jindal (DIN: 0001523) as Wholetime Director designated as Chairman ofthe Company for a period of 3 (three) years w.e.f. October 1 2017.

ii. Mr. Rajeev Rupendra Bhadauria (DIN 00376562) as Wholetime Director of the Companyfor a period of 3 (three) years w.e.f. May 27 2018.

iii. Mr. Dinesh Kumar Saraogi (DIN 06426609) as Wholetime Director of the Company for aperiod of 3 (three) years w.e.f. November 9 2017.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles the Company Mr. Naveen Jindal and Mr. Rajeev Rupendra Bhadauria areretiring by rotation at the ensuing Annual General Meeting and being eligible seekre-appointment.

Necessary Resolutions in respect of the appointment of Directors mentioned above areincluded in the Notice convening the ensuing Annual General Meeting. Your Board recommendsthe appointment/ re-appointment of Mr. Naveen Jindal Mr. Rajeev Rupendra Bhadauria Mr.Dinesh Kumar Saraogi Mr. Kuldip Chander Sood Dr. Amar Singh Mr. Deepak sood and Mr.Anjan Barua. The particulars in respect of these Directors as required under Regulations36(3) of SEBI (LODR) Regulations 2015 are mentioned elsewhere in the Notice of AnnualGeneral Meeting.

RESIGNATIONS

Directors

i. Mr. Chandan Roy and Mr. Haigreve Khaitan resigned from the position ofIndependent Directors of the Company w.e.f. June 7 2016 and December 7 2016respectively.

ii. Mr. Shalil Mukund Awale Nominee Director of IDBI Bank Ltd. resigned from theBoard of the Company w.e.f December 8 2016 consequent to withdrawal of his nominationBank Limited.

Key Managerial Personnel

During the period under review: i. Mr. Murli Manohar Purohit was appointed as CompanySecretary & Compliance Officer of the Company w.e.f. October 10 2016 to fill thevacancy caused by the resignation of the Company Secretary appointed earlier. Hesubsequently resigned from the Company w.e.f. May 31 2017.

ii. Mr. Kannabiran Rajagopal resigned from the position of Group .f. November 21Chief Financial Officer 2016. Mr. Rajesh Bhatia who was appointed in his place as theChief Financial Officerof the Company resigned from the Company w.e.f. June 27 2017. stproviso to Section 139 of the Your Directors would like to record their deep sense ofappreciation for the contributions made by the above Directors and Key ManagerialPersonnels during their respective tenures.

MEETINGS OF THE BOARD AND COMMITTEES

The Board of Directors met 10 (ten) times during the period under review. The detailsof number of Meetings of the Board and various Committees of your Company are set out inthe Corporate Governance Report which forms part of this report. The intervening gapbetween the meetings was within the period prescribed under the Companies Act 2013 theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and SecretarialStandards on Meeting of the Board of Directors as issued by The Institute of CompanySecretaries of India.

REMUNERATION POLICY

178 of the Companies Inaccordancewiththe provisions of Section Act 2013 and Part D ofSchedule II of SEBI (LODR) Regulations 2015 the policy on Nomination and Remuneration ofDirectors KMPs and Senior Management of your Company is uploaded on the website at thefollowing link: http://www.jindalsteelpower.com/img/admin/report/pdf/Remuneration_Policy.pdf

PARTICULARS OF EMPLOYEES RELATED DISCLOSURES

197(2) read with Rule 5(2) of DetailsasrequiredunderSection the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 and the statement showing the nameof the employees drawing remuneration in excess of the limits set out in Section 197(12)of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as Annexure-C.

Members and other entitled persons who have not registered their email address with theCompany may access the full version of the from Annual Report of the Company or byphysically inspecting the full version of the Annual Report at the Registered office andat the Corporate office of theCompany on all working days of the Company between 10.00a.m. to 1.00 p.m. or by requesting a physical copy by writing to the Company Secretary.

STATUTORY AUDITORS

M/s Lodha & Co. Chartered Accountants (ICAI Firm Registration No. 301051E) NewDelhi were appointed as the Statutory Auditors at previous Annual General Meeting (AGM)for a period of 5 years from the conclusion of 37th Annual General Meeting till 42 ndAnnual General Meeting of the Company subject to ratification at each Annual GeneralMeeting by the shareholders of the Company. Companies Act Intermsofthe 2013 appointmentof M/s Lodha & Co. Chartered Accountants as the Statutory Auditors of the Companyis recommended for ratification at the ensuing AGM.

Explanations on qualification reservation or adverse remark by Statutory Auditors

A) During the financialyear 2014-15 the Hon' ble Supreme Court vide its judgementdated August 25 2014 read with its order dated September 24 2014 had cancelled theallocation of certain Coal Blocks which were allotted from year 1993 onwards throughScreening Committee. The Supreme Court also directed the Coal block allottees to pay anadditional levy of Rs 295 per MT on the coal extracted from the operational mines. Thereview petition filed by the Company and its subsidiary company JPL before the Hon'bleSupreme Court of

India against the order challenging cancellation of coal and imposing additional levyofRs 295 per MT on coal extracted with

In the meanwhile the Company has paid Rs 3267.43 crore (including Rs 1185.20 crorepaid by its subsidiary company JPL) under protest on the Run of Mine coal extracted fromthe operational mines from the commencement of coal mining in the year 1993 to September30 2014. Out of the said amount on the basis of the legal advice obtained by the Companythat additional levy of Rs 295 per MT is payable only on coal extracted and is not payableon shale rejects and ungraded middlings an amount of Rs 1911.64 crore (including Rs1103.87 crore related to its subsidiary company JPL) computed on coal extracted excludingshale rejects and ungraded middling has been shown as an exceptional item in theStatement of Profit and Loss. The balance amount of Rs 1355.79 crore (including Rs 81.33crore related to its subsidiary company JPL) being additionallevy ofand processes. Therisks are Rs 295 per MT functions shale rejects and ungraded middlings hasaccordingly been shown as recoverable. On the same principle the Company has accruedadditional levy of Rs 178.18 crore (including Rs 85.78 crore payable by itssubsidiary company JPL) based on coal extracted excluding shale rejects and ungradedmiddling from October 1 2014 to June 30 2015.

The Board of the Company based on the legal advice is sanguine of obtainingappropriate relief in respect of the same.

B) The Board is of the view that as of now there is no requirement for adjustment tothe carrying value of investmentmadein statements and such mining assets by the companyand difference if any shall be accountedforwhenthematterisfinallysettled

SECRETARIAL AUDITORS

M/s RSMV & Co. Company Secretaries New Delhi (CP No. 11571) were appointed toconduct the Secretarial Audit of the Company as required under Section 204 of theCompanies Act 2013 and Rules thereunder. The Secretarial udit Report i.e. MR-3 forms partof the Annual Report as Annexure-D to the Board's Report.

Observation of Secretarial Auditors on composition of Board is explained elsewhere inthe report.

COST AUDITORS

M/s Ramanath Iyer & Co. (FRN 00019) Cost Accountants were appointed as CostAuditors of the Company for auditing the cost records of the Company for the FinancialYear 2017-18.

The Cost Audit Report for the Financial Year ended March 31 2016 of the Company wasfiled on September 7 2016.

In terms of Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 appropriate resolution seeking ratification of the remuneration ofM/s Ramanath Iyer & Co. (FRN 00019) Cost Accountants approved by the Board isincluded in the Notice convening the 38 th AGM of the Company.

RISK MANAGEMENT

The Company has in place a robust risk management framework which identifies andevaluates business risks and opportunities. The Company recognizes that these risks needto be managed and mitigated to protect the interest of the shareholders and stakeholdersto achieve business objectives and enable sustainable growth. The risk managementframework is aimed at effectively mitigating the Company's various business andoperational risks through strategic actions.Risk management is embedded in our criticalbusiness activities reviewed for the change in the nature and extent of the major risksidentifiedsince the last assessment. It also provides control measures for risk and futureaction plans.

The Company has a Risk Management Committee of the Board which looks after theidentification of risks and their mitigation planning. More details about this Committeeand its role and responsibilities are given in the Corporate Governance Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate Internal Financial Controls with internal financialcontrols referencetofinancial are operating effectively. Your Company has adopted policiesand procedures for ensuring the orderly and business including adherence to the Company'spolicies the safeguarding of its assets prevention and detection of frauds and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial disclosures.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 of the Act the Company has constituted acommittee to formulate implement and monitor the

CSR Policy of the Company.

The Annual Report on the Corporate Social Responsibility (CSR) activities for theFinancial Year 2016-17 as required under Section 134 and 135 of the Companies Act 2013read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 andRule 9 of the Companies (Accounts) Rules 2014 is attached to Report as Annexure-E.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

Courts which would impact the going concern status of the Company and its futureoperation following:

De-Allocation of Coal Blocks:

Following the petition in M L Sharma vs The Principal Secretary & Ors andsubsequent other Writs the Hon'ble Supreme Court vide its judgment dated August 25 2014read with its order dated September 24 2014 had cancelled the allocation of Coal Blocksallotted from 1993 onwards through Screening Committee Route.

Subsequently the Company's subsidiary Jindal Power Limited (JPL) despite having madewinning bids during the auction of Gare

Palma IV/2 and IV/3 Coal Mine in February 2015 was not declared a successful bidderby the office of Nominated Authority. This challenged by JPL before Hon'ble Delhi HighCourt which decided the matter on March 9 2017 and the proceedings arising from the sameare presently sub-judice before the Hon'ble Supreme Court. gy Technology Absorptionand Foreign

However since de-allocation of Coal Blocks the Company is fully geared and cateringto its coal requirements through coal linkage e-auctions etc. Further the Company alsointends to participate future Coal Block Auctions.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act 2013 the Directors state:

(a) that in the preparation of the annual accounts for the year ended March 31 2017the applicable accounting standards and Schedule III to the Companies Act 2013 have beenfollowed and there are no material departures from the same;

(b) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of your Company as at March 31

2017 and of the loss of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken for maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of your Company and for preventing and detecting irregularities;fraudandother

(d) that the annual accounts have been prepared on a going concern basis;

(e) that proper internal financial controls laid down by the

Directors were followed by the Company and that such internal financialcontrols areadequate and were operating effectively; and

(f) that proper systems to ensure compliance with the provisions duringtheyearunderreviewexceptthe of all applicable laws were in place and that such systems wereadequate and operating effectively.

OTHER INFORMATION

Business Responsibility Report

As stipulated under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Business Responsibility Report describing the initiatives taken bythe environmental social and governance perspective is part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review as stipulatedunderSEBI (ListingObligationsand Disclosure Requirements) Regulations 2015 is annexedherewith as Annexure F to this Report.

Conservation of Exchange Earnings and Outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as Section 134(3) (m) read with Rule 8 of the Companies (Accounts)Rules 2014 is annexed herewith as Annexure - G to this Report.

Certificate on Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by Securities and Exchange Boardof India. The Company has also implemented several best corporate governance practices asprevalent globally. The report on Corporate Governance as stipulated under theSEBI(Listing Disclosure Requirements) Regulations 2015 forms an integral part of this Report.The requisite certificate issued by M/s RSMV & Co. Company Secretaries in Practiceconfirming compliance with the conditions of Corporate Governance(Annexure - I) isannexed with Corporate Governance Report.

Whistle Blower and Vigil Mechanism

Your Company has formulated a vigil mechanism to deal with instances of unethicalbehaviour actual or suspected fraud or violation of Company's code of conduct or ethicspolicy. The details of policy is explained in Corporate Governance Report and alsouploaded on Company's website at the following link:http://www.jindalsteelpower.com/img/admin/report/pdf/whistle.pdf

Prevention of Sexual Harassment at Workplace

As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules made thereunder your Company hasconstituted Internal independent member(s) Complaints to redress complaints regardingsexual harassment. During the year no complaint regarding Sexual Harassment has beenreported.

Extract of the Annual Return

The details forming part of the extract of the Annual Return in Form No. MGT 9 inaccordance with Section92 of the provisionsofCompanies Act 2013 read with theCompanies (Management and Administration)Rules 2014 are set out herewith as Annexure-Hto this Report.

Cautionary Statement

Statements in the Board's Report and the Management Discussion

& Analysis describing the Company's objectives expectations or forecasts may beforward looking within the meaning of applicable Securities Laws and Regulations. Actualresults may differ materially from those expressed in the statement. Important factorsthat could influence the Company's operations include global and domestic demand andsupply conditions finished goods input availability and prices changes inGovernmentRegulationsTax aws Economic Developments within the country and other factors such aslitigation and industrial relations.

Acknowledgements

The Directors wish to place on record their appreciation for the sincere servicesrendered by employees of the Company at all levels. Your Directors also wish to place onrecord their appreciation for the valuable co-operation and support received from theGovernment of India various State Governments the Banks/ Financial Institutions andother stakeholders such as shareholders customers and suppliers among others. TheDirectors also commend the continuing commitment and dedication of the employees at alllevels which has been critical for the Company's success. The Directors look forward totheir continued support in future.

For and on behalf of the Board of Directors
Naveen Jindal
Place: New Delhi Chairman
Dated: August 8 2017 DIN: 00001523

Annexure - A

Statement as at March 31 2017 pursuant to Securities and Exchange Board of India(Share Based Employee Benefits) Regulations

I. a) Date of Shareholders' Approval : June 21 2013
b) Number of shares issued : 120434 Equity Shares
c) The price at which such shares were issued : Rs 1/- per equity share
d) Lock-in period : 2 Years from the date of allotment

 

Details
Particulars

2016-17

2015-16

2014-15

1 Number of shares issued under JSPL-ESPS 2013

120434

Nil

17816

2 Issue Price

Rs 1/- per equity share

NA

Rs 1/- per equity share

3 Employee wise details of the shares issued to: Name of Employee No. of shares allotted Name of Employee No. of shares allotted
(i) Senior Managerial Personnel Mr. Ravikant 120434 NA Mr. Ravikant 17816
Uppal Uppal
(ii) any other employee who is issued shares in any one year amounting to 5% or more shares issued during that year yees who were issued shares during any one emplo (iii)identified year equal to or exceeding 1% of the issued capital of the Company at the time of issuance NA NA NA
NA NA NA
4 Diluted Earnings Per Share pursuant to issue of Equity Shares under JSPL-ESPS 2013 (10.78) NA (3.40)
5 Consideration received against allotment of Equity Shares Rs 120434/- NA Rs 17816/-
6 Loan repaid by Trust during the year from exercise price received NA NA NA

 

For and on behalf of the Board of Directors
Naveen Jindal
Place: New Delhi Chairman
Dated: August 8 2017 DIN: 00001523

Annexure - B

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014) Form for disclosure of particulars ofcontracts/arrangementsenteredintobythe eferred to in sub-sectionCompanywithrelatedparties

(1) of section 188 of the Companies Act 2013 including certain arm's

1. Details of contracts or arrangements or transactions not at arm's length basis Not applicable
2. Details of material contracts or arrangements or length basistransactions
a) Name(s) of the related party and nature of relationship JSW Energy Limited Promoter of JSW Energy Limited is a relative of Mr. Naveen Jindal.
b) Nature of contracts / arrangements / transactions Divestment of 1000 MW Power unit of the Subsidiary Company i.e. Jindal Power Limited to JSW Energy Limited a related party through a process of scheme or other mechanism including transfer through special purpose vehicle (SPV) and sale of the entire share capital and other securities of the aforesaid SPV in terms of share purchase agreement. June 30 2018
c) Duration of the contracts / arrangements/ transactions
d) Salient terms of the contracts or arrangements or transactions including the value if any Divestment of 1000 MW Power unit of the Subsidiary Company i.e. Jindal Power Limited to JSW Energy Limited a related party through a process of scheme or other mechanism including transfer through special purpose vehicle (SPV) and sale of the entire share capital and other securities of the aforesaid SPV in terms of share purchase agreement.
Value of Transaction: Enterprise value of Rs 6500 crore plus the value of Net Current
Assets as on the closing date. The valuation may vary based upon the achievement of PPAs as subject to minimum Rs 4000 crore plus the value of Net Current Assets as on the closing date.
e) Date(s) of approval by the Board if any May 4 2016
f) Amount paid as advances if any Rs 373 crore

 

For and on behalf of the Board of Directors
Naveen Jindal
Place: New Delhi Chairman
Dated: August 8 2017 DIN: 00001523

Annexure - C

Statement of Information to be furnished pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014

(i) Ratio of the remuneration of each Director to the median remuneration of theemployees 17 the percentage increase in remuneration of each Chief Executive OfficerChief Financial Officer Executive Directors and Company Secretary during the FinancialYear 2016-17:

Name of Director/KMP and Designation Remuneration of Director/ KMP for Financial Year 2016-17 (Rs in Lakh) % increase in Remuneration in Financial Year 2016-17# Ratio of Remuneration of Director to Median Remuneration of employees
1. Mr. Naveen Jindal Chairman 705.63 - 113.45
2. Mr. Ravikant Uppal Managing Director & Group CEO 605.87 - 97.40
3. Mr. K. Rajagopal Group CFO* 158.17 - NA
4. Mr. Rajeev Rupendra Bhadauria Wholetime Director 178.10 - 28.63
5. Mr. Dinesh Kumar Saraogi Wholetime Director 129.39 - 20.80
6. Mr. Rajesh Bhatia CFO** 53.84 - NA
7. Mr. Jagdish Patra VP & Group Company Secretary*** 29.34 - NA
8. Mr. Murli Manohar Purohit Company Secretary & Compliance Officer**** 18.02 - NA

Remuneration pertaining to the period starting from: * April 12016 to November 212016. ** November 22 2016 to March 31 2017. *** April 1 2016 to July 11 2016.

**** October 10 2016 to March 31 2017.

# There is no increase in remuneration during the Financial Year 2016-17.

(ii) The number of permanent employees on the roll of the Company as on March 31 2017were 6071 and the median remuneration was Rs 6.22 Lacs. above Directors and KMPs hasdecreased by 2.86%.

(iii) Average percentile increase already made in the salaries of the employees otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration;

March 31 2017 March 31 2016 Difference
Average Salary
of Employees 963213 997221 (3.41)%
of Directors 23479437 36083429 (34.93)%

(v) The remuneration of Directors KMPs and other employees is in accordance with theRemuneration Policy of the Company provided under the section "Corporate GovernanceReport" which forms part of the Board's Report.

Statement Containing the particularsofemployeesunderSection197 (12) of the CompaniesAct 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as on March 31 2017

a.) Top Ten Employees in terms of remuneration drawn

Name Age (in yrs.) Designation Remuneration (in Rs) Qualification Date of Commencement of Employment Experience (in yrs.) Last employment held Designation
1 Mr. Anand Goel 64 Chief Advisor 26982251 B.Com 01-09-1976 40 - -
2 Mr. Sundres Pillay 43 Executive Director 19850414 MBA 01-04-2016 23 Sasol Dept. Gulf
Technologies Production
3 Mr. Virendra Kumar Mehta 65 Director - Sales & 14491392 B. Sc. Hons M.A. 01-12-2011 41 SAIL Executive
Marketing Director
4 Mr. Pankaj Gautam 64 Executive Director 13708902 B.E. PGDBM 03-03-2014 42 Visa Steel Limited JMD & CEO
5 Mr. Manish Kharbanda 47 Executive Director 12856178 MBA-HR M. Sc. - Geology LLB 30-09-2011 25 MTS Head- HR
6 Mr. Ranjit Budhai 58 Executive Vice President 11262320 MBA 12-03-2015 35 Sasol Synfuels Sr. Manager
7 Mr. Sabyasachi Bandyopadhyay 48 Chief Technology Officer 11114623 M.Tech B.E. 15-04-2015 27 Steel Dynamics Incorporated Director of Quality
8 Mr. Shunmugam Kanniapen Govender 47 Executive Vice President 9981353 MBA - Operations Dip. Mech. Engg. 01-04-2016 27 Oswal Group -
9 Mr. Niladri Sarkar 55 President 10217013 B.Tech 01-02-2016 33 Fedders Lloyd Corporation Chief Executive Officer
10 Mr. Mariam J Carter 57 General Manager 8012045 MBA 11-07-2011 - - -

b.) Employed throughout the year and were in receipt of remuneration of not less thanRs10200000 (Rupees One Crore Two Lakh Only) per annum

Name Age (in yrs.) Designation Remuneration (in Rs ) Qualification Date of Commencement of Employment Experience (in yrs.) Last employment held Designation
1 Mr. Manish Kharbanda 47 Executive Director 12856178 MBA-HR M. Sc. - Geology LLB 30-09-2011 25 MTS Head HR
2 Mr. Virendra Kumar Mehta 65 Director - Sales & Marketing 14491392 B. Sc. Hons M.A. 01-12-2011 41 SAIL Executive Director
3 Mr. Pankaj Gautam 64 Executive Director 13708902 B.E. PGDBM 03-03-2014 42 Visa Steel Limited JMD & CEO
4 Mr. Sabyasachi Bandyopadhyay 48 Chief Technology Officer 11114623 M.Tech B.E. 15-04-2015 27 Steel Dynamics Incorporated Director of Quality
5 Mr. Niladri Sarkar 55 President 10217013 B.Tech 01-02-2016 33 Fedders Lloyd Corporation Chief Executive Officer
6 Mr. Sundres Pillay 43 Executive Director 19850414 MBA 01-04-2016 23 Sasol Technologies Dept. Gulf Production

c.) Employed part of the year and were in receipt of remuneration of not less thanRs850000 (Rupees Eight Lakh Fifty Thousand Only) per month

Name Age (in yrs.) Designation Remuneration (in Rs ) Qualification Date of Commencement of Employment Experience (in yrs) Last employment held Designation
1 Mr. Bharat Rohra 60 Executive Director 7669931 B. Tech (Civil Engineering) 01-03-2015 37 Universal Infra Sr. VP
2 Mr. Anand Goel 64 Chief Advisor 26982251 B.Com. 01-09-1976 40 - -
3 Mr. Ranjit Budhai 58 Executive Vice President 11262320 MBA 12-03-2015 35 Sasol Synfuels Sr. Manager
4 Mr. Brijesh Shandilya 48 Associate Vice President 1667479 B.E. 12-03-2010 23 Electro Steel Casting GM
5 Mr. Pradeep Mehta 46 General Manager 956584 B.Sc. 21-10-2009 21 Jindal Petroleum Ltd. GM
6 Mr. Shunmugam Kanniapen Govender 47 Executive Vice President 9981353 MBA - Operations Dip. Mech. Engg. 01-04-2016 27 Oswal Group -

Notes:

1. Remuneration includes basic salary allowances leave travel allowances company'scontribution to provident fund and superannuation fund leave encashment gratuityreimbursements monetary value of perquisites share in net profit/ incentives on netprofit wherever applicable target variable pay etc. Target variable pay for FinancialYear 2015-16 was paid in Financial Year 2016-17 and is included in the above details.

2. None of the employees hold by himself or along with his/her spouse and dependentchildren 2% or more of equity shares of the Company.

3. All appointments are/were contractual in accordance with terms & conditions asper company rules. 4. None of the employee is a relative of any Director of the Company.

5. Details of Remuneration of Key Managerial Personnel(s) are given else where in theBoards' Report & Corporate Governance Report