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Notes to Accounts of Jindal Stainless Ltd.

Mar 31, 2023

(i) During the previous year ended 31 March 2022, the Company alloted 38,260,868 equity shares having face value of ? 2 each (including premiun of ? 40.55 per share), aggregating to ? 162.80 Crores.

(ii) During the year ended 31 March 2023, the Company has issued written direction to CITI Bank, N. A., the depository of the Company''s Global Depository Shares ("GDS") listed on Luxemburg Stock Exchange ("LSE"), to terminate the Company''s Global Depository Shares Program (GDS Program). The effective date of termination of the GDS programme was 30 April 2023. As on 31 March 2023, 7,439,583 numbers of underlying equity shares ( subject to rounding off ) representing 3,719,791 GDS were outstanding representing those GDS holders who are yet to surrender their GDS.

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a face value of ? 2 per share. Each shareholder is eligible for one vote per equity share held [other than the shares represented by Regulation S Global Depository Shares (the âGDSsâ) issued by the Company whose voting rights are subject to certain conditions and procedure as prescribed under the Regulation S Deposit Agreement]. The Company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and also has equal right in distribution of profit/surplus in proportions to the number of equity shares held by the shareholders.

Distribution of dividends:

On April 18, 2023, the Board of Directors has declared a special interim dividend @ 50% i.e. ? 1 per equity share (face value of ? 2 per equity share), aggregating to ? 82.34 Crore for the financial year ended 31 March 2023. Further, the Board of Directors in its meeting held on 17 May 2023 has recommended a final dividend @ 75% i.e. ? 1.50 per equity share (face value of ? 2 per equity share), aggregating to ? 123.52 Crore for the financial year ended 31 March 2023 subject to approval of shareholders in ensuing annual general meeting. The same has not been recognised as liabilities.

With effect from 1 April 2020, the Dividend Distribution Tax (âDDTâ) payable by the company under section 115O of Income Tax Act,1961 was abolished and a withholding tax was introduced on the payment of dividend. As a result, dividend is now taxable in the hands of the recipient.

The above term loans amounting ? 2,197.98 Crores as at 31 March 2023 bear a floating rate of interest linked with State Bank of India marginal cost of funds based lending rate or benchmark of respective banks or repo rate or T-Bill plus applicable spread ranging from Nil to 196 basis points (previous year spread ranging from 40 basis points to 375 basis points).

The foreign currency loan amounting ? 339.96 Crores as at 31 March 2023 (previous year ? 72.86 Crores) is linked to 6 month London interbank offered rate 115 basis points.

The NCDs amounting ? 375.00 Crores as at 31 March 2023 (previous year ? 375 Crores) bear a fixed rate of interest of 7.73%

?. a. payable semi-annually and the NCDs amounting to ? 99.00 Crores as at 31 March 2023 (previous year nil) bear a fixed rate of interest 8.62% p.a. payable annually.

VI Additional securities

A. Working Capital Borrowings and borrowings referred under point no B-(xi), (xii) & (xiii) are also secured/ to be secured by:

a. Unconditional and irrevocable personal guarantee of Mr. Ratan Jindal;

b. Pledge of 39.82 Crore equity shares of JSL as held by some of the Promoter and Promoter group of companies as determined on the basis of filings of the Borrower with SEBI;

?. Unconditional and irrevocable corporate guarantee of promoter group companies to the extent of equity shares (93,384,215 equity shares);

d. Pledge over shares of the entities as listed below:

â¢ PT Jindal Stainless Indonesia

â¢ JSL Stainless FZE

â¢ JSL Group Holdings Pte Limited

â¢ IberJindal S.L.

â¢ Jindal Coke Limited

â¢ Jindal United Steel Limited

â¢ JSL Logistics Limited

â¢ Jindal Lifestyle Limited

Secured Borrowings

Working capital facilities amounting to ? 477.21 Crores (previous year ? 643.78 Crores) are secured by first pari-passu charge by way of hypothecation of current assets including finished goods, raw material, work in progress, consumable stores and spares, book debts, bill receivable, etc both present and future and second pari passu charge by way of mortgage/ hypothecation of movable and immovable fixed assets, both present amd future, of the Company. Working Capital facility is repayable on demand. (read with note 15 VI (A) (b) above).

Refer note 50 for disclosure of fair values in respect of financial liabilities measured at amortised cost and analysis of their maturity profiles.

33 Composite scheme of arrangement

A The Composite Scheme of arrangement amongst the Company, Jindal Stainless (Hisar) Limited (JSHL), JSL Lifestyle Limited (JSLLL), Jindal Lifestyle Limited (JLL), JSL Media Limited (JML) and Jindal Stainless Corporate Management Services Private Limited (JSCMS) (âSchemeâ) has been approved by the Honâble National Company Law Tribunal, Chandigarh Bench (âHonâble NCLTâ) and has been made effective from 02 March 2023.

Pursuant to the approval of the Scheme by Hon''ble NCLT vide its Order dated 02 February 2023, having appointed date of 01 April 2020, Jindal Stainless (Hisar) Limited, JSL Media Limited, Jindal Stainless Corporate Management Services Private limited and JSL Lifestyle Limited (post demerger of non-mobility undertaking of JSL Lifestyle Limited into Jindal Lifestyle Limited) have been merged into the Company. The Company has restated the comparative numbers for the year ended 31 March 2022 presented in the standalone financial statements to give effect to the Scheme from the aforementioned appointed date, using Acquisition method of accounting in accordance with the requirements of Ind AS 103 Business Combinations.

B The assets of the acquired entities/undertaking comprise of one stainless steel manufacturing unit with a total capacity of 0.8 MTPA and one mobility unit that have application in mobility space having total enterprise valuation of ? 3,292.00 Crores. The acquisition of the entities/undertaking by the company is for consolidating their respective manufacturing/service capabilities thereby increasing efficiencies in operations and use of resources, for consolidating their diversified products and services portfolios for improving overall customer satisfaction, for pooling their human resources talent for optimal utilization of their expertise, for integrating marketing and distribution channels for better efficiency, for having a larger market footprint domestically and globally, for simplifying and streamlining the group structure and for ensuring optimization of working capital utilization. The acquisition is also creating value for its shareholders by acquiring ready to use assets which shall create operational efficiencies and reducing time to markets.

C In terms of the Scheme, the Company:

(a) has increased its authorised share capital to ? 243,00,00,000 (INR Two Hundred and Forty Three Crores) consisting of 103,50,00,000 ( One Hundred and Three Crores and Fifty Lakhs) Equity Shares having face value of ? 2.00 each (INR Two each) and 18,00,00,000 (Eighteen Crore) preference shares having face value of ? 2.00 each (INR Two each).

(b) has allotted 466,223,429 equity shares of ? 2.00 each fully paid-up to the eligible shareholders of JSHL and JSLLL as on the record date i.e. 09 March 2023.

(c) has also taken on record the cancellation of 168,284,309 equity shares held by JSHL in the Company, resulting in cancellation of equity share capital of the Company amounting to ? 33.66 Crores.

(d) Such issue and cancellation of shares including related adjustment of security premium has been disclosed as Share Capital Suspense Account in comparative numbers as at 31 March 2022 and earning per share, for the year ended 31 March 2022, has been disclosed considering the restated profit and aforesaid issue and cancellation of shares.

D In terms of the Scheme, the Company has accounted for the amalgamation in its books of accounts from the appointed date i.e. 01 April 2020, as per acquisition method of accounting in accordance with the accounting principles as laid down in Ind AS 103 "Business Combinations".

The purchase consideration of acquired entities/undertaking has been allocated on the basis of fair values of the respective identifiable assets and liabilities determined by an independent valuer. The Company has also obtained fair valuation of identified intangible assets and has recorded Customer relationships and Trade marks amounting to ? 647.71 Crores and ? 150.71 Crores respectively based on valuation report from an independent valuer.

The excess of fair value of new shares issued as purchase consideration and cancellation of investments (other than C (c) above) over the net assets including the identified intangible assets acquired under the scheme, has been recorded as goodwill (net). The goodwill is largely attributable to the assembled work force, expected synergies in manufacturing/service capabilities, diversified product range/service and optimized working capital utilization. It will not be deductible for tax purpose.

E Inter-company balances (including other obligations) inter see between the company and acquired entities/undertaking and the investment by acquired entity in the company stand cancelled and eliminated.

F The Company has assumed all the contingent liabilities of the acquired entities/undertaking as per the Scheme. Total contingent liability transferred to the Company, as at appointed date, was ? 220.88 Crores.

G As at appointed date, gross contractual amount of the acquired Trade receivable and other current financial assets was ? 949.42 Crores against which no provision had been considered since fair value of the acquired receivables were equal to carrying value as on the date of acquisition.

H Acquisition related costs of ? 0.52 Crores, ? 1.19 Crores and ? 15.70 Crores had been recognised under Legal & Professional Expenses in the Statement of Profit and Loss for the year ended 31 March 2023, 31 March 2022 and March 31,2021 respectively.

I The necessary steps and formalities in respect of transfer of and vesting in the properties, licenses, approvals and investments in favor of the Company and modification of charges etc are under implementation.

34 During the year ended 31 March 2023, the Company had participated in the e-auction process for purchase of Rathi Super Steel Limited ("RSSL") (which was under liquidation process), on a going concern basis, in terms of the applicable provisions of Insolvency and Bankruptcy Board of India (Liquidation Process), Regulations, 2016 (âInsolvency Regulationsâ) wherein the Company emerged as the successful bidder.

Accordingly, the Liquidator appointed by the Honâble Adjudicating Authority, National Company Law Tribunal, Principal Bench, New Delhi (âHonâble NCLTâ), issued a sale certificate (âSale Certificateâ) dated 16 November 2022 vesting the sole and beneficial ownership of RSSL in favour of the Company. Further, in terms of the para 15 of the Sale Certificate, the erstwhile board of directors of RSSL stands vacated and the nominees of the Company have been appointed as directors with effect from 16 November 2022.

The Company has filed an application with the Honâble NCLT for its confirmation on the terms of implementation and for grant of certain reliefs and concessions as sought by the Company in connection with the acquisition, for which the order of Honâble NCLT is still awaited. Considering the Company has obtained control of RSSL by virtue of appointment of the board of directors of RSSL, RSSL has been considered as a subsidiary of the Company with effect from 16 November 2022. However, pending aforementioned order by the NCLT on terms of implementation, the purchase consideration of ? 205.00 Crores paid by the Company has been considered as advance for investment in a subsidiary company and classified under âNon- current financial assetsâ.

35 During the year ended 31 March 2023, the shareholders of the Company, through postal ballot, had approved to make Jindal United Steel Limited (''JUSL''), a wholly owned subsidiary of the Company, through acquisition of 341,589,879 equity shares comprising 74% of the paid-up equity share capital of JUSL, subject to requisite approval(s), for an aggregate consideration of ? 958.00 Crores. However, pending receipts of said approval(s), the part payment, towards purchase consideration, of ? 200.00 Crores paid by the Company has been considered as advance for investment in a subsidiary company and classified under âNon- current financial assetsâ.

36 During the year ended 31 March 2023, with a view to secure its long term availability of nickel, the Company has entered into a collaboration agreement for an investment of upto USD 157 Million for development, construction and operation of a Nickel Pig Iron smelter facility in Indonesia. As a part of the said agreement, the Company has, subsequent to 31 March 2023, acquired 49% equity interest of PT Cosan Metal Industry, Indonesia through acquisition of 100% stake in Sungai Lestari Investment Pte. Ltd., Singapore for a consideration of USD 64.19 million.

37 a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is ? 930.16

Crores (previous year ? 1,646.92 Crores).

b) Export obligations pending against import made under EPCG scheme is ? 2,581.51 Crores (previous year ? 1,004.42 Crores).

c) Distribution of dividends [refer footnote to note 14(i)]

*LADT Act / Entry Tax Act

1 "The Company had challenged the legality of LADT Act / Entry Tax Act in the state of Haryana before the Hon''ble Punjab and Haryana High Court / Supreme Court of India. Subsequently, on the SLP of the Haryana Government, Constitutional Bench of the Honâble Supreme vide its judgement dated November 11, 2016 held the applicability of entry tax valid on compensatory ground and directed its Divisional/ Regular Bench for examining the provisions of the state legislation on the issue of discrimination with respect to the parameters of Article 304 (a) of the Constitution and competence of state legislatures to levy entry tax on goods entering the landmass of India from another country. The division bench of Hon''ble Supreme Court vide its order dated March 21,2017 (declared on May 20, 2017) remanded back the matter and permitted the petitioners to file petition before respective High Court to decide on factual background or any other constitutional/ statutory issues arises for consideration. The company accordingly filed Civil Writ Petition before Hon''ble High Court of Punjab & Haryana on May 30, 2017. The Honâble High Court granted interim relief by order for stay of demand on May 31, 2017 till any further direction.

In the meanwhile, the division bench of Hon''ble Supreme Court of India vide its order dated October 09, 2017 has upheld the legislative competence of the State Legislatures to levy Entry Tax on Import of goods from any territory outside India while examining the Entry Tax legislations of the State of Odisha, Kerala and Bihar.

The Company has made necessary provisions in this regard based on own assessment and calculation.

In view of above, Interest/ penalty if any, will be accounted for as and when this is finally determined/ decided by the Honâble Court.

2 "The Company had challenged the legality of Orissa Entry Tax Act, 1999 before the Honâble Supreme Court. The order dated October 09, 2017 of Divisional bench of the Honâble Supreme Court read with the order dated November 11,2016 of Nine Judge Bench of Honâble Supreme Court, decided some of the issues and granted opportunity to the petitioners for filing revival petition within 30 days for deciding the issue of discrimination under Article 304(a) as per law laid down by Nine Judges Bench of the Honâble Supreme Court. The Company has filed revival petition before the Honâble High Court of Orissa on the ground of discrimination under Article 304(a), as per the direction of the Honâble Supreme Court. However, interest/penalty (if any) till the decision of the Honâble Supreme Court had been stayed by Honâble High Court of Orissa in three separate writ petitions filed by the Company on the issue exclusively on the legality of imposing interest under the Orissa Entry Tax Act, 1999.

In the meantime so far as the interest matter is concerned, the Orissa High Court has delivered a judgement dated March 15, 2023 in a batch of writ petitions including JSL wherein the levy of interest was challenged. In the said judgement the High Court while quashing the orders levying interest and also holding that the petitioners were prevented by sufficient cause in not paying the balance tax demand, have also directed that on all the amounts which were stayed by the Supreme Court and the High Court and the petitioners did not pay the same on the due dates, the petitioners should compensate the state government by paying simple interest @ of 9% per annum. JSL has challenged the said judgement in a special leave petition before the Honâble Supreme Court of India.

B The Company has given corporate guarantee to banks against credit facilities/financial assistance availed by PT. Jindal Stainless Indonesia of ? 98.61 Crores (previous year nil).

(x) Risk exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such valuation of the Company is exposed to follow risks -

A) Salary increases : Higher than expected increases in salary will increase the defined benefit obligation.

B) Investment risk : Since the plan is funded then assets liabilities mismatch and actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the defined benefit obligation.

C) Longevity: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.

D) Discount rate : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

E) Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the value of the planâs debt investments.

F) Mortality and disability : If the actual deaths and disability cases are lower or higher than assumed in the valuation, it can impact the defined benefit obligation.

G) Withdrawals : If the actual withdrawals are higher or lower than the assumed withdrawals or there is a change in withdrawal rates at subsequent valuations, it can impact defined benefit obligation.

D a) Provident fund trust :

The Company makes monthly contributions to provident fund managed by trust for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. Employer established provident fund trusts are treated as defined benefit plans, since the Company is obliged to meet interest shortfall, if any, with respect to covered employees. According to the actuarial valuation, the defined benefit obligation of interest rate guarantee on exempted provident fund in respect of employees of the Company as on 31 March 2023 works out to '' Nil (previous year '' Nil) and hence no provision is required to be provided for in the books of account towards the guarantee for notified interest rates.

b) Gratuity fund trust :

The Company sponsors funded defined benefit plans for all qualifying employees. The level of benefits provided depends on the memberâs length of service and salary at retirement age.

The gratuity plan is covered by The Payment of Gratuity Act, 1972. Under the gratuity plan, the eligible employees are entitled to post-retirement benefit at the rate of 15 daysâ salary for each year of service until the retirement age of 58 years, without any payment ceiling. The vesting period for gratuity as payable under The Payment of Gratuity Act, 1972 is 5 years.

The funds are managed by Jindal Stainless Employees Group Gratuity Trust, Jindal Stainless (Hisar) Limited Employee Group Gratuity Trust, Jindal Stainless (Hisar) Limited (Ferro alloys) Employee Group Gratuity Scheme and Jindal Stainless Corporate Management Services Employee Gratuity Trust which are governed by the Board of trustees. The Board of Trustees is responsible for the administration of the plan assets and for the definition of the investment strategy.

42 Lease related disclosures

The Company has leases for the factory land, plant and machinery and related facilities. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. Variable lease payments which do not depend on an index or a rate are excluded from the initial measurement of the lease liability and right of use assets. The Company classifies its right-of-use assets in a consistent manner to its property, plant and equipment.

Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublease the asset to another party, the right-of-use asset can only be used by the Company. Some leases contain an option to extend the lease for a further term. The Company is prohibited from selling or pledging the underlying leased assets as security.

B Total cash outflow for leases for the year ended 31 March 2023 was ? 44.15 Crores (previous year ? 36.12 Crores).

C The Company has total commitment for short-term leases as at 31 March 2023 ? 14.40 Crores (previous year ? 10.81 Crores).

43 Operating segments

In accordance with Ind AS 108 âOperating Segmentsâ, the Board of Directors of the Company, being the chief operating decision maker of the Company has determined âStainless steel productsâ as the only operating segment.

Further, in terms of paragraph 31 of Ind AS 108, entity wide disclosures have been presented in the consolidated financial statements which are presented in the same financial report.

B Fair values hierarchy

The fair value of financial instruments as referred to in note (A) above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities [Level 1 measurements] and lowest priority to unobservable inputs [Level 3 measurements].

The categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

Valuation process and technique used to determine fair value

(i) The fair value of investments in quoted equity shares is based on the current bid price of respective investment as at the balance sheet date.

(ii) The fair value of investments in unquoted equity shares is estimated at their respective costs, since those companies do not have any significant operations and there has neither been any significant change in their performance since initial recognition nor there is any expectation of such changes in foreseeable future.

(iii) The Company enters into forward contracts with banks for hedging foreign currency risk of its borrowings and receivables and payables arising from import and export of goods. Fair values of such forward contracts are determined based on spot current exchange rates and forward foreign currency exchange premiums on similar contracts for the remaining maturity on the balance sheet date.

The management assessed that fair values of current loans, other current financial assets, cash and cash equivalents, other bank balances, trade receivables, current investments, short term borrowings, trade payables and other current financial liabilities approximate their respective carrying amounts largely due to the short-term maturities of these instruments. The fair value of the financial assets and liabilities is disclosed at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

(i) Non-current investments, long-term loans and advances and non-current financial liabilities are evaluated by the Company based on parameters such as interest rates, individual creditworthiness of the counterparty/borrower and other market risk factors.

(ii) The fair values of the Companyâs fixed interest-bearing liabilities, loans and receivables are determined by applying discounted cash flows (âDCFâ) method, using discount rate that reflects the issuerâs borrowing rate as at the end of the reporting period. The own non-performance risk as at 31 March 2023 was assessed to be insignificant.

(iii) Most of the long term borrowing facilities availed by the Company from unrelated parties are variable rate facilities which are subject to changes in underlying interest rate indices. Further, the credit spread on these facilities are subject to change with changes in Companyâs credit worthiness. The management believes that the current rate of interest on these loans are in close approximation from market rates applicable to the Company. Therefore, the management estimates that the fair value of these borrowings are approximate to their respective carrying values.

The Companyâs risk management is carried out by a central treasury department (of the Company) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and investment of excess liquidity.

C.1 Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by investments in redeemable preference shares, cash and cash equivalents, trade receivables, derivative financial instruments and other financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

(a) Credit risk management

The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The Company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

In respect of financial assets carried at amortised cost, other than trade receivables, the management has evaluated that as at 31 March 2023 and 31 March 2022, the credit risk is low and hence, allowance, if any, is measured at 12-month expected credit loss.

In respect of trade receivables, the Company is required to follow simplified approach and accordingly, allowance is recognised for lifetime expected credit losses.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country.

Derivative financial instruments

Derivative financial instruments are considered to have low credit risk since the contracts are with reputable financial institutions, most of which have an ''investment grade'' credit rating.

Trade receivables

Trade receivables are generally unsecured and non-interest bearing. There is no significant concentration of credit risk. The Companyâs credit risk management policy in relation to trade receivables involves periodically assessing the financial reliability of customers, taking into account their financial position, past experience and other factors. The utilization of credit limit is regularly monitored and a significant element of credit risk is covered by credit insurance. The Companyâs credit risk is mainly confined to the risk of customers defaulting against credit sales made. Outstanding trade receivables are regularly monitored by the Company. The Company has also taken advances and security deposits from its customers, which mitigate the credit risk to an extent. In respect of trade receivables, the Company recognises a provision for lifetime expected credit losses after evaluating the individual probabilities of default of its customers which are duly based on the inputs received from the marketing teams of the Company.

Other financial assets measured at amortised cost

Investments in redeemable preference shares of associate companies, loans (comprising security deposits and loan to a subsidiary) and other financial assets are considered to have low credit risk since there is a low risk of default by the counterparties owing to their strong capacity to meet contractual cash flow obligations in the near term. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

(b) Expected credit losses for financial assets

(i) Financial assets (other than trade receivables)

The Company provides for expected credit losses on loans and advances other than trade receivables by assessing individual financial instruments for expectation of any credit losses.

- For cash and cash equivalents, other bank balances and derivative financial instruments- Since the Company deals with only high-rated banks and financial institutions, credit risk in respect of cash and cash equivalents, derivative financial instruments, other bank balances and bank deposits is evaluated as very low.

- For loans comprising security deposits paid - Credit risk is considered low because the Company is in possession of the underlying asset.

- For other financial assets - Credit risk is evaluated based on the Company knowledge of the credit worthiness of those parties and loss allowance is measured. For such financial assets, the Company policy is to provide for 12 month expected credit losses upon initial recognition and provide for lifetime expected credit losses upon significant increase in credit risk.

As at 31 March 2023 and 31 March 2022, management has evaluated that the probability of default of outstanding financial assets (other than trade receivables) is insignificant and therefore, no allowance for expected credit losses has been recognised.

(ii) Expected credit loss for trade receivables under simplified approach

In respect of trade receivables, the Company measures the loss allowance at an amount equal to lifetime expected credit losses using a simplified approach.

Based on evaluation of historical credit loss experience, management considers an insignificant probability of default in respect of receivables which are less than one year overdue. Receivables which are more than one year overdue are analysed individually and allowance for expected credit loss is recognised accordingly.

C.2 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, it will have sufficient liquidity to meet its liabilities when they are due.

Management monitors rolling forecasts of the Company liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

(ii) Financial assets

The Companyâs investments in redeemable preference shares of its associate companies and government securities, loan to a related party and deposits with banks are carried at amortised cost and are fixed rate instruments. They are, therefore, not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. The Companyâs investments in fixed deposits carry fixed interest rates.

(c) Price risk (i) Exposure

The Companyâs exposure to price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

52 Other statutory information

i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

ii) The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

iv) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

v) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

vi) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.

vii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period. (Refer note 33 I)

viii) The Company does not have any transactions and outstanding balances during the current as well previous year with Companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

ix) Quarterly returns or statements of current assets filed by the Company with banks are in agreement with the unaudited books of accounts and no material discrepancy was noticed with the reviewed/ audited books of account.

x) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the companies act, 2013 read with the companies (restriction on number of layers) rule, 2017.

53 Capital Management

The Companyâs capital management objectives are to ensure the long term sustenance of the Company as a going concern while maintaining healthy capital ratios, strong external credit rating and to maximise the return for stakeholders.

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions, to support the need of operations and to mitigate the risks, if any. In order to maintain or adjust the capital structure, the Company may deploy cash accruals towards growth/ capital expansion, evaluate new financing options including means of raising finance (bank loans, debt capital market), refinance existing loans, monetize assets, infuse capital (equity/ preference) through public offering/ private placement/ preferential allotment, adjust the amount of dividends, reduce equity capital etc. The Company also judiciously manages its capital allocations towards different various purposes viz. sustenance, expansion, strategic acquisition/ initiatives and/ or to monetize market opportunities.

54 Code on Social Security

The Code of Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post employment received Presidential assent in September 2020. Subsequently the Ministry of Labour and Employment had released the draft rules on the aforementioned code. However, the same is yet to be notified. The Company will evaluate the impact and make necessary adjustments to the financial statements in the period when the code will come into effect.

55 Previous yearâs figures have been regrouped/ reclassified wherever necessary, to conform to current periodâs classification.

Mar 31, 2022

# The management of the Company evaluated impairment indicators with respect to non-current investment outstanding as on 31 March 2022 and concluded that no impairment indicators are applicable on such non current investments.

* Undertaking for non disposal of investment by way of letter of comfort given to banks against credit facilities/financial assistance availed by the said subsidiary.

** The Sub-committee of the Board of Directors of the Jindal United Steel Limited, an associate of the Company (JUSLâ) at its meeting held on 10 January 2022, has allotted 8,622,500 equity shares upon conversion of 0.01% 8,622,500 Non-Cumulative Compulsorily Convertible Preference Shares held by the Company in JUSL.

@ The Board of Directors of the Company at its meeting held on 6 June 2020, has approved the request received from Jindal Coke Limited, an associate of the Company, to vary the terms and conditions of 17,617,568 numbers of 0.01% Non-Cumulative Compulsorily Convertible Preference Shares (âNCCCPsâ) held by the Company in Jindal Coke Limited (JCLâ) to make them at par with existing 10% NonCumulative Non-Convertible Redeemable Preference Shares, held by the Company in JCL.

The variation in the terms of the existing NCCCPs were made effective from 19 June 2020, i.e. the date when the shareholders of JCL has approved the variation in their extra- ordinary general meeting.

Dunng the year ended 31 March 2022, the Company allotted 38,260,868 equity shares (previous year nil) having face value of 2 each, (including premium of 40.55 per share), aggregating to 162.80 crores (previous year nil).

As on 31 March 2022, 8,802,167 Global Depository Shares ( ''GDSs'' ) (previous year 8,802,167 GDSs) with 17,604,334 underlying equity shares (previous year 17,604,334 equity shares) were outstanding. Each GDS represents 2 underlying equity shares of the Company.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having a face value of 2 per share. Each shareholder is eligible for one vote per equity share held [other than the shares represented by Regulation S Global Depository Shares issued by the Company whose voting rights are subject to certain conditions and procedure as prescribed under the Regulation S Deposit Agreement]. The Company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and also has equal right in distribution of profit/surplus in proportions to the number of equity shares held by the shareholders.

The Company has not issued any share as fully paid up without payment being received in cash or as bonus shares nor any share has been bought back by the Company for the period of 5 year immediately preceding the balance sheet date.

* On 29 September 2020, the Company had issued and allotted 38,260,868 number of convertible equity warrants of K 2 each, at a price of K 42.55, which included a premium of K 40.55 per convertible equity warrants, as determined in accordance with the provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, after receipt of subscription money @ 33% of the issue price i.e. K 14.04 per warrant (including paid up amount of K 0.66 per warrant) to Virtuous Tradecorp Private Limited, a promoter group entity and Kotak Special Situations Fund, an Alternate Investment Fund and a non-promoter entity, on preferential basis.

During the year ended 31 March 2022, the Company allotted 38,260,868 equity shares (previous year nil) having face value of K 2 each, (including premium of K 40.55

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The above term loans amounting K 1,006.99 crores as at 31 March 2022 bear a floating rate of interest linked with State Bank of India marginal cost of funds based lending rate or benchmark of respective banks or repo rate plus applicable spread ranging from 40 basis points to 375 basis points (previous year spread ranging from 20 basis points to 305 basis points).

The foreign currency loan amounting K 72.86 crores as at 31 March 2022 is linked to 6 month London interbank offered rate 115 basis points (previous year nil)

The non-convertible debentures (NCD) amounting K 375.00 crores as at 31 March 2022 bear a fixed rate of interest 7.73% (previous year nil).

The inter corporate deposit from the related party is a variable rate facility which is subject to changes as notified by lender from time to time in accordance with prevailing market interest rates. As at 31 March 2022, the aforementioned deposits carry rate of interest of 10% (previous year 10%).

Pursuant to section 135 of the Act, the Company has constituted a Corporate Social Responsibility (CSR) Committee which is required to formulate and recommend to the Board of Directors a Corporate Social Responsibility Policy indicating the CSR activities to be undertaken by the Company as specified in Schedule VII to the Act. The gross amount to be spent by the Company as per the limits of section 135 is ? nil (previous year ? nil).

* On 30 September 2019, the Taxation Laws (Amendment) Ordinance 2019 (âthe Ordinanceâ) was passed introducing section 115BAA of the Income-tax Act, 1961 which allowed domestic companies to opt for an alternative tax regime from financial year 2019-20 onwards. As per the regime, companies can opt to pay reduced income-tax @22% (plus surcharge and cess) subject to foregoing of certain exemptions. Central Board of Direct taxes vide circular number 29/2019 clarified that companies opting for lower rates of taxes will not be allowed to carry forward minimum alternate tax (MAT) credit and also will not be allowed to offset brought forward losses on account of additional depreciation. During the current quarter, the Company has decided to opt for the aforementioned regime and has provided for its current taxes at lower rates and has made the requisite adjustments in its deferred taxes.

Composite scheme of arrangement

At its meeting held on 29 December 2020, the Board of Directors of the Company considered and approved a Composite Scheme of Arrangement pursuant to Sections 230 to 232 and other relevant provisions of the Companies Act, 2013, amongst the Company, Jindal Stainless (Hisar) Limited, JSL Lifestyle Limited, Jindal Lifestyle Limited, JSL Media Limited and Jindal Stainless Corporate Management Services Private Limited (''Scheme''). The aforementioned Scheme is subject to necessary statutory and regulatory approvals under applicable laws, including approval of the Honâble National Company Law Tribunal, Chandigarh Bench (âNCLTâ) which is currently awaited. In the interim, the Company has received the approval of Honâble NCLT on its first motion application for convening the meeting of the Shareholders and Creditors on 25 February 2022 and has subsequently also received the approval from its Shareholders and Creditors and is now in process of filing the second motion application before the Honâble NCLT.

The Company is closely monitoring the impact of the COVID-19 pandemic and currently believes that there will not be any adverse impact on the long term operations, financial position and performance of the Company.

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is ? 1,558.37 crores (previous year ? 734.84 crores).

00	Contingent liabilities	As at	As at
		31 March 2022	31 March 2021
A	Demands from statutory and regulatory authorities
(i)	- Sales tax, value added tax and entry tax*#	110.69	110.79
	- Excise duty, custom duty, service tax and GST#	43.97	44.70
	- Income-tax	135.61	99.96
(ii)	- Demand from office of the Dy. Director of Mines, Jajpur Road Circle, Odisha on account of mining of excess quantity of chrome ore over and above the approved quantity under mining plan/scheme	77.53	77.53
	- Royalty under the Mines and Minerals (Development and Regulation) Act, 1957, rural infrastructure and socioeconomic development tax under the Orissa Rural Infrastructure and Socio-Economic Development Act, 2004 and Water tax under the Orissa Irrigation Act, 1959	4.80	4.80
B	Corporate guarantee given to banks against credit facilities/financial assistance availed by Jindal Stainless (Hisar) Limited amount for facilities outstanding	3,143.84	2,940.36
		3,516.44	3,278.14

* The Company had challenged the legality of Orissa Entry Tax Act, 1999 before the Honâble Supreme Court. The order dated 09 October 2017 of Divisional bench of the Honâble Supreme Court read with the order dated 11 November 2016 of Nine Judge Bench of Honâble Supreme Court, decided some of the issues and granted opportunity to the petitioners for filing revival petition within 30 days for deciding the issue of discrimination under Article 304(a) as per law laid down by Nine Judges Bench of the Honâble Supreme Court. The Company has filed revival petition before the Honâble High Court of Orissa on the ground of discrimination under Article 304(a), as per the direction of the Honâble Supreme Court. However, interest/penalty (if any) till the decision of the Honâble Supreme Court has been stayed by Honâble High Court of Orissa in three separate writ petitions filed by the Company on the issue exclusively on the legality of imposing interest under the Orissa Entry Tax Act, 1999 and therefore, liability, if any, in this regard will be recognised when this matter is finally settled/determined by the Honâble High Court of Orissa.

# Amount includes basic, interest and penalty as demanded by the concerned authority in the relevant case.

C Income-tax

Contingent liabilities for income-tax specified above, inter alia, includes ? 71.10 crores (previous year ? 45.54 crores) pertaining to Assessment years 2012-13 to 2014-15 for which the management does not expect any cash outflow since the Company has sufficient unabsorbed depreciation to set off from disallowance, if any, that may arise on account of adverse ruling by higher authorities in relation to the aforementioned demands. Having said that, the management is fairly confident of a favourable outcome for the ongoing demands/ litigations on all the aforementioned years.

(ix) Risk exposures:

Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such valuation of the Company is exposed to follow risks -

A) Salary increases : Higher than expected increases in salary will increase the defined benefit obligation.

C) Discount rate : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

D) Mortality and disability : If the actual deaths and disability cases are lower or higher than assumed in the valuation, it can impact the defined benefit obligation.

E) Withdrawals : If the actual withdrawals are higher or lower than the assumed withdrawals or there is a change in withdrawal rates at subsequent valuations, it can impact defined benefit obligation.

41 Lease related disclosures

B Fair values hierarchy

The categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market;

Level 2: Directly (i.e. as prices) or indirectly (i.e. derived from prices) observable market inputs, other than Level 1 inputs; and

Valuation process and technique used to determine fair value

(i) The fair value of investments in quoted equity shares is based on the current bid price of respective investment as at the balance sheet date.

(ii) The fair values of the Company''s fixed interest-bearing liabilities, loans and receivables are determined by applying discounted cash flows (âDCF'') method, using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period. The own non-performance risk as at 31 March 2022 was assessed to be insignificant.

(iii) Most of the long term borrowing facilities availed by the Company from unrelated parties are variable rate facilities which are subject to changes in underlying interest rate indices. Further, the credit spread on these facilities are subject to change with changes in Company''s credit worthiness. The inter corporate deposit from the related party is also a variable rate facility which is subject to changes as notified by lender from time to time in accordance with prevailing market interest rates. The management believes that the current rate of interest on these loans are in close approximation from market rates applicable to the Company. Therefore, the management estimates that the fair value of these borrowings are approximate to their respective carrying values.

The Company''s risk management is carried out by a central treasury department (of the Company) under policies approved by the board of directors. The board of directors provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange nsk, interest rate risk, credit risk and investment of excess liquidity.

C.1 Credit risk

Credit nsk is the nsk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by investments in redeemable preference shares, cash and cash equivalents, trade receivables, derivative financial instruments and other financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

(a) Credit risk management

(i) Low credit risk

(ii) Moderate credit risk

(iii) High credit risk

In respect of financial assets carried at amortised cost, other than trade receivables, the management has evaluated that as at 31 March 2022 and 31 March 2021, the credit risk is low and hence, allowance, if any, is measured at 12-month expected credit loss.

In respect of trade receivables, the Company is required to follow simplified approach and accordingly, allowance is recognised for lifetime expected credit losses.

Cash and cash equivalents and bank deposits

Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits and accounts in different banks across the country. Derivative financial instruments

Derivative financial instruments are considered to have low credit risk since the contracts are with reputable financial institutions, most of which have an ''investment grade'' credit rating.

Trade receivables

Trade receivables are generally unsecured and non-interest bearing. There is no significant concentration of credit risk. The Company''s credit risk management policy in relation to trade receivables involves periodically assessing the financial reliability of customers, taking into account their financial position, past experience and other factors. The utilization of credit limit is regularly monitored and a significant element of credit risk is covered by credit insurance. The Company''s credit risk is mainly confined to the risk of customers defaulting against credit sales made. Outstanding trade receivables are regularly monitored by the Company. The Company has also taken advances and security deposits from its customers, which mitigate the credit risk to an extent. In respect of trade receivables, the Company recognises a provision for lifetime expected credit losses after evaluating the individual probabilities of default of its customers which are duly based on the inputs received from the marketing teams of the Company.

Other financial assets measured at amortised cost

(b) Expected credit losses for financial assets

(i) Financial assets (other than trade receivables)

The Company provides for expected credit losses on loans and advances other than trade receivables by assessing individual financial instruments for expectation of any credit losses.

- For loans comprising security deposits paid - Credit risk is considered low because the Company is in possession of the underlying asset.

As at 31 March 2022 and 31 March 2021, management has evaluated that the probability of default of outstanding financial assets (other than trade receivables) is insignificant and therefore, no allowance for expected credit losses has been recognised.

(ii) Expected credit loss for trade receivables under simplified approach

In respect of trade receivables, the Company measures the loss allowance at an amount equal to lifetime expected credit losses using a simplified approach.

C.2 Liquidity risk

C.3 Market risk

(a) Foreign currency risk

The Company is exposed to foreign exchange risk in the normal course of its business. Multiple currency exposures arise from commercial transactions like sales, purchases, borrowings, recognized financial assets and liabilities (monetary items). Certain transactions of the Company act as natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the Company adopts the policy of selective hedging based on risk perception of management. Foreign exchange hedging contracts are carried at fair value. Foreign currency exposures that are not hedged by derivative instruments outstanding as on the balance sheet date are as under:

(b) Interest rate risk (i) Financial liabilities

The Companyâs policy is to minimise interest rate cash flow risk exposures on external financing. At 31 March 2022 and 31 March 2021, the Company is exposed to changes in interest rates through bank borrowings carrying variable interest rates.

(ii) Financial assets

The Companyâs investments in redeemable preference shares of its associate companies and government securities, loan to a related party and deposits with banks are carried at amortised cost and are fixed rate instruments. They are, therefore, not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. The Company''s investments in fixed deposits carry fixed interest rates.

(c) Price risk

(i) Exposure

The Company''s exposure to price risk arises from investments held and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

(ii) Sensitivity

The table below summarises the impact of increases/decreases of the index on the Company''s equity and profit for the year :

50 Other statutory information

I) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.

II) The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.

iii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries

vi) The Company is not declared wilful defaulter by and bank or financials institution or lender during the year.

vii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

51 Capital Management

The Company monitors its capital using gearing ratio, which is net debt divided by total equity as given below:

52 Code on Social Security

The Code of Social Security, 2020 ("Code") relating to employee benefits during employment and post employment received Presidential assent in September 2020. Subsequently the Ministry of Labour and Employment had released the draft rules on the aforementioned code. However, the same is yet to be notified. The Company will evaluate the impact and make necessary adjustments to the financial statements in the period when the code will come into effect.

53 Previous yearâs figures have been regrouped/ reclassified wherever necessary, to conform to current periodâs classification.

This is the summary of significant accounting policies and other explanatory information referred in our report of even date.

For and on behalf of the Board of Directors

Mar 31, 2018

1. Significant accounting policies

A. Corporate and general information

Jindal Stainless Limited (âthe Companyâ) is domiciled and incorporated in India and its equity shares and GDR are listed at Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) and Luxemburg Stock Exchange (LSE) respectively. The Registered office of the Company is located at O. P. Jindal Marg, Hisar, Haryana, India. The Company is a leading manufacturer of Stainless Steel flat products in Austenitic, Ferritic, Martensitic and Duplex grades. The products range includes Ferro Alloys, Stainless Steel Slabs, Hot Rolled Coils, Plates and Sheets, and Cold Rolled Coils and Sheets.

The financial statements of the Company for the year ended 31 March 2018 were approved and authorized for issue by the Board of Directors in their meeting held on 25 April 2018.

B. Basis of preparation

These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, as amended upto the reporting date i.e. 31 March 2018.

These financial statements are separate financial statements of the Company. The Company has also prepared consolidated financial statements for the year ended 31 March 2018 in accordance with Ind AS 110 and the same were also approved for issue by the Board of directors on 25 April 2018.

All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

The financial statements have been prepared under the historical cost convention basis except for the following:

- Certain financial assets and liabilities which are measured at amortised cost or fair value;

- Defined benefit plans - plan assets measured at fair value; and

- Share based payments which are measured at fair value of the options.

The preparation of these financial statements requires management to make estimates and assumptions. Actual results could vary from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future years.

The standalone financial statements are presented in Indian Rupees (T), which is the Companyâs functional and presentation currency and all amounts are rounded to the nearest crores (except otherwise indicated).

C. Significant management judgment in applying accounting policies and estimation uncertainty

The following are the critical judgments and the key estimates concerning the future that management has made in the process of applying the Companyâs accounting policies and that may have the most significant effect on the amounts recognized in the financial statements or that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Allowance for expected credit losses - The allowances for expected credit losses reflects managementâs estimate of losses inherent in its credit portfolio. This allowances is based on Companyâs estimate of the losses to be incurred, which derives from past experience with similar receivables, current and historical past due amounts, write-offs and collection, the careful monitoring of portfolio credit quality and current and projected economic and market conditions. Should the present economic and financial situation persist or even worsen, there could be a further deterioration in the financial situation of the Companyâs debtors compared to that already taken into consideration in calculating the allowances recognized in the financial statements.

Evaluation of indicators for impairment of non-financial assets - The evaluation of applicability of indicators of impairment of non-financial assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

Useful lives of depreciable/amortizable assets - Management reviews its estimate of the useful lives of depreciable/ amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of Companyâs plant and equipment.

Defined benefits obligation (DBO) - Managementâs estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, morality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.

Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized.

Contingent liabilities - The Company is the subject of legal proceedings and tax issues covering a range of matters, which are pending in various jurisdictions. Due to the uncertainty inherent in such matters, it is difficult to predict the final outcome of such matters. The cases and claims against the Company often raise difficult and complex factual and legal issues, which are subject to many uncertainties, including but not limited to the facts and circumstances of each particular case and claim, the jurisdiction and the differences in applicable law. In the normal course of business, management consults with legal counsel and certain other experts on matter related to litigation and taxes. The Company accrues a liability when it is determined that an adverse outcome is probable and the amount of the loss can be reasonably estimated.

Fair value measurement of financial instruments: When the fair values of financial assets and financial liabilities recognised in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

D. Standards issued but not yet effective

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28 March 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.

Ind AS 115- Revenue from Contract with Customers: On 28 March 2018, MCA has notified Ind AS 115, Revenue from Contract with Customers. The core principle of new standard is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch-up approach)

The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018.

The Company is evaluating the requirements of this amendment and the impact on the financial statements is being evaluated.

(i) During the year the Company has allotted 60,570,320 equity shares having face value of Rs. 2 each (ââEquity Sharesâ) to the lenders of the Company Upon conversion of the funded Interest Term Loan I and the Funded Interest Term loan II at a price of Rs. 39.10 (including premium of Rs. 37.10) per shares, aggregating to Rs. 236.83 crores.

(ii) COMPULSORILY COVERTIBLE WARRANTS (CCWs)

During the year ended 31 March 2017, the Company had allotted 19,181,586 CCW having face value of Rs. 2 each convertible into 19,181,586 Equity Shares having the face value of Rs. 2 each to Virtuous Tradecorp Private Limited (âVTPLâ), a promoter group entity, for cash consideration at a price of Rs. 39.10 per CCWs (including premium of Rs. 37.10 per CCW) by way of preferential allotment and received a sum of Rs. 25.01 crores towards such application. During the year ended 31 March 2018, 19,181,586 CCW of Rs. 2 each have been converted into 19,181,586 Equity Shares of Rs. each on receipts of the balance Subscription amount of Rs. 26.06 per CCW from VTPL.

(iii) As on 31 March 2018, 8,802,167 GDSs (Previous year 8,802,167 GDSs) with 17,604,334 underlying equity shares (previous year 17,604,334 equity shares) were outstanding Each GDS represents 2 Underlying equity shares of the Company

(B) TERMS/RIGHT ATTACHED TO EQUITY SHARES

The Company has only one class of equity shares having a face value of Rs. 2 per share. Each Shareholder is eligible for one vote per equity shares held (other than the shares represented by regulation S Global Depository Shares (the âGDSsâ) issued by the Company whose voting rights are subject to certain conditions and procedures as prescribed under the Regulation S Deposit Agreement. The Company declares and pays dividend in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and also has equal right in distribution of profit/surplus in proportions to the number of equity shares held by the shareholders.

(D) During the five years immediately preceding 31 March 2018, in year ended 31 March 2017, the Company issued 168,284,309 equity shares to Jindal stainless (Hisar) Limited in terms of the Composite scheme of arrangement referred to in note 26. In the aforementioned period of five years the Company has neither allotted any bonus shares nor have any shares been bought back.

(E) OPTIONALLY CONVERTIBLE REDEEMABLE PREFERENCE SHARES

During the year, the Company has allotted 142,830,637 0.01% Optionally Convertible Redeemable Preference Shares having face value of Rs. 2 each (âOCRPSâ) to the lenders of the Company upon conversion of the Funded Interest Term Loan I and The Funded Interest Term Loan II at a price of Rs. 39.10 (including premium of Rs. 37.10) per OCRPS aggregating to Rs. 558.47 crores, on the terms as approved by the Board of Directors of the Company. (Refer note 30 (II) and note 13).

(F) Refer note 36 for shares reserved for issue under Employee Stock Option Plan (ESOP) 2010, equity shares of Rs. 2 each at as exercise price of Rs. 75 per share.

2. Composite Scheme of arrangement

i. Composite Scheme of Arrangement (hereinafter referred to as the âschemeâ) amongst the company (transferor company) and its three wholly owned subsidiaries, namely, Jindal Stainless (Hisar) Limited (JSHL), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) (resulting companies) under the provisions of Sections 391-394 read with Sections 100-103 of the companies Act, 1956 and other relevant provisions of Companies Act, 1956 and / or Companies Act, 2013 has been sanctioned by the Honâble High Court of Punjab & Haryana, Chandigarh vide its Order dated 21 September 2015, amended vide order dated 12 October 2015.

Section I and Section II of the Scheme became effective on 1 November 2015, operative from the appointed date i.e. close of business hours before midnight of 31 March 2014. Section III and Section IV of the Scheme became effective on 24 September 2016 (i.e. on receipts of approvals from the Orissa Industrial Infrastructure Development Corporation (OIIDCO) for the transfer/grant of the right to use of the land on which Hot Strip Mill (HSM) Plant and Coke Oven Plants are located to JUSL and JCL, respectively as specified in the Scheme), operative from the appointed date i.e. close of business hours before midnight of 31 March 2015.

ii. Pursuant to the Section III and Section IV of the Scheme becoming effective:

a. Business undertaking 2, comprising, inter alia, of the HSM Plant of the Company, has been transferred to JUSL at a lump sum consideration of Rs. 2,412.67 crores; out of this Rs. 2,150.00 crore has been received, and against the balance amount of Rs. 262.67 crores, JUSL is to issue and allot to the company:

- 175,000,000 0.01% non-cumulative compulsorily convertible preference shares (CCPS) having face value of Rs. 10 each during the year ended 31 March 2017 43,868,919 CCPS were allotted to the company and converted into equal number of equity shares of Rs. 10 each as fully paid at par and the balance 131,131,081 CCPS have been presented as â Investment in 0.01% non-cumulative compulsorily convertible preference shares pending allotment â (Refer note 3) , and 87,673,311 10% non-cumulative non-convertible redeemable preference shares having face value of Rs. 10 each, which have been allotted to the company.

b. Business undertaking 3, comprising, inter alia, of the Coke Oven plant of the company, has been transferred to JCL at a lump sum consideration of Rs. 492.65 crores; out of this Rs. 375.00 crore has been received and against the balance amount of Rs. 117.65 crores, JCL to issue and allot to the company.

- 26,000,000 0.01% non-cumulative CCPS having face value of Rs. 10 each [ during the year ended 31 March 2017 8,382,432 CCPS were allotted to the company and converted into equal number of equity shares of Rs. 10 each fully paid at par and the balance 17,617,568 CCPS have been presented as âInvestment in 0.01% non-cumulative compulsorily convertible preference shares pending allotmentâ (Refer note 3)],

- 91,647,073 10% non-cumulative non-convertible redeemable preference shares having face value of Rs. 10 each, which have been allotted to the company.

c. Post section III and section IV of the Scheme becoming effective, as per the Scheme, the company is continuing to operate the business on behalf of JCL and JUSL in trust in so far as may be necessary until all rights, licenses and permits stand fully devolved to and in favour of the resulting companies (JCL and JUSL). Accordingly, the revenue and expenses in this regard for year ended 31 March 2018 have been excluded from statement of profit and loss the transactions entered undertaken on behalf of such companies are recognized in companyâs books as inter-company balances.

*The Company had challenged the legality of Orissa Entry Tax Act, 1999 before the Honâble Supreme Court. In accordance with the order dated 09 October 2017 of Divisional bench of the Honâble Supreme Court read with the order dated 11 November 2016 of 9 judge bench of Honâble Supreme Court, the company has filed revival petition before the Honâble High court of Orissa on ground of discrimination under article 304(a), as per the direction of the Honâble Supreme Court. Liablity in this regard has been provided for. However, interest/penalty (if any) has been stayed by Honâble High Court of Orissa in three separate writ petitions filed by the Company on the issue exclusively on the legality of imposing interest under the Orissa Entry Tax Act, 1999, and therefore, liability, if any, in this regard will be recognized when this matter is finally settled / determined by the Honâble High Court of Orissa.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 161.29 crores (previous year Rs. 129.73 crores).

4. Exceptional items include:

i) Provision for estimated recompense liability to lenders as per CDR guidelines: Rs. 27.50 crores (previous year NIL) Refer note 30).

ii) Gain (net) of Rs. 36.47 crores (previous year: gain (net) of Rs. 33.24 crores) on translation/ settlement of foreign currency monetary items.

iii) Loss (net) of Rs. 1.70 crores (previous year: gain (net) of Rs. 0.12 crore) on fair valuation and settlement of derivative contracts.

iv) Amortisation of debit balance in foreign currency monetary item translation difference account of Rs. 5.90 crores (previous year: Rs. 7.23 crores).

5. Corporate Debt Restructuring (CDR)

I. Pursuant to the approval of reworked CDR package (âRework Scheme) in September 2012 and execution of Amended and Restataed Master Restructuring Agreement (âAmended MRAâ), the long term financial obligations to the CDR lenders were reworked including reworking of repayment schedule, creation of Funded Interest Term Loan (FITL, II) for certain facilities, adjustment in interest rates, etc.

II. In accordance with CDR Empowered Group (EG) approval vide letter dated 26 December 2014, during the year ended 31 March 2018, the Company has allotted 60,570,320 equity shares of face value of Rs. 2 each and 142,830,637 0.01%. Optionally Convertible Redeemable Preference Shares (OCRPS) of face value of Rs. 2 each, both at a premium of Rs. 37.10 per share on conversion of funded interest term loan I and II. As per the terms of the OCRPS, these are redeemable at the option of the Company, anytime upto 31 October 2020. If these are not redeemed by then, the CDR lenders have an option to convert these into equal number of equity shares of the Company anytime upto 31 March 2022. If neither of these options are exercised, these are redeemable on April 2022. If redeemed, the Company shall be obligated to pay or recompense amount upto the Date of redemption.

III. The credit facilities/ loans under the Rework Scheme are also secured by:

a. Unconditional and irrevocable personal guarantee of CMD Mr. Ratan Jindal;

b. Unconditional and irrevocable corporate guarantee of promoter group companies in proportion to the number and to the extent equity shares pledged by each promoter group company;

c. Unconditional and irrevocable corporate guarantee of Jindal Stainless (Hisar) Limited.

d. Pari passu pledge of 183,832,727 equity shares held in the Company by promoters.

e. Pledge over shares of the subsidiaries / associates as listed below:

- PT. Jindal Stainless Indonesia

- Jindal Stainless UK Limited

- JSL, Stainless FZE

- JSL, Group Holdings Pte. Limited

- Iberjindal S.L.

- Jindal Coke Limited

- Jindal United Steel Limited

IV. Since the financial performance of the company during the current and previous financial year was better than the projections as per the approved CDR package, during the current year ended 31 March 2018, the company has initiated negotiations with the CDR lenders for voluntary exist from CDR scheme. The exit from CDR mechanism is subject to approval by the respective banks and / or the CDR EG. CDR exit will lead to greater operational and financial flexibility for the company so that it can go ahead with its growth plans.

V. The Amended MRA as well as the Master Circulars on Corporate Debt Restructuring issued by the Reserve Bank of India, gives a right to the CDR lenders to get the recompense of their waivers and sacrifice made as a part of CDR proposal. The total amount of recompense computed by the Company in accordance with Master Circulars on Corporate Depth restructuring amounts to Rs. 49.70 crores which is subject to final confirmation /reconciliation with individual venders (read with note 29(i)).

6. There are no overdue financial obligation to any banks/ financial institutions as on 31st March 2018 (as on 31st March 2017: Rs. 266.68 crores to 30 lenders, overdue upto 60 days).

7. Based on the intimation received from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, the required disclosure is given below (to the extent information available with the Company):

8. In Compliance with Ind AS-18 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the reported revenue for the period upto 30 June 2017 is inclusive of Excise duty. Goods and Service tax (GST) is made applicable w.e.f. 1 July 2017 and as per Ind AS-18, revenue for the period from 1 July 2017 to 31 March 2018 is net of GST.

Sensitivity due to mortality and withdrawals are not material and hence impact of change in assumptions therefore is not calculated.

The above sensitivity analysis is based on a change in an assumption while holding all other assumption constant. In practice , this in unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligations to significant actuarial assumptions, the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised with in the Balance Sheet.

9. On 28 July 2010, the Company granted 3,577,500 stock options to eligible employees of the Company, its subsidiaries including non-executive directors (excluding Nominee Directors), as per Employees Stock Option Scheme, 2010 (ESOP 2010). The exercise price of stock options is Rs. 75 per share which would gradually vest over a maximum period of 4 years from the date of grant based on specified criteria, as may be decided by the Compensations Committee.

Pursuant to 1st Vesting @ 30% of ESOP outstanding on 28 july 2012, 534,771 ESOPs were vested to eligible employees based on performance rating and 150,000 fresh ESOPs were granted to the employees of the company on 28 July 2012. Pursuant to 2nd vesting @30% of ESOP outstanding on 28 July 2013, 426,024 ESOPs were vested to eligible employees based on performance rating. Pursuant to 3rd Vesting @ 40% of ESOP outstanding on 28 July 2014, 560,625 ESOPs were vested to eligible employees based on performance rating including employees transferred pursuant to the Scheme.

In terms of the Composite Scheme of Arrangement between the Company and others, as approved by the Honâble High Court of Punjab and Haryana, the employees engaged in Demerged Undertakings, Business Undertakings 1,2 and 3 who were transferred as a part of the Scheme to Resulting Company i.e JSHL or Transferee Company 2 i.e. JUSL or Transferee Company 3 i.e. JCL, shall continue to remain entitled to exercise their rights to the stock options granted and vested but have not been exercised as on the Record Date. Further the stock options granted by the company to such employees which have been granted but have not vested as of the Effective Date 1 or effective Date 2 (as defined in the Scheme), as the case may be, shall lapse automatically without any further act on the part of the Company. Furthermore, the exercise price of the stock options, in respect of the employees engaged in the Demerged Undertakings and transferred to the Resulting Company i.e. JSHL shall be reduced in the same proportion as the assets of the Demerged Undertakings bear to the total assets of the Company immediately prior to the Appointed Date 1.

10. Leases Finance lease as a lessee

The Company has taken land parcels on finance lease for periods of 83-90 years. A reconciliation between the total of future minimum lease payments and their present value is given below:

Operating lease as a lessor

The Company has entered into sub-lease agreement for certain land with lease term of 30 years. The lease term can be extended with mutual consent of the Company and the lessor. Minimum lease payments receivable under the operating lease is as below:

Operating lease as a lessee

The agreement for warehouses is on non- cancellable basis for a period of 3-5 years. Future minimum rentals payable under non-cancellable operating leases are as follows:

11. Segment information

The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 âOperating Segmentsâ, no disclosures related to segments are presented in these financial statements.

*The company had filed requisite applications for obtaining the approval of the Central Government for payment of managerial remuneration to a director, the said application is in process; remuneration paid to such director is Rs. 5.33 crores for the period from 6 November 2015 to 31 March 2018 [(Rs. 2.07 crores for the year ended 31 March 2018 (for the year ended 31 March 2017: Rs. 1.77 crores)]. Also, the Central Government has not approved the excess managerial remuneration paid amounting to Rs. 3.26 crores to erstwhile three directors, in earlier years, which is in process of recovery. The Company has recorded excess remuneration as recoverable in the books of account.

âEmployee benefits expense on account of gratuity and compensated absences are estimated based on actuarial valuation for the company as a whole and hence cannot be identified separately for KMPs.

12. The company is listed on stock exchanges in India and has prepared consolidated financial statements as required under Ind-AS 110, Consolidated Financial Statements, Sections 129 of Companies Act, 2013 and listing requirements. The consolidated financial statements are available on companyâs web site.

Investment in subsidiaries, joint ventures and associates are measured at cost as per Ind AS 27, Separate financial statements and hence, not presented here.

B. Fair values hierarchy

The categories used are as follows:

Level 1: Quoted prices for identical instruments in an active market;

Level 2: Directly (i.e as prices) or indirectly (i.e derived from prices) observable market inputs, other than Level 1 inputs; and Level 3: Inputs which are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a net asset value or valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

Valuation process and technique used to determine fair value

i) Investments: The fair values of investments in quoted equity shares are based on the current bid price of respective investments as at the balance sheet date. Fair values of investments in unquoted equity shares is estimated at their respective costs since those companies do not have any significant operations and there has neither been any significant change in their performance since initial recognition nor there is any expectation of such changes in foreseeable future.

ii) Derivative assets and liabilities: The Company enters into forward contracts with banks for hedging foreign currency risk of its borrowings and receivables and payables arising from import and export of goods. Fair values of such forward contracts are determined based on spot current exchange rates and forward foreign currency exchange premiums on similar contracts for the remaining maturity on the balance sheet date.

B.2 Fair value of financial instruments measured at amortised cost

Fair value of financial instruments measured at amortised cost for which fair value is disclosed is as follows, these fair values are calculated using level 3 inputs:

The management assessed that fair values of current investments, other financial assets, trade receivables, cash and cash equivalents, other bank balances, trade payables and other current financial liabilities measured at amortised cost in the financial statements approximate their respective carrying amounts largely due to the short term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

i. Non-current investments, long term loans and non-current financial liabilities are evaluated by the Company based on parameters such as interest rates, individual creditworthiness of the counterparty/Company and other market risk factors.

ii. The fair values of the Companyâs fixed interest- bearing liabilities, loans and receivables are determined by applying discounted cash follows (âDCFâ) method, using discount rate that reflects the issuerâs borrowing rate as at the end of the reporting period. The own non performance risk as at 31 March 2018 was assessed to be insignificant.

iii. All long term borrowings facilities availed by the Company are variable rate facilities and are subject to changes in underlying interest rate indicates/the credit spread due to changes in Companyâs creditworthiness. The management believes that the current rate of interest on these loans are in close approximation from market rates applicable to the Company. Therefore, the management estimates that the fair value of these borrowings are approximate to their respective carrying values.

C. Financial risk management C.1 Credit risk

Credit risk is the risk that a counterparty may not be able to settle its agreed obligations under a financial instrument or customer contract, leading to a financial loss. It arises from credit exposure to investments in redeemable preferences shares, loans, trade receivables, cash and cash equivalents including deposits with banks, derivative financial instruments and other financial assets.

a) Credit risk management practices

The Company assesses and manages credit risk based on internal credit rating system. Internal credit rating is performed for each class of financial instruments with different characteristics. The company assigns the following credit ratings to each class of financial assets based on the assumptions, inputs and factors specific to the class of financial assets.

i) Low credit risk on financial reporting date

ii) Moderate credit risk

iii) High credit risk

The Company provides for expected credit loss based on the following:

Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments after lapse of a time period, usually not exceeding 3 years from the agreed time period as per contract, as this reflects the historical experience of the Company with respects to the period over which substantially all of the collectible financial assets are settled. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company or debtor declaring bankruptcy or a litigation decided against the company. The company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.

Trade receivables

The Companyâs credit risk is mainly confined to the risk of customers defaulting against credit sales made. Outstanding trade receivables are regularly monitored by credit monitoring group. The Company has also taken advances and security deposits from its customers which mitigate the credit risk to an extent.

In respect of trade receivables, the company recognizes a provision for lifetime expected credit losses after evaluating the individual probabilities of default of its customers which are duly based on the inputs received from the marketing teams of the Company.

Other financial assets

- Cash and cash equivalents including, deposits with banks and Derivative financial instruments are considered to have low credit risk since the contracts are with reputable financial institutions most of which have an âInvestment gradeâ credit rating.

- Investments in redeemable preference shares of associates companies, loans (Comprising security deposits and loan to subsidiary) and other financial assets are considered to have low credit risk since there is a low risk of default by the counterparties owing to their strong capacity to meet contractual cash flow obligations in near term.

b) Allowance for expected credit losses

As at 31 March 2018 and 31 March 2017, the company considered the individual probabilities of default of its financial assets (other than trade receivables) and determined that in respect of counterparties with low credit risk, no defaults events are considered to be possible with in the 12 Months after the reporting date.

In respect of trade receivables, the Company measures the loss allowance at an amount equal to lifetime expected credit losses using a simplified approach.

C.2 Liquidity risk

Liquidity risk is the risk that Company could experience difficulties in meeting its existing or future obligations due to insufficient availability of cash & cash equivalents or other financial assets. Managing liquidity risk, is one of the central risk of the Company. In order to be able to ensure the Groupâs solvency and financial flexibility at all times, long term credit limits and cash and cash equivalents are reserved on the basis of perennial financial planning and monthly rolling liquidity planning.

The Company manages its liquidity risk by using reasonable and retrospectively assessed assumptions to forecast the future cash generative capabilities and working capital requirements of the businesses it operates and by maintaining committed borrowing facilities and other credit lines as appropriate.

C.3. Market Risk a) Foreign Currency risk

The Company is exposed to foreign exchange risk in the normal course of its business. Multiple currency exposures arise from commercial transactions like sales, purchases, borrowings, recognised financial assets and liabilities (monetary items). Certain transactions of the company act as natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, The Company adapts the policy of selective hedging, based on risk perception of management. Foreign exchange hedging contracts are carried at fair value. Foreign Currency exposures that are not hedged by derivative instruments outstanding as on the balance sheet date are as under:

Foreign exchange risk sensitivity analysis has been performed on the foreign currency exposures in the Companyâs financial assets and financial liabilities at the reporting date, net of derivative contracts for hedging those exposures. Reasonably possible Changes are based on an analysis of historic currency volatility, together with any relevant assumptions regarding near term future volatility.

Below is the sensitivity of profit or loss to changes in interest rates. Reasonably possible changes in interest rates have been applied to net variable rate exposure, denominated by currency, in order to provide an indication of the possible impact on the Companyâs statement of profit and loss. The assumed movement in interest rates for sensitivity analysis is based on the currently observable market conditions.

ii. Financial assets

The Companyâs investments in redeemable preference shares of its associate companies and government securities, loan to a related party and deposits with banks are carried at amortised cost and are fixed rate deposits. They are, Therefore, not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.

c) Price risk

The Company has investment in equity shares of unrelated companies which are carried at fair value. The Company doesnât expect a significant impact on its profit or loss for the year and equity as at balance sheet date due to reasonably possible changes in prices of such financial instruments.

13. Capital Management

The Companyâs objectives when managing capital are to secure its ongoing financial needs to continue as a going concern as well as to cater to its growth targets, in order to provide returns to shareholders and benefits for other stakeholders and to maintain a cost efficient and risk optimized capital structure. The company manages the capital structure and makes adjustments to it in light of changes in economic condition, its business activities, the investment and expansion program and the risk characteristics of the underlying assets.

In order to maintain or adjust the capital structure, The Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, increase debt or sell assets to reduce debt.

The Company monitors capital, among others, on the basis of its gearing ratio and the ratio of net debt to its Earnings Before Interest, Depreciation and Amortization (EBITDA).

Mar 31, 2017

- In the principal market for the asset or liability.

- In the absence of a principal market, in the most advantageous market for the asset or liability The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

Afair value measurement of a non- financial asset takes in to account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

(i) The Company has elected to measure the items of Property, Plant & Equipment at their Fair Value on the date of transition, (refer note no 56)

(ii) Change in depreciation for 2015-16 due to fair valuation and changes in useful life is higher by Rs, 53.68 Crores.

(iii) Useful life of certain item of plant & Machinery and building have been upward revised upto 40 years and 60 years respectively.

* Includes Rs, 9.53 Crore (Rs, 9.53 Crore) jointly owned with other body corporate with 50% share.

** Includes Rs, 3.09 Crore (Rs, 3.09 Crore) jointly owned with other body corporate with 50% share.

*** Includes Project Inventory Rs, 10.50 Crore (Rs, 6.18 Crore).

# Includes (Rs, 10.80 Crore) (Rs, 82.75 Crore) on account of foreign exchange fluctuation on loan/liability including fluctuation relating to forward cover.

@ Title deeds of Free Hold Land and Building amounting to Rs, 13.46 Crore and Rs, 0.22 Crore respectively are pending to be transfer in the name of the company.

## Includes Depreciation pertaining to the previous year Rs, NIL (Rs, 1.78 Crore).

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;

- Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

- Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

(R) Non-current assets held for sale and discontinued operations:

Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups are classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a complete sale within one year from the date of classification.

Discontinued operations are excluded from the results of continuing operations are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit and loss.

Assets and liabilities classified as held for distribution are presented separately from other assets and liabilities in the balance sheet.

A disposal group qualifies as discontinued operation if it is a component of the Company that either has been disposed of, or is classified as held for sale, and:

- Represents a separate major line of business or geographical area of operations,

- Is part of a single co-ordinate plan to disclose of a separate major line of business or geographical area of operations Or

- Is a subsidiary acquired exclusively with a view to resale.

An entity shall not depreciate (or amortize) a non-current asset while it is classified as held for sale or while it is part of a disposal group classified as held for sale.

(S) Significant Accounting Judgments, Estimates and Assumptions:

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

(a) Income taxes

Management judgement is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets/ liabilities. The factors used in the estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the stand alone financial statements.

(b) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

(c) Defined benefit plans:

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These Includes the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its longterm nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

(d) Contingencies:

Management judgment is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of pending matters with accuracy.

(e) Mines Restoration Obligation:

The company is hopeful that no material future obligation shall be incurred towards mines restoration obligation and provision already made in books is sufficient.

(T) Capital:

Debt and equity instruments:

Ordinary equity shares are classified as equity .Debt instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement. 3,759,213 (3,759,213) Equity shares of t 21- each fully paid up have been allotted to the holders of 2,060 (2,060) Foreign Currency Convertible Bonds of US $ 5000/- each at pre determined (as per scheme) conversion rate of Rs, 119.872 each during the last five years.

(b) (i) TERMS/RIGHTS ATTACHED TO EQUITY SHARES

The company has only one class of equity shares having a face value of ^ 21- per share. Each shareholder is eligible for one vote per equity share held [other than the shares represented by Regulation S Global Depositary Shares (the âGDSsâ) issued by the Company whose voting rights are subject to certain conditions and procedure as prescribed under the Regulation S Deposit Agreement], The company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and also has equal right in distribution of Profit/Surplus in proportions to the number of equity shares held by the shareholders.

As on 31st March, 2017, 8,802,167 GDSs (8,802,167 GDSs) with 17,604,334 underlying equity shares (17,604,334 equity shares) were outstanding. Each GDS represents 2 underlying equity shares of the Company.

Refer Note No. 27 A, on Foreign currency long term borrowings against which depreciable assets has been transferred to JUSL pursuant to the scheme. Nature of Reserve

i) Amalgamation Reserve

ii) Debenture Redemption Reserve(DRR):-Represents statutory resreve created for redemption of non convertibles debentures issued by the company

iii) Securities Premium Reserve :-Represents the amount received in excess of par value of securities.

iv) Capital Redemption Reserve :-Represents the statutory reserve created when capital is redeemed.

v) Equity Component of Financial Liablity:- Reclassification of Cumulative Compulsory Convertible Preference Shares.

vi) TERMS/RIGHTS ATTACHED TO COMPULSORY CONVERTIBLE WARRANT (CCW)

19181586 (Nil) Compulsory convertible warrants of Rs, 2/-each at premium of Rs, 37.10 per CCW to Virtuous Traducer (P) Ltd. (the allottee), Rs, 13.04 paid up, balance amount of Rs, 26.06 per CCW, shall be payable at the time of conversion of the CCW into Equity Shares of the Company within a period of 18 months from the date of allotment at the option of the allottee and upon such conversion the allottee shall be entitled to be allotted one Equity Share of the Company having face value of Rs, 2 (Rupees Two) for each CCW held by the Allottee.

In the event, the allottee fails to make payment of the balance amount of Rs, 26.06 per CCW at the time of conversion of the CCW into Equity Shares, the amount already paid by them on application shall stand forfeited, the CCW shall expire and no equity shares shall be issued in lieu of such CCW.

All such Equity Shares that will be allotted shall rank pari passu with the then existing Equity Shares of the Company in all respects.

vii) Other Comprehensive Income Reserve:-Represent the balance in equity for items to be accounted in Other Comprehensive Income.

LONG TERM BORROWINGS

Secured Borrowings

[read with note no. 32]

(a) âRedeemable Non-Convertible Debentures (âcarrying floating rate of interest equivalent to SBI Base Rate plus spread of 425 bps) of Rs, 10,00,000 each, balance amounting to Rs, 216.75 Crores (Rs, 226.75 Crores ) are redeemable in quarterly installments of Rs, 8.13 Crores each during 2017-18, Rs,10.00 Crores each during 2018-19 and thereafter ranging from Rs, 10.63 Crores to Rs, 11.88 Crores during 2019-20 to 2021-22. Debentures are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of movable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished good, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(b) (i) Rupee Term Loans from banks amounting to Rs, 86.68 Crores (Rs, 1,322.37 Crores) are repayable in quarterly installments ofRs, 3.25 Crores each during 2017-18, Rs, 4.00 Crores each during 2018-19 and thereafter ranging from Rs, 4.25 Crores to Rs, 4.75 Crores during 2019-20 to 2021-22. The loans are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(ii) Rupee Term Loans from banks amounting to Rs, 235.05 Crores (Rs, 2,205.60 Crores) are repayable in quarterly installments of, Rs, 8.11 Crores each during 2017-18, Rs, 10.13 Crores each during 2018-19 and thereafter ranging from Rs, 11.35 Crores to Rs, 14.86 Crores during 2019-20 to 2021-22. The loans are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(iii) Rupee Term Loan from banks amounting to Rs, 21.82 Crores (Rs, 333.17 Crores) is repayable on 31st March, 2022. The loan is secured by second pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(iv) Rupee Term Loans from banks amounting to Rs, 29.07 Crores (Rs, 581.13 Crores) are repayable in quarterly installments of, Rs, 1.09 Crores each during 2017-18, Rs, 1.34 Crores each during 2018-19 and thereafter ranging from Rs, 1.42 Crores to Rs, 1.59 Crores during 2019-20 to 2021-22. The loans are secured by second pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(v) Rupee Term Loan from banks amounting to Rs, 956.08 Crores (Rs, 957.18 Crores) are repayable in quarterly installments of, Rs, 0.48 Crores each during 2017-18, Rs, 7.19 Crores each during 2018-19 and thereafter ranging from Rs, 9.58 Crores to Rs, 46.94 Crores during 2019-20 to 2026-27. The loans are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(vi) Foreign Currency Loans from banks amounting to Rs, 33.10 Crores (Rs, 73.81 Crores) are repayable in quarterly installments of Rs, 1.11 Crores each during 2017-18, Rs, 1.43 Crores each during 2018-19 and thereafter ranging from Rs, 1.62 Crores to Rs, 2.09 Crores during 2019-20 to 2021-22. The loans are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(vii) Foreign Currency Loans from banks amounting to Rs, 954.58 Crores (Rs, 1,304.49 Crores) are repayable in annual installments of Rs, 243.21 Crores in 2017-18 and Rs, 237.13 Crores each during 2018-19 to 2020-21. The loans are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge byway of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(c) (i) Funded Interest Term Loans (I) from banks amounting to Rs, 399.18 Crores (Rs, 418.68 Crores) (including Rs, 33.62 Crores (Rs, 35.11 Crores )

from Financial Institutions) are repayable in quarterly installments of Rs, 15.09 Crores each during 2017-18, Rs, 18.58 Crores each during 2018-19 and thereafter ranging from Rs, 19.74 Crores to Rs, 22.06 Crores during 2019-20 to 2021-22. The loans are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(ii) Funded Interest Term Loans (II) from banks amounting to Rs, 472.67 Crores (Rs, 554.92 Crores) (including Rs, 20.67 Crores (Rs, 23.87 Crores) from Financial Institutions) are repayable in 2 quarterly installments of Rs,19.82 Crores each from 30th April, 2017 till 31st July, 2017 and thereafter maximum quarterly installment of Rs, 38.08 Crores each starting from 31st October, 2017 and ending on 31st July 2020. The loans are secured by first pari-passu charge by way of mortgage of Company''s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/or pledge of current assets namely finished goods, raw materials, work-in-progress, consumable stores and spares, book debts and bills receivable.

(a,b,c) (i) Above Term Loans amounting to Rs, 2,450.40 Crores (including Funded Interest Term Loan Rs, 871.85 Crores, Debentures amounting to Rs, 216.75 Crores) are also secured by additional securities as mentioned in Note No. 32 (A) (iii).

(ii) In accordance with the AMP proposal, as approved by CDR EG, during the year the Company has prepaid its long term domestic debt obligations amounting to Rs, 3,988.58 Crores (Rs, 1,184.93 Crores) to the lenders of JSL from the amounts received as consideration/long term refundable security deposit from Jindal Stainless (Hisar) Limited (JSHL), Jindal Coke Limited (JCL) and Jindal United Steel Limited (JUSL).

(iii) Foreign Currency Loan of Rs, 954.58 Crores {refer (b) (vii) above} also secured by additional security as mentioned in Note no. 32(A) (iii) (c).

(iv) (a) Outstanding Rupee term loan facilities (including Redeemable Non-Convertible Debentures and Funded Interest Term Loans) carries floating rate of interest linked with SBI Base Rate plus applicable spread ranging from 100 bps to 430 bps. The Lenders also have an option to link their effective rate of interest with their own bank''s Base Rate and adjust the spread accordingly.

(b) Outstanding Foreign currency loan facilities carries rate of interest, equivalent to applicable LIBOR plus applicable spread ranging from 380 bps to 490 bps.

Unsecured Borrowings

(a) The term loan amount to Rs, 485 Crores shall be repayable in one or more installments by 31st March, 2023 or such other terms as may be mutually agreed between the Company and Jindal Stainless (Hisar) Limited.

Secured Borrowings

a) Working Capital Facilities are secured by way of hypothecation and/or pledge of current assets namely finished goods, raw material, work in progress, consumable stores and spares, book debts, bill receivable and by way of second charge in respect of other moveable and immoveable properties of the Company. Working Capital Facility is repayable on demand.

(b) Buyer Credit Facility are secured by way of hypothecation and/or pledge of current assets namely finished goods, raw material, work in progress, consumable stores and spares, book debts, bill receivable and by way of second charge in respect of other moveable and immoveable properties of the Company.

(a,b) Working Capital Facility from bank amounting to Rs, 887.32 CrorefRs, 1,065.18 Crore) and Working Capital Buyers Credit amounting to Rs, 782.63 Crore (Rs, 900.63 Crore) are also secured by additional securities as mentioned in note no. 32 (A) (iii).

âFurther Working Capital Facilities continue to have security on the assets transferred to Jindal Stainless (Hisar) Limited , Jindal United Steel Limited & Jindal Coke Limited in pursuant to Composite Scheme of Arrangement (Read with note no 27).

''"Net of the amount ofRs, NIL (Rs, 70.63 Crore) of Working Capital Facilities and Rs, NIL (Rs, 232.35 Crore) of buyer credit has been allocated to Jindal Stainless (Hisar) Limited and Rs, 81.78 Crore (Rs, 4.01 Crore) of buyers credit has been allocated to JCL pursuant to Composite Scheme of Arrangement (read with note no. 27) pending confirmation from the respective banks.

Rs, 81.78 Crore (Rs, 4.01 Crore) of buyers credit has been allocated to JCL pursuant to Composite Scheme of Arrangement (read with note no. 27) pending confirmation from the respective banks.â

* Principal amount outstanding as at the year end, there is no overdue amount of principal and interest due to Micro and small enterprises. During the year, no interest has been paid to such parties. This information has been determined to the extent such parties have been identified on the basis of information available with the Company

27A. Composite Scheme of Arrangement

1. Composite Scheme of Arrangement (here in after referred to as ''Scheme'') amongst Jindal Stainless Limited (the Company/Transferor Company) and its three wholly owned subsidiaries namely Jindal Stainless (Hisar) limited (JSHL), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) under the provision of Sec 391-394 read with Sec 100-103 of the Companies Act, 1956 and other relevant provision of Companies Act, 1956 and I or Companies Act, 2013 has been sanctioned by the Hon''ble High Court of Punjab & Haryana, Chandigarh vide its Order dated 21st September 2015, amended vide order dated 12th October, 2015.

Section I and Section II of the Scheme became effective on 1st November, 2015, operative from the appointed date i.e. close of business hours before midnight of March 31, 2014.Section III and Section IV of the Scheme became effective on 24th September 2016 [i.e. on receipt of approvals from the Orissa Industrial Infrastructure Development Corporation (OIIDCO) for the transfer/grant of the right to use in the land on which Hot Strip (HSM Plant) & Coke Oven Plants are located to JUSL & JCL respectively as specified in the Scheme], operative from the appointed date i.e. close of business hours before midnight of March 31,2015.

2. Pursuant to the Section I and Section II of the Scheme becoming effective:

(a) During the year against amount Rs, 366.19 Crores, appearing as on 31st March, 2015 under head Share Capital Suspense A/c, the company has issued and allotted 16,82,84,309 nos. fully paid up equity shares ofRs, 21 each @ Rs, 21.76 Per share (including premium ofRs, 19.76 per share) on 3rd July''2016.

(b) In terms of the Scheme, all the business and activities of Demerged Undertakings and Business Undertaking 1 carried on by the Company on and after the appointed date, as stated above till 1st Nov''2015, are deemed to have been carried on behalf of JSHL.

3. Pursuant to the Section III and Section IV of the Scheme becoming effective:

(a) Business Undertaking 2 has been transferred at a lump sum consideration of Rs, 2,412.67 Crores; out of this Rs, 2,150.00 Crores payable in cash by JUSL (Rs, 2,083.21 Crores has been received till 31st March 2017), and against the balance amount of Rs, 262.67 Crores, the JUSL is to issue & allot to the Company 17,50,00,000 nos. 0.01% non-cumulative compulsorily convertible preference shares having face value of Rs, 10 each [during the current year out of this 4,38,68,919 nos. preference shares have been allotted to the Company and also the same have been converted into equal nos. of equity shares of Rs, 10 each as fully paid at par (refer Note No.3)] and 8,76,73,311 nos. 10% non-cumulative non-convertible redeemable preference shares having face value ofRs, 10 each have been allotted to the Company. Pending allotment 13,11,31,081 nos. 0.01% non-cumulative compulsorily convertible preference shares having face value of Rs, 10 each have been shown as âInvestment- pending Allotment (refer Note No. 3) â.

(b) Business undertaking 3 has been transferred at a lump sum consideration of Rs, 492.65 Crores; out of this Rs, 375.00 Crores has been received and against the balance amount of Rs, 117.65 Crores, JCL is to issue & allot to the Company 2,60,00,000 nos. 0.01% non-cumulative compulsorily convertible preference shares having face value of Rs, 10 each [during the current year out of this 83,82,432 nos. said preference shares have been allotted to the Company and also the same have been converted into equal nos. of equity shares of Rs, 10 each fully paid at par (refer Note No. 3)] and 9,16,47,073 nos. 10% non-cumulative non-convertible redeemable preference shares having face value ofRs, 10 each have been allotted to the Company. Pending allotment 1,76,17,568 nos. 0.01% non-cumulative compulsorily convertible preference shares having face value of Rs, 10 each have been shown as âInvestment- pending Allotment (refer Note No. 3) â.

(c) In terms of the Scheme, all the business and activities of Business Undertaking 2 & Business Undertaking 3 carried on by the company on and after the appointed date, as stated above till 24th September, 2016, are deemed to have been carried for and on behalf of JUSL & JCL respectively. Accordingly, necessary effects have been given in previous year.

4. The necessary steps and formalities in respect of transfer of the properties, licenses, approvals and investments in favor of JSHL, JUSL & JCL and modification of charges etc. are under implementation.

5. The Department of Steel & Mines, Government of Odisha, while issuing No Objection Certificate to JSL has allowed transfer/right to use of the land to JUSL & JCL (a precedent condition for effectiveness Section III & Section IV of the Scheme), put I mentioned a condition that Section I & II of the Scheme will not be carried out in so far as the mining lease of JSL is concerned; accordingly transfer of the Mining Rights comprised in the Demerged Undertakings (as referred in the Scheme) has not been given effect, consequently :- (i) all mining activities in relation to the Mining Rights; (ii) all assets (excluding fixed assets) and liabilities (including contingent liabilities) in relation to the concerned undertaking (Mining); and (iii) all revenue/expenditure & net profit; continue to be carried out by and recorded in the books of JSL post 1st November, 2015 date on which the Section I and Section II of the Scheme became effective.

27B.

As above, Section III and Section IV of the Scheme became effective on 24th September, 2016, the company has entered into settlement agreement and recovered interest reimbursement w.e.f 1 st April, 2016 (consideration payable by them under the scheme) on account of delay in receipt of Consideration from JCL and JUSL. Interest cost is net of Rs, 213.11 Crores and Rs, 23.63 Crores received from JUSL and JCL respectively.

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs, 129.73 Crores (T 13.78 Crores).

2. Exceptional items includes

(i) Gain I (Loss) (net) of Rs, 33.42 Crores {(Rs, 40.82 Crores)} on translation/settlement of foreign currency monetary items (including borrowing), gain I (loss) of Rs, 5.73 Crores {(Rs, 6.47 Crores)} upon marked to market of derivatives contracts, gain/ (loss) of (Rs, 5.61 Crores) (Rs, 15.60 Crores) on forward cover cancellation.

(ii) Foreign Currency Monetary Item Translation Difference Account- amortization expense of Rs, 7.23 Crores (Rs, 3.78 Crores).

(iii) Foreign currency translation reserve (FCTR) loss ofRs, 0.18 Crores (gain Rs, 1.12 Crores) related to long term loan given to subsidiaries.

3. The Company had received a notice during the year 2012-13 from office of the Dy. Director of Mines, Jajpur Road Circle, Odisha (the Office) asking company to deposit in Rs, 85.40 Crores with the department on account of cost price on mining of excess quantity of Chrome Ore over and above the approved quantity of mining plan/scheme. The company has disputed and challenged the same as demand made by the Office is incorrect, unjustified and baseless and was without furnishing any supporting documents and/or providing any basis/reason for such demand. The case is pending before Revisional Authority of Mining tribunal, Govt, of India.

4. (A) Corporate Debt Restructuring (CDR)

(i) Pursuant to the approval of reworked CDR package (âRework Schemeâ) in September 2012 and execution of Amended & Restated Master Restructuring Agreement (âAmended MRAâ), the long term financial obligations to the CDR lenders were reworked including reworking of repayment schedule, Creation of Funded Interest Term Loan (FITL II) for certain facilities, adjustment in interest rates, etc. w.e.f. 31st March, 2012. Accordingly, interest has been accounted for based upon the terms of the Rework Scheme I confirmations received from the banks.

(ii) During the financial year 2014-15, CDR Empowered Group (EG) while approving the Asset Monetisation cum Business Reorganization Plan (âAMPâ) vide its letter dated December 26, 2014 has approved conversion of both FITL I & FITL II (âFITLâ) into equity I other instruments, on certain terms and conditions, within 30 days of effective date of the Asset Monetisation cum Business Reorganization Plan (âAMPâ) subject to compliance with applicable laws. As per the terms approved by its CDR lenders, Rs, 250 Crores had been proposed to be converted into equity and balance outstanding amount of FITL into 0.01% Optionally Convertible Redeemable Preference Shares (OCRPS). Redemption of OCRPS shall be by March 31, 2022 and the CDR lenders would have the right to convert OCRPS into equity at any time after 5 years from November 01, 2015. Alternatively, the Company might redeem these OCRPS along with all dues thereof

including recompense before conversion option is exercised by the CDR lender. In this regard shareholders have accorded its approval in its Extraordinary General Meeting held on 11th February, 2017.

(iii) The Credit facilities/loans under Rework Scheme are/will also be secured by:

(a) Unconditional & irrevocable personal guarantee of CMD Mr. Ratan Jindal;

(b) Unconditional & irrevocable corporate guarantee of promoter group companies in proportion to the number and to the extent of equity shares pledged by each promoter group company;

(d) Pari-passu pledge of 10, 54, 17,065 nos. of equity shares held in the company by promoters. Non disposal undertaking (pending Creation of pledge) over the requisite no. of shares allotted to JSHL on July 03, 2016 [pursuant to scheme referred in note no. 27(2)(a)j (will be pledged with lenders);

(e) All assets transferred to JSHL, JUSL and JCL pursuant to the Scheme; and

(f) Pledge over shares of the subsidiaries as listed below:

- JSL lifestyle Limited³ (Subsidiary till 31st March 2014)

- JSL Logistics Limited* (Subsidiary till 31st March 2014)

- PT. Jindal Stainless Indonesia

- Jindal Stainless UK Limited

- JSL Stainless FZE

- JSL Group Holdings Pte. Limited

- Jindal Stainless Madencilik Sanaye Ve Ticaret A.S

- Jindal Aceros Inoxidables S.L

- Iberjindal S.L.

- transferred to JSHL pursuant to the scheme

(g) Certain conditions, covenants and Creation of security under the Rework Scheme, as the case may be, are in process of compliance/waiver. Certain secured facilities from Banks are subject to confirmation and/or reconciliation.

(h) Pledge of shares of JCL & JUSL allotted/to be allotted to in favor of the Company (JSL) (refer note no. 27) (Will be pledged with lenders).

(iv) Under the Corporate Debt Restructuring mechanism, the recompense amount works out to Rs, 34.63 Crores as at March 31, 2017. The same is ascertained after taking into account the interest rate difference for all term loan facilities of each bank post restructuring. However, the same is subject to final confirmation/reconciliation with individual lenders.

(B) Restructuring of ECB Facilities

Besides reworking of its domestic term debt obligations as stated in note A above, the Company has also completed the restructuring of its debt obligations in relation to USD 250 million ECB facilities, outstanding of USD 147.19 million (USD 196.88 million) availed for the part financing of Odisha Phase II project and has executed requisite amendment agreements with all the ECB lenders on 29th March 2013. The revised terms inter-alia includes deferment of repayment schedule, increase in interest rates, etc. had been implemented on receipts of RBI approvals. The company has executed the Third Amendment and Restatement Agreement on 03rd January, 2017 with all the existing lenders for implementation of AMP.

5. As on March 31, 2017, the overdue financial obligations to banks/financial institutions (30 in nos.) (30 in nos.) were Rs, 266.68 Crores (Rs, 553.60 Crores) of which maximum overdue period was 60 days (61 days).

6. Post adoption of IND AS and Due to adoption of fair valuation of assets (including property, plant and equipment as allowed in IND-AS and liabilities) the net worth of the company became positive (refer note no. 56). Further, to strengthen its net worth , the Company is taking necessary steps towards full implementation of AMP including conversion of Funded Interest Term Loan (FITL) by the Lenders of the Company into Equity Shares I Optionally Convertible Redeemable Preference Shares refer note no. 32 (A)(ii)). Thus, these accounts have been prepared on a going concern basis.

7. The Company has made investment of Rs, 8.47 Crores (along with bank guarantee ofRs, 10.01 Crores) in MJSJ Coal Limited (MJSJ) and Rs, 0.10 Crores in Jindal Synfuels Limited (Jindal Synfuels), wherein JSL hold 9% and 10% stake respectively (both joint venture companies). The Hon''ble Supreme Court of India vide order dated 24.09.2014 has cancelled 214 out of 218 coal blocks allotted to various companies/entities, including the coal blocks allotted to MJSJ & Jindal Synfuels. No mining activity/production had commenced in these coal blocks, therefore cancellation of these coal blocks allotted to the MJSJ and Jindal Synfuels will not have any material impact on the current operations of the Company. The Company has filed review petition on 18.11.2014 challenging the order dated 24.09.2014 passed by Hon''ble Supreme Court and the matter is pending adjudication in respect of coal block allotted to MJSJ. After the enactment of the Coal Mines (Special Provisions) Act, 2015 dated 30th March 2015 allowing compensation to the prior allotees in respect of land and mining infrastructure, the management does not anticipate any material variance between carrying value of assets in investee companies and the expected compensation.

8. (a) Company has filed Writ Petition (C) before the Hon''ble High Court of Orissa, challenging the order passed by the Dy. Commissioner of

Commercial Tax, Jajpur for the period from 01/10/2006 to 30/09/2010, for payment of Entry Tax under the Orissa Entry Tax Act 1999 on the goods procured from outside the territory of India. The demand is on 2/3rd amount of Entry Tax on the goods imported from outside the territory of India on which the payment of 1 /3rd amount of entry tax deposited as per the interim order of the Hon''ble Supreme Court. Considering the prudence, demand of entry tax have been fully provided for and pending final decision interest and penalty have been included under note no. 28(A)(d)(i) (Contingent Liability).

The Hon''ble High Court has heard the matter and vide its interim order dated 14.03.2012, directed the company to deposit 50% of the amount of interest i.e. Rs, 1.08 Crores by 25.03.2012 and granted stay for the balance amount of demand till disposal of the case. The company has deposited the amount within the permitted time and informed to the Hon''ble High Court.

(b) The Company had challenged the legality of Orissa Entry Tax Act 1999 in the Hon''ble Supreme Court of India. On 16.04.2010 the Entry tax matters of the states have been referred to a larger 9-judges Constitutional Bench of the Hon''ble Supreme Court of India, the 9 judges bench while holding the constitutional validity of entry tax, has, vide its Order dated 11th November 2016, referred the same to divisional/ regular benches for testing and determination of the Article 304 (a) of the constitution vis a vis state legislation and levy of entry tax on goods entering the landmass of India from another country. The liability in this regards have been provided. Interest/ penalty if any, will be accounted for as and when this is finally settled/ determined by the Regular Benches hearing the matters/where the appropriate proceedings are continuing presently the same included under note no. 28(A)(d)(i) (Contingent Liability).

9. Due from Grid Corporation of Orissa Limited (Gridco) is of Rs, 117.56 Crore (Rs, 105.31 Crores) including interest. The company had realized part of the overdue amount on receipt of the order of Orissa Electricity Regulatory Commission (OERC) in Case no. 106 of 2011 No. 4387 dated 17/11/2012. Delayed payment surcharge (Interest) on this will be accounted for in terms of contractual obligation on final settlement. The management is hopeful of recovery of due from Gridco.

10. The company has filed Writ Petition (C) before the Hon''ble High Court of Orissa, Cuttack challenging the order passed by the Jt Commissioner of Commercial Tax, Jajpur disallowing the issue of C Form for the procurement of plant and machinery for Captive Power Plant during the year 2004-05 to 2007-08. The Hon''ble Court heard the matter and passed interim order dated 14.03.2012, directing the company to deposit 25% out of total demanded amount of Rs, 33.06 Crore. The company has deposited an amount of Rs, 8.26 Crore within the permitted time and informed the Hon''ble High Court. Pending final decision, no provision in this respect has been made in the books and the same is included in note no. 28(A) (d) (i) (Contingent Liability).

Pursuant to 1st vesting @ 30% of ESOP outstanding on 28th July, 2012, 5,34,771 ESOPs were vested to eligible employees based on performance rating and 1,50,000 fresh ESOPs were granted to the employees of the Company on 28th July, 2012. Pursuant to 2nd vesting @ 30% of ESOP outstanding on 28th July 2013,4,26,024 ESOPs were vested to eligible employees based on performance rating. Pursuant to 3rd vesting @ 40% of ESOP outstanding on 28th July 2014, 560,625 ESOPs were vested to eligible employees based on performance rating including employees transferred pursuant to the Scheme (Refer note no 27 herein above).

In terms of the Composite Scheme of Arrangement between the Company and others, as approved by the Hon''ble High Court of Punjab and Haryana, the employees engaged in Demerged Undertakings, Business Undertakings 1, 2 and 3 who were transferred as a part of the Scheme to Resulting Company i.e. Jindal Stainless (Hisar) Limited or Transferee Company 2 i.e. Jindal United Steel Limited or Transferee Company 3 i.e. Jindal Coke Limited, shall continue to remain entitled to exercise their rights to the stock options granted and vested but have not been exercised as on the Record Date. Further the Stock options granted by the Company to such employees which have been granted but have not vested as of the Effective Date 1 or Effective Date 2 (as defined in the scheme), as the case may be, shall lapse automatically without any further act on the part of the Company. Furthermore, the exercise price of the stock options, in respect of the employees engaged in the Demerged Undertakings and transferred to the Resulting Company i.e. JSHL shall be reduced in the same proportion as the assets of the Demerged Undertakings bear to the total assets of the Company immediately prior to the Appointed Date 1.â

During the year ended on 31st March, 2017, 4,10,706 (4,45,546) stock options lapsed due to resignation, retirement and non-exercise of option by employees. No vested options were exercised by employees during the year. As on 31st March, 2017, 4,22,875 (8,33,581) ESOPs were in force.

11. The company has a regular programme of physical verification for its inventory. Further, during the year physical verification of significant part of inventory of finished goods and work in progress has been carried out by an independent firm of professionals and technical consultant and no material discrepancy were found.

12. (i) Information about Business Segment (for the year 2016-17)

Company operates in a Single Primary Segment(Business Segment) i.e. Stainless Steel Products.

* Revenues from two customers of companyâs Within India represents approximately Rs, 1,717.54 Crores (26%) [Revenues from one customer ofRs, 748.64 crores (15%)] of the companyâs total revenues within India.

* Revenues from one customer of companyâs Outside India represents-approximately Rs, 266.84(11%) [Rs, 367.35 crores (18%)] of the companyâs total revenues outside India.

** The company operating facilities are located in India.

*** Post Scheme Numbers (Refer Note No. 27 A).

13. Related Party Transactions

(A) In accordance with the requirements of IND AS 24, on related party disclosures, name of the related party, relationship, transactions and outstanding balances including commitments where control exists and with whom transactions have taken place during reported periods, are: Related party name and relationship

(a) Key Managerial Personnel:

1 Shri Ratan Jindal Chairman & MD

2 Shri S. Bhattacharya Whole Time Director

3 Shri Raajesh Kumar Gupta Company secretary (Ceased w.e.f. close of working hours on 31.3.2017)

4 Shri Ashish Gupta Chief financial officer (Upto Feb. 6,2017)

5 Shri Anurag Mantri Chief financial officer (From Feb 7,2017)

6 Shri Mohan Lai Unit Head (w.e.f 08.12.2016)

7 Shri Rajinder Prakash Jindal Whole Time Director (Ceased to be WTD w.e.f. 31.01.2016)

8 Shri Vipin Agarwal Chief Financial Officer (from 30.05.2015 till 19.10.2015)

9 Shri S.K.Agrawal Unit Head (Ceased w.e.f 31.05.2016)

10 Shri Naveen Jindal Non Executive Director, Brother of Mr. Ratan Jindal

11 Shri Gautam Kanjilal Nominee Director

Fair valuation of financial guarantees

Financial guarantees issued by the company on behalf of Jindal Stainless (Hissar) Limited has been measured at fair value through profit and loss account. Fair value of said guarantees as at March 31, 2017, March 31, 2016 and April 1, 2015 have been considered at nil as estimated by the management and an independent professional.

14. Financial risk management, objective and policies

15.1 Financial risk factors

The financial risk management is governed by policies guidelines which are reviewed and approved by the board of directors. The guidelines and policies primarily cover credit risk, liquidity risk, forex risk, interest rate risk and commodity price risk. The Company''s operation exposed to various of financial risks: market risk (including currency risk, interest rate, price risk), credit risk and liquidity risk. The company uses derivative financial instruments to hedge certain risk exposures.

(i) Credit risk

Credit risk is the possible risk that a counter party may not to settle its agreed obligations under a financial instrument or customer contract, leading to a financial loss. It arises from credit exposure to trade receivable, cash and cash and cash equivalent including deposits with banks and derivative financial instruments. Trade receivables are generally unsecured non-interest bearing. There is no significant concentration of credit risk. The company''s credit risk management policy in relation to trade receivables involves periodically assessing the financial reliability of customers, taking into account their financial position, past experience and other factors. The utilization of credit limit is regularly monitored and a significant element of credit risk is covered by credit insurance.

Trade Receivables

The company''s exposure to the credit risk inherent in its trade receivables and the associated risk management techniques that the company deploys in order to mitigate this risk. The company''s credit risk is mainly confined to the risk of customers defaulting against credit sales made.

Outstanding trade receivables are regularly monitored by Credit monitoring group. The Company has also taken advances and security deposits from its customers, which mitigate the credit risk to an extent.

The Ageing of trade receivables is as below:-

(iii) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Various measures are used to mitigate or eliminate the risk of fluctuations in the fair values or future cash flows from financial instruments due to market changes. These mainly include foreign currency forward contracts, interest rate swaps and commodity forward contracts with banks. Financial instruments affected by market risk include loans and borrowings, deposits, investments, and derivative financial instruments,

(a) Foreign exchange risk

The company is exposed to foreign exchange risk in the normal course of its business. Multiple currency exposures arise from commercial transactions like sales, purchase, borrowings denominated in foreign currencies, recognized financial assets and liabilities (monetary items) denominated in foreign currencies and translational exposure on net investments in foreign operations. The company''s manage foreign currency transactional exposures by entering into foreign exchange forward contract and other derivative contracts to hedge exposed foreign currency risk.

Foreign exchange risk sensitivity analysis has been performed on the foreign currency exposures in the company''s financial assets and financial liabilities at the reporting date i.e. 31st March 2017, net of related foreign exchange contracts. Reasonably possible changes are based on an analysis of historic currency volatility, together with any relevant assumptions regarding near-term future volatility.

The impact on the Company''s profit before tax and other comprehensive income due to Changes in the fair value of monetary assets and liabilities are given below:

The companies transact business primarily in Indian Rupee, USD, ADR, EURO and Pound. The Company has obtained foreign currency loans and has foreign currency trade payables and receivables and is therefore, exposed to foreign exchange risk. Certain transactions of the company act as natural hedge as a portion of both assets and liabilities are denominated in similar foreign currencies. For the remaining exposure to foreign exchange risk, the company adapts the policy of selective hedging based on risk perception of management. Foreign exchange hedging contracts are carried at fair value.

Interest rate risk and sensitivity

The company is exposed to interest rate risk due to fluctuating rate financial instruments .The interest bearing financial liabilities I assets are exposed to risks from changing interest rates. Reasonably possible changes in interest rates have been applied to net variable rate exposure, denominated by currency, in order to provide an indication of the possible impact on the company''s statement of Profit and Loss. The assumed movement in basis points for interest rate sensitivity analysis is based on the currently observable market conditions.

16. Commodity price risk and sensitivity

The company uses various non-ferrous metals, especially nickel, as well as commodities such as ore, coal, coke and energy, for different production processes. Purchase prices for commodities, energy and freight capacity can vary significantly depending on market conditions. The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company has in place policies to manage exposure to fluctuations in the prices of the key raw materials used in operations. The Company enter into contracts for procurement of material, most of the transactions are short term fixed price contract.

17. Capital risk management

The company''s objectives when managing capital are to secure the Group''s ongoing financial needs to continue as a going concern as well as to cater for its growth targets, in order to provide returns to shareholders and benefits for other stakeholders and to maintain a cost-efficient and risk-optimized capital structure. The company manages the capital structure and makes adjustments to it in light of changes in economic conditions, its business activities, the investment and expansion program and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, increase debt or sell assets to reduce debt.

The company monitors capital, among others, on the basis of the ratio of funds from operations as a percentage of net financial debt and the ratio of net financial debt to EBITDA. The company also monitors gearing ratio.

The impact of change in depreciation for 2015-16 due to fair valuation and changes in useful life isRs, 53.68 Crores.

(b) The company has elected to measure some of its investment at fair value and consequently, investment was decreased by Rs, 1.70 crore.

The Company has financial receivables and payables that are non-derivative financial instrument.

Under previous GAAP, these were carried at transactions cost less allowances for impairment if any.

Under Ind AS, these are financial assets and liabilities are initially recognized at fair value.

(d) The Company has accounted for additional deferred tax liability on the fair value of Property Plant and Equipment.

(e) Business Combinations:

As per composite scheme of arrangement, Section III and IV of the scheme, Business undertaking 2 (Hot Strip Plant) and Business Undertaking

3 (Coke Oven Plant) of the Company transferred and vested with Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) respectively w.e.f. appointed date i.e. close of business hours before midnight of March 31, 2015. The opening Balance Sheet as on 1st April 2015 as per IND AS has been prepared after giving impact of transfer of Business undertaking 2 and 3 as per Section III and IV of the scheme consequently gain on Slum sale of Rs, 362.60 Crores has been transferred to opening retained earnings as on 1st April, 2015 (read with note no 27).

(f) Under previous GAAP, actuarial gains and losses were recognized in the statement of profit and loss. Under Ind AS, the actuarial gains and losses form part of re-measurement of the net defined benefit liability/ asset, which is recognized in Other Comprehensive Income. Consequently, the tax effect of the same has also been recognized in other comprehensive income under Ind AS instead of the statement of profit and loss.

18. Previous years'' figures have been re-arranged and regrouped wherever considered necessary.

19. Figures in bracket indicate previous year figures.

20. Note to 60 are annexed to and from integral part of the Balance Sheet and Statement of Profit & Loss.

Mar 31, 2016

1. Composite Scheme of Arrangement

1. A Composite Scheme of Arrangement (here in after referred to as âSchemeâ) amongst Jindal Stainless Limited (the Company/Transferor Company) and its three wholly owned subsidiaries namely Jindal Stainless (Hisar) limited (JSHL), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) under the provision of Sec 391-394 read with Sec 100-103 of the Companies Act, 1956 and other relevant provision of Companies Act, 1956 and / or Companies Act, 2013 has been sanctioned by the Honâble High Court of Punjab & Haryana, Chandigarh vide its Order dated 21st September, 2015, as amended vide order dated 12th October, 2015.

Section I and Section II of the Scheme became effective on 1st November, 2015, operative from the appointed date i.e. close of business hours before midnight of March 31, 2014.

Section III of the scheme comprising Transfer of the Business undertaking 2 (as defined in the scheme) of the Company comprising, inter-alia, of the Hot Strip Plant of the Company located at Odisha and vesting of the same in Jindal United Steel Limited (JUSL) on Going Concern basis by way of Slump Sale w.e.f. appointed date i.e. close of business hours before midnight of March 31, 2015 and Section IV of the Scheme comprising Transfer of the Business Undertaking 3 (as defined in the Scheme) of the Company comprising, inter-alia, of the Coke Oven Plant of the Company Located at Odisha and vesting of the same with Jindal Coke Limited (JCL) on Going Concern basis by way of Slump Sale w.e.f. appointed date i.e. close of business hours before midnight of March 31, 2015. Section III and section IV of the Scheme has become effective on 24th September, 2016 [i.e. on receipt of approvals from the Orissa Industrial Infrastructure Development Corporation (OIIDCO) for the transfer/grant of the right to use in the land on which Hot Strip (HSM Plant) & Coke Oven Plants are located to JUSL & JCL respectively as specified in the Scheme].

2. Pursuant to the Section I and Section II of the Scheme becoming effective:

a) Against amount ofRs, 36,618.67 Lacs, the company is required to issue and allot equity shares to JSHL at a price to be determined in accordance with chapter VII of SEBI (ICDR) regulations 2009, with the record date jointly to be decided by the board of directors of the Company and JSHL being considered as relevant date as specified in the Scheme. The board of the Company and JSHL have, in their respective meetings held on 06th November, 2015, fixed 21st November, 2015 as the record date. However, since the price worked out for issue of equity shares by the Company to JSHL, in terms of the provisions of chapter VII SEBI (ICDR) was not reflective of the actual price of the equity shares of the Company on Ex -JSHL basis, therefore the allotment of equity shares based on the aforesaid record date has not been pursued. Hence, pending allotment by the Company of the aforesaid equity shares to JSHL as on 31st March, 2016, the same has been shown as âShare Capital Suspense Accountâ. Subsequent to the Balance Sheet date the company has allotted 16,82,84,309 nos. fully paid up equity shares ofRs, 2/ each @ Rs, 21.76 per share (including premium ofRs, 19.76 per share) on 3rd Julyâ2016.

b) Out of'' 2,60,000.00 Lacs payable by JSHL,Rs, 1,18,493.00 Lacs has been received upto 31 st March, 2016 and also balance amount ofRs, 1,41,507.00 Lacs has been received subsequent to balance sheet date.

c) In terms of the Scheme, all the business and activities of Demerged Undertakings and Business Undertaking 1 carried on by the Company on and after the appointed date, as stated above, are deemed to have been carried on behalf of JSHL. Accordingly, necessary effects had been given in the previous year accounts and in these accounts on the Scheme becoming effective (read with note no. 5 below).

3. Pursuant to the Section III and Section IV of the Scheme becoming effective:

a) Business undertaking 2 & Business undertaking 3 have been transferred to and vested in JUSL & JCL respectively with effect from the Appointed Date i.e. close of business hours before midnight of March 31, 2015 and the same has been given effect to in these accounts.

b) (i) Business Undertaking 2 has been transferred at a lump sum consideration ofRs, 2,41,267.33 Lacs; out of this Rs, 2,15,000.00 Lacs shall be paid by JUSL and against the balance amount ofRs, 26,267.33 Lacs, the JUSL is to issue & allot to the Company 17,50,00,000 nos. 0.01% non-cumulative compulsorily convertible preference shares having face value ofRs, 10 each and 8,76,73,311 nos. 10% non-cumulative non-convertible redeemable preference shares having face value ofRs, 10 each as specified in the Scheme; AND

(ii) Business undertaking 3 has been transferred at a lump sum consideration ofRs, 49,264.71 Lacs; out of this Rs, 37,500.00 Lacs shall be paid by JCL and against the balance amount ofRs, 11,764.71 Lacs, the JCL is to issue & allot to the Company 2,60,00,000 nos. 0.01% non-cumulative compulsorily convertible preference shares having face value of Rs, 10 each and 9,16,47,073 nos. 10% non-cumulative non-convertible redeemable preference shares having face value ofRs, 10 each as specified in the Scheme. Pending allotment as stated above the same have been shown as âInvestment- pending Allotmentâ

c) On transfer of Business Undertaking 2 & Business Undertaking 3, the differential between the book values of assets & liabilities transferred and the lump sum consideration received as stated above amounting to Rs, 36,259.75 Lacs has been credited in the Statement of Profit & Loss and included under Exceptional Item. (Note no. 30).

d) In terms of the Scheme, all the business and activities of Business Undertaking 2 & Business Undertaking 3 carried on by the company on and after the appointed date, as stated above, are deemed to have been carried for and on behalf of JUSL & JCL respectively. Accordingly, necessary effects have been given in these accounts on the Scheme becoming effective.

5. While according its approval for transfer/right to use of the land in the name of JUSL & JCL Government of Odisha, Department of Steel & Mines vide letter dated 16th August 2016, had put a condition that Section I & II of the Scheme will not be carried out in so far as the mining lease of the Company is concerned; accordingly transfer of the Mining Rights to Demerged Undertakings (as referred in the Scheme) (Demerged undertaking transferred to JSHL) is not been given effect, consequently :- (i) all mining activities in relation to the Mining Rights continue to be carried out by the company (JSL); and (ii) all assets (excluding fixed assets) and liabilities (including contingent liabilities) in relation to the Mining Rights continue to be recorded in the books of JSL; and (iii) all revenue and net profit: post 1st November 2015 on section I & II of the scheme becoming effective are recorded in the books of the company.

6. Post Section III of the Scheme becoming effective, the Company has entered into an agreement for Trolling of slabs got done from JUSL (Business Undertaking 2) effective from 1st April 2015, accordingly impact of the same amounting to Rs, 35,262.50 Lacs has been given under manufacturing expenses in these accounts.

7. (A) Pursuant to the Scheme the effects on the financial statements of operations carried out by the company for on behalf of JUSL & JCL

post the said appointed date have been given in these accounts from the effective date (for the close of business hours before midnight of 31st March, 2015) are as summarized below :

(B ) As stated in note no. 1 above, the Section III and Section IV of the Scheme became effective on 24th September 2016, accordingly interest on amount receivable will be accounted for.

8. The financial statements of the Company for the year ended 31st March, 2016 were earlier approved by the Board of Directors at their meeting held on 28th May, 2016 on which the Statutory Auditors of the Company had issued their report dated 28th May, 2016. These financial statements have been reopened and revised to give effect to the Scheme as stated in note no. 1 & 3 herein above.

9. Current yearâs figures are not comparable with those of the previous year for the reasons as stated in note no. 1 & 3 herein above.

10. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs, 1,378.06 Lacs (Rs, 3,177.51 Lacs).

11.. Exceptional items includes

i) Gain/ (Loss) (net) of (Rs, 4,082.46) Lacs (Rs, 1,041.71 Lacs) on translation/settlement of foreign currency monetary items (including borrowing), gain / (loss) of (Rs, 647.31 Lacs) {(Rs, 57.22) Lacs} upon marked to market of derivatives contracts, gain/ (loss) of Rs, 1,560.46 Lacs (Rs, 1,955.70 Lacs) on forward cover cancellation.

ii) Provision for diminution in value of investment and advances Rs, NIL (Rs, 1,637.49 Lacs) to Jindal Stainless Madencilik Sanayi VE Ticaret A.S., Turkey and Jindal Acerox Inoxidable S.L., Spain

iii) Gain Rs, 36,259.75 Lacs (Rs, 1,16,021.85 Lacs ) pursuant to the Scheme.

iv) Investment written offRs, NIL (Rs, 5.00 Lacs).

v) Foreign Currency Monetary Item Translation Difference Account- amortization expense ofRs, 377.65 Lacs (Rs, Nil).

12.. The Company had received a notice during the year 2012-13 from office of the Dy. Director of Mines, Jajpur Road Circle, Odisha (the Office) asking company to deposit in Rs, 8,540.27 Lacs with the department on account of cost price on mining of excess quantity of Chrome Ore over and above the approved quantity of mining plan/scheme. The company has disputed and challenged the same as demand made by the Office is incorrect, unjustified, and baseless and was without furnishing any supporting documents and/or providing any basis/reason for such demand. The case is pending before Provisional Authority of Mining tribunal, Govt. of India.

13.. (A) Corporate Debt Restructuring

i) Pursuant to the approval of reworked CDR package (âRework Schemeâ) in September 2012 and execution of Amended & Restated Master Restructuring Agreement (âAmended MRAâ), the long term financial obligations to the CDR lenders were reworked including reworking of repayment schedule, creation of Funded Interest Term Loan (FITL II) for certain facilities, adjustment in interest rates, etc. w.e.f. 31st March, 2012. Accordingly, interest has been accounted for based upon the terms of the Rework Scheme / confirmations received from the banks.

ii) During the financial year 2014-15, CDR EG vide its letter dated December 26, 2014 has approved conversion of both FITL I & FITL II (âFITLâ) into equity / other instruments, on certain terms and conditions, within 30 days of effective date of the Asset Monetization cum Business Reorganization Plan (âAMPâ) subject to compliance with applicable laws. As per the approval,Rs, 250 Crore has been proposed to be converted into equity and balance outstanding amount of FITL into 0.01% Cumulative Redeemable Preference Shares (CRPS) / Optionally Convertible Redeemable Preference Shares (OCRPS). Redemption of CRPS/OCRPS shall be by March 31, 2022 and the CDR lenders would have the right to convert CRPS/OCRPS into equity at any time after 5 years from the effective date of the AMP. Alternatively, the Company might redeem these CRPS/OCRPS along with all dues thereof including recompense before conversion option is exercised by the CDR lender.

iii) The credit facilities / loans under Rework Scheme are/will also be secured by:-

a. Unconditional & irrevocable personal guarantee of CMD Mr. Ratan Jindal;

b. Unconditional & irrevocable corporate guarantee of promoter group companies in proportion to the number and to the extent of equity shares pledged or required to be pledged by each promoter group company;

c. Unconditional & irrevocable corporate guarantee of Jindal Stainless (Hisar) Limited.

d. (i) Pari-passu pledge of 10,54,17,065 nos. of equity shares held in the company by promoters. Creation of security over the additional shares allotted subsequent to March, 2016 (share allotted to JSHL pursuant to scheme referred in note no. 27 (2)(a)) is in process of being pledged with lenders); and (ii) pledge of shares of JCL & JUSL to be allotted to JSL /promoters ( refer note no. 27) (will be pledged with lenders).

e. All assets transferred to JSHL, JUSL and JCL pursuant to the Scheme; and

f. Pledge and non-disposal undertaking for all investment of the Company in subsidiaries as listed below:

- JSL Lifestyle Limited (and JSL Architecture Limited (since merged))*

- JSL Logistics Limited *

- PT. Jindal Stainless Indonesia

- Jindal Stainless UK Limited

- JSL Stainless FZE

- JSL Group Holdings Pte. Limited

- Jindal Stainless Madencilik Sanaye Ve Ticaret A.S.

- Jindal Aceros Inoxidables S.L.

- Iberjindal S.L.

- transferred to JSHL pursuant to the Scheme.

g. Certain conditions, covenants and creation of security under the Rework Scheme, as the case may be, are in process of compliance/ waiver. Certain secured facilities from Banks are subject to confirmation and/or reconciliation.

iv) The lenders have right to recompense as per the approval of reworked CDR package in accordance with applicable CDR guidelines.

(B) Restructuring of ECB Facilities

Besides reworking of its domestic term debt obligations as stated in note A above, the Company has also completed the restructuring of its debt obligations in relation to USD 250 million ECB facilities (outstanding of USD 196.88 million as on 31 st March 2016) availed for the part financing of Odisha Phase II project and has executed requisite amendment agreements with all the ECB lenders on 29th March 2013. The revised terms inter-alia includes deferment of repayment schedule, increase in interest rates, etc. had been implemented on receipts of RBI approvals. Consent of certain ECB lenders to AMP is under discussion.

14. As on March 31, 2016, the overdue financial obligations to banks/financial institutions (30 in nos.) (23 in nos.) were Rs, 55,359.54 Lacs (Rs, 40,144.56 Lacs) of which maximum overdue period was 61 days (59 days).

15. In view of losses, as at 31st March, 2016, the net worth of the Company have been eroded. However, keeping in view the improving business climate in the recent past giving optimism for the future, increase in the business volume and the expected full implementation of AMP [including conversion of Funded Interest Term Loan by the Lenders of the Company into Equity Shares / Cumulative Redeemable Preference Shares / Optionally Convertible Redeemable Preference Shares (refer note no. 32(A)(ii))], the management of the Company expects that the net worth of the Company will become positive and hence, the accounts have been prepared on a going concern basis.

16. The Company has made investment ofRs, 8.56 Crore (along with bank guarantee ofRs, 10.01 Crore) in MJSJ Coal Limited (MJSJ) and Rs, 0.10 Crore in Jindal Synfuels Limited (Jindal Synfuels), wherein JSL hold 9% and 10% stake respectively (both joint venture companies). The HonRs,ble Supreme Court of India vide order dated 24.09.2014 has cancelled 214 out of 218 coal blocks allotted to various companies/entities, including the coal blocks allotted to MJSJ & Jindal Synfuels. No mining activity/production had commenced in these coal blocks, therefore cancellation of these coal blocks allotted to the MJSJ and Jindal Synfuels will not have any material impact on the current operations of the Company. The Company has filed review petition on 18.11.2014 challenging the order dated 24.09.2014 passed by Honâble Supreme Court and the matter is pending adjudication in respect of coal block allotted to MJSJ. After the enactment of the Coal Mines (Special Provisions) Act, 2015 dated 30th March, 2015 allowing compensation to the prior allotees in respect of land and mining infrastructure, the management does not anticipate any material variance between carrying value of assets in investee companies and the expected compensation.

17. (a) Company has filed Writ Petition (C) before the Honâble High Court of Orissa, challenging the order passed by the Dy. Commissioner ofCommercial Tax, Jajpur for the period from 01/10/2006 to 30/09/2010, for payment of Entry Tax under the Odisha Entry Tax Act 1999 on the goods procured from outside the territory of India. The demand is on 2/3rd amount of Entry Tax on the goods imported from outside the territory of India on which the payment of 1/3rd amount of entry tax deposited as per the interim order of the Honâble Supreme Court. Considering the prudence, demand of entry tax have been fully provided for and pending final decision interest and penalty have been included under note no. 28(A)(d)(i) (Contingent Liability).

The Honâble Court has heard the matter and vide its interim order dated 14.03.2012, directed the company to deposit 50% of the amount of interest i.e. '' 1.08 crores by 25.03.2012 and granted stay for the balance amount of demand till disposal of the case. The company has deposited the amount within the permitted time and informed to the Honâble Court.

(b) The Company had challenged the legality of Odisha Entry Tax Act 1999 in the Honâble Supreme Court of India. On 16.04.2010 the Entry tax matters of the states have been referred to a larger 9-judge Constitutional Bench of the Honâble Supreme Court of India. The Honâble 9 judge bench while holding the constitutional validity of entry tax, has, vide its Order dated 11th November 2016, referred the same to divisional/ regular benches for testing and determination of the Article 304 (a) of the constitution vis a vis state legislation and levy of entry tax on goods entering the landmass of India from another country. The liability in this regards have been provided. Interest/ penalty if any, will be accounted for as and when this is finally settled/ determined by the Regular Benches hearing the matters/where the appropriate proceedings are continuing. Pending decision, presently included under note no. 28(A)(d)(i) (Contingent Liability).

18. Due from Grid Corporation of Odisha Limited (Gridco) is ofRs, 10,530.58 Lacs (Rs, 11,055.01 Lacs). The company had realized part of the overdue amount on receipt of the order of Odisha Electricity Regulatory Commission (OERC) in Case no. 106 of 2011 No. 4387 dated 17/11/2012. Delayed payment surcharge (Interest) on this have been accounted in terms of contractual obligation. The management is hopeful of recovery of due from Gridco.

19. The company has filed Writ Petition (C) before the Honâble High Court of Orissa, Cuttack challenging the order passed by the Jt Commissioner of Commercial Tax, Jajpur disallowing the issue of C Form for the procurement of plant and machinery for Captive Power Plant during the year 2005-06, 2006-07 & 2007-08. The Honâble Court heard the matter and passed interim order dated 14.03.2012, directing the company to deposit 25% out of total demanded amount of'' 3,305.92 Lacs. The company has deposited an amount ofRs, 826.47 Lacs within the permitted time and informed the Honâble Court. Pending final decision, no provision in this respect has been made in the books and the same is included in note no. 28(A)(d)(i) (Contingent Liability).

* to the extent information available with the company.

20.

(A) Certain balances of trade receivable, loan & advances, trade payable and other liabilities are subject to confirmation and/or reconciliation.

(B) Although the book value\ fair value of certain unquoted investments amounting to Rs, 8,275.51 Lacs (Rs, 5,894.74 Lacs), as reflected in note no. 12, is lower than the cost or companies are having negative net worth, considering the strategic and long term nature of the investment, future prospectus and assets base of the investee company, such decline, in the opinion of the management, has been considered to be of temporary in nature and hence no provision for the same at this stage is considered necessary.

The company has also given inter corporate deposit to its subsidiary companies amounting to Rs, 1,656.25 Lacs (Rs, 1,562.38 Lacs) where the subsidiary companies has accumulated losses\negative net worth. In view of the long term involvement of the company, in the said companies no provision has been considered necessary.

(C) In the opinion of board, assets have a realizable value, in the ordinary course of business at least equal to the amount at which they are stated.

21. In accordance with the provisions of âAccounting Standard-28 - Impairment of Assetsâ, the company has made an assessment of the recoverable amount of assets based on higher of , the value in use considering its projected scale of operations, prevailing market conditions, future cash flows and future growth projections for domestic consumption and export of stainless steel items in general and estimated net selling price of the assets pertaining to its various Cash Generating Units and found recoverable amount of these assets to be higher as compared to carrying value of assets in its Financial Statements. Accordingly, management consider that there is no need for the provision on account of impairment of assets.

22. a) Derivative contracts entered into by the company and outstanding as on 31st March, 2016 for hedging currency risks:

Note: INR equivalent values have been calculated at the yearend exchange rates (except in case of currency swaps) in INR to give an indicative value of the contracts in rupees. Actual hedges however may be in different currency denominations.

b) Foreign Currency exposure that are not hedged by derivative instruments or otherwise outstanding as on 31st March, 2016 is as under:

The expected return on the plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of assets management, historical results of returns on the plan assets and the policy for the management of plan assets management.

The estimates of future salary increase, considered in actuarial valuation, taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The company is taking necessary steps for transfer of fund balance to the employee transferred to Jindal Stainless (Hisar) Limited, Jindal Coke Limited and Jindal United Steel Limited pursuant of the Scheme. (Refer note no. 27 herein above).

23. On 28th July, 2010, the Company granted 35,77,500 stock options to eligible employees of the Company, its subsidiaries including non executive directors (excluding Nominee Director), as per Employees Stock Option Scheme, 2010 (ESOP 2010). The exercise price of stock options is Rs, 75/- per share which would gradually vest over a maximum period of 4 years from the date of grant based on specified criteria, as may be decided by the Compensation Committee.

Pursuant to 1 st vesting @ 30% of ESOP outstanding on 28th July, 2012, 5,34,771 ESOPs were vested to eligible employees based on performance rating and 1,50,000 fresh ESOPs were granted to the employees of the Company on 28th July, 2012. Pursuant to 2nd vesting @ 30% of ESOP outstanding on 28th July 2013, 4,26,024 ESOPs were vested to eligible employees based on performance rating. Pursuant to 3rd vesting @ 40% of ESOP outstanding on 28th July 2014, 5,60,625 ESOPs were vested to eligible employees based on performance rating including employees transferred pursuant to the Scheme (Refer note no. 27 herein above).

In terms of the Composite Scheme of Arrangement between the Company and others, as approved by the Honâble High Court of Punjab and Haryana, the employees engaged in Demerged Undertakings, Business Undertakings 1, 2 and 3 who were transferred as a part of the Scheme to Resulting Company i.e. Jindal Stainless (Hisar) Limited or Transferee Company 2 i.e. Jindal United Steel Limited or Transferee Company 3 i.e. Jindal Coke Limited, shall continue to remain entitled to exercise their rights to the stock options granted and vested but have not been exercised as on the Record Date. Further the Stock options granted by the Company to such employees which have been granted but have not vested as of the Effective Date 1 or Effective Date 2 (as defined in the scheme), as the case may be, shall lapse automatically without any further act on the part of the Company. Furthermore, the exercise price of the stock options, in respect of the employees engaged in the Demerged Undertakings and transferred to the Resulting Company i.e. JSHL shall be reduced in the same proportion as the assets of the Demerged Undertakings bear to the total assets of the Company immediately prior to the Appointed Date 1.â

During the year ended on 31st March, 2016, 4,45,546 (3,29,754) stock options lapsed due to resignation, retirement and non-exercise of option by employees. No vested options were exercised by employees during the year. As on 31st March, 2016, 8,33,581 (12,79,127) ESOPs were in force.

24. The company has a regular programme of physical verification for its inventory. Further, during the year physical verification of significant part of inventory of finished goods and work in progress has been carried out by an independent firm of professionals and technical consultant and no material discrepancy were found.

25. Segment Reporting

i) Information about Business Segment (for the year 2015-16 )

Company operates in a Single Primary Segment (Business Segment ) i.e. Stainless Steel products.

ii) Secondary Segments (Geographical Segment )

** As per Income Tax valuation.

** Excluding Gratuity/leave encashment.

# Included in the previous yearRs, 127.36 Lacs allocated to Jindal Stainless (Hisar) Limited pursuant to Composite Scheme ofArrangement (refer note no. 27)

(i) For Remuneration paid to a Whole Time Director/s (WTD):

(a) amounting to Rs, 16.20 Lacs ,Rs, 18.11 Lacs,Rs, 358.98 Lacs and Rs, 220.97 Lacs for the years 2008-2009 , 2009-2010, 2013-14, and 2014-15 respectively, the Company has already filed an application with the Ministry of Corporate Affairs seeking waiver of recovery of the excess remuneration paid and the said application is under consideration.

(b) For the year 2015-16 the company has filed application for approval of amounting to Rs, 149.99 Lacs.

26 Capital work-in-progress (CWIP) includes technical know-how and supervision fees, taxes, machinery under installation/in transit, pre-operative expenses and other assets under erection. Details of same areas under:-

27 Previous yearsâ figures have been re-arranged and regrouped wherever considered necessary .

28 Figures in bracket indicate previous year figures.

29 Note 1 to 54 are annexed to and from integral part of the Balance Sheet and Statement of Profit and Loss.

Mar 31, 2015

(a) (i) TERMS/RIGHTS ATTACHED TO EQUITY SHARES

The company has only one class of equity shares having a par value of Rs. 2/- per share. Each shareholder is eligible for one vote per equity share held [other than the shares represented by Regulation S Global Depositary Shares (the "GDSs") issued by the Company whose voting rights are subject to certain conditions and procedure as prescribed under the Regulation S Deposit Agreement]. The company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and also has equal right in distribution of Profit/Surplus in proportions to the number of equity shares held by the shareholders.

As on 31st March 2015, 8,802,167 GDSs (8,802,167 GDSs) with 17,604,334 underlying equity shares (17,604,334 equity shares) were outstanding. Each GDS represents 2 underlying equity shares of the Company.

(b) (ii) TERMS/RIGHTS ATTACHED TO CUMULATIVE COMPULSORY CONVERTIBLE PREFERENCE SHARES (CCCPS)

On 31st March, 2014, the Company has issued & allotted 15,810,440 number 0.10% Cumulative Compulsory Convertible Preference Shares (CCCPS) of Rs.2/- each. The holder of the CCCPS shall have an option to apply for and be allotted one Equity Share of face value of Rs. 2/- of the Company per CCCPS at any time after the date of allotment but on or before the expiry of 18 months from the dare of allotment. The unconverted CCCPS shall compulsorily get converted into equity shares at the end of 18 months from the date of allotment. These CCCPS are subject to the provisions of Memorandum and Articles of Association of the Company. The Equity Shares arising on conversion of CCCPS shall rank pari passu inter se with the then existing Equity Shares of the Company in all respect, including dividend. The holder of CCCPS shall have a right to vote only on resolution placed before the Company which directly affect the rights attached to his preference share.

(c) EQUITY SHARES RESERVED FOR ISSUE UNDER OPTIONS For details of shares reserved for issue under the Employee Stock Option Scheme, 2010 of the company, please Refer note no. 49

(d) No bonus, buy back, issue of shares other than in cash in last five years, except about share capital suspense read with note no.27.

Mar 31, 2014

1. (Rs. in Lacs)

A Contingent Liabilities not provided for in respect of : As at As at 31.03.2014 31.03.2013

a) Counter Guarantee given to Company''s Bankers for the Guarantee given by them on behalf of Company 7,441.09 10,283.04

b) Letter of Credit outstanding 92,250.35 82,291.29

c) Bills discounted with Banks 56,211.84 42,132.20

d) i) Sale Tax/Entry Tax demands against which company preferred appeals. 9236.71 9,129.73

ii) Excise Duty/Custom/Service Tax Show Cause Notices/ Demands against which company has preferred appeals. 17,830.03 15,401.82

iii) Income tax demands against which Company has preferred appeals. 4,200.91 4,802.74

iv) Claims and other liabilities against the company not acknowledged as debt. 10,588.26 8,812.91

e) Demand made by Sr. Dy. Director of Mines, Notified Authority, Jajpur Road Circle, Orissa as cess on 320.49 320.49 Chromite Ore production. The matter being pending with Hon''ble Supreme Court.

f) Demand made by Dy. Director of Mines, Jajpur Road Circle, Orissa against which company has 139.56 24.74 preferred appeal.

B i) Guarantee given to custom authorities for import under EPCG Scheme. {Custom duty saved/to be saved 59,484.56 91,638.82 as on 31st March, 2014 Rs.19,080.63 Lacs (Rs.25,676.82 Lacs)}

ii) Custom Duty saved on material consumed imported under Advance License 337.12 266.66

C Letter of Comfort to banks against credit facilities/ financial assistance availed by subsidiaries. 55,036.61 60,403.29

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs.2,474.43 Lacs (Rs.2,082.96 Lacs).

3. Exceptional items includes Gain/(Loss) (net) of (Rs.37,247.31 Lacs) {(Rs.12,484.71 Lacs)} on translation/settlement of foreign currency monetary items (including borrowing), gain / (loss) of Rs. (509.27) Lacs Rs.119.04 Lacs} upon marked to market of derivatives contracts, gain/(loss) of (Rs.3,933.35 Lacs) {(Rs.4,330.39 Lacs)} on forward cover cancelation.

4. Appeals in respect of certain assessments of Sales Tax / Income Tax are pending and additional tax liabilities/refunds, if any, are not determinable at this stage. Adjustments for the same will be made after the same are finally determined. In the opinion of management there will not be material liability on this account.

5. a) Addition/adjustment to Plant & Machinery / Capital Work-In-Progress includes Rs.19,335.20 Lacs (Net Debit) (Rs.25,876.17 Lacs (Net Debit)) on account of foreign exchange fluctuation on Loan/Liability including fluctuation relating to forward cover. (Includes amount disclosed in Note No. 44 (c) below).

b) Interest expenses includes pro-rata premium of Rs.165.98 Lacs (Net Credit) {Rs.134.64 Lacs (Net Credit)}

6. (A) Corporate Debt Restructuring

i) Pursuant to the approval of reworked CDR package ("Rework Scheme") in September 2012 and execution of Amended & Restated Master Restructuring Agreement ("Amended MRA"), the long term financial obligations to the CDR lenders were reworked including reworking of repayment schedule, creation of Funded Interest Term Loan (FITL II), adjustment in interest rates, etc. w.e.f. 31st March, 2012.

ii) Under the Rework Scheme, the interest rates are shifted from fixed rate of interest to floating rate of interest. Interest has been accounted for based upon the terms of the Rework Scheme / confirmations so far received from the Banks.

iii) The Funded Interest Term Loan (FITL-II) has been created on certain credit facilities as per the terms of the Rework Scheme and the amendment thereof. Further, subject to necessary applicable approvals including regulatory and CDR EG, each CDR lender also has option to convert up to an amount equivalent to 30% of FITL - II (created out of interest for the financial year 2012-13 in the Rework Scheme), into equity shares on certain terms and conditions.

iv) The credit facilities / loans under Rework Scheme are/will also be secured by:

a. Unconditional & irrevocable personal guarantee of CMD Mr. Ratan Jindal;

b. Unconditional & irrevocable corporate guarantee of promoter group companies in proportion to the number and to the extent of equity shares pledged or required to be pledged by each body corporate;

c. Pari-passu pledge/ non disposal undertaking / lodgment of 65,306,625 nos. of equity shares held in the company by promoters. Creation of security over 87.7% of the additional equity shares allotted to, a member of the promoter group, on 30th March 2013 and 31st March, 2014; and

d. Under the Scheme, the company had created pledge and submitted non-disposal undertaking for all its investment in subsidiaries as listed below:

- JSL Lifestyle Limited

- JSL Logistics Limited

PT. Jindal Stainless Indonesia

- Jindal Stainless UK Limited

- JSL Stainless FZE

- JSL Group Holdings Re. Limited

- JSL Architecture Limited

- Jindal Stainless Madencilik Sanaye Ve Ticaret A.S.

- JindalAceroslnoxidablesS.L.

- IberjindalS.L.

e. Certain conditions, covenants and creation of security under the Rework Scheme are in process of compliance. Certain secured facilities from Banks are subject to confirmation and/or reconciliation.

(B) Restructuring of ECB Facilities

Besides reworking of its domestic term debt obligations as stated in note A above, the Company has also completed the restructuring of its debt obligations in relation to USD 250 million ECB facilities (outstanding of USD 223.75 million as on 31st March 2014) availed for the part financing of Odisha Phase II project and has executed requisite amendment agreements with all the ECB lenders on 29th March 2013. The revised terms inter-alia includes deferment of repayment schedule, increase in interest rates, etc. has been implemented on receipts of RBI approvals.

7. As on March 31, 2014, the overdue interest to lenders (21 in nos.) was Rs. 3,175.42 Lacs of which maximum overdue period was 30 days.

However, on account of certain technical issues from banks'' side and/or reconciliation issues (refer Note No. 32 (A) (iv) (e) above), certain amounts were reported as overdue for more than 60 days by certain banks. This overdue position of more than 60 days has been rectified subsequent to the balance sheet date.

8. (a) During the year, the Company has received subscription (application/allotment) money (including premium) aggregating to Rs.10,157.66 Lacs from JSL Overseas Limited (the allottee) in two tranches. Subsequent to the receipt of funds, the Company has allottedh

i) 10,750,000 nos. equity shares of Rs.2/- each @ Rs.37.65 per share (including premium of Rs.35.65 per share) to JSL Overseas Limited; and

ii) 15,810,440 nos. Cumulative Compulsory Convertible Preference Shares (CCCPS) of Rs.2/- each @ Rs.37.65 per CCCPS (including premium of Rs. 35.65 per CCCPS) to JSL Overseas Limited.

Amount received of Rs.10,000.01 Lacs have been fully utilized for the purpose the issue was made. The balance amount of Rs.157.65 Lacs after adjustment of consideration for allotment of aforementioned equity shares & CCCPS, pending for refund as on 31st March, 2014 has been subsequently refunded.

(b) During the previous year, Company has issued and allotted 13,550,000 nos fully paid up equity shares of Rs.2 each at Rs.74 per share (including premium of Rs.72 per share) on preferential basis in terms of approval taken from shareholders. Amount received ofRs.100.27 Lacs have been fully utilized for the purpose the issue was made.

9. (a) The company has filed Writ Petition (C) before the Hon''ble High Court of Orissa, challenging the order passed by the Dy Commissioner of Commercial Tax, Jajpur for the period from 01/10/2006 to 30/09/2010, for payment of Entry Tax under the Orissa Entry Tax Act 1999 on the goods procured from outside the territory of India. The demand is on 2/3rd amount of Entry Tax on the goods imported from outside the territory of India on which the payment of 1/3rd amount of entry tax deposited as per the interim order of the Hon''ble Supreme Court. Considering the prudence demand of entry tax have been fully provided for and pending final decision interest and penalty have been shown under note no. 27(d)(i) (Contingent Liability).

The Hon''ble Court has heard the matter and vide its interim order dated 14.03.2012, directed the company to deposit 50% of the amount of interest i.e. Rs.1.08 crores by 25.03.2012 and granted stay for the balance amount of demand till disposal of the case. The company has deposited the amount within the permitted time and informed to the Hon''ble Court.

(b) The Company had also challenged the levy of entry tax on goods not produced in Orissa and same is pending before decision of the Hon''ble Supreme Court. Considering the prudence full liability in this regards have been provided. Interest/ penalty if any, will be accounted for as and when finally settled/determined and the same is included in note no. 27(d)Â© (Contingent Liability).

10. Due from Grid Corporation of Orissa (Gridco) Limited is of Rs.9,641.21 Lacs (Rs.9,268.43 Lacs). The company had realized part of the overdue amount on receipt of the order of Odisha Electricity Regulatory Commission (OERC) in Case no. 106 of 2011 No. 4387 dated 17/11/2012. Delayed payment surcharge (Interest) on this have been accounted in terms of contractual obligation. The management is hopeful of recovery of due from Gridco.

11. The company has filed Writ Petition (C) before the Hon''ble High Court of Orissa, Cuttak challenging the order passed by the Jt Commissioner of Commercial Tax, Jajpur disallowing the issue of C Form for the procurement of plant and machinery for Captive Power Plant during the year 2005-06, 2006-07 & 2007-08. The Hon''ble Court heard the matter and passed interim order dated 14.03.2012, directing the company to deposit 25% out of total demanded amount of Rs.3,305.92 Lacs. The company has deposited an amount of Rs.826.47 Lacs within the permitted time and informed the Hon''ble Court. Pending final decision, no provision in this respect has been made in the books and the same is included in note no. 27(d)(i) (Contingent Liability).

12. During the previous year, the company has received a notice from office of the Dy. Director of Mines, Jajpur Road Circle, Odisha (the Office) asking company to deposit Rs.8,540.27 Lacs with the department on account of cost price on mining of excess quantity of Chrome Ore over and above the approved quantity of mining plan/scheme. The company has disputed and challenged the same as demand made by the Office is incorrect, unjustified, baseless and was without furnishing any supporting documents and/or providing any basis/ reason for such demand. The case is pending before Revisional Authority of Mining tribunal, Govt. of India.

13. (A) Certain balances of trade receivable, trade payable and other liabilities are subject to confirmation and/or reconciliation.

(B) Certain charges created for secured loans are in process of satisfaction.

(C) Although the book value fair value of certain unquoted investments amounting to Rs.9,967.85 Lacs (Rs.3,663.10 Lacs), as reflected in Note no 12, including investment in foreign subsidiaries is lower than the cost or companies are having negative net worth, considering the strategic and long term nature of the investment, future prospectus and assets base of the investee company, such decline, in the opinion of the management, has been considered to be of temporary nature and hence no provision for the same at this stage is considered necessary.

The company has also given inter corporate deposit to its subsidiary companies amounting to Rs.5,981.43 Lacs (Rs.3,243.15 Lacs) where the subsidiary companies has accumulated lossesnegative net worth. In view of the long term involvement of the company (read with note (C) above) in the said companies no provision has been considered necessary.

14. In accordance with the provisions of "Accounting Standard-28 - Impairment of Assets", the company has made an assessment of the recoverable amount of assets based on higher of, the value in use considering its projected scale of operations, prevailing market conditions, future cash flows and future growth projections for domestic consumption and export of stainless steel items in general and estimated net selling price of the assets pertaining to its various Cash Generating Units and found recoverable amount of these assets to be higher as compared to carrying value of assets in its Financial Statements. Accordingly, management consider that there is no need for the provision on account of impairment of assets.

15. (a) Advance recoverable in cash or in kind or for value to be received includes Interest free loan to employee amounting to Rs.15.55 Lacs (Rs.29.76 Lacs) in the ordinary course of business and as per employee service rules of the company. Maximum balance outstanding during the year is Rs. 24.45 Lacs (Rs.37.53 Lacs).

(b) Loan & Advances to subsidiaries includes Rs.22.30 Lacs (Rs. 22.30 Lacs) as advance against share application money with a subsidiary company.

(c) Public Fixed Deposits includes deposit from a director amounting to Rs.63.13 Lacs (Rs. Nil) in the ordinary course of business of the company. Maximum balance outstanding during the year is Rs.273.33 Lacs (Rs. Nil).

(d) Pursuant to clause 32 of the Listing Agreement, Loans and Advances in the nature of Loans to Subsidiaries companies:

16. Research and Development expenses for the year amounting to Rs.64.63 Lacs (Rs.113.46 Lacs) on account of revenue expenditure charged/debited to respective heads of accounts.

17. The Haryana Government levied w.e.f. 05.05.2000 a Local Area Development Tax (the LADT Act) on the Manufacturing units in the State of Haryana on the entry of goods for use and consumption. JSL and other units have challenged the Act in the Hon''ble Punjab and Haryana High Court. The Hon''ble Punjab and Haryana High Court disallowed the petition in December, 2001 and the company had by a Special Leave Petition challenged the Order of High Court in the Hon''ble Supreme Court. The Hon''ble Supreme Court referred the matter to a ''five judges'' Constitutional Bench, which laid certain parameters to examine the Act on those lines. On the basis of these parameters the Hon''ble High Court have declared the Act to be ultra virus on 14th March, 2007. Since, this issue was being canvassed by various High Courts, the Hon''ble Supreme Court gave an Interim Order that those states where the High Courts have given judgment in favour of the petitioner, no tax would be collected. In the mean time the Haryana Government has repealed the LADT Act and introduced another Act by the name of ''Entry Tax'' on the same lines. That Act was also been held ultra virus by the High Court. However, on prudence basis, the liability has been fully provided for. The order of Punjab and Haryana High Court and other judgements of all the Courts of India have been long pending. The State Governments have requested the Hon''ble Supreme Court that it is very difficult for them to run the Government. So at least till the pendency of the cases in the Hon''ble Supreme Court they may be allowed to charge from past liability and also from the future liability to be accrued. On 30th October, 2009, the Hon''ble Supreme Court have directed that 1/3rd of the liability is to be paid by all the assesses whose cases are pending in the High Courts. As, at present, there is no Act either LADT/Entry Ta x prevalent in Haryana State, no tax is being collected from the assesses however undertaking have given by assesses that in case they lose they will make the payment. As such on prudence basis, full liability has been provided for. In the meantime, i.e. on 16.04.2010 the Entry Tax matters of the states have been referred to a larger 9-Judges Constitutional Bench of the Supreme Court, where the judgement of 7-Judges Constitutional Bench passed 49 years ago would be revisited. Constitution Bench has not been constituted as yet and the status of the case is as it is and at present no tax is being collected/paid in Haryana.

(f) The company makes monthly contributions to Provident Fund managed by Trust for qualifying employees. Under the scheme, the company is required to contribute a specified percentage of the payroll costs to fund the benefits.

In keeping with the Guidance on Implementing Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by the companies (Accounting Standards) Rules, 2006, employer established provident fund trusts are treated as Defined Benefit Plans, since the Company is obliged to meet interest shortfall, if any, with respect to covered employees. Accounting to the actuarial Valuation, the Defined Benefit Obligation of Interest Rate Guarantee on exempted Provident Fund in respect of employees of the company as on 31st March, 2014 works out ofRs. Nil (Rs. Nil)and hence no provision is required to be provided for in the books of account towards the guarantee for notified interest rates.

18. On 28th July, 2010, the Company granted 35,77,500 stock options to eligible employees of the Company, its subsidiaries including non executive directors (excluding Nominee Director), as per Employees Stock Option Scheme, 2010 (ESOP 2010). The exercise price of stock options is Rs.75/- per share which would gradually vest over a maximum period of 4 years from the date of grant based on specified criteria, as may be decided by the Compensation Committee.

Pursuant to 1st vesting @ 30% of ESOP outstanding on 28th July, 2012, 534,771 ESOPs were vested to eligible employees based on performance rating and 1,50,000 fresh ESOPs were granted to the employees of the Company on 28th July, 2012. Pursuant to 2nd vesting @ 30% of ESOP outstanding on 28th July 2013, 426,024 ESOPs were vested to eligible employees based on performance rating.

During the year ended on 31st March, 2014, 662,763 (497,106) stock options lapsed due to resignation, retirement and low vesting due to performance rating. No vested options were exercised by employees during the year. As on 31st March, 2014, 1,608,881 (2,271,644) ESOPs were in force.

19. Finance Lease

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such assets are capitalized at inception of the lease at the lower of the fair value or net present value if minimum lease payments and a liability is created for an equivalent amount.

Lease interest charged to profit & loss for right to use of CTL Machine (Cut to length) for the services regarding cutting of Stainless Steel sheets.

20. The company has a regular programme of physical verification for its inventory. Further, during the year physical verification of significant part of inventory of finished goods and work in progress has been carried out by an independent firm of professionals and technical consultant and no material discrepancy were found.

21 Related Party Transactions

A List of Related Party & Relationship (As identified by the Management)

a) Subsidiary Companies :

1 PT. Jindal Stainless Indonesia

2 Jindal Stainless Steelway Limited

3 JSL Lifestyle Limited

4 JSL Architecture Limited

5 Jindal Stainless UK Limited

6 Jindal Stainless FZE

7 Green Delhi BQS Limited

8 Jindal Stainless Madencilik Sanayi Ve Ticaret Anonim Sirketi

9 JSL Media Limited

10 Jindal Aceros Inoxidables S.L.

11 JSL Group Holdings Pte. Limited

12 JSL Logistics Limited

13 Iberjindal S.L.

14 Jindal Stainless Italy Srl.

15 JSL Ventures Pte. Limited

16 JSL Europe SA

17 JSL Minerals & Metals SA

b) Joint Ventures:

1 MJSJ Coal Limited

2 Jindal Synfuels Limited

c) Key Management Personnel :

1 Shri Ratan Jindal Chairman & Managing Director

2 Shri Ramesh R. Nair President & Executive Director (w.e.f. 03.11.2011 to till 04.06.2013)

3 Shri U.K.Chaturvedi Chief Executive Officer (w.e.f. 01.04.2013 to till 31.12.2013)

4 Shri S.S. Virdi Executive Director & Chief Operating Officer (till 31.07.2013)

5 Shri Jitender P. Verma Executive Director - Finance

6 Shri Rajinder Prakash Jindal Executive Director (w.e.f. 06.01.2014)

7 Shri Jitendra Kumar Company Secretary

d) Enterprises over which Key Management Personnel and their relatives exercise significant influence with whom transactions have been taken place during the year:

1 Jindal Steel & Power Limited

2 JSW Steel Limited

3 Jindal Saw Limited

4 Jindal Industries Limited

5 Nalwa Steel & Power Limited

6 Bir Plantation Private Limited

7 JSL Overseas Holding Limited (formely Jindal Overseas Holding Limited)

8 JSL Overseas Limited

9 JSW Ispat Steel Limited

22 Previous years'' figures have been re-arranged and regrouped wherever considered necessary .

23 Figures in bracket indicate previous year figures.

24 Note 1 to 58 are annexed to and form integral part of the Balance Sheet and Statement of Profit & Loss.

Mar 31, 2013

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 2,082.96 Lacs (Rs. 5,725.73 Lacs).

2. Custom Duty saved on material consumed imported under advance license scheme as on 31st March, 2013 and 31st March, 2012 is Rs. 266.66 Lacs and Rs. 34.29 Lacs respectively. The management is of the view that considering the past export performance, future prospects and going concern concept there is certainty that pending export obligation under advance licenses will be fulfilled before expiry of the respective licenses.

3. Exceptional items includes Gain/(Loss) (net) of (Rs. 12,484.53 Lacs) {(Rs. 17,231.29 Lacs)} on translation/settlement of foreign currency monetary items (including borrowing), gain / (loss) of Rs.119.04 Lacs {Rs. 456.08 Lacs} upon marked to market of derivatives contracts, gain/(loss) of (Rs. 4,330.19 Lacs) {Rs. 1,045.24 Lacs} on forward cover cancelation, resulting from volatile global market conditions.

4. Appeals in respect of certain assessments of Sales Tax / Income Tax are pending and additional tax liabilities/refunds, if any, are not determinable at this stage. Adjustments for the same will be made after the same are finally determined. In the opinion of management there will not be material liability on this account.

5. a) Addition/adjustment to Plant & Machinery / Capital Work-In-Progress includes Rs. 25,876.17 Lacs (Net Debit) (Rs. 41,153.60 Lacs (Net Debit)) on account of foreign exchange fluctuation on Loan/Liability including fluctuation relating to forward cover. (Includes amount disclosed in Note No. 42 (c) below).

b) Interest expenses includes pro-rata premium of Rs. 134.64 Lacs (Net Credit) {Rs. 41.99 Lacs (Net Credit)}

6. (A) Corporate Debt Restructuring

i) The Company''s proposal in relation to re-work of its term debt obligations ("Rework Scheme") under CDR mechanism has been approved by CDR EG through Rework Letter of Approval ("Rework LOA") vide its letter dated September 18, 2012. The Rework Scheme inter-alia includes reworking of repayment schedule, interest funding, adjustments in interest rates to ensure protection of net present value of the respective facilities, etc w.e.f. 31st March 2012 ("Reworking Cut-off Date"). Consequently, the amended & restated master restructuring agreement ("Amended MRA") & other necessary documents have been executed with all the lenders, except one.

ii) Under the Rework Scheme, the interest rates are shifted from fixed rate of interest to floating rate of interest. Interest has been accounted for based upon terms of Rework Scheme / confirmation so far received from banks.

iii) The Funded Interest Term Loan (FITL-II) has been created on certain credit facilities. Accordingly, the value of debt service (including interest paid) post Reworking Cut-off Date amounting to Rs. 906.61 Lacs (including refunds due of CDR 2009-10) to be refunded by banks/institutions is included under loans and advances.

Further, subject to necessary applicable approvals including regulatory and CDR EG, each CDR Lender have the option to convert up to an amount equivalent to 30% of FITL- II (being created out of interest for the financial year 2012-13 in the Rework Scheme), into equity shares on certain terms and conditions.

iv) As per the Rework Scheme, the company/promoters are to arrange equity of Rs. 200 crores out of which the promoters have already brought in Rs. 100 crores by way of preferential subscription and balance equity is to be introduced by 31st March, 2014.

v) The credit facilities / loans under Rework Scheme will also be secured by:

a. Unconditional & irrevocable personal guarantee of VC & MD Mr. Ratan Jindal;

b. Unconditional & irrevocable corporate guarantee of promoter group companies in proportion to the number and to the extent of equity shares pledged or required to be pledged by each body corporate;

c. Pari-passu pledge/ non disposal undertaking / lodgment of 65,306,625 nos. of equity shares held in the company by promoters. The pledge to the extent of 87.7% in respect of additional equity shares allotted to, a member of the promoter group, on 30th March 2013; and

d. Under the Scheme, the company has created pari passu pledge and submitted non-disposal undertaking for all its investment in subsidiaries as listed below:

- JSL Lifestyle Limited

- JSL Logistics Limited

- PT. Jindal Stainless Indonesia

- Jindal Stainless UK Limited

- JSL Stainless FZE

- JSL Group Holdings Pte. Limited

- JSL Architecture Limited

- Jindal Stainless Madencilik Sanaye Ve Ticaret A.S.

- Jindal Aceros Inoxidables S.L.

- Iberjindal S.L.

e. Certain conditions, covenants and creation of security under the Rework Scheme are in process of compliance. Certain secured facilities (including FITL -II) are subject to bank confirmation and/or reconciliation.

(B) Restructuring of ECB Facilities

Besides reworking of its domestic term debt obligations as stated in note A above, the Company has also completed the restructuring of its debt obligations in relation to USD 250 million ECB facilities (outstanding of USD 225 million as on 31st March 2013) availed for the part financing of Odisha Phase II project and has executed requisite amendment agreements with all the ECB lenders on 29th March 2013. The revised terms inter-alia includes deferment of repayment schedule, increase in interest rates, etc.

7. (a) The company has filed Writ Petition (C) before the Hon''ble High Court of Odisha, challenging the order passed by the Dy Commissioner of Commercial Tax, Jajpur for the period from 01/10/2006 to 30/09/2010, for payment of Entry Tax under the Odisha Entry Tax Act 1999 on the goods procured from outside the territory of India. The demand is on 2/3rd amount of Entry Tax on the goods imported from outside the territory of India on which the payment of 1/3rd amount of entry tax deposited as per the interim order of the Hon''ble Supreme Court. Considering the prudence demand of entry tax have been fully provided for and pending final decision interest and penalty have been shown under note no. 27(d)(i) (Contingent Liability).The Hon''ble Court has heard the matter and vide its interim order dated 14.03.2012, directed the company to deposit 50% of the amount of interest i.e. Rs. 1.08 crores by 25.03.2012 and granted stay for the balance amount of demand till disposal of the case. The company has deposited the amount within the permitted time and informed to the Hon''ble Court.

(b) The Company had also challenged the levy of entry tax on goods not produced in Odisha and same is pending before decision of the Hon''ble Supreme Court. Considering the prudence full liability in this regards have been provided. Interest/ penalty if any, will be accounted for as and when finally settled/determined and the same is included in note no. 27(d)(i) (Contingent Liability).

8. Due from Grid Corporation of Odisha (Gridco) Limited is of Rs. 9,268.43 Lacs. During the year the company have realized part of the overdue amount on receipt of the order of Odisha Electricity Regulatory Commission (OERC) in Case no. 106 of 2011 No. 4387 dated 17/11/2012. Delayed payment surcharge (Interest) on this have been accounted in terms of contractual obligation. The management is hopeful of recovery of balance amount from Gridco.

9. The company has tiled Writ Petition (C) before the Hon''ble High Court of Odisha, Cuttak challenging the order passed by the Jt Commissioner of Commercial Tax, Jajpur disallowing the issue of C Form for the procurement of plant and machinery for Captive Power Plant during the year 2005-06, 2006-07 & 2007-08. The Hon''ble Court heard the matter and passed interim order dated 14.03.2012, directing the company to deposit 25% out of total demanded amount of Rs. 3,305.92 Lacs. The company has deposited an amount of Rs. 826.47 Lacs within the permitted time and informed the Hon''ble Court. Pending tinal decision, no provision in this respect has been made in the books and the same is included in note no. 27(d)(i) (Contingent Liability).

10. During the year, the company has received a notice from office of the Dy. Director of Mines, Jajpur Road Circle, Odisha (the Office) asking company to deposit Rs. 8,540.27 Lacs with the department on account of royalty on mining of excess quantity of Chrome Ore over and above the approved quantity of mining plan/scheme. The company has disputed and challenge the same as demand made by the Office is incorrect, unjustified, baseless and was without furnishing any supporting documents and/or providing any basis/reason for such demand.

11. (A) certain balances of debtors, trade payable and other liabilities are subject to confirmation and/or reconciliation.

(B) Certain charges created for secured loans are in process of satisfaction.

(C) Although the book value fair value of certain unquoted investments amounting to Rs.3,663.10 Lacs (Rs. 3,663.10 Lacs), as reflected in Note no 12, including investment in a foreign subsidiary is lower than the cost or companies are having negative net worth, considering the strategic and long term nature of the investment, future prospectus and assets base of the investee company, such decline, in the opinion of the management, has been considered to be of temporary nature and hence no provision for the same at this stage is considered necessary.

The company has also given inter corporate deposit to its subsidiary companies amounting to Rs.3,243.15 Lacs (Rs. 4,639.70 Lacs) where the subsidiary companies has accumulated losses egative net worth. In view of the long term involvement of the company (read with note (C) above) in the said companies no provision has been considered necessary.

12. (a) Advance recoverable in cash or in kind or for value to be received includes Interest free loan to employee amounting to Rs. 29.76 Lacs (Rs. 35.62 Lacs) in the ordinary course of business and as per employee service rules of the company.

Maximum balance outstanding during the year is Rs.37.53 Lacs (Rs. 61.85 Lacs).

(b) Loan & Advances to subsidiaries includes Rs. 22.30 Lacs (Rs. 22.30 Lacs) as advance against share application money with a subsidiary company.

13. Research and Development expenses for the year amounting to Rs. 113.46 Lacs (Rs. 86.47 Lacs) on account of revenue expenditure charged/debited to respective heads of accounts.

14. The Haryana Government levied w.e.f. 05.05.2000 a Local Area Development Tax (the LADT Act) on the Manufacturing units in the State of Haryana on the entry of goods for use and consumption. JSL and other units have challenged the Act in the Hon''ble Punjab and Haryana High Court. The Hon''ble Punjab and Haryana High Court disallowed the petition in December, 2001 and the company had by a Special Leave Petition challenged the Order of High Court in the Hon''ble Supreme Court. The Hon''ble Supreme Court referred the matter to a ''tive judges'' Constitutional Bench, which laid certain parameters to examine the Act on those lines. On the basis of these parameters the Hon''ble High Court have declared the Act to be ultra virus on 14th March, 2007. Since, this issue was being canvassed by various High Courts, the Hon''ble Supreme Court gave an Interim Order that those states where the High Courts have given judgment in favour of the petitioner, no tax would be collected. In the mean time the Haryana Government has repealed the LADT Act and introduced another Act by the name of ''Entry Tax'' on the same lines. That Act was also been held ultra virus by the High Court. However, on prudence basis, the liability has been fully provided for. The order of Punjab and Haryana High Court and other judgements of all the Courts of India have been long pending. The State Governments have requested the Hon''ble Supreme Court that it is very difficult for them to run the Government. So at least till the pendency of the cases in the Hon''ble Supreme Court they may be allowed to charge from past liability and also from the future liability to be accrued. On 30th October, 2009, the Hon''ble Supreme Court have directed that 1/3rd of the liability is to be paid by all the assesses whose cases are pending in the High Courts. As, at present, there is no Act either LADT/Entry Tax prevalent in Haryana State, no tax is being collected from the assesses however undertaking have given by assesses that in case they lose they will make the payment. As such on prudence basis, full liability has been provided for. In the meantime, i.e. on 16.04.2010 the Entry Tax matters of the states have been referred to a larger 9-Judges Constitutional Bench of the Supreme Court, where the judgement of 7-Judges Constitutional Bench passed 49 years ago would be revisited. Constitution Bench has not been constituted as yet and the status of the case is as it is and at present no tax is being collected/paid in Haryana.

15. On 28th July, 2010, the Company granted 35,77,500 stock options to eligible employees of the Company, its subsidiaries including non executive directors (excluding Nominee Director), as per Employees Stock Option Scheme, 2010 (ESOP 2010). The exercise price of stock options is Rs.75/- per share which would gradually vest over a maximum period of 4 years from the date of grant based on specified criteria, as may be decided by the Compensation Committee.

16. Finance Lease

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such assets are capitalized at inception of the lease at the lower of the fair value or net present value if minimum lease payments and a liability is created for an equivalent amount.

17. During the year, Company has issued and allotted 13,550,000 nos fully paid up equity shares of Rs. 2 each at Rs. 74 per share (including premium of Rs. 72 per share) on preferential basis in terms of approval taken from shareholders. Amount received of Rs. 100.27 Crores have been fully utilized for the purpose the issue was made.

18 Segment Reporting

i) Information about Business Segment ( for the year 2012-13 )

Company operates in a Single Primary Segment ( Business Segment ) i.e. Stainless Steel products.

19 Related Party Transactions

A List of Related Party & Relationship ( As identified by the Management)

a) Subsidiary Companies :

1 PT. Jindal Stainless Indonesia

2 Jindal Stainless Steelway Limited

3 JSL Lifestyle Limited

4 JSL Architecture Limited

5 Jindal Stainless UK Limited

6 Jindal Stainless FZE

7 Green Delhi BQS Limited

8 Jindal Stainless Madencilik Sanayi Ve Ticaret Anonim Sirketi

9 JSL Media Limited

10 Jindal Aceros Inoxidables S.L.

11 JSL Group Holdings Pte. Limited

12 JSL Logistics Limited

13 Iberjindal S.L.

14 Jindal Stainless Italy Srl.

15 JSL Ventures Pte. Limited

16 JSL Europe SA

17 JSL Minerals & Metals SA

b) Joint Ventures:

1 MJSJ Coal Limited

c) Key Management Personnel :

1 Shri Ratan Jindal Vice Chairman & Managing Director

2 Shri Ramesh R. Nair President & Executive Director (w.e.f. 03.11.2011)

3 Shri Arvind Parakh Director - Finance (till 01.10.2011)

4 Shri S.S. Virdi Executive Director & Chief Operating Officer

5 Shri Jitender P. Verma Executive Director - Finance (w.e.f. 09.02.2012)

6 Shri Jitendra Kumar Company Secretary

d) Enterprises over which Key Management Personnel and their relatives exercise significant influence with whom transactions have been taken place during the year:

1 Jindal Steel & Power Limited

2 JSW Steel Limited

3 Jindal Saw Limited

4 Jindal Industries Limited

5 Nalwa Steel & Power Limited

6 Bir Plantation Private Limited

7 Sona Bheel Tea Limited

8 Jindal Overseas Holding Limited

9 JSW Ispat Steel Limited

Mar 31, 2012

1. ( Rs. in Lacs )

A Contingent Liabilities not provided for in respect of: 31.03.2012 31.03.2011

a) Counter Guarantee given to Company's Bankers for the Guarantee 6,494.27 4,293.15 given by them on behalf of Company

b) Letter of Credit outstanding 98,215.98 81,132.32

c) Bills discounted with Banks 38,001.59 26,290.73

d) i) Sales Tax demands against which company has preferred 17,257.81 280.68 appeals.

ii) Excise Duty/Service Tax Show Cause Notices/Demands 10,816.49 9,544.41 against which company has preferred appeals.

iii) Income tax demands against which Company has preferred 7,055.66 6,621.38 appeals.

iv) Claims and other liabilities against the company not 3,859.75 9,547.30 acknowledged as debt

e) Demand made by Sr. Dy. Director of Mines, Notified Authority, 320.49 320.49 Jajpur Road Circle, Orissa as cess on Chromite Ore production.

The matter being pending with Hon'ble Supreme Court.

e) Demand made by Dy. Director of Mines, Jajpur Road Circle, 600.84 - Orissa against which company has preferred appeal.

B Guarantee given to custom authorities for import under EPCG Scheme. 89,343.34 80,934.71 {Custom duty saved/to be saved as on 31st March, 2012 Rs. 25,235.08 Lacs ( Rs. 23,144.54 Lacs)}

C Letter of Comfort to banks against credit facilities/financial assistance 66,103.68 30,710.45 availed by subsidiaries

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 5,725.73 ( Rs. 45,557.21 Lacs).

3. Custom Duty saved on material consumed imported under advance license scheme as on 31st March, 2012 and 31st March, 2011 is Rs. 34.29 Lacs and Rs. 353.26 Lacs respectively. The management is of the view that considering the past export performance, future prospects and going concern concept there is certainty that pending export obligation under advance licenses will be fulfilled before expiry of the respective licenses.

4. Exceptional items includes :

a) Gain/(Loss) (net) of ( Rs. 17,231.29 Lacs) { Rs. 4,741.27 Lacs} on translation/settlement of foreign currency monetary items (including borrowing), gain / (loss) of Rs. 456.08 Lacs {( Rs. 600.56 Lacs)} upon marked to market of derivatives contracts, gain of Rs. 1,045.24 Lacs ( Rs. 1,281.78 Lacs) on forward cover cancelation, resulting from volatile global market conditions.

b) During the year, recomputation of energy billing to Gridco for the year 2010-11 as per the order of OERC resulting in net loss of Rs. 1,484.36 Lacs.

c) As per the settlement between Xstrata and the company (Jindal Stainless Limited), Rs. 3,561.60 Lacs has been considered as payable to Xstrata against the disputed shipments of Coking Coal claim (Note no.38).

5. Appeals in respect of certain assessments of Sales Tax / Income Tax are pending and additional tax liabilities/refunds, if any, are not determinable at this stage. Adjustments for the same will be made after the same are finally determined. In the opinion of management there will not be material liability on this account.

6. a) Addition/adjustment to Plant & Machinery / Capital Work-In-Progress includes Rs. 41,153.60 Lacs (Net Debit) {Rs. 6,508.11 Lacs (Net Credit)} on account of foreign exchange fluctuation on Loan/Liability including fluctuation relating to forward cover. (Includes amount disclosed in Note No. 43 (c) below).

b) Addition to Building and Plant & Machinery include interest amounting to Rs. 7,380.81 Lacs and Rs. 53,466.65 Lacs respectively.

c) Interest expenses includes pro-rata premium of Rs. 41.99 Lacs (Net Credit) {Rs. 90.92 Lacs (Net Debit)}

7. Corporate Debt Restructuring:

i) Pursuant to the approval of CDR (the Scheme) in January 2010 and signing of Master Restructuring Agreement (MRA) in March 2010, the financial obligations to the lenders was rescheduled including creation of funded interest term loan (FITL), adjustment in interest rates and additional security in favour of lenders. The Scheme was subsequently amended in December 2010 on account of early completion of certain projects and reduction in FITL. Interest has been accounted for based on the Scheme and the amendments thereof.

ii) The Funded Interest Term Loan (FITL) has been created on certain credit facilities as per the Scheme.

iii) The Credit facilities/loans under CDR is additionally secured by unconditional and irrevocable Personal guarantee of VC & MD Mr. Ratan Jindal.

iv) Under the Scheme, the company have pari passu pledged and submitted non-disposal undertaking for all its investments in subsidiaries as listed below :

- JSL Lifestyle Limited

- JSL Logistics Limited

- PT. Jindal Stainless Indonesia

- Jindal Stainless UK Limited

- Jindal Stainless FZE

- JSL Group Holdings Pte. Limited

- JSL Architecture Limited

- Jindal Stainless Madencilik Sanayi ve Ticaret A.S.

- Jindal Aceros Inoxidables S.L.

- Iberjindal S.L.

v) As per the Scheme, the promoters were to arrange equity of Rs. 515 crore which included Rs. 145 crore linked to sacrifices of lenders as stipulated and balance Rs. 370 crore towards further capital expenditure. The company had infused fresh equity of Rs. 247 crore by way of QIP equity placement in March 2010 and balance equity is proposed to be deferred on account of deferment of underlying capital expenditure.

vi) Certain conditions and covenants under the Scheme are in process of compliance. Certain secured facilities are subject to balance confirmations and/or reconciliation.

vii) During the year, the company has made proposal to its lenders to re-work its debt obligations including reworking of repayment schedule, adjustments towards interest obligations etc and the proposal is under considerations with the lenders.

8. The company has filed Writ Petition (C) before the Hon'ble High Court of Orissa, challenging the order passed by the Dy Commissioner of Commercial Tax, Jajpur for the period from 01/10/2006 to 30/09/2010, for payment of Entry Tax under the Orissa Entry Tax Act 1999 on the goods procured from outside the territory of India. The demand is on 2/3rd amount of Entry Tax on the goods imported from outside the territory of India on which the payment of 1/3rd amount of entry tax deposited as per the interim order of the Hon'ble Supreme Court. The amount of demand is Rs. 27.00 Crores Interest of Rs. 2.17 Crores Penalty of Rs. 54.01 Crores.

The Hon'ble Court has heard the matter and vide interim order dated 14.03.2012, directed the company to deposit 50% of the amount of interest i.e. Rs. 1.08 crores by 25.03.2012 and granted stay for the balance amount of demand till disposal of the case. The company has deposited the amount within the permitted time and informed the Hon'ble Court.

9. Sundry debtors include due from Grid corporation of Orissa (Gridco) Limited outstanding for more than six month amounting to Rs. 102.87 crore. The company had initiated legal action for recovery of amount due upto the end of the previous year and part of the debtors has been realized during the financial year 2010-11. Pending litigation, these debtors balances are not reconciled. The debtors also include interest on overdue amount accounted for in terms of contractua obligation. The management is hopeful of recovery of these debtors from Gridco.

10. Initially the project was conceived in SEZ and the formal approval was granted by the Ministry of Commerce and Industry vide letter No.F2/444/2006.SEZ dated 25.10.2006 for development of a Special Economic Zone for Stainless steel and ancillary/downstream industry at Kalinga Nagar, Orissa. Due to change in global economic scenario and on the Company's request for de-notification of SEZ, appropriate/concerned authority finally approved after refund of applicable taxes / duties. Finally your company has successfully exited from SEZ Scheme.

11. The company has filed Writ Petition (C) before the Hon'ble High Court of Orissa, Cuttak challenging the order passed by the Jt Commissioner of Commercial Tax, Jajpur disallowing the issue of C Form for the procurement of plant and machinery for Captive Power Plant during the year 2005-06, 2006-07 & 2007-08. The Hon'ble Court heard the matter and passed interim order dated 14.03.2012, directing the company to deposit 25% out of total demand amounting Rs. 33.06 Crores and the balance amount of demand have been stayed till final disposal of the matter. The company has deposited the amount within the permitted time and informed the Hon'ble Court.

12. During June 2008, Jindal Stainless Limited (JSL) entered into coking coal contract with M/s. Xstrata Coal Queensland Pty. Ltd. (Xstrata) for two shipments of coking coal (50,000 MT each). Certain disputes arose between the parties in earlier years. Xstrata invoked Arbitration at London Court of International Arbitration (LCIA) and claimed a loss of USD 12.5 million. LCAI passed an award of USD 8 million plus interest and costs against JSL. JSL had challenged the award by filing its objections u/s 34 of Arbitration and Conciliation Act 1996, in the Hon'ble District Court of Odisha at Cuttack, wherein the Court had admitted JSL's petition and had issued notice to Xstrata.

During the year, Xstrata had initiated enforcement proceedings against certain overseas assets of JSL, including immovable property situated in London, United Kingdom, assets of JSL's overseas subsidiaries and JSL's investments in its overseas subsidiaries. Subsequent to above, the existing lenders initiated their claims in some of the proceedings, pursuant to their rights under the security package.

Xstrata has now in-principle agreed to settle the claim for a total amount of USD 7 million, however, this is subject to necessary statutory approvals and execution of settlement agreement to this effect. Pending the fulfillment of foregoing requirements, a provision has been created for equivalent of USD 7 million under the head Exceptional Items.

13. (A) certain balances of debtors, trade payable and other liabilities are subject to confirmation and/or reconciliation.

(B) Certain charges created for secured loans are in process of satisfaction.

(C) Although the book value/fair value of certain unquoted investments amounting to Rs. 3,663.10 Lacs ( Rs. 3,663.10 Lacs), as reflected in Note no 12, including investment in a foreign subsidiary is lower than the cost or companies are having negative net worth, considering the strategic and long term nature of the investment, future prospectus and assets base of the investee company, such decline, in the opinion of the management, has been considered to be of temporary nature and hence no provision for the same is considered necessary.

The company has also given inter corporate deposit to its subsidiary company amounting to Rs. 4,639.70 Lacs ( Rs. 4,430.11 Lacs) where the subsidiary companies has accumulated losses/negative net worth. In view of the long term involvement of the company in the said companies no provision has been considered necessary.

14. Advance recoverable in cash or in kind or for value to be received includes:- (a) Interest free loan to employee amounting to Rs. 35.62 Lacs ( Rs. 16.82 Lacs) in the ordinary course of business and as per employee service rules of the company. Maximum balance outstanding during the year is Rs. 61.85 Lacs ( Rs. 28.16 Lacs).

(b) Rs. 22.30 Lacs ( Rs. 22.30 Lacs) as advance against share application money with subsidiary company.

15. Research and Development expenses for the year amounting to Rs. 86.47 Lacs ( Rs. 63.28 Lacs) on account of revenue expenditure charged/debited to respective heads of accounts.

16. The Haryana Government levied w.e.f. 05.05.2000 a Local Area Development Tax (the LADT Act) on the Manufacturing units in the State of Haryana on the entry of goods for use and consumption. JSL and other units have challenged the Act in the Hon'ble Punjab and Haryana High Court. The Hon'ble Punjab and Haryana High Court disallowed the petition in December, 2001 and the company had by a Special Leave Petition challenged the Order of High Court in the Hon'ble Supreme Court. The Hon'ble Supreme Court referred the matter to a 'five judges' Constitutional Bench, which laid certain parameters to examine the Act on those lines. On the basis of these parameters the Hon'ble High Court have declared the Act to be ultra virus on 14th March, 2007. Since, this issue was being canvassed by various High Courts, the Hon'ble Supreme Court gave an Interim Order that those states where the High Courts have given judgment in favour of the petitioner, no tax would be collected. In the mean time the Haryana Government has repealed the LADT Act and introduced another Act by the name of 'Entry Tax' on the same lines. That Act was also been held ultra virus by the High Court. However, on prudence basis, the liability has been fully provided for. The order of Punjab and Haryana High Court and other judgements of all the Courts of India have been long pending. The State Governments have requested the Hon'ble Supreme Court that it is very difficult for them to run the Government. So at least till the pendency of the cases in the Hon'ble Supreme Court they may be allowed to charge from past liability and also from the future liability to be accrued. On 30th October, 2009, the Hon'ble Supreme Court have directed that 1/3rd of the liability is to be paid by all the assesses whose cases are pending in the High Courts. As, at present, there is no Act either LADT/Entry Tax prevalent in Haryana State, no tax is being collected from the assesses however undertaking have given by assesses that in case they lose they will make the payment. As such on prudence basis, full liability has been provided for. In the meantime, i.e. on 16.04.2010 the Entry Tax matters of the states have been referred to a larger 9-Judges Constitutional Bench of the Supreme Court, where the judgement of 7-Judges Constitutional Bench passed 49 years ago would be revisited. Constitution Bench has not been constituted as yet and the status of the case is as it is and at present no tax is being collected/paid in Haryana.

17. On 28th July, 2010, the company has granted 3,577,500 stock options to eligible employees of the company, its subsidiaries including non executive directors (excluding Nominee Director), as per Company's Employee Stock Option Scheme, 2010 (ESOP 2010). The exercise price of stock options is Rs. 75/- per share which would gradually vest over a maximum period of 4 years from the date of grant based on specified criteria, as may be decided by Compensation Committee. During the year ended on 31st March, 2012, 487,500 (471,250) stock options lapsed due to resignation, retirement etc.

18. Finance Lease

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such assets are capitalized at inception of the lease at the lower of the fair value or net present value if minimum lease payments and a liability is created for an equivalent amount.

Lease interest charged to profit & loss for right to use of CTL Machine (Cut to length) for the services regarding cutting of Stainless Steel sheets.

19. During the year ended 31st March 2012, the Revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements, however it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

20. The company has exercised option available to its under clause 46A of Accounting Standard AS 11 as amended by the Companies (Accounting Standards) (Second Amendment) Rules, 2011 in respect of accounting for fluctuation in foreign exchange relating to "Long Term Foreign Currency Monetary Items". Accordingly, during the year, the company has adjusted a sum of Rs. 5,611.19 Lacs to the cost of its fixed assets on account of such difference arising during the year ended on 31st March, 2012, which was hitherto charged to the profit & loss account.

21. Segment Reporting

i) Information about Business Segment ( for the year 2011-12 )

Company operates in a Single Primary Segment ( Business Segment ) i.e. Stainless Steel products.

22. Related Party Transactions

A List of Related Party & Relationship ( As identified by the Management )

a) Subsidiary Companies :

1 PT. Jindal Stainless Indonesia

2 Jindal Stainless Steelway Limited

3 JSL Lifestyle Limited

4 JSL Architecture Limited

5 Jindal Stainless UK Limited

6 Jindal Stainless FZE

7 Green Delhi BQS Limited

8 Jindal Stainless Madencilik Sanayi Ve Ticaret Anonim Sirketi

9 JSL Media Limited

10 Jindal Aceros Inoxidables S.L.

11 JSL Group Holdings Pte. Limited

12 JSL Logistics Limited

13 Iberjindal S.L.

14 Jindal Stainless Italy Srl.

15 JSL Ventures Pte. Limited

16 JSL Europe SA

17 JSL Minerals & Metals SA

b) Joint Ventures:

1 MJSJ Coal Limited

c) Key Management Personnel :

1 Smt. Savitri Devi Jindal Chairperson (till 31.03.2011)

2 Shri Ratan Jindal Vice-Chairman & Managing Director

3 Shri Ramesh R. Nair President & Executive Director (w.e.f. 03.11.2011)

4 Shri Arvind Parakh Director - Finance (till 01.10.2011)

5 Shri S.S. Virdi Executive Director & Chief Operating Officer (w.e.f. 06.04.2010)

6 Shri Jitender P Verma Executive Director - Finance (w.e.f. 09.02.2012)

7 Shri N.P. Jayaswal Executive Director (till 06.04.2010)

8 Shri Jitendra Kumar Company Secretary

d) Enterprises over which Key Management Personnel and their relatives exercise significant influence with whom transactions have been taken place during the year:

1 Jindal Steel & Power Limited

2 JSW Steel Limited

3 Jindal Saw Limited

4 Jindal Industries Limited

5 Nalwa Steel & Power Limited

6 Bir Plantation Private Limited

7 Sona Bheel Tea Limited

8 Jindal Overseas Holding Limited

9 JSW Ispat Steel Limited

23. Previous years' figures have been re-arranged and regrouped wherever considered necessary .

24. Figures in bracket indicate previous year figures.

25. Note 1 to 58 are annexed to and form integral part of the Balance Sheet and Statement of Profit & Loss.

Mar 31, 2011

( Rs. in Lacs )

1A. Contingent Liabilities not provided for in respect of: As at As at

31.03.2011 31.03.2010

a) Counter Guarantee given to Company's Bankers for the guarantee given by them on behalf of Company. 4,293.15 5,754.63

b) Letter of Credit outstanding 81,132.32 60,429.56

c) Bills discounted by banks 26,290.73 7,125.36

d) i) a) Sales tax Demands against which Company has preferred appeals. 280.68 280.68

b) Income tax Demands against which Company has preferred appeals. 6,621.38 3,386.73

ii) Excise Duty/Service Tax Show Cause Notices/Demands against which 9,544.41 5,782.65 company has preferred appeals.

e) Claim against the company not acknowledged as debt 9,547.30 9,269.70

f) Guarantee given to custom authorities for import 80,934.71 17,006.03 under EPCG Scheme. {Custom duty saved/to be saved as on 31st March, 2011 Rs. 23,144.54 Lacs ( Rs. 1,822.67 Lacs)}

g) Demand made by Sr. Dy. Director of Mines, Notified Authority, 320.49 320.49 Jajpur Road Circle, Odisha as cess on Chromite Ore production.

The matter being pending with Hon'ble Supreme Court.

2B. Custom Duty saved on material consumed imported under advance license scheme as on 31st March, 2011 and 31st March, 2010 is Rs. 353.26 Lacs and Rs. 1,045.41 Lacs respectively. The management is of the view that considering the past export performance, future prospects and going concern concept there is certainty that pending export obligation under advance licenses will be fulfilled before expiry of the respective licenses.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 45,557.21 Lacs (Rs. 91,352.22 Lacs).

4. Appeals in respect of certain assessments of Sales Tax/Income Tax are pending and additional tax liabilities/refunds, if any, are not determinable at this stage. Adjustments for the same will be made after the same are finally determined. In the opinion of management there will not be material liability on this account.

5. Exceptional Items includes gain (net) of Rs. 4,741.27 Lacs (Rs. 18,072.60 Lacs) on translation/settlement of foreign currency monetary items (including borrowing), gain / (loss) of Rs. (600.56) Lacs (Rs. 2,601.04 Lacs) upon marked to market of derivatives contracts, gain of Rs. 1,281.78 Lacs (Rs. 2,613.59 Lacs) on forward cover cancelation, resulting from volatile global market.

6. a) Addition/adjustment to Plant & Machinery / Capital Work-In-Progress includes Rs. 6,508.11 Lacs (Net Credit) {Rs. 9,282.36 Lacs (Net Credit)} on account of foreign exchange fluctuation on Loan/Liability including fluctuation relating to forward cover. (Includes amount disclosed in Note No. 16 (c) below).

b) Interest paid on fixed loan includes pro-rata premium of Rs. 90.92 Lacs (Net Debit) {Rs. 703.52 Lacs (Net Debit)}.

7. Corporate Debt Restructuring:

a) Pursuant to the approval of CDR (the Scheme) under the CDR mechanism approved by the EMPOWERED group of CDR (CDR EG) in previous year and Master Restructuring Agreement (MRA) had been executed with lenders. The Scheme inter - alia includes restructuring of Re-payment Schedule, Reduction/adjustment in interest rates and additional security in favour of CDR lenders by pledge of Shares under promoters control in the company.

b) Interest has been accounted for based upon terms of package/ confirmation so far received from banks. Balance of certain secured loans (including FITL) is subject to confirmation and/or reconciliation.

c) The Funded Interest Term Loan (FITL) has been created on certain credit facilities as per CDR scheme approved. On the decision of the MC that the entire debt services by the company post cut off date i.e. 30th June, 2009 was to be refunded back to the company, which however was pending for sanctions from few of the respective banks/FIs. Accordingly the value of debts service (including interest paid) post cut off date amounting to Rs. 1,353.36 Lacs (Rs. 9,048.70 Lacs) to be refunded by banks/Institutions included under Loans and Advances.

d) As stipulated, promoters shall arrange to bring funds to meet short fall in cash flows on demand by CDR EG.

e) The Credit facilities/ loans under CDR is further secured by unconditional and irrevocable Personal guarantee of VC & MD Mr. Ratan Jindal. Further for waiver of Unconditional and irrevocable corporate guarantee of promoters group companies (as stated in MRA) in proportion to the numbers of equity shares held by them in the company, final decision is under consideration. Balance certain covenants/conditions as stipulated in CDR package are in process of compliance.

f) (i) During the year Company has received necessary approval for part conversion of Non Convertible Debenture of Rs. 180 crores into Rupee Term Loan. (ii) Further, during the year, the CDR lenders have approved for restricting the FITL build up period to 31st March, 2011 instead of earlier approved FITL build up period till 31st March, 2012. Thus, post 31st March, 2011, the company has also started to service the interest on the respective domestic term loans on which the FITL was being created, instead of being converted into FITL, and (iii)The company have pari passu pledged and submitted non-disposal undertaking for all its investments in subsidiaries as listed below :

- JSL Life Style Limited (formerly Austenitic Creations Private Limited)

- JSL Logistics Limited

- PT. Jindal Stainless Indonesia

- Jindal Stainless UK Limited

- Jindal Stainless FZE

- JSL Group Holdings Pte. Limited

- JSL Architecture Limited (formerly Jindal Architecture Limited)

- Jindal Stainless Madencilik Sanayi Ticaret A.S.

- Jindal Aceros Inoxidables S.L.

8. During the financial year 2007-08 the Company had filed Writ Petition in Hon'ble High Court of Odisha challenging the validity of Entry Tax Act, 1999.The Hon'ble High Court of Odisha vide their order dated 16.05.2007 granted stay to the extent of depositing 50% of the entry tax demand raised by the Commercial tax Department. However, the Company has provided full liability for entry tax in the books of accounts during the year 2007-08 while deposited 50% amount with the Department. The outstanding amount of liability on this account as on 31st March, 2008 was Rs. 351.65 Lacs which still remains outstanding.

Subsequently in February, 08, the Hon'ble High Court disposed off the Writ Petition. As per legal advice received by the Company on interpretation of the High Court Order, it believes that its liability will be less than the amount already deposited. Accordingly, the Company has filed the refund application which has been rejected by Joint Commissioner. Subsequently the company has gone for appeal to the Appellate Authority and the hearing is pending.

The commercial tax department has gone for appeal to Hon'ble Supreme Court against the Order of High Court & the Hon'ble Supreme Court has been given stay against the order of Hon'ble High Court. The company again appealed to the Hon'ble Supreme Court against the stay & the Hon'ble Supreme Court after several hearing, ordered to deposit under protest 1/3rd of the outstanding liability. Accordingly the company is depositing 1/3rd of the liability as per order given by the Hon'ble Supreme Court. Pending this, liability of Rs. 4,575.98 lacs may arise depending upon final decesion by Hon'ble Supreme Court.

9. Sundry debtors include due from Grid corporation of Odisha (Gridco) Limited outstanding for more than six month amounting to Rs. 63.43 crore .The company had initiated legal action for recovery of amount due upto the end of the previous year and part of the debtors has been realized during the financial year 2010-11.Pending litigation, these debtors balances are not reconciled. The debtors also include interest on overdue amount accounted for in terms of contractual obligation. The management is hopeful of recovery of these debtors from Gridco.

10. The Company was granted formal approval by the Ministry of Commerce and Industry vide letter No.F.2/444/2006.SEZ dated 25.10.2006 for development of a Special Economic Zone for Stainless steel and ancillary/ downstream industry at Kalinga Nagar, Odisha. The SEZ has been notified vide Notification S.O.2004(E) dated 28.11.2007. The Company was also granted approval to set up a SEZ unit in the said SEZ vide letter No.SEZ/LIC/J-7(1)/2008/955 dated 11.06.2008 issued by the Development Commissioner, Falta SEZ. Due to change in global economic scenario, the Company's request for de- notification of SEZ was in-principle approved by the Board of Approval (BOA) and the Unit Approval Committee has approved de-bonding of the SEZ unit subject to refund of taxes / duties. The amount of Tax/ Duty already paid on account of customs duty, excise duty and others is Rs. 10,160.16 Lacs. Additionally, the Company has taken EPCG license for Rs. 567.24 Crores as per Rule 74 of Special Economic Zones Rules, 2006. Further, for discharging the liability under the Central Sales Tax, the company is collecting the relevant forms and submitting the same with the relevant Development Commissioner. The management is confident that final de-bonding certificate will be received once all the requisite formalities are completed.

11. During June 2008, JSL Stainless Ltd. (JSL) entered into Coking Coal Contract with M/s Xstrata Coal Queensland Pty Ltd. (Xstrata) for two shipments of coking coal (50,000 MT each). Certain disputes arose between the parties. Xstrata invoked Arbitration at London Court of International Arbitration (LCIA) and claimed a loss of 12.5 million US$. LCIA made an award of 8 million US$ against JSL.

JSL has challenged the award by filing objections against the award U/s 34 of Arbitration and Conciliation Act 1996, in the Hon'ble District Court of Odisha, wherein the Court has admitted our petition and has issued notice to Xstrata.

12. a) Certain balances of sundry debtors, sundry creditors are subject to confirmation and/or reconciliation.

b) Certain charges created for secured loans are in process of satisfaction.

c) Although the book value / fair value of certain unquoted investments amounting to Rs. 3,663.10 Lacs (Rs. 3,663.10 Lacs), as reflected in schedule no 6, including investment in foreign subsidiary is lower than the cost, considering the strategic and long term nature of the investment, future prospectus and assets base of the investee company, such decline, in the opinion of the management, has been considered to be of temporary nature and hence no provision for the same is considered necessary.

The company has also given inter corporate deposit to its subsidiary company amounting to Rs. 4,430.11 Lacs (Rs. 4,214.32 Lacs) where the subsidiary companies has accumulated losses / negative net worth. In view of the long term involvement of the company in the said companies no provision has been considered necessary.

13. Advance Recoverable in Cash or in kind or for value to be received includes:

a) Rs. Nil (Rs. Nil), maximum amount outstanding at any time during the Year is Rs. Nil (Rs. 2.89 Lacs) being the amount due from directors/officers of the company.

b) Interest free loan to employees amounting to Rs. 16.82 Lacs (Rs. 11.50 Lacs) in the ordinary course of the business and as per employee service rules of the Company. Maximum balance outstanding during the year Rs. 28.16 Lacs (Rs. 24.53 Lacs).

c) Rs. 22.30 Lacs (Rs. 22.30 Lacs) as advance against share application money with subsidiary company.

14. Research and Development expenses for the year amounting to Rs. 63.28 Lacs (Rs. 39.14 Lacs) on account of revenue expenditure and Rs. Nil (Rs. Nil) on account of capital expenditure have been charged/debited to respective head of accounts.

15. The Haryana Government levied w.e.f. 05.05.2000 a Local Area Development Tax (the LADT Act) on the manufacturing units in the State of Haryana on the entry of goods for use and consumption. JSL and other units have challenged the Act in the Hon'ble Punjab and Haryana High Court. The Hon'ble Punjab and Haryana High Court disallowed the petition in December, 2001 and the company had by a Special Leave Petition challenged the Order of High Court in the Hon'ble Supreme Court. The Hon'ble Supreme Court referred the matter to a 'five judges' Constitutional Bench, which laid certain parameters to examine the Act on those lines. On the basis of these parameters the Hon'ble High Court have declared the Act to be ultra virus on 14th March, 2007. Since, this issue was being canvassed by various High Courts, the Hon'ble Supreme Court gave an Interim Order that those states where the High Courts have given judgement in favour of the petitioner, no tax would be collected. In the mean time the Haryana Government has repealed the LADT Act and introduced another Act by the name of 'Entry Tax' on the same lines. That Act was also been held ultra virus by the High Court. However, on prudence basis, the liability has been fully provided for. The order of Punjab and Haryana High Court and rather judgements of all the Courts of India have been long pending. The State Governments have requested the Hon'ble Supreme Court that it is very difficult for them to run the Government. So at least till the pendency of the cases in the Hon'ble Supreme Court they may be allowed to charge from past liability and also from the future liability to be accrued. On 30th October, 2009, the Hon'ble Supreme Court have directed that 1/3rd of the liability is to be paid by all the assesses whose cases are pending in the High Courts. As, at present, there is no Act either LADT/Entry Tax prevalent in Haryana State, no tax is being collected from the assesses however undertaking have given by assesses that in case they lose they will make the payment. As such on prudence basis, full liability has been provided for. In the meantime, i.e. on 16.04.2010 the Entry Tax matters of the states have been referred to a larger 9-Judges Constitutional Bench of the Supreme Court, where the judgement of 7-Judges Constitutional Bench passed 49 years ago would be revisited. Constitution Bench has not been constituted as yet and the status of the case is as it is and at present no tax is being collected/paid in Haryana.

16. Money received in Escrow account as on 31st March, 2010 against allotment of 23,447,240 nos. equity shares of Rs. 2/-each at price of Rs. 105.50 per share (including premium of Rs. 103.50 per share) of amounting to Rs. 24,736.84 Lacs from Qualified Institutional Buyer's have been fully utilized for the purpose the said issue of shares was made.

The expected return on the plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of assets management, historical results of returns on the plan assets and the policy for the management of plan assets management.

The estimates of future salary increase, considered in actuarial valuation, taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

f) Pending the issuance of the Guidance Note from the Actuarial Society of India, the company's actuary has expressed his inability to reliably measure the provident fund (funded) liability.

17. The Company has given Letter of Comfort to Banks against credit facilities/financial assistance [amount outstanding as on 31st March, 2011 Rs. 30,710.45 Lacs (Rs. 26,173.23 Lacs)] availed by a subsidiary.

18. On 28th July, 2010, the company has granted 3,577,500 stock options to eligible employees of the company, its subsidiaries including non executive directors (excluding Nominee Director), as per Company's Employee Stock Option Scheme, 2010 (ESOP 2010). The exercise price of stock options is Rs. 75/- per share which would gradually vest over a maximum period of 4 years from the date of grant based on specified criteria, as may be decided by Compensation Committee. During the year ended on 31st March, 2011, 471,250 stock options lapsed due to resignation, retirement etc.

19. Finance Lease

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such assets are capitalized at inception of the lease at the lower of the fair value or net present value if minimum lease payments and a liability is created for an equivalent amount.

Lease interest charged to profit & loss for right to use of CTL Machine (Cut to length) for the services regarding cutting of Stainless Steel sheets.

20 Segment Reporting

i) Information about Business Segment ( for the year 2010-11 )

Company operates in a Single Primary Segment ( Business Segment ) i.e. Stainless Steel products.

21 Related Party Transactions

A List of Related Party & Relationship ( As identified by the Management )

a) Subsidiary Companies :

1 PT. Jindal Stainless Indonesia

2 Jindal Stainless Steelway Limited

3 JSL Lifestyle Limited (formerly Austenitic Creations Private Limited)

4 JSL Architecture Limited (formerly Jindal Architecture Limited)

5 Jindal Stainless UK Limited

6 Jindal Stainless FZE

7 Green Delhi BQS Limited

8 Jindal Stainless Madencilik Sanayi Ve Ticaret Anonim Sirketi

9 JSL Media Limited (formerly Parivartan City Infrastructure Limited)

10 Jindal Aceros Inoxidables S.L.

11 JSL Group Holdings Pte. Limited

12 JSL Logistics Limited

13 Iberjindal S.L.(w.e.f. 07.05.2009)

14 Jindal Stainless Italy Srl.

15 JSL Ventures Pte. Limited

16 JSL Europe SA

17 JSL Minerals & Metals SA

b) Joint Ventures:

1 MJSJ Coal Limited

c) Key Management Personnel :

1 Smt. Savitri Devi Jindal Chairperson

2 Shri Ratan Jindal Vice-Chairman & Managing Director

3 Shri Arvind Parakh Director - Finance

4 Shri S.S. Virdi Executive Director & Chief Operating Officer (w.e.f. 06.04.2010)

5 Shri N.P. Jayaswal Executive Director (till 06.04.2010)

6 Shri Jitendra Kumar Company Secretary

d) Enterprises over which Key Management Personnel and their relatives exercise significant influence with whom transactions have been taken place during the year:

1 Jindal Steel & Power Limited

2 JSW Steel Limited

3 Jindal Saw Limited

4 Jindal Industries Limited

5 Nalwa Steel & Power Limited

6 Bir Plantation Private Limited

7 Sona Bheel Tea Limited

8 Jindal Overseas Holding Limited

Mar 31, 2010

(Rs. in Lacs) 1A. Contingent Liabilities not provided for in respect of: As at As at 31.03.2010 31.03.2009 a) Counter Guarantee given to Companys Bankers for the 5,754.63 7,918.70 guarantee given by them on behalf of Company. b) Letter of Credit outstanding 60,429.56 151,710.75 c) Bills discounted by banks 7,125.36 11,521.45 d) l) a) Sales tax Demands against which Company has preferred appeals. 280.68 281.68 b) Income tax Demands against which Company has preferred appeals. 3386.73 2594.04 u) Excise Duty/Service Tax Show Cause Notices/Demands against which 5,782.65 3,752.23 company has preferred appeals. e) Claim against the company not acknowledged as debt 9269.70 497.99 f) Guarantee given to custom authorities for import under EPCG Scheme. 17006.03 10820.23 g) Demand made by Sr. Dy Director of Mines, Notified Authority, 320.49 320.49 jajpur Road Circle, Onssa as cess on Chromite Ore producnon. The matter being pending with Honble Supreme Court.

2A. Custom Duty saved on material consumed imported under advance license scheme as on 31st March, 10 and 31st March, 09 is Rs. 1,045.41 Lacs and Rs. 1,067.59 Lacs respectively. The management is of the view that considering the past export performance and future prospects there is certainty that pending export obligation under advance licenses will be fulfilled before expiry of the respective licenses.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 91,352.22 Lacs (Rs. 249,931.54 Lacs).

4. Appeals in respect of certain assessments of Sales Tax/Income Tax are pending and additional tax HabiMes/refunds, if any, are not determinable at this stage. Adjustments for the same will be made after the same are finaUy determined. In the opinion of management there will not be material liability on this account.

5. a) Exceptional Items includes gam / (loss) (net) of Rs. 18,072.60 Lacs (Rs. (51,902.07 Lacs)) on translation/settlement of foreign currency monetary items (including borrowing), gam / (loss) of Rs. 2,601.04 Lacs (Rs. (2,601.04 Lacs)) upon marked to market of derivatives contracts, gam of Rs. 2,613.59 Lacs (Rs. 420.13 Lacs) on forward cover cancelation and loss of Rs. Nil (Rs. 1,631.66 Lacs) on settlement of commodity hedging contract, resulting from volatile global market.

b) During the previous year, coking coal purchased for coke oven plant was sold out / contracted for sale by the company due to delay in commissioning of plant and resulting a loss of Rs. 3,779.70 Lacs charged to revenue as exceptional item.

6. a) Addition/adjustment to Pkmt & Machinery / Capital Work-in-Progress includes Rs. 9,282.36 Lacs (Net Credit) {Rs. 29,162.62 Lacs (Net Debit)}on account of foreign exchange fluctuation on Loan/ Liability including fluctuation relatmg to forward cover (Includes amount disclosed mNote No. 14(c) below).

b) Interest paid on fixed loan includes pro-rata premium of Rs. 703.52 Lacs (Net Debit) {Rs. 1,067.46 Lacs (Net Debit)}.

7. Corporate Debt Restructuring:

(i) The debt restructuring scheme (the Scheme) under CDR Mechanism has been approved and Letter of Approval issued on 23rd January 2010. The scheme mter-alia includes restructuring of re-payment schedule, interest funding, reduction/adjustment in interest rates and additional security in favour of CDR lenders by pledge of shares of promoters, as stipulated. Master Restructuring Agreement ("MRA") has been executed on 26th March 2010 with majority of Lenders. The impact in terms of the approved Scheme has been given on provisional basis. Pending confirmation of some lenders, additional impact, if any, will be accounted for as and when finally confirmed/assessed.

u) Interest has been accounted for based upon terms of package/confirmations so far received from the Banks. Balance of certain secured loans (including FITL) is subject to confirmanon and/or reconcilianon.

iii) (a) The Funded Interest Term Loan (FITL) has been created on certain credit facilities w.e.f. 1st July 2009 as per the CDR scheme approved by the CDR EG on 18th December 2009, respective letter of approval dated 23rd January 2010 and the Monitoring Committee (MC) meeting held on 7th May 2010. Further based on the decision of the MC that the entire debt serviced by the company post cut off date i.e. 30th June 2009 would have to be refunded to the company, which is however, subject to the approval of CDR EG and also the amendment to sanctions from the respective banks/FIs and accordingly the value of FITL created The FITL value has been considered based on sanctions so far received/to be received. The value of debt serviced (including interest paid) post cut off date amounting to Rs. 9,048.70 Lacs to be refunded by banks/Institutions post cut off date has been included under Loans and Advances.

(b) Part of Non- Convertible Debentures on cut off date shall be (has been converted pending compliance of certain conditions/ approval) reconstituted and/or converted into rupee term loan subject to the necessary approvals.

;iv) The Credit Facilities/loans under CDR will be further secured by unconditional and irrevocable Personal guarantee of VC & MD Mr. Ratan jmdal and unconditional and irrevocable corporate guarantee of promoters group companies (as stated in MRA) in proportion to the numbers of equity shares held by them in the company.

;v) CDR Empowered group have also snpukted that promoters shall arrange to bring funds and also pledge all unencumbered investments (m all subsidiaries either Indian or overseas) in subsidiaries on the Cut Off date subject to necessary approvals.

;vi) Certain covenants/conditions as snpulated in the CDR package are in the process of compliance.

8. During the financial year 2007-08 the Company had filed Writ Petition in Honble High Court of Onssa challenging the validity of Entry Tax Act, 1999. The Honble High Court of Onssa vide their order dated 16.05.2007 granted stay to the extent of depositing 50% of the entry tax demand raised by the Commercial tax Department. However, the Company has provided full liability for entry tax in the books of accounts during the year 2007-08 while deposited of 50% amount with the Department. The outstanding amount of liability on this account as on 31st March, 2008 was Rs. 351.65 Lacs which still remain outstanding.

Subsequently in February, 08, the Honble High Court disposed off the Writ Petition. As per legal advice received by the Company on interpretation of the High Court Order, it believes that its liability will be less than the amount already deposited. Accordingly, the Company has filed the refund application which has been rejected by joint Commissioner. Subsequently the company has gone for appeal to the Appellate Authority and the hearing is pending. For the year 2008-09, the company has computed and deposited the liability as per legal advice.

The commercial tax department has gone for appeal to Honble Supreme Court against the Order of High Court & the Honble Supreme Court has been given stay against the order of Honble Hgh Court. The company again appeal to the Honble Supreme Court against tne stay & the Honble Supreme Court after several hearing, order to deposit under protest1 /3rd of the outstanding liability of the company within 31st March, 10. Accordingly the company has deposited the amount within the specified limit given by the Honble Supreme Court.

9. Based on the intimation received from supplier regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. the required disclosure is given below*:

10. 0.50% Foreign Currency Convertible Bonds ("FCCB") under Unsecured Loans represents outstanding of principal and premium calculated on YTM basis amounting to Rs. 3,232.95 Lacs (USD 7.20 million). The company is under renegotiation of terms of its 0.50% FCCB, & pending this & receipt of necessary approvals, if any, so required, outstanding FCCBs amounting to Rs.14,031.40 Lacs (USD 31.25 million) were not redeemed on due date, i.e. 24th December 2009 and premium after due date has been provided at the rate of 5.75% per annum as against the agreed interest rate of 8% per annum. Accordingly additional liability of Rs. 84.19 Lacs for post due date period has not been provided for. Diluted EPS is currently calculated without considering conversion right.

11. a) Certain balances of sundry debtors, sundry creditors are subject to confirmation and/or reconciliation.

b) Certain charges created for secured loans are in process of satisfaction/modification.

c) Although the book value of investment in certain subsidiary companies (book value amounting to Rs. 2,061.49 Lacs (Rs. 7,529.87 Lacs)) is lower than the cost, considering the strategic and long term nature of the investments, future prospects and assets base of mvestee company, such decline, in the opinion of the management has been considered to be of temporary in nature and hence no provision there against is considered necessary.

12. Advance Recoverable in Cash or in kind or for value to be received includes:

a) Rs. Nil (Rs. 2.89 Lacs), maximum amount outstanding at any time during the Year is Rs. 2.89 Lacs (Rs. 8.09 Lacs) being the amount due from directors/officers of the company.

b) Interest free loan to employees amounting to Rs. 11.50 Lacs (Rs. 21.43 Lacs) in the ordinary course of the business and as per employee service rules of the Company. Maximum balance outstanding during the year Rs. 24.53 Lacs (Rs. 28.61 Lacs).

c) Rs. 22.30 Lacs (Rs. 29.08 Lacs) as advance against share application money with subsidiary companies.

13. Research and Development expenses for the year amounting to Rs. 39.14 Lacs (Rs. 77.26 Lacs) on account of revenue expenditure and Rs. Nil (Rs. 92.80 Lacs) on account of capital expenditure have been charged/debited to respective head of accounts.

c) In compliance of clarifications of ICAI on outstanding derivatives which are not covered by AS-ll"Accounnng for effects of changes in foreign exchange rates", the Company has accounted for Mark to market losses on derivatives entered for INR Term Loans amounting to Rs. 3,524.99 Lacs (Rs. 5,221.84 Lacs) & against interest rate auction Rs. 2,820.98 Lacs (Rs. 3,164.38 Lacs) till 31st March, 10 which have been charged to Pre-operanve expenses.

15. The Haryana Government levied w.e.f. 05.05.2000 a Local Area Development Tax (the LADT Act) on the manufacturing units in the State of Haryana on the entry of goods for use and consumption. JSL and other units have challenged the Act in the Honble Punjab and Haryana High Court. The Honble Punjab and Haryana High Court disallowed the petition in December, 2001 and the company had by a Special Leave Pention challenged the Order of High Court in the Honble Supreme Court. The Honble Supreme Court referred the matter to afive judges Constitutional Bench, which laid certain parameters to examine the Act on those lines. On the basis of these parameters the Honble ffigh Court have declared the Act to be ultra virus on 14th March, 2007. Since, this issue was being canvassed by various High Courts, the Honble Supreme Court gave an Interim Order that those states where the High Courts have given judgement in favour of the petitioner, no tax would be collected. In L mean nme the Haryana Government has repealed the LADT Act and introduced another Act by the name of Entry Tax on the same lines. That Act was also been held ultra virus by the High Court. However, on prudence basis, the liability has been fully provided for. The order of Punjab and Haryana High Court and rather judgements of all the Courts of India have been long pending. The State Governments have requested the Honble Supreme Court that it is very difficult for them to run the Government. So at least till the pendency of the cases in the Honble Supreme Court they may be allowed to charge from past liability and also from the future liability to be accrued On 30th October, 2009, the Honble Supreme Court have directed that l/3rd of the liability is to be paid by all the assesses whose cases are pending in the High Courts. As, at present, there is no Act either LADT/Entry Tax prevalent in Haryana State, no tax is being collected from the assesses however undertaking have given by assesses that in case they lose they will make the payment. As such on prudence basis, full liability has been provided for. In the meantime, i.e. on 16.04.2010 the Entry Tax matters of the states have been referred to a larger 9-judges Constitutional Bench of the Supreme Court.

16. As on 31st March, 2010, the company has received the funds in escrow account and allotted 23,447,240 equity shares of Rs. 2/- each at price of Rs 105.50 per share (including premium of Rs. 103.50 per share) to Qualified Institutional Buyers. Subsequent to the receipt of money in escrow account and the allotment of shares, the paid up share capital of the company have increased from Rs. 3,242.70 Lacs to Rs. 3,711.64 Lacs. Pending listing and receipts of release letter (dated 06^)4.2010) the amount of issue is shown as balance in escrow account under Cash & Bank Balances.

The expected return on the plan assets is determined considering several applicable factors mainly the composition of plan assets held. assessed risk of assets management, historical results of returns on the plan assets and the policy for the management of plan assets management.

The estimates of future salary increase, considered in actuarial valuation, taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

f) Pending the issuance of the Guidance Note from the Actuarial Society of India, the companys actuary has expressed his inability to reliably measure the provident fund (funded) liability.

18. The Company has given Letter of Comfort to Banks against credit facilities/financial assistance [amount outstanding as on 31st March, 2010 Rs. 26,173.23 Lacs (Rs. 17,808.69 Lacs)] availed by a subsidiary.

19 In the absence of profit under section 349 of the Companies Act, 1956 no computaion of net profit has been given.

20 Previous years figures have been re-arranged and regrouped wherever considered necessary.

21 Figures in bracket indicate previous year figures.

22 Schedule 1 to 20 are annexed to and form integral part of the Balance Sheet and Profit & Loss Account.

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