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Auditor Report of JSW Steel Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of JSW STEEL LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143 (11) of the Act.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its loss and its cash flows for the year ended on that date.

EMPHASIS OF MATTERS

We draw attention to the following matters in the Notes to the financial statements:

a) Note 25(4)(a) regarding the factors considered in estimating values of businesses/ assets of certain subsidiaries, and recognition of provision of Rs. 982.37 crores (Previous year Rs. 333.75 crores) for ''other than temporary'' diminution in value of investments, Rs. 3,915.30 crores for loans doubtful of recovery and Rs. 957.85 crores towards guarantees.

b) Note 25(5) regarding the Company''s assessment that there is no decline, other than temporary, in carrying amounts of investments of Rs. 612.82 crores (net of provisions) in certain subsidiaries and joint ventures and loans / advances of Rs. 270.60 crores to them are fully recoverable.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

Gross block and net Particulars of freehold land block as at 31st March, 2016 (Rs. in crores)

Land located at Maharashtra 11.23 Benaghat village of Raigad district admeasuring 25.22 acres

Land located at Maharashtra 0.94 Vave village of Raigad district admeasuring 2.12 acres

Land located at Maharashtra 2.12 Dolvi village of Raigad district admeasuring 4.03 acres

Land located at Maharashtra 3.23 Khar Kharavi village of Raigad district admeasuring 6.13 acres

In respect of immovable properties of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. There are no buildings that have been taken on lease and disclosed as fixed assets.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals, except for inventories lying with third parties where confirmations have been received by the management, and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit and hence reporting under paragraph 3(v) of the Order is not applicable.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income- tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at 31st March, 2016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31st March, 2016 on account of disputes are given below:

Nature of Forum where dues dispute is Name of statute pending

Supreme Court

High Court The Central Excise Act, 1944 Excise Duty CESTAT

Commissioner

Supreme Court

The Custom Act, 1962 Customs Duty CESTAT

Commissioner

Commissioner The Karnataka Value Added Tax Act, 2003 VAT DDCT

CESTAT Chapter V of the Finance Act, 1994 Service Tax Commissioner

CITA

The Income Tax Act, 1961 Income Tax ITAT

High Court

Name of Statute Period(s) to which Amount unpaid Amount paid the amount relates * (Rs. in crores) under protest (Rs. in crores)

2000-01 to 2012-13 15.60 48.16

1997-98 to 2015-16 121.45 -

The Central Excise 1998-99 to 2015-16 272.54 10.88 Act, 1944 2002-03 to 2014-15 47.78 32.72

The Custom Act, 1962 2002-03 to 2004-05 43.87 5.49

1995-96 to 2014-15 236.35 10.11

2008-09 to 2015-16 85.04 8.45

The Karnataka Value 2008-09 to 2009-10 17.85 9.00 Added Tax Act, 2003 2012-13 0.49 -

Chapter V of the Finance Act, 1994 2004-05 to 2010-11 21.60 0.41

2002-03 to 2014-15 78.94 2.68

1992-93 to 2011-12 0.49 0.98

The Income Tax Act, 1961 2003-04 to 2006-07 83.07 -

2002-03 to 2004-05 90.17 -

*Period represents the earliest year to the latest year

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.

(ix) In our opinion and according to the information and explanations given to us, money raised by way of the term loans have been applied by the Company during the year for the purposes for which they were raised or as per purposes revised with appropriate approvals, other than temporary deployment pending application of proceeds. The Company has neither raised any moneys by way of initial public offer / further public offer (including debt instruments) nor were such proceeds pending to be applied, during the current year.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, having regard to legal opinions obtained by the Company, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under paragraph 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013 where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLS LLP Chartered Accountants

(Firm Registration No. 117366W/ W-100018)

A. SIDDHARTH

Partner

Mumbai, dated: 18 May 2016 (Membership No. 31467)


Mar 31, 2014

We have audited the accompanying financial statements of JSW STEEL LIMITED ("the Company") which comprise the Balance Sheet as at 31 March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2014;

(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter

We draw attention to the Note 26(5) to the financial statements relating to the Company''s assessment that no provision is presently necessary against the carrying amounts of investments and loan aggregating to Rs. 2,007.46 crores and with respect to financials guarantees of Rs. 2,752.57 crores relating to JSW Steel (USA) Inc., a subsidiary of the Company, for the reasons stated in the note.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("CARO") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs).

(e) On the basis of the written representations received from the directors as on 31 March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

In our opinion and according to the information and explanations given to us, the nature of the Company''s business/ activities/ results during the year are such that clauses (vi), (xii), (xiii), (xiv), (xviii) and (xx) of paragraph 4 of the Order are not applicable to the Company. Further, in respect of other clauses, we report that:

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, which in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(ii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals, except for inventories lying with third parties where confirmations have been received.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) In respect of unsecured loans granted to two wholly owned foreign subsidiary companies covered in the register maintained under Section 301 of the Act, according to the information and explanations given to us:

(a) At the year-end, the outstanding balances of such loans aggregated Rs. 160.71 crores (number of parties 1) and the maximum amount involved during the year was Rs. 623.25 crores (number of parties 2).

(b) The rate of interest and other terms and conditions for such loans are, in our opinion, prima facie, not prejudicial to the interest of the Company.

(c) The receipts of the principal amounts and interest have been regular.

(d) There is no overdue amount outstanding as at the year-end.

The Company has not taken any loan from parties covered under Section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any major weakness in such internal control system.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Act and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered into the Register maintained under the said Section have been so entered.

(b) Where each of such transaction (excluding loans reported under paragraph (iii) above) is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the Company has an adequate internal audit system commensurate with the size of the company and the nature of its business.

(vii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Act and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(viii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31 March 2014 on account of disputes are given below:

Name of Statute Nature of Dues Forum where dispute is pending

Income Tax Act, Income Tax Commissioner of Income Tax 1961 (Appeals)

Wealth Tax Act, Wealth Tax Income Tax Appellate 1957 Tribunal, Kolkata

Chapter V of the Service Tax Commissioner of Central Finance Act, 1994 Excise (Appeals) Customs, Excise and Service Tax Appellate Tribunal

Karnataka Value Sales Tax Karnataka Appellate Added Tax Act, Special Entry Tax Tribunal, Bangalore 2003

The Central Excise Excise Duty Customs, Excise and Service Act, 1944 Tax Appellate Tribunal Commissioner of Central Excise (Appeals)

The High Court of Bombay

The Customs Act, Customs Duty Commissioner of (Appeals) 1962 Customs

Customs, Excise and Service Tax Appellate Tribunal

The High Court of Karnataka The Supreme Court of India

Name of Statue Period to which the Amount Involved Amount Relates (Rs. in crores)

Income Tax Act 1961 2002-2003 0.49

Wealth Tax Act 1957 2002-2003 0.27

Chapter V of the Finance Act, 1994 2004-05 & 2012-13 0.15

2001-02 to 2011-12 67.32

Karnataka Value Added Tax Act, 2003 The Central Excise Act, 1944 2006-07 to 2007-08 2.69 2006-07 to 2009-10 10.56

1998-99 to 2011-12 250

2005-06 to 2012-13 1.51

1998-1999 0.6

The Customs Act 1962 2011-12 to 2012-13 25.05

1995 to1997, 1999-00, 169.39 2009-10, 2010-11 to 2012-13

2002 43.71

1997 - 1998 & 2.31 2004 - 2005

(ix) The Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(xi) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xiii) In our opinion and according to the information and explanations give to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

(xiv) According to the information and explanations given to us, during the year the Company had issued 23,000 Non-Convertible Debentures (NCDs) of Rs. 10 lakhs each and the Company has created security in respect of 10,000 NCDs and is in the process of creating security in respect of 13,000 NCDs.

(xv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm Registration No. 117366W/ W-10018)

A. Siddharth

Mumbai Partner

Dated: 27 May 2014 (Membership No. 31467)


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of JSW STEEL LIMITED ("the Company") which comprise the Balance Sheet as at 31 March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2013;

b. in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to the following notes to the financial statements:

i. Note 26 (4) relating to the Scheme of Amalgamation and Arrangement sanctioned by the Bombay High Court on 3rd May 2013. The certified copy of the Court Order is awaited, on receipt of which the Company will initiate requisite formalities to give effect to the Scheme. Accordingly therefore, the accounting treatment laid out in the Scheme and consequential adjustments that would arise will be dealt with by the Company in the financial statements, once the Scheme is implemented.

ii. Note 26 (5) relating to the Company''s assessment that no provision against the carrying amounts of its long term strategic investment and loans relating to its subsidiary, JSW Steel (USA) Inc., of Rs. 3,155.65 crores is presently necessary, for the reasons stated in the note.

Our opinion is not qualified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1 As required by the Companies (Auditor''s Report) Order, 2003 ("CARO") issued by the Central Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2.As required by Section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

e. On the basis of the written representations received from the directors as on 31 March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) Having regard to the nature of the Company''s business/activities/result, clauses (i-c), (iii), (vi), (x), (xii), (xiii), (xiv), (xviii) and (xx) of CARO are not applicable to the Company.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals, except for inventories lying with third parties where confirmations have been received.

(b) As the Company''s inventory of raw materials mostly comprises bulk materials such as iron ore, iron ore fines, coal, coke, pellets etc. requiring technical expertise for establishing the quality and the quantification thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above, according to the information and explanations furnished to us, the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased/ sold are of special nature and suitable alternate sources for obtaining comparable quotations are not readily available, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal control.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered into the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the Company has an adequate internal audit system commensurate with the size of the company and the nature of its business

(vii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(viii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March 2013 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which have not been deposited as on 31 March 2013 on account of disputes are given below:

Name of Statute Nature of the Dues Amount involved (Rs. in Crores)

Income Tax Act 1961 Income Tax 0.49

The Bombay Sales Tax Sales Tax 7.43 Act 1959

The Karnataka Value Sales Tax 10.19 Added Tax Act 2003

Chapter V of the Service Tax 48.12 Finance Act 1994

Chapter V of the Service Tax 0.27 Finance Act, 1994

The Custom Act, 1962 Custom Duty 2.24

The Custom Act, 1962 Custom Duty 43.71

The Custom Act, 1962 Custom Duty 109.21

Name of Staute Period to which Forum where Dispute is the amount pending relates

Income Tax Act 1961 2002-2003 Commissioner of Income Tax (Appeals)

The Bombay Sales Tax Act 1959 2000-2004 The Joint Commissioner of Sales Tax (Appeals), Mumbai

The Karnataka Value Added Tax Act 2003 2007-2010 Karnataka Appellate Tribunal, Bangalore

Chapter V of the Finance Act 1994 2005-2012 Custom, Excise and Service Tax Appellate Tribunal

Chapter V of the Finance Act 1994 2006-2007 Custom, Excise and Service Tax Appellate Tribunal

The Customs Act 1962 1997-1998, The Supreme Court of India 2004-2005

The Customs Act 1962 2001-2002 The High Court of Karnataka

The Customs Act 1962 2001-2002, Custom, Excise and Service 2007-2008, Tax Appellate Tribunal / 2009-2011 Commissioner of Customs (Appeals)

ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by subsidiaries (including step down subsidiaries) from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xii) In our opinion and according to the information and explanations give to us and on an overall examination of the balance sheet of the Company, we report that the fund raised on short- term basis have, prima face, not been used during the year for long-term investment.

(xiii) According to the information and explanations given to us and the records examined by us, securities/ charge have been created or are in the process of creation in respect of the debenture issued.

(xiv) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the company has been noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117366W)

P.B. Pardiwalla

Partner

MUMBAI (Membership No. 40005)

23 May, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of JSW STEEL LIMITED ("the Company") as at 31 March 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. Without qualifying our opinion, we draw attention to note 26(4) relating to the Companys assessment that no provision against the carrying amounts of its long term strategic investment and loans extended to its subsidiary, JSW Steel (USA) Inc. of Rs. 1,948.41 crores is presently necessary, for the reasons stated in the note.

4. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

5. Further to and read with our comments in paragraph 3 above and the Annexure referred to in paragraph 4 above, we report as follows:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

e. in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

6. On the basis of the written representations received from the Directors as on 31 March 2012 taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March 2012 from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956.

Annexure to the Auditors Report

(Referred to in paragraph 4 of our report of even date)

(i) Having regard to the nature of the Companys business/activities/result, clauses (i-c), (iii), (vi), (x), (xii), (xiii), (xiv), (xviii) and (xx) of CARO are not applicable to the Company.

(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals, except for inventories lying with third parties where confirmations have been received.

(b) As the Companys inventory of raw materials mostly comprises bulk materials such as iron ore, iron ore fines, coal, coke, pellets etc. requiring technical expertise for establishing the quality and the quantification thereof; the Company has hired independent agencies for physical verification of such stocks. Relying on the above, according to the information and explanations furnished to us, the procedure of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased/sold are of special nature and suitable alternate sources for obtaining comparable quotations are not readily available, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal control.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered into the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) In our opinion, the Company has an adequate internal audit system commensurate with the size of the company and the nature of its business.

(vii) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of steel, steel products and electricity and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

(viii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty , Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty and other material statutory dues in arrears as at 31 March 2012 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty and Excise Duty which have not been deposited as on 31 March 2012 on account of disputes are given below:

Name of Nature of Amount Period to Forum where dispute Statute the Dues involved which the is pending Rs.in amount Crore relates

Income Tax Income Tax 0.49 2002-2003 Commissioner of Act, 1961 Income Tax(Appeal)

The Bombay Sales Tax 14.27 2000-2002, The Joint Commissioner Sales Tax 2003-2005 of Sales Tax (Appeals) Act, 1959 Thane

The Sales Tax 2.69 2006-2007 Karnataka Appellate Karnataka Tribunal,Bangalore Value Added Tax Act, 2003

Chapter V of Service Tax 20.60 2005-2009 Customs,Excise and the Finance Service Tax Appellate Act, 1994 Tribunal

Chapter V of Service Tax 0.31 2005-2006 The Commisioner of the Finance Central Excise Act, 1994 (Appeals),Mangalore

The Custom Customs 43.71 2001-2002 High Court of Act, 1962 Duty Karnataka

The Custom Customs 13.02 2001-2002, Customs,Excise and Act, 1962 Duty 2008-2009 Service Tax Apellate Tribunal

The Custom Customs 2.14 2004-2005 Supreme Court of Act, 1962 Duty Karnataka

The Central Excise Duty 1.33 2005-2006 The COmmisioner of Excise Act, Central Excise (Appeals),Chennai 1944

The Central Excise Duty 302.52 2002-2010 Customs,Excise and Excise Act, Service Tax Appellate 1944 Tribunal

The Central Excise Duty 0.31 2008 The Commissioner Excise Act, of Central Excise 1944 (Appeals),Mumbai

The Central Excise Duty 0.19 2005-2007 Additional Comisioner Excise Act, Salem 1944

The Central Excise Duty 0.19 2004-2005 The Joint Commisioner Excise Act, Sales Tax (Appeals) 1944 Thane

The Central Excise Duty 0.23 2008 Commisioner,Central Excise Act, Excise,Mumbai 1944

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks, financial institutions and debenture holders.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by subsidiaries (including step down subsidiaries) from banks and financial institutions are not prima facie prejudicial to the interests of the Company.

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained, other than temporary deployment pending application

(xii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, fund raised on short- term basis have, prima facie, not been used during the year for long-term investment.

(xiii) According to the information and explanations given to us and the records examined by us, security/ charge have been created or are in the process of creation in respect of the debenture issued.

(xiv) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117366W)

P. B. Pardiwalla

Place: Mumbai Partner

Date : 14 May 2012 (Membership No. 40005)


Mar 31, 2011

1. We have audited the attached Balance Sheet of JSW Steel Limited ("the Company") as at 31 st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date and

(iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

5. On the basis of the written representations received from the Directors as on 31st March, 2011 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date)

1. Having regard to the nature of the Companys business/activity, Clauses (i-c), (iii), (vi), (x), (xii), (xiii), (xiv), (xviii) and (xx) of CARO are not applicable to the Company.

2. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) Some of the fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

3. In respect of its inventories:

a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals, except for inventories lying with third parties where confirmations have been received.

b) As the Companys inventory of raw materials mostly comprises bulk materials such as coal, coke, pellets etc. requiring technical expertise for establishing the quality and the quantification thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above, according to the information and explanation furnished to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased/ sold are of special nature and suitable alternate sources for obtaining comparable quotations are not readily available, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit we have not observed any major weaknesses in such internal controls.

5. In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 and according to the information and explanations given to us:

a) The particulars of the contracts or arrangements referred to in Section 301 that needed to be entered into the register, maintained under the said section have been so entered.

b) Where each of such transaction is in excess of X 5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

7. We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the

Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of steel, steel products and electricity and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

8. According to the information and explanations given to us in respect of its statutory dues:

a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Income-tax, Wealth- tax, Sales-tax, Service tax, Custom duty, Excise duty, Cess, Investor Education and Protection Fund and any other material statutory dues applicable to it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2011 for a period of more than six months from the date they became payable.

c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31st March, 2011 on account of disputes are given below :

Rs. in crores

Name of Statute Nature of Amount Period to which Forum where dispute the dues the amount is pending relates

Income Tax Act, Income Tax 0.49 2002 - 2003 Commissioner of 1961 Income Tax (Appeal)

The Bombay Sales Tax 14.27 2000 - 2002, The Joint Sales Tax Act, 2003 - 2005 Commissioner of 1959 Sales Tax (Appeals), Thane

Chapter V of Service Tax 18.90 2005 - 2009 Customs, Excise and the Finance Act, Service Tax Appellate 1994 Tribunal

Chapter V of Service Tax 0.31 2005 - 2006 The Commissioner the Finance Act, of Central Excise 1994 (Appeals), Mangalore

The Custom Customs 2.14 2004 - 2005 Supreme Court of Act,1962 Duty India.

The Custom Customs 43.71 2001 - 2002 High Court of Act,1962 Duty Karnataka

The Custom Customs 13.01 2001 - 2002, Customs, Excise and Act,1962 Duty 2008 - 2011 Service Tax Appellate Tribunal

The Custom Customs 1.89 2009 - 2010 Commissioner of Act,1962 Duty Custom, Guntur

The Central Excise Duty 40.79 2000 - 2008 Customs, Excise and Excise Act,1944 Service Tax Appellate Tribunal.

The Central Excise Duty 49.34 2000 - 2010 Customs, Excise and Excise Act,1944 Service Tax Appellate Tribunal

The Central Excise Duty 0.35 2007 - 2008, The Commissioner Excise Act,1944 2009 - 2010 of Central Excise (Appeals), Mumbai

The Central Excise Duty 5.97 2009 - 2010 The Commissioner of Excise Act,1944 Central Excise, Dadar

The Central Excise Duty 0.19 2004 - 2005 The Commissioner of Excise Act,1944 Central Excise, Thane

The Central Excise Duty 0.19 2005 - 2007 Additional Excise Act,1944 Commissioner, Salem

9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

10. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by subsidiaries (including step down subsidiaries) from banks are prima facie not prejudicial to the interests of the Company.

11. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained, other than temporary deployment pending application.

12. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

13. According to the information and explanations given to us and the records examined by us, securities/charges have been created in respect of the debentures issued.

14. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.



For Deloitte Haskins & Sells

Chartered Accountants Registration No. 117366W

P. B. Pardiwalla

Place: Mumbai Partner

Date: 16 May 2011 Membership No. 40005




Mar 31, 2010

1. We have audited the attached Balance Sheet of JSW Steel Limited ("the Company") as at 31 March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards, require.that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (CARO) issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:

(a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2010;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. 5. On the basis of the written representations received from the Directors as on 31 March, 2010 and taken on record by the Board of Directors, none of the Directors are disqualified as on 31 March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date)

1. Having regard to the nature of the Companys business/activity, clauses (i-c), (iii), (vi), (x), (xii), (xiii), (xiv), (xviii) and (xx) of CARO are not applicable to the Company.

2. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) Some of the fixed assets were physically verified during the year by the management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

3. In respect of its inventories:

a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals, except for inventories lying with third parties where confirmations have been received.

b) As the Companys inventory of raw materials mostly comprises bulk materials such as coal, coke, pellets etc. requiring technical expertise for establishing the quality and the quantification thereof, the Company has hired independent agencies for physical verification of such stocks. Relying on the above, according to the information and explanations furnished to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

4. In our opinion and according to the information and explanations given to us, having regard to.the explanations that some of the items purchased/ sold are of special nature and suitable alternate sources for obtaining comparable quotations are not readily available, there are adequate internal control systems commensurate with the size of the Companyand the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit we have not observed any major weaknesses in such internal controls.

5. In respect of contracts or arrangements entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 and according to the information and explanations given to us:

a) The particulars of the contracts or arrangements referred to in Section 301 that needed to be entered into the register, maintained under the said section have been so entered.

b) Where each of such transaction is in excess of Rs. 5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion, the Company has an adequate internal audit system commensurate with the size and the nature of its business.

7. We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of steei, steel products and electricity and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

8. According to the information and explanations given to us in respect of its statutory dues:

a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Income Tax, Wealth-Tax, Sales-Tax, Service Tax, Custom Duty, Excise Duty, Cess, Investor Education and Protection Fund and any other material statutory dues applicable to it with the appropriate authorities.

b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March 2010 for a period of more than six months from the date they became payable.

c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31 March 2010 on account of disputes are given below:

Rupees in crores

Name of Statute Nature of Amount Pericd to Forum where the dues which the dispute is pending amount relates

Income Tax Act, Income Tax 9.52 2002-2003, Commissioner of 1961 2005-2006 Income Tax (Appeal)

Income Tax Act, Income Tax 13.52 2004-2005 Income Tax 1961 Appellate Tribunal

The Bombay Sales Tax 0.35 2000-2002 The Joint Sales Tax Act, Commissioner of 1959 Sales Tax (Appeals), Thane

Chapter V of the Service Tax 5.29 2005-2008 Customs, Excise Finance Act, 1994 and Service Tax Appellate Tribunal

Chapter V of the Service Tax 7.82 2007-2008 The Commissioner Finance Act, 1994 of Central Excise, Belgaum

The Custom Custom 2.14 2004-2005 Supreme Court of Act, 1962 Duty India

The Custom Act, Custom 49.30 2001-2002, High Court of 1962 Duty 2004-2005 Karnataka

The Custom Act, Custom 11.03 2001-2002 Customs, Excise 1962 Duty and Service Tax Appellate Tribunal

The Custom Act, Custom 38.72 2004-2005 Deputy 1962 Duty Commissioner of Custom, Bangalore



Name of Statute Nature of Amount Period to the dues which the amount relates

The Central Excise Duty 40.79 2000-2008 Excise Act, 1944

The Central Excise Duty 40.31 2005-2009 Excise Act, 1944

The Central Excise Duty 0.01 2005-2006 Excise Act, 1944

The Central Excise Duty 0.31 2007-2008 Excise Act, 1944

The Central Excise Duty 35.84 2003-2008 Excise Act, 1944

The Central Excise Duty 0.19 2004-2005 Excise Act, 1944

Name of Statue Forum where dispute is pending

The Central Excise Act, 1944 Customs, Excise and Service Tax Appellate Tribunal

The Central Excise Act, 1944 Supreme Court of India

The Central Excise Act, 1944 High Court of Maharashtra

The Central Excise Act, 1944 The Commissioner of Central Excise (Appeals), Mumbai

The Central Excise Act, 1944 The Commissioner of Central Excise, Belgaum

The Central Excise Act, 1944 The Commissioner of Central Excise, Thane

9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to Financial Institutions, Banks and Debentureholders.

10. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by subsidiaries (including step down subsidiaries) and others from banks are prima facie not prejudicial to the interests of the Company.

11. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained, other than temporary deployment pending application.

12. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long term investment.

13. According to the information and explanations given to us and the records examined by us, securities/charges have been created in respect of the debentures issued.

14. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants Registration No. 117366W

P. B. Pardiwalla

Place: Mumbai Partner

Date: 3 May 2010 Membership No. 40005



 
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