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Directors Report of Jindal Stainless (Hisar) Ltd.

Mar 31, 2016

THE MEMBERS,

The Directors have pleasure in presenting the 3rd Annual Report on the business and operations of your Company together with the Audited Statement of Accounts for the financial year ended 31st March, 2016.

Financial Results

Your Company’s performance for the financial year ended 31st March, 2016 is summarized below:

(Rs. in Crore)

Standalone

Consolidated

Particulars

Year Ended

Year Ended

Year Ended

Year Ended

31.03.2016

31.03.2015

31.03.2016

31.03.2015

Revenue from operations (Gross)

7,091.04

8,145.23

8,043.91

8,989.26

Less: Excise Duty on sales

673.90

741.35

756.84

792.85

Revenue from Operations (Net)

6,417.14

7,403.88

7,287.06

8,196.40

Profit before other Income, Finance Cost, Depreciation, Exceptional Items, Tax & Amortization (EBIDTA)

800.72

712.89

857.88

741.30

Add: Other Income

24.81

22.62

25.19

28.29

Less: Finance Costs

470.78

447.24

494.58

474.97

Less: Depreciation / Amortization

295.34

291.91

315.15

312.75

Profit /(Loss)Before Tax & Exceptional Items

59.41

(3.65)

73.34

(18.14)

Add: Exceptional Items - Gain/(Loss)

(44.96)

15.97

(44.21)

16.69

Profit/(Loss) Before Tax

14.45

12.32

29.12

(1.45)

Less: Tax Expenses

(0.14)

-

1.55

4.50

Net Profit /(loss) after Tax

14.59

12.32

27.57

(5.95)

Share in Profit / (Loss) of Associate

-

-

(0.92)

-

Minority Interest

-

-

(1.22)

(2.09)

Net Profit / (Loss) (After Adjustment for Associate & Minority Interest)

14.59

12.32

25.43

(8.04)

Add / Less:

Add: As per last year account

12.18

-

(38.16)

-

Less: Depreciation adjusted to Retained Earnings

-

0.14

-

0.70

Add: On merger of Subsidiaries

-

-

0.88

-

Less: Loss on acquisition of Subsidiaries (Net)

-

-

-

29.42

Add: Debenture Redemption Reserve written back

-

-

-

-

Net surplus/(deficit) in statement of Profit & Loss

26.77

12.18

(11.85)

(38.16)

Financial Highlights

During financial year ended 31st March 2016, the Gross Revenue from operations of your Company on standalone basis was Rs.7,091 Crore as compared to Rs.8,145 Crore during previous financial year 2014-15. Total Income from Operations (net) for the financial year ended 31st March, 2016 is Rs.6,417 Crore. EBIDTA for the financial year ended 31st March 2016 stood at Rs.801 Crore.

Further, during financial year ended 31st March 2016, consolidated total Income from Operations (net) and EBIDTA stood at Rs.7,287 Crore and Rs.858 Crore respectively. The consolidated Profit after Tax stood at Rs.28 Crore as compared to the loss of Rs.6 Crore during the previous financial year.

Despite reduction in the production and sales volume, the Company is able to achieve substantial improvement in the EBIDTA margins. EBIDTA % margin has increased to 12.32% in financial year 2015-16. Improvement in EBIDTA margin was on account of the various steps taken up by the Company including the change in the product mix by increasing volume of high margin products. In addition to this, Profit after Tax has improved by 25% with reported profit of Rs.15 Crore in FY 2015-16 as against Rs.12 Crore in FY 2014-15.

Indian Stainless steel industry continues to suffer from surge in imports forcing capacities to remain idle. Import prices are significantly lower than domestic prices, especially from countries like China and Korea. Measures such as Anti Dumping have failed to guard the domestic industry from unwarranted imports because of wide spread circumvention of anti-dumping duties. We anticipate Stainless steel demand to grow steadily in tune with the GDP growth, however, infrastructure spending would be instrumental to drive stainless steel demand in coming time.

Operations

Your Company has been able to sustain its performance in financial year 2015-16 despite the adverse global position of stainless steel industry. Your Company has sold 6,22,682 MT stainless steel products during the financial year 2015 -16. There was a reduction in sales in comparison to previous year, however, the focus to increase the share in value added products and cost reduction initiatives resulted in higher EBIDTA margins.

Your Company continued to focus on value added products and successfully stabilized its productions for wider plates, bright bars & rounds etc. During past one year, your Company has focused on to develop and produce various new and special steel grades, majority import substitutes, to meet country’s requirements in Defense and Strategic sectors. Your Company is quite hopeful to increase its shares in these critical sectors with help of Govt. new schemes like “Make in India”. During the year also the Company was awarded with various awards on account of excellent performance in manufacturing sector. The National “PAR EXCELLENCE AWARD” was given to your Company in Quality circle front by NCQC(National Convention on Quality Circles). The Company is very much focussed on its systems and processes and improving it to further level every year. During the year FICCI has also awarded your Company “QUALITY SYSTEMS EXCELLENCE AWARD FOR MANUFACTURING FOR 2015”. Your Company has acclaimed COMMENDATION CERTIFICATE” for its continuous energy saving initiatives.

Vizag Division:

The Vizag Plant produces High Carbon Ferro Chrome (HCFC) with annual capacity of 40,000 tons per annum. Vizag Unit uses Chrome Ore supplied from captive Sukinda Mines and transfers the output to Hisar Plant. Due to low demand of High Carbon Ferro Chrome the Vizag Unit operated one furnace of 16MVA capacity out of 2 Nos. furnaces during the F.Y.2015-16. The Vizag Unit run the plant till September 12,

2015 and shut down the plant’s all operation w.e.f. September 13, 2015 onwards due to workers problem. The Unit could produce 9,974 tons of HCFC during the year 2015-16 due to shut down of operation as compared to 28,587 tons during the last year 2014-15.

Further the Vizag Division could dispatch 11,825 ton of HCFC to Hisar plant during the year 2015-16 as compared to 28,646 ton during 2014-15.

Mines:

In terms of the Composite Scheme of Arrangement among the Company, Jindal Stainless Limited, Jindal United Steel Limited and Jindal Coke Limited and their respective Shareholders and Creditors sanctioned by the Hon’ble High Court of Punjab and Haryana at Chandigarh vide its Order dated September 21, 2015 as modified by its order dated October 12, 2015 (“Scheme”), the Demerged Undertakings, inter alia, including the business undertaking comprising of the Mining Division consisting of the chromite mines located in Village Kaliapani and forest block number 27, Sukinda Tehesil, Jajpur District, Odisha, in respect of which Jindal Stainless Limited (“JSL”) had leasehold rights (“Chromite Mine”) was demerged and vested with the Company.

In terms of the High Court Order, the Chromite Mine, are deemed to have been demerged and vested with the Company with effect from the Appointed Date 1 i.e. close of business hours before midnight of March 31, 2014, the actual transfer of the Chromite Mine will take place in compliance with the applicable laws, after the receipt of all necessary regulatory approvals. Thus, post Section I and Section II of the Scheme becoming effective upon filing of the court order with the Registrar of Companies on November 1, 2015, while the equipments related to the Chromite Mine were transferred and vested with the Company, the Chromite Mine still continue to remain with JSL pending receipt of necessary regulatory approvals.

Dividend and Transfer to Reserves

The Board, considering the Company’s performance and financial position for the year under review, has not recommended any dividend on equity shares of the Company for the financial year ended 31st March, 2016. Accordingly, no amount is proposed to be transferred to the reserves of the Company.

Share Capital

As on 31st March, 2015, paid up share capital of the Company was Rs.5,00,000 divided into 2,50,000 equity shares of Rs.2/- each. In terms of the Scheme, the said capital of Rs.5,00,000/- have been extinguished and cancelled. Pursuant to the Scheme, 23,11,85,445 equity shares of Rs.2/- each were allotted to the equity shareholders of Jindal Stainless Limited on 25th November, 2015. The Equity Shares of the Company were listed on the BSE Limited and National Stock Exchange of India Limited and permitted for trading with effect from 28th January, 2016.

Consequent upon allotment, the paid up share capital of the Company stand at Rs.46,23,70,890 divided into 23,11,85,445 equity shares of Rs.2/- each.

On 30th March, 2016, the Company had allotted 12,50,00,000 (Twelve Crore Fifty Lakhs) Compulsory Convertible Warrants (“CCW”) having the face value of Rs.2/- each to ‘JSL Limited’ and ‘Jindal Infrastructure and Utilities Limited’, members of the promoter group, for an aggregate amount of Rs.25 Crore (Rupees Twenty Five Crore).

As per terms of the issue, CCW are convertible in Equity shares of the Company at any time after 5 months and before 18 months from the date of allotment i.e. between 30th August, 2016 and 30th September, 2017. The price of the Equity shares to be issued upon conversion of the CCW shall be determined as per formula prescribed by SEBI in the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (“ICDR Regulations”). The holders of the CCW will become entitled on 30th August, 2016 to apply for Equity Shares, therefore, relevant date is 31st July, 2016. Since the relevant date i.e. 31st July, 2016, fell on Sunday and 30th July, 2016 was weekend, 29th July, 2016 has been reckoned as the relevant date.

Based on above Regulation, considering 29th July, 2016 as the relevant date, price of the equity shares for conversion of above CCW has been worked out to Rs.52.64 of face value of Rs. 2/- per share and accordingly 47,49,240 equity shares in aggregate, i.e. 23,74,620 equity shares each will be issued and allotted to JSL Limited and Jindal Infrastructure and Utilities Limited as per terms of the issue of CCW.

Management Discussion and Analysis Report

Management Discussion and Analysis Report as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI LODR”) forms part of this Annual Report.

Employees Stock Option Scheme

Since the Company has not issued any stock options, the requirement of disclosure under Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is not applicable to the Company.

Information Technology

During the year Company’s IT & SAP Department played a crucial role in Company’s restructuring exercise and successfully realigned the Organization structures and business processes accordingly. Process simplification and improvements in the processes, was the focus area; wherein various complex processes were simplified and automated. Auto email and workflows were developed for Procurement approvals and Plant maintenance processes, resulting in better and real time communication hence control. IT Application Development Center was established under ‘Go-Digital’ initiative, where various business critical applications were developed and deployed by in-house team. Development of Training Management Portal ‘SARATRHI’, Online Performance Management System (PMS) for Non managerial staff, Vehicle Imaging and Integration with SAP Processes were a few important deliverables for the year.

An integrated SAP ERP system, through real-time transactions processing, is assisting management in making informed decisions through real time MIS. The IT team has also been successful in providing secure and non-disruptive IT services to the Company throughout the year.

Consolidated Financial Statements

In accordance with the Companies Act, 2013, SEBI LODR and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS-23 on Accounting for investments in Associates and AS-27 on Financial Reporting of interests in Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report. Subsidiary Companies / Joint Ventures / Associate Companies As per the terms of the Scheme, six domestic subsidiary companies of Jindal Stainless Limited namely JSL Lifestyle Limited, Jindal Stainless Steelway Limited, JSL Architecture Limited, Green Delhi BQS Limited, JSL Media Limited and JSL Logistics Limited, were transferred to the Company through slump sale.

Pursuant to the Scheme of Amalgamation among JSL Lifestyle Limited and JSL Architecture Limited, JSL Architecture Limited was amalgamated with JSL Lifestyle Limited with effect from 1st April, 2014, the appointed date.

Consequent thereto, as on 31st March, 2016, the Company had the aforementioned five direct and step down subsidiaries, namely (i) JSL Lifestyle Limited, (ii) Jindal Stainless Steelway Limited, (iii) Green Delhi BQS Limited, (iv) JSL Media Limited and (v) JSL Logistics Limited.

As on 31st March, 2016, the Company did not have any joint venture or associate company. However, on 3rd July, 2016, the Company has been allotted 16,82,84,309 Equity Shares of Rs.2 each offered by Jindal Stainless Limited at a price of Rs.21.76 (including premium of Rs.19.76 per share) per share for an aggregate amount of Rs.366,18,66,570/-, being the amount due and payable by Jindal Stainless Limited to the Company as on the Appointed Date 1 i.e. close of business hours before midnight of 31st March, 2014, in terms of the provisions of Section II of the Scheme. Consequent upon the above said acquisition, the Company holds 42.13% shareholding of Jindal Stainless Limited and therefore, it has become Associate Company of the Company.

During the year under review, the Company acquired 50% shareholding in Jindal Stainless Corporate Management Services Pvt. Ltd. (JSCMS), making it an associate to the Company in terms of

Section 2(6) of the Companies Act, 2013.

The Financial Statements of Subsidiary Companies are kept open for inspection by the shareholders at the Registered Office of the Company during business hours on all days except Saturdays and Sundays and public holidays up to the date of Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. The members, if they desire, may write to Company Secretary at O.P. Jindal Marg, Hisar - 125005 (Haryana) to obtain the copy of the annual report of the subsidiary companies. The Financial Statements including the Consolidated Financial Statements and all other documents required to be attached with this Report have been uploaded on the website of your Company viz. www.jshlstainless.com.

A statement containing the salient features of the financial statement of the subsidiaries and associate companies in the prescribed Form AOC - 1 is attached along with financial statement. The statement also provides the details of performance, financial position of each of the subsidiary company.

Your Company has framed a policy for determining “Material Subsidiary” in terms of Regulation 16(c) of SEBI LODR. The Policy for determining material subsidiaries as approved may be accessed on the Company’s website at the link:

http://www.jshlstainless.com/pdf/Policy%20for%20determining%20

material%20subsidiaries.pdf

Directors & Key Managerial Personnel

Post last AGM held on 30th December, 2015, Ms. Ishani Chattopadhyay and Mr. T.S. Bhattacharya have ceased to be Directors w.e.f. 14th May, 2016 and 12th August, 2016 respectively. The Board places on record its sincere appreciation for the valuable contributions made by them during their tenure.

The Board of Directors has appointed Mrs. Deepika Jindal, Mr. Girish Sharma, as Additional Directors w.e.f. 1st May, 2016; Mr. Arunendra Kumar and Mr. N.C. Mathur as Additional Directors w.e.f. 16th May, 2016 and 5th August, 2016 respectively. In terms of Section 161 of the Companies Act, 2013, they will hold office up to the date of this AGM. The Company has received notices from members proposing their candidature for appointment as Directors. Accordingly, the requisite resolutions for the appointments of the aforesaid Directors will be placed before the shareholders for their approval.

Mr. Abhyuday Jindal, who retires by rotation at the ensuing Annual General Meeting under the provisions of the Companies Act, 2013 and being eligible, offers himself for reappointment.

Brief resumes of the abovementioned Directors, nature of their expertise in specific functional areas, details of Directorship in other companies, membership / chairmanship of committees of the board and other details, as stipulated under Regulation 36(3) of SEBI LODR and Secretarial Standard - 2 issued by the Institute of Company Secretaries of India, are given in the Notice forming part of the Annual Report.

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

The Company has also devised a Policy on Familiarization Programme for Independent Directors which aims to familiarize the Independent Directors with the Company, nature of the industry in which the Company operates, business operations of the Company etc. The said Policy can be accessed on the Company’s website at the link: http://jshlstainless.com/pdf/Policy%20on%20familiarisation%20 programme%20for%20independent%20directors-%20JSHL.pdf

Board Evaluation

An annual performance evaluation of all Directors, the Committees of Directors and the Board as a whole for the year under review was carried out. For the purpose of carrying out performance evaluation, assessment questionnaires were circulated to all Directors and their feedback was obtained and recorded.

Policy on Directors’ Appointment and Remuneration Policy

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has approved the (i) Policies for nomination and selection of Independent Directors and Non-Executive Non-Independent Directors and (ii) Remuneration Policy on the Recommendation of the Nomination and Remuneration Committee of the Company. The said Policies may be accessed on the Company’s website at the link: www. jshlstainless.com/pdf/Remuneration%20Policy.pdf

Fixed Deposits

The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this report.

Particulars Regarding the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure - ‘I'' forming part of this Report.

Particulars of Employees

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report, which forms part of this Report.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report, which forms part of this Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

Statutory Auditors and Auditors’ Report

M/s. Lodha & Co. and M/s. S.S. Kothari Mehta & Co., Joint Statutory Auditors of the Company, were appointed by the Shareholders at the 2nd Annual General Meeting of the Company held on 30th December, 2015, for a period of five consecutive years i.e. until the conclusion of the 7th Annual General Meeting of the Company. Pursuant to the provisions of Section 139 of the Companies Act, 2013, the matter relating to the appointment of the aforesaid Joint Statutory Auditors shall be placed for ratification by members at the ensuing Annual General Meeting of the Company. The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is required to get its cost accounting records audited by a Cost Auditor and has accordingly appointed M/s Kabra & Associates, Cost Accountants, for this purpose for FY 2016-17.

The remuneration of the Cost Auditors shall be placed for ratification by members in terms of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

Secretarial Auditors

The Board has appointed M/s Vinod Kothari & Co., Practicing Company Secretary to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith marked as Annexure - II to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Corporate Social Responsibility

The Board of Directors of the Company, in their meeting held on 2nd November, 2015 constituted the Corporate Social Responsibility Committee of Directors. The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (“CSR Policy”) indicating the focus areas of Company’s CSR activities.

In line with the CSR philosophy and the focus areas, the Company has planned interventions in the fields of education & vocational training, integrated health care, women empowerment, social projects, rural infrastructure development, environment sustainability, sports, preservation of art and culture, business of human rights and disaster management.

Being the initial year, the Company is in the process of exploring the areas / locations for CSR activities for welfare of society. As a socially responsible Corporate, your Company is committed to increase its CSR impact and spend over the coming years, with its aim of playing a larger role in India’s sustainable development by embedding wider economic, social and environmental objectives.

The Disclosure as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed to this Report at Annexure- III. The CSR Policy can be accessed on the Company’s website at the link: http://jshlstainless.com/pdf/JSHL%20CSR%20 Policy.pdf.

Internal Financial Controls

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

Sexual Harassment Policy

The Company has in place a policy on prevention of sexual harassment at workplace in accordance with the provisions of Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013. The policy aims at prevention of harassment of employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. There is an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy.

During the year ended 31st March, 2016, no complaints were received pertaining to sexual harassment.

Audit Committee

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

Sl. No.

Name

Status

Category

1

Mr. Girish Sharma

Chairman

Independent

Director

2

Mr. Kanwaljit Singh Thind

Member

Independent

Director

3

Mr. Ashok Kumar Gupta

Member

Whole Time Director

4

Mr. Arunendra Kumar *

Member

Independent

Director

* Mr. Arunendra Kumar has been inducted in the Audit Committee w.e.f. 5th August, 2016

All the recommendations made by the Audit Committee during the financial year 2015-16 were accepted by the Board.

CSR Committee

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

Sl. No.

Name

Status

Category

1

Mrs. Deepika Jindal

Chairperson

Non

Executive

Director

2

Mr. Ashok Kumar Gupta

Member

Whole Time Director

3

Mr. Kanwaljit Singh Thind

Member

Independent

Director

Stock Exchanges where the shares are listed

National Stock Exchange of India Limited, BSE Limited Exchange Plaza, 5th Floor, Plot No. C/1, Phiroze Jeejeebhoy G - Block, Bandra-Kurla Complex, Towers, Dalal Street

Bandra (E), Mumbai - 400 051 Mumbai - 400 001

The annual listing fee was paid to both the stock exchanges. No shares of the Company were delisted during the financial year 2015-16.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure -‘IV’.

Number of Board Meetings

The Board of Directors met fifteen times during the financial year ended on 31st March, 2016. The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report forming part of this Annual Report.

Whistle Blower Policy / Vigil Mechanism

Pursuant to the provisions of Section 177(9) read with Companies (Meetings of Board and its Powers) Rules, 2014 of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has a Vigil Mechanism namely, Whistle Blower Policy for directors, employees and business partners to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy. The Whistle Blower Policy can be accessed on the Company’s website at the link: http:// jshlstainless.com/pdf/Whistle%20Blower%20Policy-JSHL.pdf

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

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

Contracts or Arrangements with Related Parties

Particulars of contracts or arrangements entered into by the Company with the related parties referred to in Section 188(1) of the Companies Act, 2013, in prescribed form AOC-2, is attached as Annexure - V to this Report.

All related party transactions that were entered and executed during the year under review were at arms’ length basis. As per the provisions of Section 188 of the Companies Act, 2013 and Rules made there under read with Regulation 23 of SEBI LODR, your Company had obtained prior approval of the Audit Committee under omnibus approval route and / or under specific agenda before entering into such transactions. Your Directors draw attention of the members to Note 42 to the financial statement which sets out related party disclosures. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website at the link:

http://www.jshlstainless.com/pdf/Policy%20for%20determining%20

material%20subsidiaries.pdf

In terms of Regulation 23 of SEBI LODR, all transactions with related parties, which are of material in nature, are subject to the approval of the Members of the Company. The requisite resolution in order to comply with the aforesaid requirements, as detailed at Item Nos. 9 & 10 of the Notice and relevant Explanatory Statement is commended for the members’ approval.

Risk Management

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

The change in the nature of business, if any

There has been no change in the nature of Company’s business during the financial year ended on 31st March, 2016.

Material Changes and Commitments, if any, affecting the financial position of the Company

During the quarter ended 30th June, 2016, the Company has achieved total income of Rs.1497 Crore with EBIDTA of Rs. 238 Crore. The Company has earned net profit of Rs.49 Crore during this period.

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

During the financial year there were no such significant material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future.

Directors’ Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) i n the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) t he directors 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 31st March, 2016 and of the profit and loss of the Company for the year ended on that date;

(c) t he directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors have prepared the annual accounts of the Company on a ‘going concern’ basis.

(e) The directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

(f) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

Corporate Governance

A separate section on Corporate Governance forms part of this Annual Report and a certificate from the practicing Company Secretary regarding compliance of conditions of Corporate Governance as required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, form part of this Annual Report.

Acknowledgement

Your Directors would like to express their gratitude for the valuable assistance and co-operation received from shareholders, banks, government authorities, customers and vendors. Your Directors also wish to place on record their appreciation for the committed services of all the employees of the Company.

For and on behalf of the Board of Directors

Place: New Delhi Ratan Jindal

Date: 12th August, 2016 Chairman


Mar 31, 2015

The Directors have pleasure in presenting the 2nd Annual Report on the business and operations of your Company together with the Audited Statement of Accounts for the financial year ended 31st March, 2015.

Financial Results

The Company's performance for the financial year ended 31st March, 2015 is stated below:

(Rs,in Lacs)

Particulars Standalone Consolidated

Year Ended Year Ended Year Ended Year Ended 31.03.2015 31.03.2014 31.03.2015 31.03.2014

Revenue from operations (Gross) 814,279.32 - 898,603.10 -

Less: Excise Duty on sales 74,135.56 - 79,285.44 -

Revenue from Operations (Net) 740,143.76 - 819,317.66 -

Profit before other Income, Finance Cost, Depreciation, 71,288.80 (0.23) 74,129.87 (0.23)

Exceptional Items, Tax & Amortization (EBIDTA)

Add: Other Income 2,261.89 - 2,828.75 -

Less: Finance Costs 44,724.10 - 47,497.50 -

Less: Depreciation / Amortization 29,191.38 - 31,274.86 -

Profit /(Loss) Before Tax & Exceptional Items (364.79) (0.23) (1,813.74) (0.23)

Add: Exceptional Items - GainZ (Loss) 1,596.78 - 1,668.60 -

Profit/(Loss) Before Tax 1,231.99 (0.23) (145.14) (02.37

Less: Tax Expenses - - 450.16 -

Net Profit/(loss) after Tax 1,231.99 (0.23) (595.30) (0.23)

Share in Profit / (Loss) of Associate - - 0.05 -

Minority Interest - - (208.76) -

Net Profit/(Loss) 1,231.99 (0.23) (804.01) (0.23) (After Adjustment for Associate & Minority Interest)

Add / Less:

Add: As per last year account (0.23) - - (0.23)

Less: Depreciation adjusted to Retained Earnings 13.84 - 69.98 -

Less: Loss on acquisition of Subsidiaries (Net) - - 2,942.06 -

Add: Debenture Redemption Reserve written back

Amount available for Appropriation 1,217.98 (0.23) (3,816.28) (0.23)

Less: Transferred to General Reserve

Less: Being deficit, Set off from General Reserve

Net surplus/ (deficit) in statement of Profit & Loss 1,217.92 (0.23) (3,816.28) (0.23)

The above financial results of the Company for the year ended 31st March, 2015 are not comparable with the financial results for the year ended 31st March, 2014 as the financial results for FY 2014-15 have been reopened and revised to give effect to the terms of Section I and II of the Composite Scheme of Arrangement ("Scheme") amongst the Company and Jindal Stainless Limited, Jindal United Steel Limited and Jindal Coke Limited and their respective shareholders and creditors which was approved by the Hon'ble High Court of Punjab and Haryana at Chandigarh vide its order dated 21st September, 2015 (as modified on 12th October, 2015). The certified true copy of the said order was filed with the office of Registrar of Companies on 1st November, 2015 and accordingly, Section I and II of the Scheme have become operative with effect from the Appointed Date 1 i.e. close of business hours before midnight of 31st March, 2014.

During the year, the net Revenue from operations of your Company on standalone basis stood at Rs, 740,143.76 lacs. The Profit before other income, Finance Cost, Depreciation, Exceptional Items, Tax & Amortisation on standalone basis stood atRs, 71,288.80 lacs.

The financial results of the Company during the year 2014-15 remained under stress on account of various factors viz. subdued economic environment, increase in imports (especially cheaper imports from China), increasing raw material prices, unfavorable duty structure and adverse foreign exchange fluctuation.

Operations

As per the terms of the Scheme, the Ferro Alloys Division of Jindal Stainless Limited ("JSL") comprising of Ferro Alloy manufacturing facility located at Jindal Nagar, Kothavalasa, Distt. Vizianagaram, Andhra Pradesh and the Mining Division comprising of Chromite Mines have been demerged and vested with the Company. Further, the business undertaking relating to Hisar Unit of JSL has been transferred to the Company on slump sale basis. Consequent upon the filing of the Court Order with the office of the ROC, this part i.e. Section I and II of the Scheme has become effective with effect from the Appointed Date 1 i.e. close of business hours before midnight of 31st March, 2014.

The stainless steel industry is going through a challenging phase on account of economic uncertainties and unfavorable business environment in India and dumping of material by China. Despite these adversities, the Hisar Unit has been able to sustain its performance and successfully dispatched 6,66,676 MT stainless steel products during the current financial year.

The Hisar Unit focused on value added products during the financial year and achieved highest ever dispatches of 2,66,212 MT of cold rolled annealed pickled products. Special Products Division also performed well during the year and dispatched 23,512 MT which is approximately 11% higher than the previous financial year.

Further, the Hisar Unit continued its journey towards manufacturing excellence through cost reduction and quality improvements. The Company has been successfully imparting culture of excellence at all levels. The Company workforce participated in various national level initiatives and secured par excellence and excellence in "National Chapter convention on Quality Concepts". Your Company has been accredited NABL certification for Chemical labs. The Company has also been awarded with IIM National sustainability award this year.

The Vizag Plant produces High Carbon Ferro Chrome with annual capacity of 40,000 Tons per annum. Vizag Unit uses Chrome Ore supplied from captive Sukhinda Chromite Mines and transfers the output to the Hisar Plant. The division has achieved 71% of the installed capacity by producing 28,587 Tons of High Carbon Ferro Chrome during the year 2014-15 as compared to 30,648 Tons during the preceding year. The Production was less during the year 2014-15 due to Non availability of Power for 25 days on being effected by Hud-Hud Cyclone on 12th October, 2014.

Further, Vizag Unit dispatched 28,646 tons during the year 2014-15 as compared to 28,137 tons during the preceding financial year.

Jindal Chromite Mine produced 24,628 MT of chromite ore concentrate from its beneficiation plant and also achieved 69,298 MT chromite ore from Mines pit during the current year. The mines dispatched 23,696 MT of concentrate ore and 43,079 MT chrome ore to Vizag plant during the year.

Composite Scheme of Arrangement

The Board of Directors of the Company in their meeting held on 29th December, 2014 approved a Composite Scheme of Arrangement amongst the Company, Jindal Stainless Limited (JSL), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) and their respective Shareholders and Creditors. The Scheme, inter-alia, provided for demerger of Ferro Alloys Division and Mining Division of Jindal Stainless Limited into the Company and slump-sale of stainless steel manufacturing facility by JSL to the Company. The Scheme also provided that the Company, as a consideration of demerger, shall issue and allot one fully paid up equity share having face value of Rs, 21- each to the shareholders of JSL for every one share held by them in JSL. Further, as a consideration for slump-sale the Company shall make total payment ofRs, 2,809.79 Crores to JSL (Rs, 2,600 Crores to be paid in cash and balance Rs, 209.79 Crore to be adjusted out of the amount due and payable by JSL to the Company as on Appointed Datel).

The above Scheme was filed with the Hon'ble High Court of Punjab and Haryana at Chandigarh on 27th March, 2015 and the High Court vide its order dated 31st March, 2015 dispensed with the requirement of convening the meetings of the Shareholders and Creditors of the Company. However, the Court ordered for convening the meetings on 16th May, 2015 of the Shareholders, Secured Creditors and Unsecured Creditors of JSL. Accordingly, the second motion application was filed with the Hon'ble High Court on 20th May, 2015.

The Hon'ble High Court of Punjab and Haryana at Chandigarh, vide its order dated 21st September, 2015 (as modified on 12th October, 2015), has approved the 'Composite Scheme of Arrangement' (Scheme) among Jindal Stainless Limited (JSL), Jindal Stainless (Hisar) Limited (JSHL), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) and their respective shareholders and creditors. Certified true copy of the said Order was received on 20th October, 2015 and was filed on 1 st November, 2015, with the office of Registrar of Companies, NCT of Delhi and Haryana.

As per the terms of the Scheme, upon filing of the aforesaid Order with the Office of the Registrar of Companies, NCT of Delhi and Haryana, Section I and II of the Scheme (pertaining to transfer of Demerged Undertakings comprised of Ferro Alloys Manufacturing facility at Kothavalasa, Distt. Vizianagaram, Andhra Pradesh and Chromite Mines and Business Undertaking 1 comprised of manufacturing facility at Hisar from JSL to the Company) have become operative from the appointed date 1 i.e. close of business hours before midnight of 31st March, 2014.

Issue and Allotment of Equity Share to the Shareholders of JSL

As envisaged in the Scheme, the Board of Directors of the Company have in their meeting held on 6th November, 2015 decided to fix, 21 st November, 2015 as the Record Date for determining the names of the Shareholders of JSL who shall be entitled for issue and allotment of one Equity Share of Rs. 21- each for every 1 (one) equity share held by them in JSL. Post allotment of shares, necessary formalities for listing of these shares shall be initiated and the same is expected to be completed by January, 2016. Payment of consideration for slump sale to JSL As stated hereinabove, as a part of the Scheme, the Company is required to make payment of Rs, 2,600 Crores to JSL as part payment of consideration for slump-sale of manufacturing facility at Hisar to the Company. The Company has already initiated discussions with various Banks / Financial Institutions for availing term loans / credit facilities and the said funds will be utilized for payment of the said consideration.

An amount of Rs, 575.98 Crores was due and payable by JSL to the Company as on the Appointed Date 1, out of which Rs, 209.79 Crores will be adjusted out of the total consideration of Rs, 2,809.79 Crores payable by the Company to JSL for slump-sale and balance Rs, 366.19 Crores are proposed to be converted into Equity Shares of JSL, as per the terms of the Scheme.

Dividend

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

Transfer to Reserves

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

Share Capital

As on 1st April, 2014, the paid up share capital of the Company was Rs,1,00,000/- divided into 10,000 equity shares of Rs,10/- each. On 3rd December, 2014,40,000 equity shares of Rs,10/- were allotted to the then existing shareholders on rights basis and on 5th December, 2014, the equity shares of the Company were sub-divided from the face value of Rs,10/- per share to Rs,2/- per share. As on 31st March, 2015, paid up share capital of the Company was Rs,5,00,000 divided into 2,50,000 equity shares of Rs,2/- each. In terms of the Scheme, the said capital of Rs, 5,00,000/- has been deemed to have been extinguished and cancelled.

Pursuant to the Scheme, 23,11,85,445 equity shares of Rs, 21- each would be allotted to the equity shareholders of Jindal Stainless Limited. Pending allotment, an amount of Rs, 46.24 Crores has been shown under "Share Capital Suspense Account" in the Books of Accounts of the Company as on 31st March, 2015. Consequent upon allotment, the paid up share capital of the Company shall stand at Rs,46,23,70,890 divided into 23,11,85,445 equity shares of Rs,2/-each.

Management Discussion and Analysis Report

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

Employees Stock Option Scheme

Pursuant to the Scheme, the stock options granted by Jindal Stainless Limited ("JSL") under the ESOP Scheme to employees engaged in the Demerged Undertaking and Business Undertaking 1 who have been transferred as part of the Scheme to the Company, which have been granted and vested but have not been exercised as on the Record Date, such options shall continue to vest in the employees of the Demerged Undertaking and Business Undertaking 1 transferred to the Company. Upon exercise of the aforesaid options by the said employees from time to time in accordance with the ESOP Scheme, JSL shall continue to honour its obligations under the ESOP Scheme with respect to such employees in accordance with the provisions of the ESOP Scheme and shall issue and allot fully paid-up equity shares of JSL in respect of such exercised options in accordance with the ESOP Scheme. The Company shall have no obligation to issue any stock options or shares to such employees of the Demerged Undertaking and Business Undertaking 1 in lieu of the stock options granted by JSL under the ESOP Scheme.

Since the Company has not issued any stock options, the requirement of disclosure under Regulation 14 of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 is not applicable to the Company.

Information Technology

During the year, the Company's IT and SAP department has further enhanced the SAP ECC 6.0 System and incorporated various 'checks and balances 'for better control on business functions. Implementation of Digital Signatures in Mill Test Certificates, Workflow in procurement, Development of in-house 'Material Master Data Management tool', Simplification / automation of Yard receipt process are a few new initiatives planned and delivered in the current year. This integrated SAP Business Support mechanism is assisting management in making informed decisions through MIS, which is aligned towards achieving goals and through real-time transactions processing. The SAP and IT team will play a critical role in enabling the Company's Restructuring exercise by re-aligning the current SAP Landscape. The IT team has also been successful in providing secure and non-disruptive IT (Hardware, Network, Software etc.) services to the Company throughout the year.

Consolidated Financial Statements

In accordance with the Companies Act, 2013 and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS-23 on Accounting for investments in Associates and AS-27 on Financial Reporting of interests in Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report. Subsidiary Companies / Joint Ventures /Associate Companies As per the terms of the Scheme, six domestic subsidiary companies of JSL have been transferred to the Company through slump sale. Consequent thereto, as on 31st March, 2015, the Company has the aforementioned six direct and step down subsidiaries, namely (i) JSL Lifestyle Limited, (ii) Jindal Stainless Steelway Limited, (iii) JSL Architecture Limited, (iv) Green Delhi BQS Limited, (v) JSL Media Limited and (vi) JSL Logistics Limited.

The Company does not have any joint venture or associate company.

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

A statement containing the salient features of the financial statement of the subsidiaries and associate companies in the prescribed Form AOC -1 is attached along with financial statements. The statement also provides the details of performance, financial position of each of the subsidiaries companies. The Policy for determining material subsidiaries as approved can be accessed on the Company's website at the link:

http://jshlstainless.com/pdf/Policy%20for%20determining%20

material%20subsidiaries-JSHL.pdf

Directors & Key Managerial Personnel

The Board of Directors has appointed Mr. Ratan Jindal, Mr. Abhyuday Jindal and Mr. Ashok Kumar Gupta, as Additional Directors in the capacity of Chairman, Vice Chairman and Whole Time Director respectively w.e.f. 2nd November, 2015. The Board has also appointed Mr. T.S. Bhattacharya, Maj. Gen. Kanwaljit Singh Thind, VSM (Retd.) and Ms. Ishani Chattopadhyay as Additional Directors w.e.f. 2nd November, 2015.

The requisite resolutions for the appointments of the aforesaid Directors will be placed before the shareholders for their approval.

The Board of Directors has also appointed Mr. Ankur Agrawal as the Chief Financial Officer and Mr. Bhartendu Han't as the Company Secretary and Compliance Officer respectively. The Board has also designated Mr. Ashok Kumar Gupta, Mr. Ankur Agrawal and Mr. Bhartendu Harit as the Key Managerial Personnel (KMPs) of the Company.

Mr. Shailesh Goyal resigned from the Board of Directors of the Company w.e.f. 15th December, 2014. Mr. Rajinder Parkash Jindal, Mr. Mahabir Parshad Swami, Directors, who were appointed as Additional Directors w.e.f. 3rd December, 2014 resigned from the Board of Directors of the Company w.e.f. 6th November, 2015 and Mr. Mahender Kumar Goel, Director has tendered his resignation from the Board of Directors of the Company w.e.f. 20th November, 2015. The Board places on record its sincere appreciation for the valuable contributions made by them during their tenure.

Since all the Directors will be appointed in the ensuing Annual General Meeting (AGM) of the Company, there is no Director who will retire by rotation in the ensuing AGM.

Brief resumes of the abovementioned Directors, nature of their expertise in specific functional areas, details of Directorship in other companies and the membership / chairmanship of committees of the board, as stipulated under Clause 49 of the listing agreement with the stock exchanges, are given in the Notice forming part of the annual report.

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

The Company has also devised a Policy on Familiarization Programme for Independent Directors which aims to familiarize the Independent Directors with the Company, nature of the industry in which the Company operates, business operations of the Company etc. The said Policy can be accessed on the Company's website at the link:

http://jshlstainless.com/pdf/Policy%20on%20familiarisation%20 programme%20for%20independent%20directors-%20JSHL.pdf Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has approved the criteria for performance evaluation of all Directors, the Committees of Directors and the Board as a whole, on the recommendation of the Nomination and Remuneration Committee of the Company. Performance evaluation of the Board, each Director and the Committees will be carried out for the financial year ending 31 st March, 2016. The evaluation of the Directors will be based on various aspects, inter-alia, included the level of participation in the Board Meetings, understanding of their roles and responsibilities, business of the Company along with the environment and effectiveness of their contribution. Policy on Directors' Appointment and Remuneration Policy

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has approved the (i) Policies for nomination and selection of Independent Directors and Non-Executive Non-independent Directors and (ii) Remuneration Policy on the Recommendation of the Nomination and Remuneration Committee of the Company. The aforesaid policies are attached to this Report at Annexure - 7 (A)' and Annexure - 7(B)'respectively. Fixed Deposits

The Company has not accepted any deposit from the public. Hence, no information is required to be appended to this report.

Particulars Regarding the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure - 'II' forming part of this Report.

Particulars of Employees

As per the terms of Section I and II of the Composite Scheme of Arrangement approved by the Hon'ble High Court of Punjab and Haryana at Chandigarh vide its order dated 21st September, 2015 (as modified on 12th October, 2015), business undertaking relating to Hisar Unit of Jindal Stainless Limited has been transferred to Jindal Stainless (Hisar) Limited on slump sale basis and Ferro Alloys Division of Jindal Stainless Limited comprising of Ferro Alloy manufacturing facility located at Jindal Nagar, Kothavalasa, Distt. Vizianagaram, Andhra Pradesh and the Mining Division comprising of Chromite Mines have been demerged and vested with the Company. The certified true copy of the said order was filed with the office of Registrar of Companies on 1st November, 2015. Consequent upon the filing of the Court order with the office of the ROC, this part i.e. Section I and II of the Scheme has become effective.

In view of the above, since the Company has become operational during current financial year, particulars of the employees in terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the year ended 31st March, 2015 are not applicable.

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5( 1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not required, since the Company is an unlisted company. As required under Rule 5(1)(vii) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Net Worth of the Company as on 31st March, 2014 and 31st March, 2015 was Rs, 0.77 lac and Rs, 58,543.07 lacs respectively.

Auditors and Auditors' Report

M/s. N.C. Aggarwal & Co., Chartered Accountants, were appointed as statutory auditors of the Company by the shareholders at the Extraordinary General Meeting of Shareholders of the Company held on 29th October, 2014 to fill the casual vacancy caused by resignation of M/s. Sandeep Khurana & Associates., Chartered Accountants, Hisar. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

M/s. Lodha & Co. and M/s. S.S. Kothari Mehta & Co., Chartered Accountants, are proposed to be appointed as Joint Statutory Auditors of the Company. Pursuant to the provisions of Section 139 of the Companies Act, 2013, the matter relating to the appointment of the aforesaid Joint Statutory Auditors shall be placed for approval by the members at the ensuing Annual General Meeting of the Company.

Cost Auditors

In accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 as amended vide Companies (Cost Records and Audit) Amendment Rules, 2014 vide notification dated 31st December, 2014, your Company is required to get its cost accounting records audited by a Cost Auditor and has accordingly appointed M/s Kabra & Associates, Cost Accountants, for this purpose for FY 2015-16.

The Board of Directors at its meeting held on 27th September, 2015 has appointed M/s Kabra & Associates, Cost Accountants for conducting the audit of cost audit records in respect of Steel business of the Company for the financial year 2015-16. The said appointment is subject to ratification by the members in terms of Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014.

Secretarial Auditors

The Board of Directors would appoint Secretarial Auditor to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ending 31st March, 2016 would be annexed with the Directors Report of the year ending 31st March, ¦ 2016.

Corporate Social Responsibility

The Board of Directors of the Company have in their meeting held on 2nd November, 2015 constituted the Corporate Social Responsibility Committee of Directors. The Disclosure requirement as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is not applicable for the year 2014-15.

The CSR Policy, after approval by the Board of Directors would be uploaded on the Company's website.

Internal Financial Controls

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

Audit Committee

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

SI. No. Name Status

1 Mr. IS. Bhattacharya Chairman

2 Mr. Kanwaljit Singh Thind Member

3 Ms. Ishani Chattopadhyay Member

4 Mr. Ashok Kumar Gupta Member

The above Committee was constituted on 3rd April, 2015, hence no meetings were of the Committee were held during the financial year 2014-15.

CSR Committee

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

SI. No. Name Status_

1 Mr. Abhyuday Jindal Chairman

2 Mr. Ashok Kumar Gupta Member

3 Mr. Kanwaljit Singh Thind Member

Stock Exchanges where the shares are proposed to be listed

National Stock Exchange of India Ltd., BSE Ltd.

Exchange Plaza, 5th Floor, Plot No. C/1, Phiroze Jeejeebhoy

G - Block, Bandra-Kurla Complex, Towers, Dalai Street

Bandra (E),Mumbai - 400 051 Mumbai - 400 001

The Company is in the process of getting its shares listed on BSE and NSE.

Extract of Annual Return

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as Annexure -'III'.

Number of Board Meetings

The Board of Directors met 18 (eighteen) times during the financial year ended on 31st March, 2015. The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report forming part of this Annual Report. Whistle Blower Policy / Vigil Mechanism

Pursuant to the provisions of Section 177(9) read with Companies (Meetings of Board and its Powers) Rules, 2014 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has a Vigil Mechanism namely, Whistle Blower Policy for directors, employees and business partners to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The Whistle Blower Policy can be accessed on the Company's website at the link: http://jshlstainless.com/pdf/Whistle%20Blower%20Policy-JSHL.pdf Particulars of loans, guarantees or investments by the Company under section 186

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

Contracts or Arrangements with Related Parties The Company has entered into contracts / arrangements with the related parties in the ordinary course of business and on arm's length basis.

Your Directors draw attention of the members to Note 42 to the financial statement which sets out related party disclosures. Based on the recommendations of the Audit Committee, your Board of Directors had approved the Policy on Related Party Transactions in accordance with Clause 49 of the Listing Agreement and as per the provisions of the Companies Act, 2013. The Policy on materiality of related party transactions and dealing with related party transactions after approval by the Board would be uploaded on the website of the company. In terms of Clause 49 of the Listing Agreement, all transactions with related parties, which are of material in nature, are subject to the approval of the Members of the Company. The requisite resolution in order to comply with the aforesaid requirements of Clause 49 of the Listing Agreement, as detailed at Item No. 11 of the Notice and relevant Explanatory Statement is commended for the members' approval. Risk Management

The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. These procedures are periodically reviewed to ensure that executive management controls risk through means of a properly defined framework. The Company has also devised a Risk Management Policy for identification of elements of risks and procedures for reporting the same to the Board. The change in the nature of business, if any The Company was originally incorporated as KS Infra Tower and Landmark Private Limited on 30th July, 2013 under the Companies Act, 1956 with the Registrar of Companies, NCT Delhi & Haryana. Name of the Company was changed to Jindal Stainless (Hisar) Private Limited and fresh Certificate of Incorporation was issued by the Registrar of Companies, NCT Delhi & Haryana dated 28th August, 2014. The Company was converted into Public Limited Company on 26th December, 2014 and its name was changed to Jindal Stainless (Hisar) Limited. During the year, the main objects of the Company were changed with approval of the Shareholders at the Extraordinary General Meeting held on 21st July, 2014.

Material Changes and Commitments, if any, affecting the financial position of the Company

During the half year ended 30th September, 2015, the Company has achieved total income of Rs,3,445.82 Crores with EBIDTA of Rs, 416 Crores. The Company has earned net profit of Rs, 4.04 Crores during this period.

Any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

During the financial year there is no such significant material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

Directors' Responsibility Statement

Pursuant to the requirement under section 134(5) of the Companies

Act, 2013 with respect to directors' responsibility statement, it is hereby

confirmed that:

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

(b) the Directors had 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 31st March, 2015 and of the profit and loss of the Company for the year ended on that date;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

Corporate Governance

A separate section on Corporate Governance forms part of this Annual

Report.

Acknowledgement

Your Directors would like to express their gratitude for the valuable assistance and co-operation received from shareholders, banks, government authorities, customers and vendors. Your Directors also wish to place on record their appreciation for the committed services of all the employees of the Company.

For and on behalf of the Board of Directors

Place: New Delhi Ratan Jindal

Date : 6th November, 2015 Chairman