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Directors Report of Jai Balaji Industries Ltd.

Mar 31, 2014

Dear Members

The Directors are pleased to present the fifteenth Annual Report together with the Audited Accounts of your Company for the financial year ended 31st March, 2014.

The summarised Standalone and Consolidated financial performance of your Company is presented as hereunder:

FINANCIAL PERFORMANCE (Rs. in lacs)

Standalone Particulars Financial year Nine months ended 31st period ended March, 2014 31st March, 2013

Income 199,078.40 156,657.62

Less: Expenses 193,743.78 161,997.96

Finance Costs 33,636.48 17,644.70

Depreciation and Amortization Expenses 13,572.21 8,612.67

Profit/(Loss) before exceptional and extraordinary items and Tax (41,874.07) (31,597.71)

Less : Exceptional items - -

Profit/(Loss) before extraordinary items and Tax (41,874.07) (31,597.71)

Less : Extraordinary items - -

Profit/(Loss) before Tax (41,874.07) (31,597.71)

Less : Tax expense Current Tax (270.94) 147 MAT Credit Entitlement - - Deferred Tax credit (9,707.98) (10,286.40)

Profit/Loss after tax (31,895.15) (21,312.78)

Earnings per share (Nominal value per share Rs. 10/-)

Basic and Diluted (48.27) (33.42)



Consolidated Particulars Financial year Nine months ended 31st period ended March, 2014 31st March, 2013

Income 199,472.98 156,711.98

Less: Expenses 194,581.89 162,442.96

Finance Costs 14,334.24 9,184.92

Depreciation and Amortization Expenses 34,523.72 18,510.49

Profit/(Loss) before exceptional and extraordinary items and Tax (43,966.87) (33,426.39)

Less : Exceptional items - -

Profit/(Loss) before extraordinary items and Tax (43,966.87) (33,426.39)

Less : Extraordinary items - -

Profit/(Loss) before Tax (43,966.87) (33,426.39)

Less : Tax expense Current Tax (249.49) 1.47 MAT Credit Entitlement - - Deferred Tax credit (10,399.28) (11,075.69)

Profit/Loss after tax (33,318.10) (22,352.17)

Earnings per share (Nominal value per share Rs. 10/-)

Basic and Diluted (50.43) (35.04)

FINANCIAL HIGHLIGHTS

During the year 2013-14, your Company incurred loss which can be mainly attributable to raw material price inflation, rising borrowing costs and other global factors. The Loss before exceptional and extraordinary items and tax was Rs. 41,874.07 lacs as compared to loss of Rs. 31,597.71 lacs in the previous year. The net loss for the year under review (twelve months) was Rs. 31,895.15 lacs against loss after tax of Rs. 21,312.78 lacs in the previous year (nine months).

The Consolidated loss before exceptional and extraordinary items and tax was Rs. 43,966.87 lacs as compared to loss of 33,318.10 lacs in the previous year. The consolidated net loss for the year under review (twelve months) was Rs. 33,321.43 lacs against loss after tax of Rs. 22,352.17 lacs in the previous year (nine months).

DIVIDEND

In view of losses incurred and requirement of capital, considering the capital intensive nature of the industry, for working of the Company, your Directors did not recommend dividend for the financial year 2013-14.

NUMBER OF MEETINGS OF THE BOARD

During the financial year 2013-14, 9 (Nine) meetings of the Board of Directors of your Company were held viz. 22nd April, 2013, 15th May, 2013, 4th July, 2013, 5th August, 2013, 12th August, 2013, 12th September, 2013, 14th November, 2013, 24th December, 2013 and 12th February, 2014.

Further, a Circular Resolution was passed on 20th September, 2013, by obtaining the assent of all the Directors of your Company, in terms of Section 289 of the Companies Act, 1956.

The maximum time gap between two consecutive Board Meetings did not exceed four months in compliance with clause 49(I)(C) of the Listing Agreement with the Stock Exchanges.

PREFERENTIAL ISSUE

During the year under reporting, your Company has issued and allotted 1,00,00,000 warrants on 4th July, 2013, on private placement basis to two promoter group companies viz. M/s. Hari Management Limited (81,00,000 warrants) and M/ s. Enfield Suppliers Limited (19,00,000 warrants) at a issue price of Rs. 50/- each. Warrant was convertible into one fully paid-up equity share each ranking pari-passu in all respects, including as to dividend, with the existing equity shares of the Company, within a period of 18 months from the date of allotment, in one or more tranches, at a conversion price of Rs. 50/- per equity share (including premium of Rs. 40/- per share) which is a price greater than the price determined as per Regulation 76 of Chapter VII of SEBI (ICDR) Regulations, 2009.

Subsequently, the Board of Directors of your Company at its meeting held on 5th August, 2013, has fully and partly converted the said warrants, by way of allotment of 34,95,000 equity shares at a conversion price of Rs. 50/- per equity share (including a premium of Rs. 40/- per share), being 19,00,000 equity shares to M/ s. Enfield Suppliers Limited and 15,95,000 equity shares to M/ s. Hari Management Limited, pursuant to the application letter received from the respective allottees.

Further, the Board of Directors of your Company at its meeting held on 29th May, 2014, has fully converted the remaining 65,05,000 warrants by way of allotment of 65,05,000 equity shares at a conversion price of Rs. 50/- per equity share (including a premium of Rs. 40/- per share) to M/ s. Hari Management Limited, pursuant to the application letter received from the allottee.

Consequent to the full conversion of warrants, the paid-up equity share capital of your Company stands at Rs. 73,78,14,860 divided into 7,37,81,486 equity shares of Rs. 10/- each.

EXPANSION & PROJECTS

The Company continues its journey to serve its customers in a more efficient, cost-effective, reliable and environment- friendly manner, while bolstering its market position in the industry.

The Company had expanded a 350000 MTPA Coke Oven Plant along with Waste Heat Recovery Boiler of 80 TPH. The said coke oven is presently running satisfactorily.

The Dumri Coal Block allotted to the subsidiary company M/s. Nilachal Iron & Power Limited, has received Environmental clearance and Forest Go Certificate. Forest clearance stage one has been received and stage two is under process, Net Present Value letter has also been received from the authorities.

Your Company''s products meet stringent quality parameters which is gaining market share comprising of private, institutional, non-institutional and government body buyers. This achievement highlights the technical and project execution skills of the management of your Company to successfully execute large projects within record time.

SUBSIDIARIES

As on the date of reporting, your Company has three wholly owned subsidiaries namely M/ s. Nilachal Iron & Power Limited, M/ s. Jai Balaji Steels (Purulia) Limited & M/ s. Jai Balaji Energy (Purulia) Limited.

* Nilachal Iron & Power Limited

A Wholly Owned Subsidiary of your Company since 26th October, 2007, having its manufacturing plant located at Kandra near Jamshedpur, Jharkhand. Currently, it manufactures sponge iron, and work on increasing its capacity by 60,000 tonnes per annum has been initiated. The Company has been allotted the Dumri Coal Block for captive mining from the Government of India, about 300 kms from the plant. During the year under review, the Company has achieved total revenue of Rs. 394.39 lacs as against Rs. 2,400.29 lacs in the previous year. The Profit/Loss before Interest, Depreciation and tax (PBIDT) for the year amounted to Rs. 443.597 lacs as against Rs. 701.56 lacs for the previous year. The Net Loss for the year 2013-14 stood at Rs. 1,423.02 lacs as against loss after tax of Rs. 1,677.72 lacs in the previous year.

* Jai Balaji Steels (Purulia) Limited

A Wholly Owned Subsidiary of your Company since 1st November, 2010. It did not commence commercial production as on the date of reporting.

* Jai Balaji Energy (Purulia) Limited

A Wholly Owned Subsidiary of your Company since 1st November, 2010. It did not commence commercial production as on the date of reporting.

The Audited Balance Sheet and Statement of Profit & Loss together with the respective Reports of the Board of Directors'' and the Auditors'' thereon of the said subsidiaries, wherever applicable, for the financial year ended 31st March, 2014 are attached in terms of Section 212 of the Companies Act, 1956.

A statement relating to amount of profit/(loss) of subsidiaries, dealt with and not dealt with in the Companies account, as per Section 212 of the Companies Act, 1956 is also provided in this report.

JOINT VENTURES

Your Company continues to have two joint venture companies namely, M/s. Andal East Coal Company Private Limited and M/s. Rohne Coal Company Private Limited.

* Andal East Coal Company Private Limited

A Joint Venture Company ''M/ s. Andal East Coal Company Private Limited'' was formed in 2009-10 with the Registrar of Companies, West Bengal, in which your Company along with M/ s. Bhushan Steel Limited and M/s Rashmi Cement Limited are venture partners. The said Joint Venture Company was formed in terms of allocation of Andal Non-Coking Coal Block in the State of West Bengal by Ministry of Coal, Government of India. Your Company has 32.79% stake in the coal block.

* Rohne Coal Company Private Limited

A Joint Venture Company ''M/ s. Rohne Coal Company Private Limited'' was formed in 2008-09 with the Registrar of Companies, NCT of Delhi & Haryana, in which your Company along with M/ s JSW Steel Limited & M/ s Bhushan Power & Steel Limited are venture partners. The said Joint Venture Company was formed in terms of allocation of Rohne-Coking Coal Block in the State of Jharkhand by Ministry of Coal, Government of India. Your Company has 6.90% stake in the coal block.

Both the Joint Venture Companies are in the process of setting up coal mining facilities at their respective coal blocks.

LISTING

The equity shares of your Company continue to be listed on the National Stock Exchange of India Limited (NSE), BSE Limited (BSE) and The Calcutta Stock Exchange Limited (CSE). Both NSE and BSE have nationwide terminals which enable the shareholders / investors to trade in the shares of your Company from any part of the country without any difficulty.

Further, during the year under reporting, your Company had applied for listing and trading approvals to the Stock Exchanges where shares of the Company are listed in respect of 34,95,000 equity shares of Rs. 10/- each allotted to the two promoter group companies viz. M/ s. Hari Management Limited (81,00,000 warrants) and M/ s. Enfield Suppliers Limited (19,00,000 warrants) upon conversion of 34,95,000 warrants.

Subsequently, final listing and trading approvals was granted to your Company by the Stock Exchanges, in respect of the aforesaid equity shares post which the listed equity capital of your Company stood at Rs. 67,27,64,860 divided into 6,72,76,486 equity shares of Rs. 10/- each.

Further, post the allocation of 65,05,000 equity shares to M/ s. Hari Management Limited upon conversion of the remaining 65,05,000 convertible warrants, your Company had applied for listing and trading approval to the Stock Exchanges in respect of the aforesaid equity shares. The listing approval in respect of the said equity shares has been granted to your Company by the Stock Exchanges post which the listed equity capital of your Company stands at Rs. 73,78,14,860 divided into 7,37,81,486 equity shares of Rs. 10/- each.

Your Company has paid the annual listing fees for the year 2014 - 15 to the abovementioned Stock Exchanges.

DEMATERIALISED SHARES

The dematerialised shares of your Company are maintained by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

During the year under reporting, your Company has received confirmation of dematerialisation and admission in NSDL and CDSL of 34,95,000 equity shares of Rs. 10/- each allotted to the two promoter group companies viz. M/ s. Hari Management Limited (81,00,000 warrants) and M/s. Enfield Suppliers Limited (1,900,000 warrants) upon conversion of 3,495,000 warrants as well as 65,05,000 equity shares of Rs. 10/- each allotted to M/s. Hari Management Limited upon conversion of the remaining 65,05,000 warrants.

Also, your Company has paid the annual custodial fees for the financial year 2014-15 to NSDL and CDSL.

PROSPECTS

The speed and degree of changes in the global economy and the increasingly complex interplay of factors influencing a more globally integrated steel business make horizon watching essential. In 2013 world steel demand grew higher than previous forecasts due to a stronger than expected performance in the developed world in the second half of the year. At the end of 2013, global industrial production indicators showed a definite upswing in sentiment, with 3% month on month growth which is further expected to grow in 2014 with a forecasted growth of about 4% as compared to 1.9% in 2013. Overall, the global economic outlook was positive with industrial production forecast to grow by 4% in 2014. Global steel demand increased by an estimated 3.2 % in 2013 as compared to 2012, largely due to increased infrastructure and construction activity. However, growth in emerging markets slowed down in 2013 due to weak demand especially in developed countries and tighter financial conditions.

India has become the second best in terms of growth amongst the top ten steel producing countries in the world and a net exporter of steel during 2013-14. The Indian steel sector contributes nearly 2% of the GDP (Gross Domestic Product) and employs over 5 lacs people. In 2013, India remained the 4th largest steel producing country in the world since 2010, behind China, Japan and the US and is expected to become the 2nd largest producer of crude steel in the world by 2015.

Steel is crucial to the development of any modern economy and is considered to be the backbone of human civilization. The level of per capita consumption of steel is treated as an important index of the level of socio-economic development and living standards of the people of any country and thus is a major contributor to the overall economic development of every nation. India is bestowed with large resources of iron ore which occur in different geological formations. India is the world''s largest producer of sponge iron. Trend indicate that blast furnace route of iron making capacity would continue to dominate the iron production scenario in India. India is almost self sufficient in iron ore and to meet the future projected targets the existing raw-materials are to be utilized efficiently.

The Indian economy''s outlook for 2013- 14 can be viewed as cautiously optimistic. The growth rate of the economy improved from 4.4 per cent in quarter 1 in the fiscal year 2013-14 to 4.8 per cent in Quarter 2. Compared to Quarter 1, Quarter 2 has evidenced a robust pick-up in the growth of the agricultural sector and a gradual recovery in the industrial sector. In India, steel demand is expected to grow by 3.3 per cent to 76.2 million tonnes in 2014, following a 1.8 per cent growth in 2013 as per the short-range outlook for 2014 and 2015 of the world steel association.

Despite the challenging environment in which the steel industry operates, there are a number of factors that are leading to improved conditions for steel companies. The optimistic employment scenario and rising income levels and continuity of the developmental projects around the world would strengthen economy growth and your Company believes in focussing on its long term growth strategies in order to secure its long-term competitive position in the industry.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The relevant information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure forming part of this Annual report.

INSTALLED CAPACITY AND ACTUAL PRODUCTION

Your Company has an integrated steel plant and manufactures different products in Steel sector. Your Company''s cumulative product wise installed capacity and actual production comprise of the following:

Product Annual Installed Actual Production (M.T)# Capacity (M.T) 2013-14 2012-13 2013-14 2012-13 (Nine Months)

Sponge Iron 345,000 345,000 197,211 136,418

Pig Iron 509,250 509,250 273,166 208,010

Steel Bars/Rods 260,000 260,000 66,037 60,518

Billet/MS Ingot 906,230 906,230 280,162 262,920

Ferro Alloys 106,618 106,618 16,807 29,305

Ductile Iron Pipe 240,000 240,000 58,772 41,449

Power 101.10 101.10 239.37 217.48 (MW) (MW) (MU) (MU)

Sinter 608,000 608,000 484,459 382,223

Coke 350,000 350,000 207,935 100,056

# includes production for third party conversion Ferro Alloy 150 M.T (1,499 M.T) and Lam Coke 15,527 (0 M.T) respectively.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) In the preparation of annual accounts for the financial year ended 31st March, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2014 and of the loss of the Company for the year ended on that date;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts for the financial year ended 31st March, 2014, have been prepared on a going concern basis.

INFORMATION PURSUANT TO SEC 217 OF THE COMPANIES ACT, 1956

The Company does not have any employee whose particulars are required to be furnished under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

Your Company has always strived to maintain highest ethical standards and practice sound Corporate Governance. The Board of Directors of your Company strive to take necessary actions to optimize value for various stakeholders and meet their expectations.

Your Company is in compliance with clause 49 of the Listing Agreement with the Stock Exchanges. A Separate Section on Corporate Governance and a certificate from the Auditors of your Company regarding compliance with the requirements of Corporate Governance as stipulated under the said clause, and Management Discussion and Analysis are annexed to this report.

CONSOLIDATED FINANCIAL STATEMENTS

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges, the duly audited Consolidated Financial Statements, conforming to Accounting Standard 21 and 27 issued by the Institute of Chartered Accountants of India, are attached as a part of the Annual Report.

However, while consolidating the accounts of your Company with its Subsidiaries and Joint Ventures, the principle of proportionate consolidation of assets and liabilities to the extent of Company''s Interest in one of the Joint Venture Company viz. Andal East Coal Company Private Limited in which your Company is holding 32.79% equity shares has not been followed as per Accounting Standard 27. Sufficient disclosure in this regard has been made in the Financial Statements which forms part of this Annual Report.

AUDITORS

M/s. S. K. Agrawal & Co., Chartered Accountants, who were appointed as Auditors of your Company in the last Annual General Meeting held on 12th September, 2013 retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. Your Company has received a confirmation from M/s. S. K. Agrawal & Co., Chartered Accountants that their re-appointment, if made, will be within the criteria provided in Section 141 and 139 of the Companies, Act 2013. The Audit Committee and the Board of Directors of your Company recommend the re-appointment of M/s. S. K. Agrawal & Co., Chartered Accountants, as the Auditors of your Company. Therefore, members are requested to consider the re-appointment of M/s. S. K. Agrawal & Co., Chartered Accountants, as Auditors of your Company to hold office from the conclusion of the ensuing AGM until the conclusion of the next AGM based on remuneration as may be fixed subsequently by the Board of Directors.

AUDITORS'' REPORT

The observations made in the Auditors'' Report read with Notes to Accounts are self-explanatory and therefore, do not call for any further elucidation.

COST AUDITORS

The Board of Directors of your Company has appointed M/ s. Mondal & Associates, Proprietor Mr. Amiya Mondal as the Cost Auditor of your Company in accordance with the provisions of Sections 139, 141 and 148 of the Companies Act, 2013 (corresponding to Sections 224 (1B) and 233B of the Companies Act, 1956) read with the Companies (cost records and audit) Rules, 2014 and any other relevant provisions, rules, circulars issued by the Ministry of Corporate Affairs, to carry out audit of cost records of the Company for the financial year 2014-15 at a consolidated remuneration of Rs. 1,20,000/- (excluding applicable taxes) which shall be subject to ratification by the Members at the ensuing Annual General Meeting of your Company.

COST AUDIT REPORT

The Company has filed the Cost Audit Report for the financial year 2012-13 with the Registrar of Companies, Ministry of Corporate Affairs in the prescribed form.

SECRETARIAL AUDIT

In compliance with the provisions of Section 204 of the Companies Act, 2013, the Board of Directors of your Company, at its meeting held on 29th May, 2013, has appointed Shri Sandip Kumar Kejriwal, Practising Company Secretary, as the Secretarial Auditor of your Company to conduct the Secretarial Audit.

DEPOSITS

During the year under review, your Company has not accepted any deposits from the public.

DIRECTORS

In accordance with the provisions of Section 152 of the Companies Act, 2013 (corresponding to Sections 255 & 256 of the Companies Act, 1956) and the Company''s Articles of Association, Shri Shyam Bahadur Singh (holding DIN - 01982407) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

During the year under review, Shri Gourav Jajodia (holding DIN - 00028560) resigned from the directorship of your Company w.e.f. 5th August, 2013. Subsequently, he was appointed as an Additional Director of your Company w.e.f. 20th September, 2013 in terms of Section 260 of the Companies Act, 1956 [corresponding to Section 161(1) of the Companies Act, 2013]. He shall hold office upto the date of the ensuing Annual General Meeting. Your Company has received a notice in writing from a Member under Section 160 of the Companies Act, 2013 (corresponding to Section 257 of the Companies Act, 1956) proposing the candidature of Shri Gourav Jajodia for the office of Director of your Company. In view of his vide experience and qualifications, your Directors recommend his appointment as a Director (Category - Non-Executive Promoter Director) of your Company liable to retire by rotation.

The Board of Directors of your Company at its meeting held on 12th August, 2014, based on the recommendation of the Nomination and Remuneration Committee, appointed Shri Chandra Kant Bhartia (holding DIN - 00192694), as an Additional Director (Category - Independent Director) of the Company with effect from the said date, in terms of Section 161(1) of the Companies Act, 2013 to hold office upto the date of this Annual General Meeting and further recommended his appointment as an Independent Director of the Company, not liable to retire by rotation, to hold office from the date of this Annual General Meeting till 31st March, 2019, in terms of the provisions of Sections 149, 152 and all other applicable provisions, if any, of the Companies Act, 2013, and the rules made therein in read with Schedule IV to the Companies Act, 2013 and the Listing Agreement with the Stock Exchanges. Further, your Company has received a notice in writing from a Member under Section 160 of the Companies Act 2013 (corresponding to Section 257 of the Companies Act, 1956) proposing the candidature of Shri Chandra Kant Bhartia for the office of Director.

In view of his vide experience and qualifications, your Directors recommend the appointment of Shri Chandra Kant Bhartia as Director of your Company not liable to retire by rotation, to hold office from the date of this Annual General Meeting till 31st March, 2019.

Your Company has received a declaration from Shri Chandra Kant Bhartia, that he meets the criteria of independence as provided under Section 149(7) of the Companies Act, 2013 read with SEBI Circular No. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 on Amendments to Clause 49 of the Equity Listing Agreement.

In the opinion of the Board, Shri Chandra Kant Bhartia fulfils the conditions specified in the Companies Act, 2013 and rules made there under for his appointment as an Independent Director of the Company.

Pursuant to the provisions of Sections 149, 152 and all other applicable provisions of the Companies Act, 2013 and the rules made therein read with Schedule IV to the Companies Act, 2013, Shri Amit Kumar Majumdar (holding DIN - 00194123) and Shri Shailendra Kumar Tamotia (holding DIN - 01419527), whose period of office was liable to determination of retirement of Directors by rotation and in respect of whom the Company has received notices in writing from Members in terms of Section 160 of the Companies Act, 2013 (corresponding to Section 257 of the Companies Act, 1956), shall be appointed as Independent Directors of the Company not liable to retire by rotation, to hold office from the date of this Annual General Meeting till 31st March, 2019.

Your Company has received a declaration from Shri Amit Kumar Majumdar and Shri Shailendra Kumar Tamotia, that they meet the criteria of independence as provided under Section 149(7) of the Companies Act, 2013 read with Clause 49 of the Listing Agreement amended vide SEBI Circular No. CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014.

In the opinion of the Board, Shri Amit Kumar Majumdar and Shri Shailendra Kumar Tamotia fulfils the conditions specified in the Companies Act, 2013 and rules made there under for their appointment as Independent Directors of the Company.

Further, your Directors have appointed Shri Manas Kumar Nag (holding DIN - 02058292) as a Nominee Director (Nominee of State Bank of India) w.e.f 12th September, 2013, in order to broad base the expertise of the Board of Directors of your Company.

Shri Krishnava S. Dutt, Shri Ashim Kumar Mukherjee and Shri Satish Chander Gupta have resigned from the directorship of your Company with effect from 14th May, 2013, 13th December, 2013 and 12th February, 2014, respectively. The Board wishes to place on record its sincere appreciation for the sterling contribution rendered by Shri Krishnava S. Dutt, Shri Ashim Kumar Mukherjee and Shri Satish Chander Gupta towards the growth and development of your Company through their wealth of knowledge and experience during their tenure.

All the Directors have filed form MBP-1 with your Company as required under the Companies (Meetings of Board and its Powers) Rules, 2014.

A brief resume of the Directors seeking appointment/ re-appointment at the ensuing Annual General Meeting is incorporated in the Notice calling the said meeting.

KEY MANAGERIAL PERSONNEL (KMP)

Pursuant to the provisions of Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company is required to have the following Whole-time Key Managerial Personnel (KMP) and determine their terms and conditions including remuneration -

a) Managing Director, Chief Executive Officer or Manager or in their absence, a Whole-time director

b) Company Secretary

c) Chief Financial Officer

The Board of Directors of your Company has appointed Shri Aditya Jajodia, Chairman & Managing Director, Shri Ajay Kumar Tantia, Company Secretary as per the requirements of the Companies Act, 1956 & Shri Sanjiv Jajodia, Chief Financial Officer as per the requirements of the Listing Agreement with the Stock Exchanges. However, the aforesaid persons are required to be designated as Key Managerial

Personnel (KMP) in compliance with the relevant provisions of the Companies Act, 2013. Therefore, in order to ensure compliance with the said provisions of the Companies Act, 2013, the Board of Directors of your Company, at its meeting held on 29th May, 2014, has designated the aforesaid persons as KMP w.e.f. the said date.

NOMINATION & REMUNERATION POLICY

The Board of Directors of your Company, at its meeting held on 29th May, 2014, has approved the Nomination & Remuneration Policy on appointment and remuneration of Directors, Key Managerial Personnel and other employees based on the recommendations of the Nomination & Remuneration Committee. The said policy sets out the criteria for determining the qualifications, positive attributes, independence of a director as per Schedule IV of the Companies Act, 2013 as required under Section 178(3) of the said Act.

VIGIL MECHANISM UNDER THE WHISTLEBLOWER POLICY

In compliance with Section 177(9) of the Companies Act, 2013 and rules made there under read with SEBI Circular No CIR/CFD/POLICY CELL/2/2014 dated 17th April, 2014 on Amendments to Clause 49 of the Equity Listing Agreement (effective from 1st October, 2014), the Board of Directors at their meeting held on 29th May, 2014, has adopted a Whistle Blower Policy for Directors and Employees to report their genuine concerns or grievances against any wrong doing in your Company as well as provide them adequate safeguards against victimisation. The employees and directors shall report to the Audit Committee/Chairman of Audit Committee instances of unethical behaviour, actual or suspected, fraud or violation of the Company''s code of conduct or ethics policy including:

a) Manipulation of the data/records of the Company

b) Misuse of company''s properties, assets and resources

c) Abuse of authority

d) Leaking confidential information of the Company

e) Violation of the Company''s code of conduct or any rules/ regulations/laws

f) Forgery/fraud/corruption/bribery

g) Physical/emotional violence

h) Any other matter that might cause financial/non-financial loss to the director/employee of the Company or might impact their goodwill

The said policy has also been made available on the website of the Company viz., www.jaibalajigroup.com

INTERNAL CONTROL AND AUDIT

Internal Control is a part of the day to day management and administration of your Company and is designed to ensure that the significant financial, managerial and operating information that is relevant, accurate and reliable is provided on time. The Internal Audit functions serve to provide independent and objective assurance on the adequacy and effectiveness of the organisation''s risk management, control and governance processes. The Internal Audit functions also assesses opportunities for improvement in business processes, systems and controls and provides recommendations designed to add value to the organisation and follows up on the implementation of the agreed audit recommendations. Your Company has various oversight Committees with their defined roles and responsibilities to ensure appropriate internal control checks and maintain balance. The Audit Committee of your Company comprises of eminent professionals who are well versed with the financial management. The Audit Committee actively reviews the adequacy and effectiveness of the internal audit functions of your Company and monitors the implementation of the same.

RISK MANAGEMENT

The Board of Directors of your Company at its meeting held on 29th May, 2014, has approved the Risk Management Policy of the Company. Risk Management is an integral part of your Company''s business and your Company takes the endeavour to develop appropriate risks mitigation measures so as to address the threats posed by the business environment which affects or might affect its growth.

Your Company is committed to managing risks in an effective & proactive manner since it recognizes risks as an integral and unavoidable component of business. It adopts systematic approach to mitigate risks associated with accomplishment of objectives, operations, revenues and regulations. Your Company believes that this would ensure mitigating steps proactively and help to achieve its objectives. Some of the risks and steps taken by the management to mitigate them have been highlighted in the Risk Management policy of your Company.

HUMAN RESOURCE MANAGEMENT

The Company is dedicated to have an optimum level of human resource and believes in the concept of right talent at the right job since it considers human capital to be the most valuable asset of your Company. We nurture our human resource and provide them a growth oriented and challenging work environment thereby achieving our organisational goals. Your Company acknowledges the tremendous contribution of all its employees towards its growth in leading, thinking, working, motivating etc. Human Resources development practices in your company are guided by the principles of consistency and fairness in order to ensure a productive and innovative work place.

The management continuously urges for building harmonious relations and strengthening the human resource system by making available better tools, technology and techniques at the workplace to maximise the skills of the workforce, thus enhancing a competitively superior position in terms of human capital.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company views Corporate Social Responsibility (CSR) as a management strategy to integrate social and environmental concerns in its business operations and interactions with its stakeholders. Your Company strives to achieve a balance between economic, environmental and social imperatives, thus improving the quality of life of the workforce and their families as well as of the local community and society at large and simultaneously contributing to economic development.

Pursuant to Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, a CSR Committee of your Company has been constituted on 29th May, 2014.

The Board of Directors of your Company at its meeting held on 29th May, 2014, has approved the CSR policy based on the recommendations of the CSR Committee.

As per the requirement of Section 135 of the Companies Act, 2013, the companies specified therein are required to spend at least two percent of the average net profits made during the three immediately preceding financial years towards CSR activities.

Your Company has incurred losses during the immediately preceding three financial years, hence, the said requirement of spending at least two percent of the average net profits made during the three immediately preceding financial years towards CSR activities is not applicable to your Company for the current financial year i.e. 2014-15. However, as a good practice and for better governance, your Company continues to strive towards spending for CSR the way it has been doing in the past years.

As a part of its policy, your Company undertakes a range of activities to improve the living conditions of people in the neighbourhood of all its plants. These activities include environment protection, healthcare, education, rural development etc. Some of the CSR activities undertaken by your Company during the year are as under:

Environment

* Plantation of trees in and around the manufacturing plants and in the adjoining villages

* Pest Control incentives in nearby villages

Healthcare

* Free medical treatment of employees

* Rural development

* Refilling the empty well at nearby villages in the summer season etc.

Social

* Setting up of flood lights

* Arrangement of pandals and lunch for mass marriage ceremony

* Contribution to the villagers for offering puja

* Providing financial assistance for organisation of sports and cultural programmes

* Book Distribution among the poor students

Corporate Social Responsibility and Sustainable Development will continue to remain one of the leading priorities of your Company through which it shall consistently strive to touch lives and make a difference.

Acknowledgement

Your Directors take this opportunity to place on record their sincere gratitude to its customers, dealers, suppliers, investors, members, financial institutions/ banks, Central Government, State Government, all regulatory and government authorities and all other business associates for their continued support and co-operation extended by them to the Company.

Your Directors express deep appreciation for the excellent contribution of its employees, workers, staff and executives of the Company by means of their sincere and dedicated hard work during the year under review which has been instrumental to the growth of your Company.

On behalf of the Board of Directors

Aditya Jajodia Place: Kolkata Chairman & Managing Director Date : 12th August, 2014 (DIN: 00045114)


Mar 31, 2013

Dear Members

The Directors are pleased to present the fourteenth Annual Report of your Company along with the audited accounts for the nine months financial year ended 31st March, 2013.

FINANCIAL PERFORMANCE

(Rs.in lacs)

Particulars Nine months Fifteen months period ended period ended March 31st, 2013 June 30th, 2012

Income 156,657.62 295,901.21

Less: Expenses 161,997.96 288,909.67

Finance Costs 17,644.70 31,999.68

Depreciation and amortization expenses 8,612.67 13,875.94

Profit / (Loss) before exceptional and extraordinary items and Tax (31,597.71) (38,884.08)

Less : Exceptional items

Profit / (Loss) before extraordinary items and Tax (31,597.71) (38,884.08)

Less : Extraordinary items

Profit / (Loss) before Tax (31,597.71) (38,884.08)

Less : Tax expense

Current Tax 1.47

MAT Credit Entitlement

Deferred Tax Credit 10,286.40 11,278.46

Profit/(Loss) after tax (21,312.78) (27,605.62)

Earnings per share (Nominal value per share Rs. 10/-) (33.42) (43.28) Basic and Diluted

FINANCIAL HIGHLIGHTS

During the year 2012-13, your company incurred loss which can be mainly attributable to raw material price inflation, rising borrowing costs and other global factors. The Loss before exceptional and extraordinary items and tax was Rs. 31,597.71 lacs as compared to loss of Rs. 38,884.08 lacs in the previous year. The net loss for the year under review (nine months) was Rs. 21,312.78 lacs againt loss after tax of Rs. 27,605.62 lacs in the previous year (fifteen months).

FINANCIAL YEAR

The previous financial year, 2011-12 was extended by three months thereby ending on 30th June, 2013. The Financial Year under reporting ended on 31st March, 2013, being a period of nine months, commencing on 1st July, 2012 ending on 31st March, 2013. Henceforth, the financial year of the Company shall commence on 1st April and end on 31st March every year, if not otherwise decided by the Board in any particular financial year.

DIVIDEND

In view of losses incurred and requirement of capital, considering the capital intensive nature of the industry, for the working of the Company, your Directors did not recommended dividend for the financial year 2012-13.

PREFERENTIAL ISSUE

During the year under reporting, no GDRs/ADRs/Warrants or any Convertible Instruments were issued.

However, the Company has issued and allotted on 4th July, 2013, 10,000,000 warrants to promoter group companies namely M/s. Enfield Suppliers Limited (1,900,000 warrants) and M/s. Hari Management Limited (8,100,000 warrants) on a private placement basis at an issue price of Rs. 50/- each.

Each warrant is convertible into one equity share within a period of 18 months from the date of allotment, in one or more tranches, at a conversion price of Rs. 50/- per equity share (including a premium of Rs. 40/- per share), which is a price greater than the price determined as per Regulation 76 of Chapter VII of SEBI (ICDR) Regulations, 2009.

The Board at its meeting held on 5th August, 2013, has fully and partly converted the said warrants, by way of allotment of 3,495,000 equity shares, being 1,900,000 equity shares to M/s. Enfield Suppliers Limited and 1,595,000 equity shares to M/s. Hari Management Limited, pursuant to their respective application for conversion of warrants. After the said conversion, the equity share capital of your company stands at Rs. 67,264,860/- divided into 6,726,486 equity shares of Rs. 10/- each.

After the full conversion of remaining warrants, if exercised, the equity capital of the Company will increase to Rs. 737,814,860/-. The shares so issued shall rank pari-passu in all respects, including as to dividend, with the existing shares of the Company.

EXPANSION & PROJECTS

Your Company continues its journey to deliver value for customers and to all the stakeholders of the Company by improving its performance in safety, quality, productivity, environment and people development through knowledge transmission.

During the year under reporting, your company''s project for expansion of 350000 MTPA Coke Oven Plant along with Waste Heat Recovery Boiler of 80 TPH completed and capitalised. The said coke oven plant is presently running satisfactorily.

The DRI Plant of 60000 MT & coal washery in subsidiary company M/s Nilachal Iron & Power Limited started its commercial production during the year under review. The Dumri Coal Block has also received Environmental clearance and Forest Go Certificate. Forest clearance stage one has been received and stage two is under process.

The Company''s products meet stringent quality parameters and which is gaining market share comprising of private, institutional, non-institutional and government body buyers. This achievement highlights the technical and project execution skills of the management of your Company to successfully execute large projects within record time.

CORPORATE DEBT RESTRUCTURING

Your Company''s Corporate Debt Restructuring scheme, which was approved vide letter of approval dated 20th September, 2012 from CDR Empowered Group/CDR Cell, has been implemented during the year.

SUBSIDIARIES

Your Company continues to have three wholly owned subsidiaries namely, M/s. Nilachal Iron & Power Limited, M/s. Jai Balaji Steels (Purulia) Limited & M/s. Jai Balaji Energy (Purulia) Limited.

¦ Nilachal Iron & Power Limited

A wholly owned subsidiary of your Company since 26.10.2007, having its manufacturing plant located in Kandra near Jamshedpur, Jharkhand. Currently, it manufactures sponge iron, and work on increasing its capacity by 60,000 tonnes per annum has been initiated. The company has been allotted the Dumri Coal Block for captive mining from the Government of India, about 300 kms from the plant.

¦ Jai Balaji Steels (Purulia) Limited

Wholly owned subsidiary of the Company. It did not commence commercial production as on the date of reporting.

¦ Jai Balaji Energy (Purulia) Limited

Wholly owned subsidiary of the Company. It did not commence commercial production as on the date of reporting.

The Audited Balance Sheet and Statement of Profit & Loss Account along with the respective Reports of the Board of Directors'' and the Auditors'' Report thereon of the said subsidiaries, wherever applicable, for the financial year ended 31st March, 2013 are attached in terms of Section 212 of the Companies Act, 1956.

A statement relating to amount of profit/(loss) of subsidiaries, dealt with and not dealt with in the Companies account, as per Section 212 of the Companies Act, 1956 is also provided in this report.

JOINT VENTURES

Your Company continues to have two Joint Venture Companies namely, M/s. Andal East Coal Company Private Limited and M/s. Rohne Coal Company Private Limited.

¦ Andal East Coal Company Private Limited

A Joint Venture Company

''M/s Andal East Coal Company Private Limited'' was formed in 2009-10 with the Registrar of Companies, West Bengal, in which the Company along with M/s Bhushan Steel Limited and M/s Rashmi Cement Limited are venture partners. The said Joint Venture Company was formed in terms of allocation of Andal Non- Coking Coal Block in the State of West Bengal by Ministry of Coal, Government of India.

¦ Rohne Coal Company Private Limited

A Joint Venture Company ''M/s. Rohne Coal Company Private Limited'' was formed in 2008-09 with the Registrar of Companies, NCT of Delhi & Haryana, in which the company along with M/s. JSW Steel Limited & M/s. Bhushan Power & Steel Limited are venture partners. The said Joint Venture Company was formed in terms of allocation of Rohne-Coking Coal Block in the State of Jharkhand by Ministry of Coal, Government of India.

Both the Joint Venture Companies are in the process of setting up coal mining facilities at respective coal blocks.

LISTING

The equity shares continue to be listed on the National Stock Exchange of India Limited (NSE), BSE Limited (BSE) and The Calcutta Stock Exchange Limited (CSE). Both NSE and BSE have nationwide terminals which enable the shareholders / investors to trade in the shares of the Company from any part of the country without any difficulty. The Company has paid annual listing

fees for the year 2013 – 2014 to the National Stock Exchange of India Limited (NSE), BSE Limited (BSE) and The Calcutta Stock Exchange Limited (CSE).

DEMATERIALISED SHARES

The dematerialised shares of the Company are maintained by National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). The company has paid the annual fees for the year 2013-2014 to the NSDL and CDSL.

PROSPECTS

The global economy appears to be transitioning toward a period of more stable but slower growth. The economic conditions improved modestly in the third and fourth quarter of 2012, however, a broad set of indicators for global industrial production and trade suggests that global growth did not strengthen further. A sharp pullback in demand of steel in the third quarter has pushed up steel consumption in the fourth quarter.

Steel industry is vital for overall economic development of every nation as it is one of the core sectors. Despite all the headwinds and lingering difficulties steel industry has delivered robust growth rate. However their projects after hitting several road blockades are yet to generate output. The steel sector contributes to nearly 2 percent in the GDP and employs over 5 lakh people. Indian Steel industry is poised for greater growth catapulating India to the league of highest steel consuming nations of the world in the next decade.

The Indian economy''s outlook for 2013- 14 can be viewed as cautiously optimistic. Backed by policy actions announced in the recent budget, it is

projected that India would return to the robust growth path of 7-8% over the next two to three years. Though the Steel demand was low in 2012-13 due to continuing economic crisis, however, spurt in demand is expected in 2014- 15. Domestic steel demand is expected to be muted in 2013-14 and profit margins in financial year 2013-14 to remain broadly similar to the financial year 2013-14. This is mainly due to persistent high cost of steel production.

Your company reasonably believes that the turbulent conditions during the year under review, which did not allow the potential of the operations to be fully realized, will not be a lasting phenomenon. In order to secure its long-term competitive position, your Company will continue to focus on its growth strategies.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The relevant information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure forming part of this Annual report.

INSTALLED CAPACITY AND ACTUAL PRODUCTION

Your company has an integrated steel plant and manufactures different products in Steel sector. The Company''s cumulative product wise installed capacity and actual production comprise of the following:

Annual Installed Capacity (M.T.) Actual Production (M.T.) # Product 2012-13 2011-12 2012-13 2011-12 (Nine Months) (Fifteen Months)

Sponge Iron 345,000 345,000 136,419 262,293

Pig Iron 509,250 509,250 208,010 498,803

Steel Bars/Rods 260,000 260,000 60,518 97,850

Billet/MS Ingot 906,230 906,230 262,920 420,223

Ferro Alloys 106,618 106,618 29,305 68,746

Ductile Iron Pipe 240,000 240,000 41,449 91,788

Power 101.10 101.10 217.48 505.91

Product (MW) (MW) (MU) (MU)

Sinter 608,000 608,000 382,223 795,643

Coke 350,000 100,056

# includes production for third party conversion 4,499 M.T (14,101 M.T.) and NIL (6,674 M.T.) in respect of Ferro Alloy and Steel Bars/Rods respectively.

# Coke oven production includes trial run production 81,808 M.T.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) In the preparation of annual accounts, the applicable accounting standards have been followed;

ii) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the statement of affairs of the Company as at 31st March, 2013 and of the loss of the Company for the year ended on that date;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

INFORMATION PURSUANT TO SEC 217 OF THE COMPANIES ACT, 1956

The Company does not have any employee whose particulars are required to be furnished under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS

Your company has complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A report on the Corporate Governance practices, the Auditor''s Certificate regarding compliance of the conditions of Corporate Governance, and Management Discussion and Analysis are annexed to this report.

CONSOLIDATED FINANCIAL STATEMENTS

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges, the duly audited Consolidated Financial Statements, conforming to

Accounting Standard 21 and 27 issued by the Institute of Chartered Accountants of India, are attached as a part of the Annual Report.

AUDITORS

The Joint statutory auditors of your Company, M/s. U. Narain & Co., Chartered Accountants, and M/s. Rashmi & Co., Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and have expressed their unwillingness to be re- appointed as statutory auditors.

The Company has received a notice from a shareholder under Section 225 of the Companies Act, 1956 nominating M/s. S. K. Agrawal & Co., Chartered Accountants of 4A, Council House Street, Kolkata-700 001, as Statutory Auditors of the Company. The said M/s. S. K. Agrawal & Co., Chartered Accountants have given their consent to act as Statutory Auditors of the Company, if appointed, and has further confirmed that the said appointment would be in conformity with the provisions of Section 224(1B) of the Companies Act, 1956.

Your directors recommend appointment of M/s. S. K. Agrawal & Co., as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting tiil the conclusion of the next Annual General Meeting.

AUDITORS'' REPORT

The observations made in the Auditors'' Report read with Notes to Accounts are self-explanatory and therefore, do not call for any further elucidation.

COST AUDITORS

Your Board has appointed M/s. Mondal & Associates, Proprietor Mr. Amiya Mondal as Cost Auditor of the Company in accordance with the provisions of Section 233B of the Companies Act, 1956 read with Cost Accounting Records (Steel Plant) Rules, 1990, The Companies (Cost Accounting Records) Rules, 2011, The Companies (Cost Audit Report) Rules, 2011, and relevant circulars issued by the Ministry of Corporate Affairs, to carry out audit of cost records of the Company for the financial year 2013-14. The same has subsequently been approved by the Central Government.

COST AUDIT REPORT

The Company has filed the Cost Audit Report for the financial year 2011-12 with the Registrar of Companies, Ministry of Corporate Affairs in the prescribed form.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Shri Satish Chander Gupta and Shri Ashim Kumar Mukherjee, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The Board has re-appointed Shri Sanjiv Jajodia, whose term as the Whole-time Director of the Company expired on 30th April, 2013, as the Whole-time Director for a further period of 5 (five) years with effect from 1st May, 2013, subject to the approval of shareholders and on the terms and conditions as specified in the agreement entered into between Shri Sanjiv Jajodia and the Company.

Your Directors appointed Shri Shailendra Kumar Tamotia w.e.f. 15th May, 2013 as an Additional Directors of the Company. He shall hold office upto the date of ensuing Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 proposing the candidature of Shri Shailendra Kumar Tamotia as Director of the Company. In view of his vide experience and qualifications your Directors recommend his appointment. Shri Shailendra Kumar Tamotia, if appointed, will continue to act as an independent director of the Company.

Shri Krishnava S. Dutt and Shri Gourav Jajodia have resigned from the directorship of the Company with effect from 14th May, 2013 and 5th August, 2013, respectively. The Board wishes to place on record its sincere appreciation for the valuable contribution rendered by Shri Krishnava S. Dutt and Shri Gourav Jajodia during their tenure.

A brief resume of the Directors seeking re–appointment and appointment in the ensuing Annual General Meeting is incorporated in the Notice of the ensuing Annual General Meeting.

HUMAN RESOURCE MANAGEMENT

The Company is dedicated to have an optimum level of human resource and believes in the concept of right talent at the right job. We nurture our human resource and provide them a growth oriented and challenging work environment thereby achieving our organisational goals. The Company acknowledges the tremendous contribution of all its employees towards its growth in leading, thinking, working, motivating, etc.

The management continuously urges for building harmonious relations and strengthening the human resource system by making available better tools, technology and techniques at the workplace to maximise the skills of the workforce. The Company gives proper opportunities to its employees to improve their skills leading to consistent improvements in systems as well as to ensure the Company has the right competency in its workforce.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is viewed by company as operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business by contributing to economic development and improving the quality of life of the workforce and their families as well as of the local community and society at large.

As part of its policy for corporate social responsibility, the Company undertakes a range of activities to improve living conditions of people in the neighbourhood of all its plants. These activities include environment protection, healthcare, education, rural development and some of the activities undertaken during the year are as under:

? Environment

¦ Plantation of trees in and around the manufacturing plants and in the adjoining villages.

¦ Water sprinkling on road at nearby villages.

¦ Cleaning and maintaining of plantation area at nearby villages.

? Healthcare

¦ Distribution of free medicines.

¦ Provides ambulance services for nearby villagers in emergency conditions.

? Rural Development

¦ Maintaining street lights at nearby villages.

¦ Financial assistance for providing water and electricity.

? Social

¦ Provided financial assistance by way of donations to various local agencies during festive occasions.

¦ Provided financial help to District Sainik Welfare.

¦ Provided financial assistance for organisation of sports championships.

Corporate Social Responsibility and Sustainable development will continue to remain one of the leading priorities of your Company through which it shall consistently strive to touch lives and make a difference.

ACKNOWLEDGEMENT

Your Directors take this opportunity to place on record their sincere gratitude to its customers, dealers, suppliers, investors, members, financial institutions/banks, Central Government, State Government, all regulatory and government authorities and all other business associates for their continued support and co- operation extended by them to the Company.

Your Directors express deep appreciation for excellent contribution of the employees, workers, staff and executives of the Company by means their sincere and dedicated hard work during the year under review which has been instrumental to the growth of your company.

On behalf of the Board of Directors

Aditya Jajodia

Chairman & Managing Director

Place: Kolkata

Date: 12th August, 2013


Jun 30, 2012

Dear Members

The Directors are pleased to present the thirteenth Annual Report of your Company along with the audited accounts for the financial year ended 30th June, 2012.

Financial Performance

(Rs. in lacs) Particulars 15 months 12 months period ended period ended June 30, 2012 March 31, 2011

Income 295,901.21 218,796.87

Less: Expenses 288,909.67 183,577.90

Finance Costs 31,999.68 15,637.23

Depreciation and amortization expenses 13,875.94 8,280.65

Profit / (Loss) before exceptional and extraordinary items and Tax (38,884.08) 11,301.09

Less : Exceptional items -- --

Profit / (Loss) before extraordinary items and Tax (38,884.08) 11,301.09

Less : Extraordinary items -- --

Profit / (Loss) before Tax (38,884.08) 11,301.09

Less : Tax expense

Current Tax -- 2,510.22

MAT Credit Entitlement -- (2,490.29)

Deferred Tax 11,278.46 3,886.07

Profit/Loss after tax (27,605.62) 7,395.09

Earnings per share (Nominal value per share Rs. 10/-) (43.28) 11.60 Basic and Diluted





Financial Highlights

During the year 2011-12, your Company achieved a total revenue of 295,901.21 lacs as compared to Rs. 218,796.87 lacs in the previous year which reflects a growth of around 35.24%. Despite moderate increase in turnover, your company incurred loss during the year under review which was mainly due to hike in the price of raw materials, rising borrowing costs and other global factors. The Loss before exceptional and extraordinary items and tax was Rs. 38,884.08 lacs as compared to profit before exceptional and extraordinary items and tax of Rs. 11,301.09 lacs in the previous year. The net loss for the year under review was Rs. 27,605.62 lacs against profit of Rs. 7,395.09 lacs in the previous year.

Financial Year

The financial year of the Company

2011-12 has been extended by three months such that the Financial Year shall commence from 1st April, 2011 and will end upon completion of 15 months there from on 30th June, 2012.

The financial year 2012-13 shall comments on 1st July, 2012 and end on 31st March, 2013.

Dividend

In view of losses incurred and requirement of capital, considering the capital intensive nature of the industry, for the working of the Company, your Directors have not recommended dividend for the financial year 2011-12.

Awards and Accolades

Your directors are pleased to share with you that The Banaras Hindu University has bestowed upon Shri Amit Kumar Majumdar an independent director of the Company its "Distinguished Alumnus Award" in 2012 for his outstanding achievements in the field of Metallurigical Engineering of the said university.

Your Company has received 'One Leaf Award' of 23% Score and 10th Ranking and was one of the three Companies rated in this regard from the State, for its Key plus points as high blast furnace productivity, good safety performance and relatively better solid waste management practices by the ratings released on 4th June, 2012. The ratings were released by Planning Commission Deputy Chairperson, Montek Singh Ahluwalia and Jayanthi Nataranjan, Union Minister of State for environment & forests .

Your Company has received Carbon

Credit, Volume of CERs: 55730 (Tradable Volume: 54615) on account of Power generated from its Waste Heat Recovery Boilers by the UNFCCC and first monetary receipt of approximately Rs. 33 million (Rupees thirty three millions only) on account of sale of 54615 units of Carbon Credit.

Your Company has received a Certificate of Conformity for production of Ductile Iron Pipes for water pipelines, which is in Conformity against the requirements of the following standards: ISO 2531:2009, EN 545:2010 by BUREAU VERITAS Certification. Further a License has been granted to use the Kite mark in accordance with the Kite mark License as approved by the Registrar under the Trade Marks Act, 1944 in respect of BS ISO 2531, ductile iron pipes, fittings, accessories and their joints for water applications.

Expansion & Projects

Your Company continues its journey to deliver value for customers and to all the stakeholders of the Company by improving its performance in safety, quality, productivity, environment and people development through knowledge transmission.

The Company's planned expansion of 350000 MTPA Coke Oven Plant along with Waste Heat Recovery Boiler of 80 TPH is in advanced stage and infrastructure work of roads & drains for the entire plant is commissioned.

The DRI Plant of 60000 MT & coal washery in subsidiary company M/s Nilachal Iron & Power Limited is already commissioned and Forest Clearance certificate, pollution clearance and clearance from the Ministry of Environment has been received. The Dumri Coal Block has also received Environmental Clearance and Fresh Go Certificate.

The Company's products meet stringent quality parameters and are gaining market share comprising of private, institutional, non-institutional and government body buyers. This achievement highlights the technical and project execution skills of the management of your Company to successfully execute large projects within record time.

Corporate Debt Restructuring

Your Company has applied for restructuring of its debts and has received the Corporate Debt Restructuring letter of approval dated 20th September, 2012 from CDR Empowered Group/CDR Cell pursuant to the CDR package approved by the CDR empowered group.

Subsidiaries

Your Company has three wholly owned subsidiaries namely, M/s. Nilachal Iron & Power Limited, M/s. Jai Balaji Steels (Purulia) Limited & M/ s. Jai Balaji Energy (Purulia) Limited.

The Audited Balance Sheet and Statement of Profit & Loss account along with the Auditors' Report thereon and the respective Reports of the Board of Directors' of the said subsidiaries for the financial year ended 31st March, 2012 are attached in terms of Section 212 of the Companies Act, 1956.

Joint Ventures

Andal East Coal Company Private Limited

A Joint Venture Company M/s. Andal East Coal Company Private Limited was formed in 2009-10 with the Registrar of Companies, West Bengal, in which the Company along with M/ s. Bhushan Steel Limited and M/ s. Rashmi Cement Limited are venture partners. The said Joint Venture Company was formed in terms of allocation of Andal Non-Coking Coal Block in the State of West Bengal by Ministry of Coal, Government of India. Your Company has 32.79% stake in the coal block.

Rohne Coal Company Private Limited

A Joint Venture Company M/s. Rohne Coal Company Private Limited was formed in 2008-09 with the Registrar of Companies, NCT of Delhi & Haryana, in which the Company along with M/ s. JSW Steel Limited & M/s. Bhushan Power & Steel Limited are venture partners. The said Joint Venture Company was formed in terms of allocation of Rohne- Coking Coal Block in the State of Jharkhand by Ministry of Coal, Government of India. Your Company has 6.90% stake in the coal block.

Both the Joint Venture Companies are in the process of setting up coal mining facilities at respective coal blocks.

Listing

The equity shares continue to be listed on the National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and The Calcutta Stock Exchange Limited (CSE). Both NSE and BSE have nationwide terminals which enable the shareholders / investors to trade in the shares of the Company from any part of the country without any difficulty. The Company has paid annual listing fees for 2012 - 2013 to the National Stock Exchange of India Limited (NSE), Bombay Stock Exchange Limited (BSE) and The Calcutta Stock Exchange Limited (CSE).

Prospects

The world steel demand is directly correlated to growth in world real GDP. According to IMF real GDP growth is forecast to slow to about 3.5% in 2012, from about 4% in 2011and to return to 4% in 2013. In 2011, according to World Steel Association, global steel consumption has risen by 6 percent and is estimated to increase at approximately 5 percent to reach

1.4 billion tonnes in 2012.

The Indian economy grew at 6.5 per cent in 2011-12, after having grown at the rate of 8.4 per cent in each of the two preceding years. This indicates a slowdown compared not just to the previous two years but 2003 to 2011 (except 2008-09). Steel Capacity is projected to be around 200 million tons by 2020. The main drivers being the infra projects, railways & new constructions. India has reached 4th rank among the steel producing nations.

The outlook for 2012 remains cautious. Despite good start in 2011, the global economy entered an uneven and uncertain territory in the second half of the year. Consequent to the turmoil in euro zone, the growth in developed economies may continue to disappoint, expanding by only about 1% percent in 2012 and by 2 percent in 2013.

Your company reasonably believes that the turbulent conditions during the year under review, which did not allow the potential of the operations to be fully realized, will not be a lasting phenomenon. In order to secure its long-term competitive position, your Company will continue to focus on its growth strategies.

Particulars of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo The relevant information pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosures of Particulars in the Report of Board of Directors) Rules, 1988, pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the Annexure forming part of this report.

Directors' Responsibility Statement

In terms of the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors hereby confirm that:

i) In the preparation of annual

INSTALLED CAPACITY AND ACTUAL PRODUCTION

Your company manufactures different products in Steel sector. The Company's cumulative product wise installed capacity and actual production comprise of the following:



Installed Capacity (M.T.) Actual Production (M.T.) # 2011-12 (15 months) 2010-11 (12 months) 2011-12 (15 months) 2010-11 (12 months)

Sponge Iron 345,000 345,000 262,293 216,145

Pig Iron 509,250 509,250 498,803 378,786

Steel Bars/Rods 260,000 260,000 97,850 131,685

Billet/MS Ingot 906,230 906,230 420,223 357,075

Ferro Alloys 106,618 106,618 68,746 60,210

Ductile Iron Pipe 240,000 240,000 91,788 26,319

Power 101.10 101.10 505.91 400.73 (MW) (MW) (MU) (MU)

Sinter 608,000 608,000 795,643 614,830



# Includes production for third party conversion 14,101 M.T. (16,850 M.T.) and 6,674 M.T. (12,283 M.T.) in respect of Ferro Alloys and Steel Bars /Rods respectively. accounts, the applicable accounting standards have been followed;

ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2012 and of the loss of the Company for the year ended on that date;

iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv) The annual accounts have been prepared on a going concern basis.

Particulars of Employees

The Company does not have any employee whose particulars are required to be furnished under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended from time to time.

Corporate Governance and Management Discussion and Analysis

Your company has complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. A report on the Corporate Governance practices, the Auditor's Certificate regarding compliance of the conditions of Corporate Governance and Management Discussion and Analysis Report are annexed to this report.

Consolidated Financial Statements

In terms of Clause 32 of the Listing Agreement with the Stock Exchanges, the duly audited Consolidated Financial Statements, conforming to Accounting Standard 21 and 27 issued by the Institute of Chartered Accountants of India, are attached as a part of the Annual Report.

Auditors

The Statutory Auditor of your Company M/s. S. R. Batliboi & Co., Chartered Accountants, who were appointed as Statutory Auditors of the Company in the last Annual General Meeting held on 21st September, 2011, resigned from being the Statutory Auditor of the Company during the year and subsequently, Joint Statutory Auditors namely, M/ s. U. Narain & Co., Chartered Accountants and M/ s. Rashmi & Co., Chartered Accountants were appointed by the members at their Extra-Ordinary General Meeting held on 9th May, 2012. Your Company wishes to place on record its sincere appreciation for valuable contribution of M/s. S. R. Batliboi & Co.

The Joint Statutory Auditors of your Company, M/ s. U. Narain & Co., Chartered Accountants and M/ s. Rashmi & Co., Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting and being eligible, offers themselves for re-appointment.

Auditors' Report

The Board's clarifications to certain observations made in the Auditors Report for the year under review are as under:

The Auditors have pointed out in the Annexure to the Auditors' Report at para ix(a) that the Company is generally regular in depositing undisputed statutory dues except for delay in certain cases.

The management takes due care for deposit of all applicable statutory dues in time, however for certain cases there has been unavoidable circumstances of delay. The manage- ment has taken due measures to avoid such delays.

The Auditors have pointed out in the Annexure to the Auditors' Report at para xi that the Company has delayed in repayment of dues to banks during the year.

Due to temporary cash flow mismatch there has been delay in repayments of dues to Banks.

The other observations made in the Auditors' Report read with Notes to Accounts are self-explanatory and therefore, do not call for any further elucidation.

Cost Auditors

Your Board has appointed M/s. Mondal & Associates, Proprietor Mr. Amiya Mondal as Cost Auditor of the Company in accordance with the provisions of Section 233B of the Companies Act, 1956 read with Cost Accounting Records (Steel Plant) Rules, 1990, The Companies (Cost Accounting Records) Rules, 2011 and The Companies (Cost Audit Report) Rules, 2011 for the financial year 2012-

13. The said appointment has subsequently been approved by the Central Government.

Directors

In accordance with the provisions of the Companies Act, 1956, and the Company's Articles of Association, Shri Rajiv Jajodia and Shri Amit Kumar Majumdar, Directors, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Your Directors had appointed Shri Angshuman Ghatak w.e.f. 31st July, 2009 as an Additional Director of the Company and he was further appointed as Director of the Company in the Annual General Meeting of the Company held on 15th September, 2009 as an independent director. The sad demise of Shri Angshuman Ghatak on 18th February, 2012, who had served the Company as an independent director, thereby leads his office to be vacated from the Board. Your Company expresses their grief over his sad demise and places on record their appreciation for the valuable services rendered by him during his tenure.

A brief resume of the Directors being re-appointed is incorporated in the Notice of the ensuing Annual General Meeting.

Human Resource Management

The Company recognizes the need to have an optimum level of human resource and integrates employee growth with organizational growth by offering a challenging workplace. The Company acknowledges the tremendous contribution of all its employees towards its growth in leading, thinking, working, motivating, etc.

The management continuously strengthens the human resource system by making available better tools, technology and techniques at the workplace to maximize the skills of the workforce. The Company gives proper opportunities to its employees to improve their skills leading to consistent improvements in systems as well as to ensure the Company has the right competency in its workforce.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility is viewed by company as operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has from business, by contributing to economic development and improving the quality of life of the workforce and their families as well as of the local community and society at large.

As part of its policy for corporate social responsibility, the Company undertakes a range of activities to improve living conditions of people in the neighborhood of all its plants. These activities include environment protection, healthcare, education, rural development. Some of the activities undertaken during the year are as under:

Environment

Plantation of trees in and around the manufacturing

plants and in the adjoining villages.

- Pr ogramme on energy conservation was conducted.

- Healthcare

- Distribution of free medicines.

- Provides ambulance services for nearby villagers in emergency conditions.

- Education

- Books distribution among poor students.

- Rural development

- Refilling the empty wells at nearby villages in summer season.

- Social

- Provided financial assistance by way of donations to various local agencies during festive occasions

- Provided financial help to District Sainik Welfare Corporate Social Responsibility and Sustainable development will continue to remain one of the leading priorities of your Company through which it shall consistently strive to touch lives and make a difference.

Acknowledgement

Your Directors place on record their gratitude to Customers, Dealers, Suppliers, Investors, Members, Financial Institutions/ Banks, regulatory and government authorities and all other business associates for their continued support and co- operation extended by them to the Company. Your Directors also thank the employees, workers, staff and executives of the Company for the sincere and hard work put in by them during the year under review.



On behalf of the Board of Directors

Aditya Jajodia

Chairman & Managing Director

Place: Kolkata

Date: 09.11.2012

 
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