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Auditor Report of Jindal Stainless Ltd.

Mar 31, 2023

To the Members of Jindal Stainless Limited Basis for Opinion

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Jindal Stainless Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information.

2. 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 Companies Act, 2013 (‘the Act’) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS’) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2023, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

Revenue Recognition:

Refer notes 23 and 38 of the accompanying standalone

Our audit procedures in relation to the recognition of revenue included, but were not limited to the following:

financial statements for the revenue recorded during the

- Obtained an understanding of the Company’s process of

year ended 31 March 2023 and related accounting policy

revenue recognition and evaluated the appropriateness

adopted by the Company for revenue recognition.

The Company recognises revenue from the sales of products

of accounting policy adopted by the Company in accordance with Ind AS 115.

when control over goods is transferred to customers and are

- Evaluated the design and tested the operating

accounted for net of returns and rebates.

effectiveness of the internal controls put in place by the Company over recognition and measurement of revenue

The Company has a large number of customers operating in

in accordance with underlying customer contracts and

various geographies and the sales contracts / arrangements with such customers have distinct varying commercial terms,

accounting policies.

including Incoterms that determine the timing of transfer

- Performed test of details (including year end cut-off

of control. Accordingly, significant efforts and judgment of

testing) by selecting samples of revenue transactions

the management is required in determining the timing of

recorded during the year and samples from specific period

transfer of control and measurement of revenue recognition

before and after year end. For such samples selected,

in accordance with Ind AS 115, Revenue from Contracts with

verified the underlying documents, which included sales

Customers (‘Ind AS 115’).

invoices / contracts and dispatch / shipping documents to ensure revenue is booked with accurate amount and in

Further, revenue is also a key performance indicator for the Company and there is risk of revenue being overstated due

the correct period.

to the pressure to achieve targets or earning expectations.

- Performed analytical procedures including ratio analysis and period-on-period variance analysis, over revenue

Owing to the multiplicity of the Company’s products,

recorded during the year to identify any unusual indicators

volume of sales transactions, size of distribution network and varied terms of contracts with customers, in line with

/ trends.

the requirements of the Standards on Auditing, revenue is

- Performed test of details over the outstanding trade

determined to be an area involving significant risk requiring

receivable balances which included obtaining direct

significant auditor attention and is therefore considered to

independent confirmations from customers, on a sample

be a key audit matter in the current year audit.

basis, for balances outstanding as at the year end.

- Assessed the appropriateness and adequacy of the related disclosures in financial statements of the Company in accordance with the applicable accounting standards.

Key audit matter

How our audit addressed the key audit matter

Business Combinations

Our audit procedures in relation to Business Combination included, but were not limited to, the following:

Refer note 33 of the accompanying standalone financial

statements relating to a Composite Scheme of Arrangement

- Obtained an understanding of the Scheme and the NCLT

(‘the Scheme’) amongst the Company, Jindal Stainless (Hisar)

Order documents to understand the key terms anc

Limited, JSL Lifestyle Limited, Jindal Lifestyle Limited, JSL Media Limited and Jindal Stainless Corporate Management

conditions of the acquisition.

Services Private Limited, pursuant to Sections 230 to 232

- Assessed the design and tested the operating

and other relevant provisions of Companies Act, 2013

effectiveness of the Company’s controls over the

approved by the Hon’ble National Company Law Tribunal,

accounting of business combination which includes

Chandigarh Bench, vide order dated 02 February 2023 (‘the

valuation of identified assets and liabilities acquired under

NCLT Order’), with an appointed date of 01 April 2020.

the business combination.

The Scheme was accounted for as a business combination

- Assessed appropriateness of the accounting policy

in accordance with Ind AS 103 ‘Business Combinations’ (‘Ind

adopted by the Company in terms of the requirements of

AS 103’) which requires recognition of identifiable assets and liabilities including identifiable intangibles, at fair value

Ind AS 103.

on the date of acquisition, with the excess of the acquisition

- Evaluated the competence and objectivity of the

price over such identified fair values recognised as goodwill.

management’s valuation expert engaged for the purchase

The Company appointed an independent valuation expert to allocate the purchase consideration to the respective assets and liabilities acquired as per the fair values determined using various valuation models adopted by the expert, which

price allocation and obtained an understanding of the approach adopted by the expert for this purpose.

- Critically evaluated the reasonableness of key

involved significant management estimates and judgements with respect to future business plans and projections, which involve high inherent estimation uncertainty.

assumptions, estimates and judgements involved in the identification and valuation of acquired assets (including intangible assets) and liabilities, based on our knowledge of the Company and the industry.

The management determined that the fair values of the net identifiable assets acquired was ? 3,226.72 crores as part

- Involved auditor’s valuation experts to assess

of the above fair valuation exercise and accordingly, the

appropriateness of the valuation methodology and

consideration paid in excess of the net identifiable assets

valuation assumptions such as discount rate used by the

acquired resulted in recognition of Goodwill of ? 89.95 crores.

management’s expert.

We have considered the accounting and valuation of the said

- Assessed the adequacy of the Company’s disclosures

business combination to be a matter of most significance to

included in the financial statements in respect of the

our current year audit given the complexity and judgement

acquisition in accordance with the requirements of Ind

involved, and the materiality of the business acquisition to the accompanying financial statements, and accordingly, this matter has been identified as a key audit matter.

AS 103.

The above matter is also considered fundamental to the understanding of the users of the accompanying financial statements on account of restatement of the comparative financial information as the accounting effect has been given from the acquisition date, being the Appointed Date approved under the Scheme.

Information other than the Financial Statements and Auditor’s Report thereon

6. The Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

7. The accompanying standalone financial statements have been approved by the Company’s Board of Directors. The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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.

8. In preparing the financial statements, the Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures

responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

15. The comparative financial information of the Company presented in these financial statements for the year ended 31 March 2022 has been restated to give effect to the Composite Scheme of Arrangement (‘Scheme’) amongst the Company, Jindal Stainless (Hisar) Limited, JSL Lifestyle Limited, JSL Media Limited and Jindal Stainless Corporate Management Services Private Limited as further detailed in note 33. The financial information of Jindal Stainless (Hisar) Limited included as above, is based on audited financial statements for the year ended 31 March 2022, which has been jointly audited by one of the joint auditors, Lodha & Co, together with another auditor, who have jointly issued an unmodified opinion vide audit report dated May 05, 2022. Further, the financial information pertaining to JSL Lifestyle Limited, JSL Media Limited and Jindal Stainless Corporate Management Services Private Limited included as above, is based on the audited financial statements of such companies for the year ended 31 March 2022 which have been audited by their respective auditors, who have issued unmodified opinions vide their audit reports dated 27 March 2023, 27 April 2022 and 18 April 2022 respectively. The aforesaid audit reports of other auditors have been furnished to us by the management and relied upon by us for the purpose of our joint audit of the accompanying financial statements. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

16. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditor’s Report) Order, 2020 (‘the Order’) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure I, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

18. Further to our comments in Annexure I, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 purpose of our audit of the accompanying standalone financial statements;

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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2023 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 with reference to financial statements of the Company as on 31 March 2023 and the operating effectiveness of such controls, refer to our separate Report in Annexure II wherein we have expressed an unmodified opinion; and

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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. the Company, as detailed in note 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2023;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2023;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2023;

iv. a. The management has represented that, to the

best of its knowledge and belief, as disclosed in note 52 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (‘the intermediaries’), with the

understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 52 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (‘the Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to

our notice that has caused us to believe that the management representations under subclauses (a) and (b) above contain any material misstatement.

v. The interim dividend declared and paid by the Company during the year ended 31 March 2023 and until the date of this audit report is in compliance with section 123 of the Act. Further, as stated in note 14 to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2023 which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 requires all companies which use accounting software for maintaining their books of account, to use such an accounting software which has a feature of audit trail, with effect from the financial year beginning on April 1, 2023 and accordingly, reporting under Rule 11 (g) of Companies (Audit and Auditors) Rules, 2014 (as amended) is not applicable for the current financial year.


Mar 31, 2022

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Jindal Stainless Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

2. 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 Companies Act, 2013 (‘the Act’) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS’) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI’) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

5. We have determined the matter described below to be the key audit matter to be communicated in our report.

Key audit matter

How our audit addressed the key audit matter

Revenue recognition:

Refer note 23 and note 37 to the accompanying standalone financial statements for revenue recorded during the year ended 31 March 2022 and related accounting policy adopted by the Company for revenue recognition.

The Company recognises revenue from the sales of products when control over goods is transferred to customers and are accounted for net of returns and rebates.

The Company has a large number of customers operating in various geographies and the sales contracts / arrangements with such customers have distinct varying commercial terms, including Incoterms that determine the timing of transfer of control. Accordingly, significant efforts and judgment of the management is required in determining the timing of transfer of control and measurement of revenue recognition in accordance with Ind AS 115, Revenue from Contracts with Customers (‘Ind AS 115’).

Further, revenue is also a key performance indicator for the Company and there is risk of revenue being overstated due to the pressure to achieve targets or earning expectations.

Owing to the multiplicity of the Company’s products, volume of sales transactions, size of distribution network and varied terms of contracts with customers, in line with the requirements of the Standards on Auditing, revenue is determined to be an area involving significant risk requiring significant auditor attention and is therefore considered to be a key audit matter in the current year audit.

Our audit procedures in relation to the recognition of revenue included, but were not limited to, the following:

- Obtained an understanding of the Company’s process of revenue recognition and evaluated the appropriateness of accounting policy adopted by the Company in accordance with Ind AS 115.

- Evaluated the design and tested the operating effectiveness of the internal controls put in place by the Company over recognition and measurement of revenue in accordance with underlying customer contracts and accounting policies;

- Performed test of details (including year end cut-off testing) by selecting samples of revenue transactions recorded during the year and samples from specific period before and after year end. For such samples selected, verified the underlying documents, which included sales invoices / contracts and dispatch / shipping documents to ensure revenue is booked with accurate amount and in the correct period;

- Performed analytical procedures including ratio analysis and period-on-period variance analysis, over revenue recorded during the year to identify any unusual indicators / trends;

- Performed test of details over the outstanding trade receivable balances which included obtaining direct independent confirmations from customers, on a sample basis, for balances outstanding as at the year end;

- Assessed the appropriateness and adequacy of the related disclosures in the standalone financial statements of the Company in accordance with the applicable accounting the applicable.

6. The Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

7. The accompanying standalone financial statements have been approved by the Company’s Board of Directors. The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. In preparing the standalone financial statements, the Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process. Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

10. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to standalone financial statements in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of Board of Directors'' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern;

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

12. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

13. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.

16. As required by the Companies (Auditor’s Report) Order, 2020 (‘the Order”) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure I, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

17. Further to our comments in Annexure I, as required by section 143(3) of the Act based on our audit, we

report, to the extent applicable, 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 purpose of our audit of the accompanying standalone financial statements;

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 standalone financial statements dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;

e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 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 with reference to financial statements of the Company as on 31 March 2022 and the operating effectiveness of such controls, refer to our separate Report in Annexure II wherein we have expressed an unmodified opinion; and

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 (as amended), in our opinion and to the best of our information and according to the explanations given to us :

i. The Company, as detailed in note 38 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2022;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2022;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2022;

iv. (a) The management has represented that, to the best of its knowledge and belief, as disclosed in note 50 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any persons or entities, including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief, as disclosed in note 50 to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (‘the Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement

v. The Company has not declared or paid any dividend during the year ended 31 March 2022.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm’s Registration No.: 001076N/N500013

Rajni Mundra

Partner

Membership No.: 058644

UDIN: 22058644AIGJFK2258

Place: Mumbai

Date: 02 May 2022


Mar 31, 2018

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Jindal Stainless Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity 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

2. 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 state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS’) specified 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

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

4. 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.

5. We conducted our audit 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 these standalone financial statements are free from material misstatement.

6. 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 controls 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.

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

Opinion

8. 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 including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

9. The comparative financial information for the year ended 31 March 2017 prepared in accordance with Ind AS included in these standalone financial statements have been audited by the predecessor auditor. The report of the predecessor auditor dated 12 May 2017 on the comparative financial information expressed an unmodified opinion on the financial information for the year ended 31 March 2017. Our opinion is not modified in respect of this matter.

Report on other Legal and Regulatory Requirements

10. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order. Further to our comments in Annexure I, 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 purpose 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 standalone financial statements dealt with by this report are in agreement with the books of accounts;

(d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under Section 133 of the Act;

(e) on tthe basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;

(f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 25 April 2018 as per Annexure II expressed an unmodified opinion;

(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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. the Company, as detailed in Note 27 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position;

ii. the Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

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

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016 which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.

Annexure I to the Independent Auditor’s Report of even date to the members of Jindal Stainless Limited, on the standalone financial statements for the year ended 31 March 2018

Annexure 1

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

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

(b) All fixed assets have not been physically verified by the management during the year, however, there is a regular program of verification once in three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties (which are included under the head ‘Property, plant and equipment’) are held in the name of the Company.

ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. No material discrepancies were noticed on the aforesaid verification.

iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.

iv) In our opinion, the Company has complied with the provisions of section 186 in respect of investments and guarantees. Further, in our opinion, the Company has not entered into any transaction covered under Section 185 and Section 186 of the Act in respect of loans and security.

v) In our opinion, the Company has complied with the directives issued by the Reserve Bank of India, the provisions of Sections 73 to 76 and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended) as applicable, with regard to the deposits accepted. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, in this regard.

vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Act in respect of Company’s products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, goods and services tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable:

(b) The dues outstanding in respect of income-tax, sales tax, services-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:

Statement of Disputed Dues

Name of the statute

Nature of dues

Amount (Rs. crores)

Amount paid under protcst (Rs. crores)

Period to which the amount relates

Forum where dispute is pending

The Central Sales Tax Act,1956

Central Sales tax

33.06

8.26

2004-05 to 2007-08

The Hon’ble High Court, Odisha

The Central Sales Tax Act, 1956

Central Sales Tax

2.35

0.47

2013-14 and 2014-15

Commissioner of Commercial Taxes, Odisha

The Odisha Value Added Tax Act, 2004

Value Added Tax

22.92

2013-14 and 2014-15

The Hon’ble High Court, Odisha

The Orissa Entry Tax Act, 1999

Entry Tax

12.48

October 2010 to March 2013, 2015-16 and 2016-17

The Hon’ble High Court, Odisha

The Orissa Entry Tax Act, 1999

Entry Tax

56.18

1.08

October 2006 to September 2010

The Hon’ble High Court, Odisha

The Orissa Entry Tax Act, 1999

Entry Tax

34.16

2013-14 and 2014-15

The Hon’ble High Court, Odisha

The Orissa Entry Tax Act,1999

Entry Tax

0.10

0.10

April 2006 to September 2006

Additional Commissioner of Commercial Tax

The Customs Tariff Act, 1975

Customs Duty

7.97

0.60

2012-13

Commissioner Of Customs

The Customs Act, 1962

Customs Duty

1.70

0.13

2014-15

Commissioner Of Customs

The Central Excise Act, 1944

Central Excise Duty

0.71

0.18

January 2009 to April 2009

CESTAT

The Central Excise Act, 1944

Central Excise Duty

1.30

1.30

2006-07, 2007-08 and 2008-09

CESTAT

The Central Excise Act, 1944

Central Excise Duty

0.50

0.05

September 2006 to August 2011

CESTAT

The Central Excise Act, 1944

Central Excise Duty

0.30

-

May 2008 to March 2009

CESTAT

The Central Excise Act, 1944

Central Excise Duty

0.94

-

2011-12 to 2015-16

Commissioner of Central Excise

Income-tax Act, 1961

Income tax

2.17

Assessment Year (AY) 2003 04

Hon’ble High Court of Delhi

Income-tax Act, 1961

Income tax

3.01

-

AY 2004-05

Hon’ble High Court of Delhi

Income-tax Act, 1961

Income tax

16.64

AY 2005-06

Hon’ble High Court of Delhi

Income-tax Act, 1961

Income tax

2.24

2.20

AY 2005-06

Commissioner of Income tax (Appeals)

Income-tax Act, 1961

Income tax

0.10

AY 2006 07

Additional Commissions of Income tax (Transfer pricing officer)

Income-tax Act, 1961

Income tax

9.06

-

AY 2006 07

Hon’ble High Court of Delhi

Income-tax Act, 1961

Income tax

0.10

-

AY 2006-07

Income tax Appellate Tribunal

Income-tax Act, 1961

Income tax

9.98

-

AY 2007-08

Income tax Appellate Tribunal

Income-tax Act, 1961

Income tax

2.87

2.34

AY 2008 09

Income tax Appellate Tribunal

Income-tax Act, 1961

Income tax

0.30

-

AY 2010-11

Income tax Appellate Tribunal

Income-tax Act, 1961

Income tax

0.21

AY 2010 11

Commissioner of Income tax (Appeals)

Income-tax Act, 1961

Income tax

1.80

AY 2011-12

Commissioner of Income tax (Appeals)

viii) As at 31 March 2018, the Company has no continuing defaults in repayment of loans or borrowings to any financial institution or a bank or government or any dues to debenture-holders, though during the year there were certain defaults which have been made good by 31 March 2018.

ix) In our opinion, the Company has applied moneys raised by way of term loans for the purposes for which these were raised. The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) during the year.

x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.

xi) Except as stated in note 42 to the financial statements with respect to three directors, managerial remuneration has been paid by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act. The Company has taken necessary steps for securing refund of excess managerial remuneration, such as communicating with the persons to whom such amounts have been paid, etc. and the said amount is presented as ‘other financial assets’ in the financial statements.

xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.

xiv) During the year, the Company has made preferential allotment of shares. In respect of the same, in our opinion, the Company has complied with the requirement of Section 42 of the Act and the Rules framed thereunder. Further, in our opinion, the amounts so raised have been used for the purposes for which the funds were raised. During the year, the Company did not make preferential allotment/ private placement of fully or partly convertible debentures.

xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.

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

Independent Auditor’s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

1. In conjunction with our audit of the standalone financial statements of Jindal Stainless Limited (‘the Company’) as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (‘IFCoFR’) of the Company as at that date.

Management’s Responsibility for internal Financial Controls

2. The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (‘the Guidance Note’) issued by the Institute of Chartered Accountants of India (the ‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Company’s business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility

3. Our responsibility is to express an opinion on the Company’s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2018, based on the Internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm’s Registration No: 001076N/N500013

per Siddharth Talwar

Partner

Membership N0:512752

Place: New Delhi

Date: 25 April 2018


Mar 31, 2017

To the Members of JINDAL STAINLESS LIMITED REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of JINDAL STAINLESS LIMITED (“the Company”), which comprise the Balance Sheet as at 31 stMarch, 2017, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement for the year then ended and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information herein after referred to as “standalone Ind AS financial statements”).

MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE IND AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under. 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 standalone Ind AS 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 Ind AS 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 there under.

We conducted our audit 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 Ind AS financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs (financial position) of the Company as at 31stMarch, 2017, and its profit financial performance including other comprehensive income)), its cash flows and the changes in equity for the year ended on that date.

EMPHASIS OF MATTERS:

We draw attention to the following matters:

(a) Pending necessary approvals for managerial remuneration [including payment made to one of the director pending central Government''s approval] and waiver application for excess remuneration paid earlier to one of the director rejected by the Central Government as stated in Note no. 49(C)(i)of the financial statements;

(b) Pending confirmations/reconciliation of balances of certain secured loans, loans & advances (including MAT credit), trade receivables, trade payables & other liabilities read with Note no. 32(A)(iii)(g) & 32(B) and 40(A) of the financial statements;

(c) Investments and loan & advances to certain subsidiary/other companies and Mat Credit entitlement, considered as good and fully realizable/ recoverable and no provision for diminution in value is considered necessary in the opinion of the management as stated in note no. 40(B) of the financial statements;

(d) Note no 35 of the financial statements wherein the company has made investment of Rs, 8.56 crore (As per Ind AS Rs, 8.47 Crore as on 31st March, 2017) (along with bank guarantee ofRs, 10.01 Crore) and Rs, 0.10 Crore in MJSJ Coal Limited and Jindal Synfuels Limited respectively. The company continues to treat the investment as good and recoverable in view of the pending decision challenging the Order and other circumstances mentioned therein;

(e) Net worth, post considering the fair value, became positive as stated in the Note no 34 of the financial statements.

Our opinion is not modified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2016(“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure ''A'' a statement on the matters specified in the paragraphs 3 and 4 of the Order.

2. 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 including Other Comprehensive Income, the Cash Flow Statement and Statement of Change in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rule issued there under.

(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) As required by section 143(3)(l) of the Companies Act, 2013, and based on the checking of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, our separate report with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls is as per Annexure ''B''.

(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 standalone Ind AS financial statements -refer Note no. 28(A & E), 36&38to the standalone Ind AS financial statements.

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivatives contracts.

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

(iv) The company had provided requisite disclosures in its Standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the company. Refer Note No. 57 to the standalone Ind AS financial statements.

Annexure “A” referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date on the Standalone Ind AS Financial Statements of JINDAL STAINLESS LIMITED for the year ended 31st March 2017

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

(b) The Company has a regular programme of Physical Verification of its Fixed assets by which fixed asset have been verified by the management according to the programme of periodical physical verification in a phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such physical verification were not material. Asset wise recording of Fair Value is in process to be reconciled with fixes assets register.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties included in fixed assets are held in the name of the Company except as stated in footnote (@) of Note No. 2 of the standalone Ind AS financial statements.

2. The inventories of the Company (except stock lying with the third parties and in transit), part of stores and spares, have been physically verified by the management at reasonable intervals. In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable in relation to the size of the Company and nature of its business. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

4. According to the information, explanations and representations provided by the management and based upon audit procedures performed, we are of the opinion that in respect of loans, investments, guarantees and security, the Company has complied with the provisions of the Section 185 and 186 of the Companies Act, 2013.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the directive issued by the Reserve Bank of India and the provisions of Section 73 to76 of the Act or any other relevant provisions of the Act and the rules framed there under (to the extent applicable) with regard to deposit accepted from the public. We have been informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or other Tribunal in this regard.

6. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act in respect of the company''s products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

7. (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March, 2017.

(b) According to the records and information & explanations given to us, there are no dues in respect of service tax that have not been deposited with the appropriate authorities to the extent applicable on account of any dispute and the dues in respect of income tax, duty of customs, duty of excise and value added tax that have not been deposited with the appropriate authorities on account of any dispute and the forum where the dispute is pending are given below: -

Name of The Statuts

Nature of Dues

Amount (Rs, in Crore)

Period (Financial Year)

Forum where dispute is pending

31.35

2005-11

CESTAT, East Zonal Bench Kolkata.

Central Excise Act

Excise Duty

0.30

April 06- March 12

Commissioner Appeal, Bhubaneswar

0.03

2011-12 & 2012-13

Commissioner Appeal Jajpur division

Central Excise Act

Custom Duty

7.97

2012-13

Commissioner of Central Excise, Customs and Service Tax, Bhubaneswar -1

24.79

2005-06 to 2007-08

High Court Odisha, Cuttack

The Central Sales Tax, 1956

Sales Tax

1.88

2013-14

2014-15

Additional Commissioner of Commercial Tax, Cuttak

0.02

2011-12

Joint Commissioner of Commercial Tax, Jajpur Range, Jajpur Road

Name of The Statuts

Nature of Dues

Amount

Period

Forum where dispute is

(Rs, in Crore)

(Financial Year)

pending

2.47

2005-06

2006-07 2010-11

Commissioner of Income Tax (Appeals), Delhi

Income tax Act

Income Tax

5.18

2002-03

2003-04

2004-05

High Court, New Delhi

28.28

2005-06 2006-07 & 2007-08

ITAT, New Delhi

69.59

2006-07 to 2016-17

Hon''ble Supreme, Court

Entry Tax Act,1999

Entry Tax

130.93

2006-11

2013-14

2014-15

High Court Odisha, Cuttack

Odisha Value Added

Value Added Tax

22.93

2013-14 & 2014-15

High Court Odisha, Cuttack

Above does not include show cause notices and are after incorporating effect of the Scheme (Refer Note27A).

8. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the company has defaulted in repayment of dues (including interest, installments letter of credits payments) to banks and financial institutions at various days during the year (read with note no. 33).The maximum amount of default on a particular date was Rs, 856.97 Crore (including default of Rs, 7.82 Crore w.r.t. outstanding debentures) and maximum delay (no. of days) noticed was 88 days (maximum delay of 84 days w.r.t. outstanding debentures). As on March 31, 2017, the overdue financial obligations to banks/ financial institutions/debenture holders was Rs, 266.68 Crore with maximum delay of 60 days, the lender wise details of which is as follows:

Allahabad Bank Rs, 3.43 Crore; Axis Bank Rs,4.67 Crore; Bank of Baroda Rs, 127.61 Crore; Bank of Maharashtra Rs, 0.28 Crore; Canara Bank Rs, 0.38 Crore; Central Bank of India Rs, 3.65 Crore; Corporation Bank Rs, 0.84 Crore; Federal Bank Rs, 0.99 Crore; General Insurance Corporation of India Rs, 0.28 Crore; HDFC Bank Rs, 0.78 Crore; IDBI Bank Rs, 5.10 Crore; Indian Bank Rs, 0.67 Crore; Jammu & Kashmir Bank Rs, 1.49 Crore; Karnataka BankRs, 0.81 Crore; Life Insurance Corporation of India Rs, 5.49 Crore; New India Assurance CompanyRs, 0.28 Crore; Oriental Bank of Commerce Rs, 3.19 Crore; Punjab National BankRs, 1.23 Crore; Standard Chartered BankRs, 22.63 Crore; State Bank of Bikaner & Jaipur Rs, 1.14 Crore; State Bank of HyderabadRs, 4.18 Crore; State Bank of IndiaRs, 0.10 Crore; State Bank of MysoreRs, 3.38 Crore; State Bank of Patiala Rs, 65.17 Crore; State BankofTravancore Rs, 1.47 Crore; Syndicate BankRs, 1.46 Crore; UCO BankRs, 1.67 Crore; United India Insurance Company Rs, 0.28 Crore; Union Bank of India Rs, 1.29 Crore; United Bank of India Rs, 2.75 Crore.

9. On the basis of information and explanations given to us, term loan were applied for the purpose for which the loans were obtained. No money have been raised during the year by way of initial public offer or further public offer.

10. Based on the audit procedure performed and on the basis of information and explanations provided by the management, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the course of the audit.

11. According to the information and explanations given to us and based on our examination of the records of the Company, managerial remuneration has been paid/provided [pending Central Government''s approval] in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, read with note no. 49(C)(1).

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

13. According to the information and explanations and records made available by the management of the Company and audit procedure performed, for transactions with the related parties during the year, the Company has complied with the provisions of Section 177 and 188 of the Act, where applicable [Read with note no. 27Band 47].As explained and as per records, details of related party transactions have been disclosed in the standalone Ind AS financial statements as per the applicable Accounting Standards.

14. According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year, read with note no. 12; except allotment of compulsorily convertible warrants as stated in note no.12A(vi) in respect of which requirement of section 42 of the Act have been complied with and the amount raised have been used for the purpose for which the funds were raised.

15. On the basis of records made available to us and according to information and explanations given to us, the Company has not entered into noncash transactions with the directors or persons connected with him.

16. The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act1934.

ANNEXURE ''B'' TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF JINDAL STAINLESS LIMITED

Report on the Internal Financial Controls over Financial Reporting under Clause (I) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of JINDAL STAINLESS LIMITED(“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For LODHA & CO. For S.S. KOTHARI MEHTA & CO.

Chartered Accountants Chartered Accountants

FRN: 301051E FRN: 000756N

N.K. LODHA SUNIL WAHAL

Partner Partner

Membership No. 85155 Membership No. 87294

Place: New Delhi Dated: 12th May 2017


Mar 31, 2016

TO THE MEMBERS OF JINDAL STAINLESS LIMITED Report on the Standalone Financial Statements

We have audited the accompanying REVISED standalone financial statements of JINDAL STAINLESS LIMITED (“the Company”), which comprise the REVISED Balance Sheet as at 31st March, 2016, the REVISED Statement of Profit and Loss, the REVISED Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information in which impact of the Scheme (as stated in Note No. 27) have been incorporated.

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 REVISED 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 specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.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 standalone 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 REVISED 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 there under.

We conducted our audit 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 standalone 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 REVISED standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid REVISED 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:

a) Net worth of the company has been eroded as stated in note no. 34 of the REVISED financial statements. The company continues to prepare its accounts on a going concern basis for the reasons as stated in the said note;

b) Pending necessary approvals for managerial remuneration as stated in Note no. 49(C)(i) of the REVISED financial statements;

c) Pending confirmations/reconciliation of balances of certain secured loans (read with Note No. 27), loans & advances, trade receivables, trade payables & other liabilities read with Note no. 32(A)(iii)(g) & 32(B) and 40(A) of the REVISED financial statements;

d) Investments and loan & advances to certain subsidiary/other companies and Mat Credit entitlement, considered as good and fully realizable/ recoverable and no provision for diminution in value is considered necessary in the opinion of the management as stated in note no. 40(B) of the REVISED financial statements;

e) Note no. 35 of the REVISED financial statements wherein the company has made investment of Rs, 8.56 crore (along with bank guarantee of Rs, 10.01 Crore) and Rs, 0.10 Crore in MJSJ Coal Limited and Jindal Synfuels Limited respectively. The company continues to treat the investment as good and recoverable in view of the pending decision challenging the Order and other circumstances mentioned therein;

f) Note no. 27 (5) of the REVISED financial statements regarding Mining Rights and effect of mining operations recorded in the financial statement of the Company for the reasons and as stated in said note no.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016(“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure ‘A’ a statement on the matters specified in the paragraphs 3 and 4 of the Order.

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

(d) In our opinion, the aforesaid REVISED standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(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) As required by section 143(3)(i) of the Companies Act, 2013, and based on the checking of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, our separate report with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls is as per Annexure ‘B’.

(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 standalone financial statements - refer Note no. 28(A & D), 36 & 38 to the REVISED standalone financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivatives contracts.

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

Annexure “A” referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date on the

REVISED Standalone Financial Statements of JINDAL STAINLESS LIMITED for the year ended 31st March 2016

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

(b) The Company has a regular programme of Physical Verification of its Fixed assets by which fixed asset have been verified by the management according to the programe of periodical physical verification in a phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such physical verification were not material.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except as stated in footnote (@) of Note No. 11 of the standalone financial statements.

2. The inventories of the Company (except stock lying with the third parties and in transit), part of stores and spares, have been physically verified by the management at reasonable intervals. In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable in relation to the size of the Company and nature of its business. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

4. According to the information, explanations and representations provided by the management and based upon audit procedures performed, we are of the opinion that in respect of loans, investments, guarantees and security, the Company has complied with the provisions of the Section 185 and 186 of the Companies Act, 2013.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the directive issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Act or any other relevant provisions of the Act and the rules framed there under (to the extent applicable) with regard to deposit accepted from the public. We have been informed that no order has been passed by the Company Law Board {however, on the application of the Company for extension of time (refer note no. 4(d)} or National Company Law Tribunal or Reserve Bank of India or any Court or other Tribunal in this regard.

6. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act in respect of the company’s products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

7. (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including provident fund, employees’

state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31 st March, 2016.

(b) According to the records and information & explanations given to us, there are no dues in respect of service tax that have not been deposited with the appropriate authorities to the extent applicable on account of any dispute and the dues in respect of income tax, duty of customs, duty of excise and value added tax that have not been deposited with the appropriate authorities on account of any dispute and the forum where the dispute is pending are given below: -

Name of The Statute

Nature of Dues

Amount (Rs, in Lacs)

Period

(Financial Year)

Forum where dispute is pending

Central Excise Act

Excise Duty

3,134.85

2005-11

CESTAT, East Zonal Bench Kolkata.

31.84

April 06 - March 12

Commissioner Appeal, Bhubaneswar

Customs Act

Custom Duty

797.05

2012-13

Commissioner of Central Excise,

Customs and Service Tax, Bhubaneswar -1

The Central Sales Tax, 1956

Sales Tax

2,479.44

2005-06 to 2007-08

High Court Orissa, Cuttack

Income tax Act

Income Tax

247.14

2005-06

2006-07 2010-11

Commissioner of Income Tax (Appeals), Delhi

517.52

2002-03

2003-04

High Court, New Delhi

2,828.17

2004-05

2005-06

2006-07 & 2007-08

ITAT, New Delhi

Entry Tax Act, 1999

Entry Tax

9,745.96

2006-07 to 2015-16

H’ble Supreme Court

8,210.54

2006-11

High Court Orissa, Cuttack

Above does not include show cause notices and are after incorporating effect of the Scheme (Refer Note no. 27)

8. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the company has defaulted in repayment of dues (including interest, installment & letter of credits payments) to banks and financial institutions at various days during the year (read with note no. 33). The maximum amount of default on a particular date was Rs, 82,274.50 Lacs (including default ofRs, 508.51 Lacs w.r.t. outstanding debentures) and maximum delay (no. of days) noticed was 86 days (maximum delay of 59 days w.r.t. outstanding debentures). As on March 31, 2016, the overdue financial obligations to banks/ financial institutions/debenture holders was Rs, 55,359.54 Lacs with maximum delay of 61 days, the lender wise details of which is as follows:

Allahabad Bank Rs, 633.40 Lacs; Axis Bank Rs, 3,084.24 Lacs; Bank of Baroda Rs, 150.37 Lacs; Bank of Maharashtra Rs, 28.78 Lacs; Canara Bank Rs, 5,910.31 Lacs; Central Bank of India Rs, 646.10 Lacs; Corporation Bank Rs, 108.18 Lacs; Federal Bank Rs, 108.48 Lacs; General Insurance Corporation of India Rs, 28.65 Lacs; HDFC Bank Rs, 120.84 Lacs; ICICI Bank Rs, 5,599.94 Lacs; IDBI Bank Rs, 1,000.82 Lacs; Indian Bank Rs, 150.88 Lacs; Jammu & Kashmir Bank Rs, 255.85 Lacs; Karnataka Bank Rs, 68.84 Lacs; Life Insurance Corporation of India Rs, 577.75 Lacs; New India Assurance Company Rs, 28.57 Lacs; Oriental Bank Of Commerce Rs, 583.73 Lacs; Punjab National Bank Rs, 15,923.17 Lacs; State Bank of Bikaner & JaipurRs, 285.32 Lacs; State Bank of Hyderabad Rs, 695.50 Lacs; State Bank of India Rs,16,570.03 Lacs; State Bank of Mysore Rs, 241.49 Lacs; State Bank of Patiala Rs, 852.08 Lacs; State Bank of Travancore Rs, 340.14 Lacs; Syndicate Bank Rs, 224.68 Lacs; UCO Bank Rs, 295.38 Lacs; United India Insurance Company Rs, 28.54 Lacs; Union Bank of India Rs, 321.85 Lacs; United Bank of India Rs, 495.64 Lacs.

9. On the basis of information and explanations given to us, term loan were applied for the purpose for which the loans were obtained. No moneys have been raised during the year by way of initial public offer or further public offer.

10. Based on the audit procedure performed and on the basis of information and explanations provided by the management, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the course of the audit.

11. According to the information and explanations given to us and based on our examination of the records of the Company, managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, read with note no. 49(C)(i).

12. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

13. According to the information and explanations and records made available by the management of the Company and audit procedure performed, for transactions with the related parties during the year, the Company has complied with the provisions of Section 177 and 188 of the Act, where applicable [Read with note no. 27(6&7) and 47]. As explained and as per records, details of related party transactions have been disclosed in the standalone financial statements as per the applicable Accounting Standards.

14. According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year, read with note no. 2(b)(ii). Accordingly, we are not offering comment with respect to compliance of requirement of Section 42 of the Act and utilization of the money.

15. On the basis of records made available to us and according to information and explanations given to us, the Company has not entered into non-cash transactions with the directors or persons connected with him.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

ANNEXURE ‘B’ TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE REVISED STANDALONE FINANCIAL STATEMENTS OF JINDAL STAINLESS LIMITED

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of JINDAL STAINLESS LIMITED (“the Company’) as of March 31, 2016 in conjunction with our audit of the REVISED standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For LODHA & CO. For S.S. KOTHARI MEHTA & CO.

Chartered Accountants Chartered Accountants

FRN: 301051E FRN: 000756N

N.K. LODHA SUNIL WAHAL

Partner Partner

Membership No. 85155 Membership No. 87294

Place : New Delhi

Dated : 23rd November, 2016


Mar 31, 2014

We have audited the accompanying financial statements of Jindal Stainless Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and 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

Management is responsible for the preparation of these financial statements that give a true and the 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 Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/ 2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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 free from material misstatement, whether due to fraud or error.

Auditor''s 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 the 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 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 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 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 case of the Balance Sheet, of the state of the affairs of the company as at 31st March, 2014,

b. In case of the statement of Profit and Loss, of the loss for the year ended on that date, and

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

Emphasis of Matter

Attention is drawn to the following:

(a) Note no. 53(C)(i) regarding pending necessary approvals for managerial remuneration as explained in the said note.

(b) Note no. 32(A)(iv)e read with Note no. 40(B) and 40(A) regarding pending confirmations of balances of certain secured loans, loans & advances, creditors & receivables as stated in the said note.

(c) Note no. 40(C) regarding certain investments and loan & advances as good and fully realizable/ recoverable related to certain subsidiary companies, for the reason stated in said note, and no provision for diminution in value is necessary in the opinion of the management.

Our opinion is not qualified in respect of above matters.

Report on other legal and regulatory requirements

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

(ii) 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 purpose 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 and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

c. The report on the accounts of the branches audited under section 228 by other auditors have been forwarded to us as required by clause (c) of sub-section 228 and have been dealt with in preparing our report in the manner considered necessary by us;

d. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account and with the audited returns received from the branches;

e. In our opinion, the Balance Sheet, the Statement of Profit & Loss and the Cash Flow Statement referred to in this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

f . On the basis of the written representations received from the Directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March 2014 from being appointed as a Director of the Company in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT Referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date

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

(b) We have been informed that certain fixed assets of the company have been physically verified by the management according to a phased programme of periodic verification which, in our opinion, is reasonable having regard to the size of the company and nature of fixed assets. As informed, no material discrepancies between book records and physical inventory have been noticed in respect of the fixed assets physically verified during the year.

(c) As per records and information and explanation given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As informed, the inventory of the company (except stocks lying with third parties, in transit), part of the stores and spares, have been physically verified by the management either at the end of the year or after the year end, and in respect of stores and spares, there is perpetual inventory system and a substantial portion of the stocks have been verified during the year (Read with Note no. 49). In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given 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 is maintaining proper records of inventory; in respect of process stock, the records are updated as and when physical verification has been carried out. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the company has not given any loan, secured or unsecured to companies, firms, or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) (b) to (d) of The Order are not applicable.

(e) As informed to us, the company has not taken any loan, secured or unsecured, from companies, firms, or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4 (iii) (f) & (g) of The Order are not applicable.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources, do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given, we have neither come across nor have we been informed of any instance of major weaknesses in aforesaid internal control systems.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Act have been so entered.

(b) In our opinion and having regard to our comments in paragraphs 4 above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered into the register maintained under section 301 of the Act and exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the Rules framed there under with regard to deposits accepted from public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. We have broadly reviewed the books of accounts 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 Act in respect of the Company''s products and are of the opinion that, prima facie, the prescribed records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have generally been regularly deposited during the year with appropriate authorities. No undisputed amount payable inrespect of the aforesaid statutory dues were outstanding as at 31.03.2014 for a period of more than six months from the date they became payable.

(b) In our opinion and according to the information and explanations given to us, there are no dues in respect of Wealth Tax and Cess that have not been deposited with appropriate authorities on account of disputes and the dues in respect of Income Tax, Excise duty, Service Tax, Sales Tax and Custom Duty that have not been deposited with appropriate authorities on account of dispute and the forum where the dispute is pending are as given below:

Name of the statue Nature of the Dues Amount (Rs. In lacs)

Central Excise Act,1944 Excise Duty 1.69

658.08

27.19

7.57

2,960.81

46.99

57.14

7.63

0.02 6.12

290.84

0.12

3,256.20

31.84

437.86

5.21

1.02

4.74

11.90

0.39

18.52 145.81

Custom Act, 1962 Custom Duty 60.00

10.00

Finance Act,1994 Service Tax 522.83

53.83

9.79

15.29



Name of the statue Period to which Forum where dispute is pending the amount relates

Central Excise Act, 1944 April 1995-June 95 High Court, New Delhi

Jan 1999- Dec 2004 High Court of Punjab & Haryana.

Jan 05-June 05 CESTAT, Delhi.

2000-01 CESTAT, Delhi.

July 05- Dec 07 CESTAT, Delhi.

July 05- Dec 07 CESTAT, Delhi.

Sep 94- March 96 Commissioner of Central Excise, Rohtak.

1994-95 Addl. Commissioner of Central Excise, Rohtak.

Jan 10- June 10 CESTAT, Delhi

July 95- Sep 95 Joint Commissioner of Central Excise, Rohtak

2006-07 CESTAT, Delhi

July 12 to Feb 13 Dy., Commissioner, Hisar

May 08 - March 11 Commissioner Appeal, Bhubaneswar

May 08 - March 11 Commissioner Appeal, Bhubaneswar

Aug-08 to Dec-10 CESTAT, Delhi

Jul-09 Revision Authority (Jt Secy)

April-07 to Oct-2007 High Court, Punjab & Haryana

May-07 to Oct-2007 High Court, Punjab & Haryana

Jan- 95 to June- 96 Joint Commissioner, Rohtak

June, 96 to July 96 Commissioner (Appeal), Delhi-III, Gurgaon

Jul-09, Aug-09 Dy Comm, Hisar

July 2011 - Sept 2011 Commissioner (Appeal), Delhi-III, Gurgaon

Custom Act, 1962 2008-09 CESTAT, Delhi

2013-14 CESTAT, Delhi

Finance Act,1994 Dec 03- March-06 CESTAT, Delhi

2005-06 to 2008-09 CESTAT, Delhi

2005-06 to 2010-11 CESTAT, Delhi

Oct.08 to Dec.08 CESTAT, Delhi



Name of the statue Nature of the Dues Amount (Rs. In lacs)

Central Sales Tax Sales Tax 3.00 Act,1956

2,479.44

Income Tax Act, 1961 Income Tax 254.05

517.52

3,429.34

Entry Tax Act, 1999 Entry Tax 4,600.91

8,210.13



Name of the statue Period to which Forum where dispute is pending the amount relates

Central Sales Tax Act,1956 1993-94 High Court of Punjab & Haryana

2005-06 to 2007-08 H''ble High Court Orissa, Cuttack

Income Tax Act, 1961 2004-05, 2009-10 CIT (A) -VIII, New Delhi

2002-03 & 2003-04 High Court, New Delhi

2004-05, 2005-06, ITAT, Delhi 2007-08

Entry Tax Act, 1999 2006-07 To 2012-13 H''ble Supreme Court

2006-11 H''ble High Court Orissa, Cuttack

Above does not include show cause notice.

10. The company has accumulated losses at the end of the financial year and also its net worth has been eroded more than 50%. Further company has incurred cash losses during the year and also incurred cash losses in the immediately preceding financial year.

11. In our opinion and according to information and explanations given to us, the company had defaulted in repayment of dues (including interest, installment & letter of credits payments) to banks at various days during the year. There is no default in repayment of dues to financial institutions/ debenture holders during the year. The maximum amount of default on a particular date was Rs. 30,677.75 lacs and maximum delay (no. of days) noticed for a particular bank was 85 days (refer foot note to Note no. 10 & Note no. 33 for continue default and read with Note no. 32).

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of The Order are not applicable to the Company.

14. In our opinion, and according to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of Clause 4 (xiv) of The Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. (Read with Note no. 27(C))

16. In our opinion and on the basis of information and explanations given to us, the term loans raised during the year by the Company were applied at the close of the financial year for the purposes for which the loans were obtained where such end use has been stipulated by the lender.

17. On the basis of information and explanations given to us, to the extent ofRs. 61,991.13 lacs fund raised on short-term basis have been used for long-term investments (read with Note no. 32).

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956. (This is to read with Note no. 34)

19. On the basis of the records made available to us, the Company has created necessary security and charge in respect of debentures outstanding at the year end.

20. The company has not raised any money through public issue during the year.

21. During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For LODHA & CO. For S.S. KOTHARI MEHTA & CO.

Chartered Accountants Chartered Accountants

FRN 301051E FRN 000756N

(N.K. LODHA) (ARUN K. TULSIAN)

Partner

Membership No. 85155

Place: New Delhi Partner

Date : 29th May, 2014 Membership No. 89907


Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of Jindal Stainless Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2013, the statement of Profit and Loss and 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

Management is responsible for the preparation of these financial statements that give a true and the 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 Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956 ("the Act"). 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 free from material misstatement, whether due to fraud or error.

Auditor''s 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 Institute of Chartered Accountant of India. Those standards require that we comply with the ethical requirements and plan and perform the audit to obtain the reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and 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. An audit also includes evaluating the appropriateness of 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 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 Balance Sheet, of the state of the affairs of the company as at 31st March 2013;

b. In the case of statement of Profit and Loss, of the loss for the year ended on that date; and

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

Emphasis of Matter

Attention is drawn to the following:

(a) Note no. 51(C)(i) regarding pending necessary approvals for managerial remuneration as explained in the said note;

(b) Note no. 33(A)(v)e read with note no. 39(B) regarding pending confirmations of balances of certain secured loans as stated in the said note; and

(c) Note no. 39(C) regarding certain investments and loans & advances considered as good and fully realizable/ recoverable related to certain subsidiary companies, for the reason stated in said note, and no provision for diminution in value is necessary in the opinion of the management.

Our opinion is not qualified in respect of these matters.

Report on other legal and the regulatory requirements:

(i) As required by the Companies (Auditors'' Report) Order, 2003("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the order.

(ii) 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 purpose 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 and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

c. The reports on the accounts of the branches audited by other Auditors have been forwarded to us and have been appropriately dealt with by us in preparing our report;

d. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account and with the audited accounts from the branches;

e. In our opinion, the Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement referred to in this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of Companies Act, 1956; and

f. On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March 2013 from being appointed as a Director of the Company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Referred to in paragraph 1 under the heading "Report on other legal and the regulatory requirements" of our report of even date

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

(b) We have been informed that certain fixed assets of the company have been physically verified by the management according to a phased programme of periodic verification which, in our opinion, is reasonable having regard to the size of the company and nature of fixed assets. As informed, no material discrepancies between book records and physical inventory have been noticed in respect of the fixed assets physically verified during the year.

(c) As per records and information and explanations given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As informed, the inventory of the company at all its locations, except stocks lying with third parties, in transit and part of the stores and spares, have been physically verified by the management either at the end of the year or after the year end, and in respect of stores and spares, there is perpetual inventory system and a substantial portion of the stocks have been verified during the year. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given 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 is maintaining proper records of inventory; in respect of process stock, the records are updated as and when physical verification is carried out. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the company has not given any loan, secured or unsecured, to companies, firms, or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii) (b) to (d) of The Order are not applicable.

(b) As informed to us, the company has not taken any loan, secured or unsecured, from companies, firms, or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4 (iii) (f) & (g) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given, we have neither come across nor have we been informed of any instance of major weaknesses in aforesaid internal control systems.

5. (a) To the best of our knowledge and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Act, have been so entered.

(b) In our opinion and having regard to our comments in paragraph 4 above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered into the register maintained under section 301 of the Act, and exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act, and the Rules framed there under with regard to deposits accepted from public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. We have broadly reviewed the books of accounts 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 Act, in respect of the Company''s products and are of the opinion that, prima facie, the prescribed records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have generally been regularly deposited during the year with appropriate authorities. No undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at last day of the financial year for a period of more than six months from the date they became payable.

(b) In our opinion and according to the information and explanations given to us, there are no dues in respect of Wealth Tax that have not been deposited with appropriate authorities on account of disputes and the dues in respect of Income Tax, Excise duty, Service Tax, Sales Tax and Custom Duty that have not been deposited with appropriate authorities on account of dispute and the forum where the dispute is pending are as given below:

10. The company has no accumulated losses at the end of the financial year and it has incurred cash loss during the year and did not incur cash loss in the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution/banks/ debenture holders, except default in payment of principal & interest of Rs. 13,570 lacs (USD 25 Million) & Rs. 1,495 lacs for a maximum period of 163 days and 41 days respectively. However as on balance sheet date there was no default and this is to be read with note no. 33(B).

12. In our opinion and according to information and explanations given to us, no loans and advances have been granted by the company on the basis of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of the Order are not applicable to the Company.

14. In our opinion, and according to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of Clause 4 (xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. (Read with Note no. 27(C))

16. In our opinion and on the basis of information and explanations given to us, the term loans raised during the year by the Company were applied at the close of the financial year for the purposes for which the loans were obtained where such end use has been stipulated by the lender.

17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the Company, no funds raised on short-term basis have been used for long-term investment. (read with note no. 33)

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act. (read with note no. 47)

19. On the basis of the records made available to us, the Company has created necessary security and charge in respect of debentures outstanding at the year end.

20. The company has not raised any money through public issue during the year.

21. During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

For LODHA & CO. For S.S. KOTHARI MEHTA & CO.

Chartered Accountants Chartered Accountants

FRN: 301051E FRN: 000756N

(N.K. LODHA) (ARUN K. TULSIAN)

Place : New Delhi Partner Partner

Date : 27th May, 2013 M. No. 85155 M. No. 89907


Mar 31, 2012

We have audited the attached Balance Sheet of Jindal Stainless Limited (Formerly JSL Stainless Limited), as at 31st March, 2012 and the Statement of Profit & Loss and also the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1) As required by the Companies (Auditor's Report) Order, 2003 (as amended) (herein after called The Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

2) Further to our comments in the Annexure referred to in Paragraph 1 above, 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 appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

c) The reports on the accounts of the branch audited by other Auditors have been forwarded to us and have been appropriately dealt with by us in preparing our report;

d) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account and with the audited accounts from the branch;

e) In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

f) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2012 from being appointed as a Director of the Company in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956;

g) Without qualifying attention is drawn to;

(i) Note no. 33(vi) read with note no. 40(B) regarding pending confirmations of balances of certain secured loans as stated in the said note.

(ii) Note no. 40(C) read with note no. 12 regarding investment and loan & advances to certain subsidiary companies, for the reason stated in said note, no provision for diminution in value is necessary in the opinion of management.

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and other Notes thereon, 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; (ii) In the case of Statement of Profit & Loss, of the loss of the Company for the year ended on that date; and (iii) In the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Annexure to the Auditors' Report (Referred to in Paragraph 1 of our report of even date to the Members of Jindal Stainless Ltd. (Formerly JSL Stainless Ltd.) on the Financial Statements for the year ended 31st March, 2012)

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

(b) We have been informed that certain fixed assets of the company have been physically verified by the management according to a phased programme of periodic verification which, in our opinion, is reasonable having regard to the size of the company and nature of fixed assets. As informed, no material discrepancies between book records and physical inventory have been noticed in respect of the fixed assets physically verified during the year.

(c) As per records and information and explanation given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As informed, the inventory of the company at all its locations, except stocks lying with third parties, in transit and part of the stores and spares, have been physically verified by the management either at the end of the year or after the year end, and in respect of stores and spares, there is perpetual inventory system and a substantial portion of the stocks have been verified during the year. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given 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 is maintaining proper records of inventory; in respect of process stock, the records are updated as and when physical verification has been carried out. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the company has not given any loan, secured or unsecured to companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (b) to (d) of The Order are not applicable.

(e) As informed to us, the company has not taken any loan, secured or unsecured, from companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (f) & (g) of The Order are not applicable.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources, do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given, we have neither come across nor have we been informed of any instance of major weaknesses in aforesaid internal control systems.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and having regard to our comments in paragraphs 4 above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under with regard to deposits accepted from public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. We have broadly reviewed the books of accounts 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 the company's products and are of the opinion that, prime facie, the prescribed records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have generally been regularly deposited during the year with appropriate authorities. No undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at last day of the financial year for a period of more than six months from the date they became payable.

(b) In our opinion and according to the information and explanations given to us, there are no dues in respect of Wealth Tax that have not been deposited with appropriate authorities on account of disputes and the dues in respect of Income Tax, Excise duty, Service Tax, Sales Tax, Custom Duty and Cess that have not been deposited with appropriate authorities on account of dispute and the forum where the dispute is pending are as given below:

Name of Nature of Amount Period to which the statue the Dues ( Rs. in Lacs) the amount relates

Central Excise 1.69 April 1995-June 95 Excise Act Duty

658.09 Jan 1999-Dec 04

27.19 Jan 05-June 05

7.57 2000-01

2.960.81 July 05-Dec 07 47.96 July 05-Dec 07

253.64 Aug 09-June 09

57.14 Sep 94-March 96

7.63 1994-95 0.39 1996-97

23.74 July & August-09

4.04 April 09-Nov 10

0.02 Jan10-Jun10

18.02 July 95-Sep 95

5.76 April 07-October 07

3.723.82 2005-11

The Custom Custom 10.00 2008-09 Act, 1962 Duty 60.00 2008-09

Finance Act Service Tax 522.83 Dec 03-March 06

7.64 2008-09 & 2009-10

53.83 2005-06 to 2008-09

The Central Sales Tax 3.00 1993-94 Sales Tax Act 1956

2,479.44 2005-06 to 2007-08



Name of the Statue Forum where dispute is pending

Central Excise Act High Court, New Delhi

High Court of Punjab & Haryana.

CESTAT, Delhi.

CESTAT, Delhi.

CESTAT, Delhi.

CESTAT, Delhi.

CESTAT, Delhi.

Commissioner of Central Excise, Rohtak.

Addl. Commissioner of Central Excise, Rohtak.

Commissioner (Appeals), Gurgaon

Revision Authority, Delhi

Commissioner (Appeals), Gurgaon

Commissioner (Appeals), Gurgaon

Joint Commissioner of Central Excise, Rohtak

Joint Secretary Excise, Rohtak

Commissioner, Central Excise, Bhubneswar-1, Odisha.

The Custom Act, 1962 High Court, New Delhi

CESTAT, Delhi.

Finance Act CESTAT, Delhi. CESTAT, Delhi. CESTAT, Delhi.

The Central Sales Tax Act 1956 High Court of Punjab & Haryana.

High Court Odisha, Cuttack.



Name of Nature of Amount Period to which the statue the Dues ( Rs. in Lacs) the amount relates

Orissa Value Sales Tax 179.53 2005-06,2006-07 Added Tax &2007-08 Act 2004

Income Tax Income Tax 5,988.49 2004-05, 2005-06 Act 2006-07

517.52 2002-03 & 2003-04

549.65 2007-08

Entry Tax Entry Tax 5,440.45 2006-07 to 2011-12 Act, 1999

8,210.13 2010-11



Name of the Statue Forum where dispute is pending

Orissa Value Added Tax Act 2004 Add. Commissioner of Sales tax, Cuttack

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

High Court, New Delhi Dispute Resolution Panel

Entry Tax Act, 1999 H'ble Supreme Court

High Court Odisha, Cuttack.

10. The company has no accumulated losses at the end of the financial year and it has not incurred cash loss during the year and also in the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions/banks/ debenture holders, in view of the debt restructuring approved under CDR mechanism as stated in note no 33 and read together with note no. 4(f).

12. In our opinion and according to information and explanations given to us, no loans and advances have been granted by the company on the basis of pledge of shares, debentures and other securities.

13. The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of The Order are not applicable to the company.

14. In our opinion and according to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of Clause 4 (xiv) of The Order are not applicable to the company.

15. In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. (Read with Note no. 27(c).

16. In our opinion and on the basis of information and explanations given to us, the term loans raised during the year by the company were applied at the close of the financial year for the purposes for which the loans were obtained where such end use has been stipulated by the lender.

17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the company, no funds raised on short-term basis have been used for long-term investments.

18. The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. On the basis of the records made available to us, the company has created necessary security and charge in respect of debentures outstanding at the year end.

20. The company has not raised any money through pubic issue during the year.

21. During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year nor we have been informed of such case by the management.

For Lodha & Co. For S.S. Kothari Mehta & Co.

Chartered Accountants Chartered Accountants FRN: 301051E FRN: 000756N

(N.K. Lodha) (Arun K. Tulsian)

Place: New Delhi Partner Partner

Date : 29th May, 2012 M. No. 85155 M. No. 89907


Mar 31, 2011

We have audited the attached Balance Sheet of JSL Stainless Limited, as at 31st March 2011 and the Profit & Loss Account and also the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1) As required by the Companies (Auditor's Report) Order, 2003 (as amended) (herein after called The Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

2) Further to our comments in the Annexure referred to in Paragraph 1 above, 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 appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

c) The reports on the accounts of the branch audited by other Auditors have been forwarded to us and have been appropriately dealt with by us in preparing our report;

d) The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account and with the audited accounts from the branch;

e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

f) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2011 from being appointed as a Director of the company in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956;

g) Without qualifying attention is drawn to;

(i) Note no. 28 (C) (i) (a) of schedule 20 regarding pending necessary approvals for managerial remuneration as explained in the said note.

(ii) Note no. 7 (b) of schedule 20 regarding pending confirmations of balances of certain secured loans as stated in the said note.

(iii) Note no. 13 (c ) of schedule 20 regarding investment and loan & advances to certain subsidiary companies, for the reason stated in said note, no provision for diminution in value is necessary in the opinion of management.

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and Notes thereon, 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

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

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

ANNEXURE TO AUDITORS' REPORT

(Referred to in Paragraph 1 of our report of even date to the Members of JSL Stainless Limited on the Financial Statements for the year ended 31st March, 2011)

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

(b) We have been informed that certain fixed assets of the company have been physically verified by the management according to a phased programme of periodic verification which, in our opinion, is reasonable having regard to the size of the company and nature of fixed assets. As informed, no material discrepancies between book records and physical inventory have been noticed in respect of the fixed assets physically verified during the year.

(c) As per records and information and explanations given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As informed, the inventory of the company at all its locations, except stocks lying with third parties, in transit and part of the stores and spares, have been physically verified by the management either at the end of the year or after the year end, and in respect of stores and spares, there is perpetual inventory system and a substantial portion of the stocks have been verified during the year. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given 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 is maintaining proper records of inventory; in respect of process stock, the records are updated as and when physical verification has been carried out. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the company has not given any loan, secured or unsecured to companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b) to (d) of The Order are not applicable.

(e) As informed to us, the company has not taken any loan, secured or unsecured, from companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (f) & (g) of The Order are not applicable.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources, do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given, we have neither come across nor have we been informed of any instance of major weaknesses in aforesaid internal control systems.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and having regard to our comments in paragraphs 4 above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under with regard to deposits accepted from public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. We have broadly reviewed the books of accounts 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 the Company's products and are of the opinion that, prime facie, the prescribed records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have generally been regularly deposited during the year with appropriate authorities. No undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at last day of the financial year for a period of more than six months from the date they became payable.

(b) In our opinion and according to the information and explanations given to us, there are no dues in respect of Wealth Tax that have not been deposited with appropriate authorities on account of disputes and the dues in respect of Income Tax, Excise duty, Service Tax, Sales Tax, Custom Duty and Cess that have not been deposited with appropriate authorities on account of dispute and the forum where the dispute is pending are as given below:

Name of Nature of Amount Period to which the Forum where dispute is pending the statute the Dues (Rs. in Lacs) amount relates

Central Excise 1.69 1995-96 Hon'ble High Court, New Delhi Excise Act Duty

658.08 1999-04 Hon'ble High Court of Punjab & Haryana.

27.19 2004-06 CESTAT, Delhi.

7.57 2000-01 CESTAT, Delhi.

113.07 2005-08 CESTAT, Delhi.

180.10 2008-10 CESTAT, Delhi.

57.14 1994-96 Commissioner of Central Excise,Rohtak

7.63 1994-95 Add. Commissioner of Central Excise,Rohtak

0.39 1996-97 Commissioner (Appeals), Gurgaon

0.98 2008-09 Commissioner (Appeals), Gurgaon

23.73 2009-10 Commissioner (Appeals), Gurgaon

18.02 1995-97 Joint Commissioner of Central Excise, Rohtak

6.53 2005-07 CESTAT, Bangalore

3,309.88 2005-10 Commissioner of Central Excise, Bhubaneshwar

70.50 2009-11 Commissioner of Central Excise, Bhubaneshwar

The Custom Custom 10.00 2008-09 Hon'ble High Court, Delhi Act, 1962 Duty

60.00 2008-09 CESTAT, Delhi

Finance Act Service Tax 745.67 2003-06 CESTAT, Delhi

7.64 2008-10 CESTAT, Delhi

Sales Tax Act Sales Tax 3.00 1993-94 Hon'ble High Court of Punjab & Haryana

65.06 2002-05 Commissioner of Sales Tax Odisha, Cuttack

O VAT 179.57 2005-06, Stay petition before Additional Commissioner 2006-07 & of Sales Tax and Writ Petition before High 2007-08 Court, Cuttack

Entry Tax Entry Tax 22.71 2004-05 Commissioner of Sales Tax Odisha, Cuttack Act, 1999

351.65 2007-08 Hon'ble Supreme Court

79.56 2008-09 Hon'ble Supreme Court

15.76 2009-10 Hon'ble Supreme Court

4,129.01 2010-11 Hon'ble Supreme Court

Income Tax Income Tax 6,103.86 2004-05, Commissioner of Income Tax (Appeals), Delhi Act 2005-06,

2006-07 & 2008-09

517.52 2002-03 & Hon'ble High Court, Delhi 2003-04

10. The company has no accumulated losses at the end of the financial year and it has not incurred cash loss during the year and also in the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution/banks/ debenture holders, in view of the debt restructuring approved under CDR mechanism as stated in note no.7 of schedule 20 and read together with notes no. 1 and 2 of schedule 4.

12. In our opinion and according to information and explanations given to us, no loans and advances have been granted by the company on the basis of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of The Order are not applicable to the Company.

14. In our opinion, and according to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of Clause 4 (xiv) of The Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. (Read with Note no. 20 of schedule 20)

16. In our opinion and on the basis of information and explanations given to us, the term loans raised during the year by the Company were applied for the purposes for which the loans were obtained where such end use has been stipulated by the lender, however pending utilization during the course of the year the loan fund has been temporarily deployed in mutual funds/bonds/deposited with banks.

17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the Company, no funds raised on short-term basis have been used for long-term investments.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. On the basis of the records made available to us, the Company has created necessary security and charge in respect of debentures outstanding at the year end.

20. The company has not raised any money through pubic issue during the year.

21. During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year nor we have been informed of such case by the management.

For Lodha & Co. For S.S. Kothari Mehta & Co.

Chartered Accountants Chartered Accountants

FRN: 301051E FRN: 000756N

(N.K. Lodha) (Arun K. Tulsian)

Place:New Delhi Partner Partner

Date :27th May, 2011 M. No. 85155 M. No. 89907


Mar 31, 2010

We have audited the attached Balance Sheet of JSL Limited, as at 31st March, 2010 and the Profit & Loss Account and also the Cash Flow Statement of the Company for the year ended on that date, 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

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 significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1) As required by the Companies (Auditors Report) Order, 2003 (as amended) ^erein after called The Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act 1956, and on the basis of such checks of the books and records of the company as we considered appropriate, we enclose in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said Order.

2) Further to our comments in the Annexure referred to in Paragraph 1 above, 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 appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

c) The reports on the accounts of the branch audited by other Auditors have been forwarded to us and have been appropriately dealt with by us in preparing our report;

d) The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account and with the audited accounts from the branch;

e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

f) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2010 from being appointed as a Director of the company in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956;

g) Without qualifying attention is drawn to;

(,) Note no. 24 (C) ® of schedule 20 regarding pending necessary approvals for managerial remuneration as explained in

thesaidnote. (u) Note no. 10 of schedule 20 regarding impact of interest on FCCB and EPS as stated in the said note.

(ill) Note no. 7 (11) of schedule 20 regarding pending confirmations of balances of certain secured loans as stated in the saidnote.

(iv) Note no. 2 (B) of schedule 20 regarding pending export obligation against raw material consumed imported under advance license as stated in the said note

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and Notes thereon, 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:

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

(u) In the case of Profit & Loss Account, of the profit of the Company for the year ended on that date; and

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

ANNEXURE TO AUDITORS REPORT

Referred to in Paragraph 1 of our report of even date to the Members of JSL LIMITED on the Financial Statements for the year ended 31st March, 2010.

1. (a) The company has maintained proper records in respect of its fixed assets showing full particulars, including quantitative

details and situation of fixed assets

(b) We have been informed that certain fixed assets of the company have been physically verified by the management according to a phased programme of periodic verification which, in oJ opinion, is reasonable having regard to the size of the company and nature of ffxed assets. As informed, no material discrepancies between book record! and physical inventory have been noticed in respect of the fixed assets physically verified during the year.

(c) As per records and information and explanations given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As informed, the inventory of the company at all its locations, except stocks lying with third parties, in transit and part of

the stores and spares, have been physically verified by the management either at the end of the year or after the year end, and in respect of stores and spares, there is perpetual inventory system and a substantial portion of the stocks have been verified during the year. In our opinion, the frequency of verification is reasonable.

(b) According to the information and explanations given 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 is maintaining proper record of inventory; in respect of process stock, the records are updated as and when physical verification has been carried out. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the company has not given any loan, secured or unsecured to companies, firms, or other parties covered

in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (b) to (d) of The Order are not applicable.

(b) As informed to us, the company has not taken any loan, secured or unsecured, from companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (ill) (f) & (g) of The Order are not applicable.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources, do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given, we have neither come across nor have we been informed of any instance of major weaknesses in aforesaid internal control systems.

5. (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the

opinion that the particulars of contracts or arrangements that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and having regard to our comments in paragraphs 4 above, and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered into the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanations given to us, the company has complied with the directives issued by the Reserve Bank of India and the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Rules framed there under with regard to deposits accepted from public. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

7. In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business.

8. We have broadly reviewed the books of accounts 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 the Companys products and are of the opinion that, prime facie, the prescribed records have been made and maintained We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident

Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have generally been regularly deposited during the year with appropriate authorities. No undisputed amount payable in respect of the aforesaid statutory dues were outstanding as at last day of the financial year for a period of more than six months from the date they became payable.

(b) In our opinion and according to the information and explanations given to us, there are no dues in respect of Wealth Tax and Custom Duty that have not been deposited with appropriate authorities on account of disputes and the dues in respect of Income Tax, Excise duty, Service Tax, Sales Tax and Cess that have not been deposited with appropriate authorities on account of dispute and the forum where the dispute is pending are as given below:

Name of the statute Nature Amount Period to which Forum where dispute of the (Rs. inthe amount is pending. Dues LAcs) relates Central Excise Act Excise Duty 1.69 1995.96 High Court, New Delhi. 21.69 1994-95 Reference application allowed by CESTAT, Delhi for further appeal in High Court, Delhi. 658.08 1999-2004 High Court of Punjab & Haryana 27.19 2004-06 CESTAT, Delhi. 113.07 2005-08 CESTAT, Delhi. 7.57 2000-01 CESTAT, Delhi. 57.14 1994-96 Commissioner of Central Excise, Rohtak. 7.63 1994-95 Addl. Commissioner of Central Excise, Rohtak 5.99 2007-08 & 2008-09 Commissioner (Appeals), Gurgaon 0.39 1996-97 Commissioner (Appeals), Gurgaon 18.02 1995-97 Joint Commissioner of Central Excise, Rohtak 6,48 2005-07 CESTAT, Banglore 14.38 2004-08 Assistant Commissioner, Vtzag 3,309.88 2005-10 Commissioner of Central Excise, Bhuvanshver Finance Act Service Tax 745.67 2003-06 CESTAT, Delhi 1.99 2007-08 & 2008-09 Commissioner (Appeals), Delhi 9.89 2008-09 Commissioner (Appeals), Gurgaon Sales Tax Act Sales Tax 3.00 1993-94 High Court of Punjab & Haryana 65.06 2002-03, 2003-04 Commissioner of Sales Tax Onssa, Cuttack. & 2004-05 OVAT 179.57 2005-06, 2006-07 Stay petition before Additional Commissioner & 2007-08 of Sales Tax and Writ Petition before High Court, Cuttack ORISED Act, 2004 Cess 320.49 2005-07 Hble Supreme Court Entry Tax Act, 1999 Entry Tax 22.71 2004-05 Commissioner of Sales Tax Onssa, Cuttack. 10.37 2005-06 Commissioner of Commercial Tax Central Zone Cuttack 351.65 2007-08 Hble Supreme Court Income Tax Act Income Tax 2,851.73 2004-05 & 2005-06 Commissioner of Income Tax (Appeals), Delhi. 534.99 2002-03 & 2003-04 High Court, New Delhi

10. The company has no accumulated losses at the end of the financial year and it has not incurred cash loss during the year. However cash loss was incurred m the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution/banks/ debenture holders, in view of the debt restructuring approved under CDR mechanism as stated in note no. 7 of schedule 20 except redemption/conversion of Foreign Currency Convertible Bonds.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the companion the basis of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a mdhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiu) of The Order are not applicable to the Company.

14. In our opinion, and according to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of The Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. (Read with Note no. 18 of schedule 20).

16. In our opinion and on the basis of information and explanations given to us, the term loans raised during the year by the Company were applied for the purposes for which the loans were obtained where such end use has been stipulated by the lender, however pending utilization during the course of the year the loan fund has been temporarily deployed in mutual funds/bonds/deposited with banks.

17. On the basis of information and explanations given to us, and on the basis of an overall examination of the balance sheet of the Company, no funds raised on short-term basis have been used for long-term investments.

18. The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. On the basis of the records made available to us, the Company has created necessary security and charge in respect of debentures outstanding at the year end.

20. The company has not raised any money through pubic issue during the year.

21. During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of material fraud on or by the company! noticed or reported during the year nor we have been informed of such case by the management.



For LODHA & CO. For S.S. KOTHARI MEHTA & CO. Chartered Accountants Chartered Accountants FRN:301051E FRN : 000756N (N.K. LODHA) (ARUN K. TULSIAN) Place: New Delhi Partner Partner Date : 31st May, 2010MNo. 85155 M. No. 89907

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