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Auditor Report of Jindal Steel & Power Ltd.

Mar 31, 2023

To the Members of Jindal Steel & Power LimitedREPORT ON THE AUDIT OF THE STANDALONE FINANCIALSTATEMENTS

Opinion

We have audited the accompanying standalone financial statements of Jindal Steel & Power Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as "standalone financial statements").

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 prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2023, its Profit (including Other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) 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 together with the ethical requirements that are relevant to our audit of the standalone 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 audit opinion on the standalone financial statements.

S. No. Description of Key Audit Matter

How our audit addressed the key audit matters

1 Recognition and measurement of taxation and tax litigation

The Company has significant tax and other litigations against it. There is a high level of judgement required in estimating the level of provisioning required and appropriateness of disclosure of those litigations as Contingent Liabilities.

Our procedures included:

• We evaluated the design and tested the operating effectiveness of controls in place for the determination and recognition of current tax and deferred tax balances. We determined that we

The recognition and measurement of taxation (current tax, deferred

could rely on these controls for the purposes of our audit;

tax assets and liabilities) requires management judgement and assumptions. The recognition of deferred tax assets involved management''s estimation regarding likelihood of the realization of these assets, in particular whether there will be taxable profits in future periods that support recognition of these assets.

Refer Note 39 and 40(a)(ii) (b) to the Standalone Financial Statements

• We tested the underlying data in support of tax calculations;

• We made enquiries regarding the tax assessments as well as the results of previous claims/ demands, and changes to the tax environments.

• For legal regulatory and tax matters our procedures included examining external opinions obtained by management, examining relevant correspondences and discussion with Company''s legal counsel and tax head.

• We also involved our internal tax specialists to gain an

understanding and to determine the level of exposure for tax litigation of the Company.

S. No. Description of Key Audit Matter

How our audit addressed the key audit matters

• In assessing management''s conclusions with respect to the

recognition of deferred tax assets, we evaluated the amount of tax losses recognised in light of the future projected profitability.

We determined that the tax balances were supportable and provision for taxes, deferred tax assets and liabilities are recorded and assessed the adequacy of disclosures in the standalone financial statements.

2 Revenue Recognition

Revenue from the sale of goods (hereinafter referred to as "Revenue")

Our procedures included:

is recognized when the Company performs its obligation to its

• Evaluating the integrity of the general information and

customers and the amount of revenue can be measured reliably

technology control environment and testing the operating

and recovery of the consideration is probable. The timing of such

effectiveness of key IT application controls

recognition in case of sale of goods is when the control over the same

is transferred to the customer, which is mainly upon delivery.

• Evaluating the design and implementation of Company''s controls in respect of revenue recognition.

The timing of revenue recognition is relevant to the reported . .

performance of the Company. The management considers revenue as

• Testing the effectiveness of such controls over revenue cut off at year-end

a key measure for evaluation of performance. There is a risk of revenue

being recorded before control is transferred.

• Testing the supporting documentation for sales transactions

Refer Note no. 3.15 - Significant Accounting Policies; and Note no. 31

recorded during the period closer to the year end and

- Revenue from Operations; of the Standalone Financial Statements

subsequent to the year end, including examination of credit notes issued after the year end to determine whether revenue was recognized in the correct period.

• Performing analytical procedures on current year revenue based on monthly trends and where appropriate, conducting further enquiries and testing.

• Assessing the appropriateness of the Company''s revenue recognition accounting policies in line with IND AS 115 ("Revenue from Contracts with Customers") and testing thereof.

Emphasis of matters

(A) Attention is drawn to:

As stated in the Note no. 49(i) of the Financial Statements, the Auditors of Jindal Steel & Power (Mauritius) Limited (JSPML) in their audit report on financial statements/ information for the year ended March 31, 2023, have drawn attention on inherent uncertainty regarding going concern, as JSPML reported net loss of H 7,890.92 crores during the year ended March 31, 2023 ( year ended March 31, 2022 loss of H 550.98 crores) and total liabilities exceeded its total assets by H 9,729.06 crores as at March 31, 2023 (H 1,008.64 crores as at March 31, 2022).

(B) We further draw attention to the Note no. 49(ii) of the financial statements (a) the Company JSP has not accounted for interest income on loan to JSPML with effect from July 1, 2022 and made full provision against interest outstanding of H 765.45 crores; (b) made provision against diminution in value of investment of H 575.73 crores; (c) made provision against loan of H 6,676.87 crores; (d) made provision against foreign exchange fluctuation of H 898.48 crores in the year ended March 31, 2023. These provision made is based on the management''s assessment for impairment after taking into consideration the report and assessment carried out by an independent valuer.

Our opinion is not modified in respect of above matter.

Key Audit Matters

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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report:-

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is 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 Auditors'' 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 and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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

Management''s Responsibility and those charged with Governance for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position/state of affairs, financial performance, total comprehensive income, changes in equity and cash flows 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 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.

In preparing the standalone financial statements, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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 SAs 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.

As part of an audit in accordance with SAs, 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 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 management''s 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 ability of the Company 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.

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.

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.

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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

Report on Other Legal and Regulatory Requirements

1. 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 A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Companies Act, 2013, 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, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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. 40(a)(ii)(a) and (b) to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or Indian accounting standards, 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 during the year ended 31st March, 2023.

iv. (a) The Management has represented that, to the

best of its knowledge and belief, as disclosed in Note No. 64 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies) including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or 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 No. 64 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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 Beneficiarires") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has come to our notice that has caused us to believe that the

representations under sub-clause (i) and (ii) of the Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The dividend declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable. As stated in Note No. 20(h) to the standalone financial statements, the Board of Directors of the Company has proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from 1st April, 2023, and accordingly, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.

h) I n our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration for the year ended 31st March, 2023 has been paid/ provided for by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act.

For Lodha & Co,

Chartered Accountants Firm''s Registration No. 301051E

(N. K. Lodha)

Partner

Membership No. 085155 UDIN: 23085155BGXASY7111

Place: New Delhi Date: 16th May 2023


Mar 31, 2022

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL

STATEMENTS

Opinion

We have audited the accompanying standalone financial statements of Jindal Steel & Power Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as "standalone financial statements").

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 prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2022, its Profit (including Other comprehensive income), changes in equity and its cash flows for the year ended on that date.

S. No. Description of Key Audit Matter

How our audit addressed the key audit matters

2 Revenue Recognition

Revenue from the sale of goods (hereinafter referred to as "Revenue") is recognized when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer, which is mainly upon delivery.

The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred.

Refer Note no. 3.15 - Significant Accounting Policies; and Note no. 31 - Revenue from Operations; of the Standalone Financial Statements

Our procedures included:

• Evaluating the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls.

• Evaluating the design and implementation of Company''s controls in respect of revenue recognition.

• Testing the effectiveness of such controls over revenue cut off at year-end.

• Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end, including examination of credit notes issued after the year end to determine whether revenue was recognized in the correct period.

• Performing analytical procedures on current year revenue based on monthly trends and where appropriate, conducting further enquiries and testing.

• Assessing the appropriateness of the Company''s revenue recognition accounting policies in line with IND AS 115 ("Revenue from Contracts with Customers") and testing thereof.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is 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 Auditors'' 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 and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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

Management''s Responsibility and those charged with Governance for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position/state of affairs, financial performance, total comprehensive income, changes in equity and cash flows 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 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.


Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) 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 together with the ethical requirements that are relevant to our audit of the standalone 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 audit opinion on the standalone financial statements.

Key Audit Matters

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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report:-

S. No. Description of Key Audit Matter

How our audit addressed the key audit matters

1. Recognition and measurement of taxation and tax litigation

The Company has significant tax and other litigations against it.

Our procedures included:

There is a high level of judgement required in estimating the

• We evaluated the design and tested the operating effectiveness of

level of provisioning required and appropriateness of disclosure of those litigations as Contingent Liabilities.

controls in place for the determination and recognition of current tax and deferred tax balances. We determined that we could rely on these

The recognition and measurement of taxation (current tax,

controls for the purposes of our audit;

deferred tax assets and liabilities) requires management judgement and assumptions. The recognition of deferred tax

• We tested the underlying data in support of tax calculations;

assets involved management''s estimation regarding likelihood

• We made enquiries regarding the tax assessments as well as the results

of the realization of these assets, in particular whether there will

of previous claims/ demands, and changes to the tax environments.

be taxable profits in future periods that support recognition of these assets.

• For legal regulatory and tax matters our procedures included examining external opinions obtained by management, examining relevant

Refer Note 39 and 40(a)(ii) (b) to the Standalone Financial

correspondences and discussing with Company''s legal counsel and tax

Statements

head.

• We also involved our internal tax specialists to gain an understanding and to determine the level of exposure for tax litigation of the Company.

• In assessing management''s conclusions with respect to the recognition of deferred tax assets, we evaluated the amount of tax losses recognised in light of the future projected profitability.

We determined that the tax balances were supportable and provision for taxes, deferred tax assets and liabilities are recorded and assessed the adequacy of disclosures in the standalone financial statements.

In preparing the standalone financial statements, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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 SAs 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.

As part of an audit in accordance with SAs, 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 in place and the operating effectiveness of such controls.

any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of it''s knowledge and belief, as disclosed in Note No. 67 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, 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 Beneficiarires") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of the Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

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

• Conclude on the appropriateness of management''s 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 ability of the Company 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.

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.

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.

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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

Report on Other Legal and Regulatory Requirements

1. 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 A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Companies Act, 2013, 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, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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. 40(a)(ii)(a) and (b) to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or Indian accounting standards, 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 during the year ended 31st March, 2022.

iv. (a) The Management has represented that, to the

best of it''s knowledge and belief, as disclosed in Note No. 67 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies) including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide

v. The dividend declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable. As stated in Note No. 20(h) to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.

h) I n our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration for the year ended 31st March, 2022 has been paid/ provided for by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act.

For Lodha & Co,

Chartered Accountants Firm Registration No. 301051E

(N. K. Lodha)

Partner

Place: New Delhi Membership No. 085155

Date: 30th May 2022 UDIN: 22085155AJXLRH3359


Mar 31, 2021

To the Members of Jindal Steel & Power Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL

STATEMENTS

Opinion

We have audited the accompanying standalone financial statements of Jindal Steel & Power Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as "standalone financial statements").

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 prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2021, its Profit (including Other comprehensive income), changes in equity and its cash flows for the year ended on that date.


Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) 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 together with the ethical requirements that are relevant to our audit of the standalone 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 Matters

Key audit matters are those matters that, in our professional judgement, 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 standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report:-

Sl. No. Description of Key Audit Matter

How our audit addressed the key audit matters

1. Recognition and measurement of taxation and tax litigation

The Company has significant tax and other litigations against

Our procedures included:

it. There is a high level of judgement required in estimating the

• We evaluated the design and tested the operating effectiveness

level of provisioning required and appropriateness of disclosure

of controls in place for the determination and recognition of

of those litigations as Contingent Liabilities.

current tax and deferred tax balances. We determined that we could rely on these controls for the purposes of our audit;

The recognition and measurement of taxation (current tax, deferred tax assets and liabilities) requires management

• We tested the underlying data in support of tax calculations;

judgement and assumptions. The recognition of deferred tax

• We made enquiries regarding the tax assessments as well as

assets involved management''s estimation regarding likelihood

the results of previous claims/demands, and changes to the tax

of the realization of these assets, in particular whether there will

environments.

be taxable profits in future periods that support recognition of these assets.

• For legal regulatory and tax matters our procedures included examining external opinions obtained by management,

Refer Note 39 and 40(a)(ii) (b) to the Standalone Financial

examining relevant correspondences and discussing with

Statements

Company''s legal counsel and tax head.

• We also involved our internal tax specialists to gain an understanding and to determine the level of exposure for tax litigation of the Company.

• In assessing management''s conclusions with respect to the recognition of deferred tax assets, we evaluated the amount of tax losses recognised in light of the future projected profitability.

We determined that the tax balances were supportable and provision for taxes, deferred tax assets and liabilities are recorded and assessed the adequacy of disclosures in the standalone financial statements.

Sl. No. Description of Key Audit Matter

How our audit addressed the key audit matters

2. Revenue Recognition

Revenue from the sale of goods (hereinafter referred to as "Revenue") is recognized when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer, which is mainly upon delivery.

The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred.

Refer Note No. 3.14- Significant Accounting Policies; and Note No. 31 - Revenue from Operations; of the Standalone Financial Statements

Our procedures included:

• Evaluating the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls

• Evaluating the design and implementation of Company''s controls in respect of revenue recognition.

• Testing the effectiveness of such controls over revenue cut off at year-end

• Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end, including examination of credit notes issued after the year end to determine whether revenue was recognized in the correct period.

• Performing analytical procedures on current year revenue based on monthly trends and where appropriate, conducting further enquiries and testing.

• Assessing the appropriateness of the Company''s revenue recognition accounting policies in line with IND AS 115 ("Revenue from Contracts with Customers") and testing thereof.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is 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 Auditors'' 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 and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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

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

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position/state of affairs, financial performance, total comprehensive income, changes in equity and cash flows 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 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.

In preparing the standalone financial statements, management is 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

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 SAs 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.

As part of an audit in accordance with SAs, we exercise professional judgement 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 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 management''s 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 ability of the Company 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.

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.

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.

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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

Other Matters

As stated in the note no. 60 regarding approval of Board of Directors at its meeting held on 26th April 2021 of the proposed divestment by way of sale, by the Company of up to its entire equity interest sale in Jindal Power Limited ("JPL") i.e., 96.42% of the paid up equity share capital. The completion of the stated proposed transaction is subject to approvals of the shareholders of the Company, lenders and such regulatory and other approvals, consents, permissions and sanctions as may be necessary. On the consummation of proposed transaction, the necessary accounting adjustments will be carried out.

Our opinion on the same is not modified in respect of above matter.

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, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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) I n 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 Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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 31st March, 2021.

h) In our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration (to be read with Note No. 54B (b) to the standalone financial statements) for the year ended 31st March, 2021 has been paid/ provided for by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act.

For Lodha & Co.

Chartered Accountants Firm Registration No. 301051E

(N. K. Lodha)

Partner

Place: New Delhi Membership No. 085155

Date: 12th May 2021 UDIN: 21085155AAAACC2857

e) On the basis of the written representations received from the directors as on 31st March, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2021 from being appointed as a director in terms of Section 164 (2) of the Act.

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note No. 40(a)(ii)(a) and (b) to the standalone financial statements;

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


Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of JINDAL STEEL & POWER LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone financial statements”).

Management’s Responsibility for the standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Secti on 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounti ng 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, implementati on and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounti ng records, relevant to the preparati on and presentati on 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 standalone financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under Section 143(11) of the Act.

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 evaluati ng the appropriateness of the accounti ng 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 obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Basis of Qualified Opinion:

We draw attention regarding impact on the net carrying value of fixed assets/investment made in mining assets not been considered for the reason stated in the Note No. 58 to the standalone financial statements of the Company for the year ended 31st March, 2018 and the management’s view about additional levy paid amounting to Rs.1274.46 Crore (being differential amount between Gross and Net) which has not been provided for as stated in the Note No. 57 to the standalone financial statements of the Company for the year ended 31st March, 2018, which has been shown as good and recoverable.

These matters were also qualified by us in our audit report on standalone financial statements for the year ended 31st March, 2017.

Qualified Opinion

In our opinion and to the best of our information and according to the explanati ons given to us, except for the effects / possible effects of our observations stated in “Basis of Qualified Opinion” paragraph above, 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 the Ind AS, of the state of affairs (financial positi on) of the Company as at 31st March, 2018, and its loss (financial performance including other comprehensive income/loss), its cash flows and the changes in equity for the year ended on that date.

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, based on our audit, we report that:

(a) we have sought and obtained all the information and explanati ons 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, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

(d) in our opinion, except for the effect / possible effect of the matters described in ‘Basis of Qualified Opinion’ paragraph above, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

(e) the matters described in ‘Basis of Qualified Opinion’ paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company.

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

(g) with respect to the adequacy of the internal financial controls over financial reporti ng of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure “B”. Our report expresses a modified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

(h) 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 has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note No. 41 to the 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 were no delays in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure “A” to the Independent Auditor’s Report (referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date on the Standalone Financial Statements of JINDAL STEEL & POWER LIMITED for the year ended 31st March, 2018)

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

(b) The fixed assets have been physically verified by the management as per the regular 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.

(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.

(ii) The inventories of the Company [except stock lying with the third parties (read with Note No. 55) 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.

(iii) The Company has not granted any secured or unsecured loan to any companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the provisions of Clauses 3(iii) (a), (b) & (c) of the Order are not applicable.

(iv) According to the information, explanations and representations provided by the management and based on the 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.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public within the provision 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). 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.

(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 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.

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

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employee’s State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, Custom Duty, Excise Duty, Cess and other material statutory dues with the appropriate authorities, to the extent applicable. There were no undisputed statutory dues payable as at 31 March, 2018 which were outstanding for a period of more than six months from the date they become payable except for Royalty of Rs.0.96 Crore.

(b) The dues in respect of Income Tax, Service Tax, Duty of Customs, Duty of Excise, Goods and Service Tax, Sales Tax 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: -

S. No.

Name of Statute

Nature of Dues

Net of Pre- amount Deposit Amount (Rs. In Crore)

Period to which relates

Closing Forum where dispute is pending

1

The Income tax Act,1961

Income Tax

928.25

FY 2004-05 to 2011-12

ITAT, New Delhi

2

The Income tax Act,1961

Income Tax

661.57

FY 2007-08 to 2009-10

Punjab & Haryana High Court

3

Central Sales Tax, 1956

Central Sales Tax

0.09

FY 2005-06

Deputy Commissioner, Sales Tax, Rourkela

4

Central Sales Tax, 1956

Central Sales Tax

0.45

FY 2006-07

Deputy Commissioner, Commercial Tax, Cuttack

5

The Odisha Value Added Tax Act, 2004

State Sales Tax

0.16

FY 2006-07

Deputy Commissioner, Commercial Tax (Appeals), Cuttack

6

The Odisha Value Added Tax Act, 2004

State Sales Tax

17.07

FY 2012-13 to FY 2013-14

Hon’ble Orissa High Court

7

Central Sales Tax, 1956

Central Sales Tax

7.52

FY 2012-13 to FY 2013-14

Hon’ble Orissa High Court

8

Central Excise Act, 1944

Excise Duty

101.34

FY 2011-12 to FY 2014-15

CESTAT, Kolkata

9

Central Excise Act, 1944

Excise Duty

2.81

FY 2011-12 to FY 2014-15

Commissioner (Appeals), BBSR

10

Central Excise Act, 1944

Excise Duty

0.33

FY 2012-13 to FY 2014-15

Asst. Commissioner, CEX

11

Central Excise Act, 1944

Excise Duty

2.43

FY 2012-13 to FY 2014-15

Commissioner, CEX

12

Tamil Nadu Vat

State Sales Tax

0.72

FY 2008-2009 to FY 2009-10

APPEAL FILED (DC)

13

West Bangal Vat

State Sales Tax

0.05

FY 2010-11

PENDING AT REVISION BOARD (Tribunal)

14

Central Sales Tax, 1956

Central Sales Tax

0.09

FY 2010-11

PENDING AT REVISION BOARD (Tribunal)

15

Central Sales Tax, 1956

Central Sales Tax

0.17

FY 2011-12 to FY 2013-14

APPEAL FILED (JC)

16

Central Excise Act, 1944

Excise Duty

139.09

FY 2007-08 to FY 2008-09 & FY 2011-12 to FY 2015-16

CCE,Raipur

17

The Finance Act, 1994

Service Tax

66.99

FY 2010-11 to FY 2015-16

CESTAT - New Delhi

18

Custom Act, 1962

Custom

Duty

13.98

FY 2013-14 to FY 2014-15

CESTAT - Hyderabad

19

Central Excise Act, 1944

Excise Duty

16.65

FY 2011-12 to 2014-15

CESTAT - New Delhi

20

Central Excise Act, 1944

Excise Duty

2.35

FY 2011-12

High Court Bilaspur

21

Custom Act, 1962

Custom

Duty

2.14

FY 2011-12

DCC - Paradeep

22

Custom Act, 1962

Custom

Duty

3.66

FY 2012-13

CESTAT - Kolkata

23

Central Excise Act, 1944

Excise Duty

1.75

FY 2010-11

High Court Bilaspur

24

Custom Act, 1962

Custom

Duty

5.75

FY 2005-06, FY 2011-12 & FY 2014-15

CESTAT, Mumbai

25

Central Excise Act, 1944

Excise Duty

0.66

FY 2012-13 to 2013-14

High Court Bilaspur

26

The Finance Act, 1994

Service Tax

0.38

FY 2011-12 to FY 2015-16

Commissioner (Appeals), Raipur

27

Central Excise Act, 1944

Excise Duty

0.24

FY 2015-16

CCE, Raipur

28

Central Excise Act, 1944

Excise Duty

2.27

FY 2007-08 & FY 2009-10

CESTAT - Delhi

29

Central Excise Act, 1944

Excise Duty

0.05

FY 2003-04

HC, Bilaspur

30

Central Excise Act, 1944

Excise Duty

0.12

FY 2016-17

ACCE, Raigarh

31

Central Excise Act, 1944

Excise Duty

666.45

FY 2009-10 to FY 2013-14

Odisha High Court

32

Central Excise Act, 1944

Excise Duty

19.00

FY 2010-11 to FY 2011-12 & FY 2013-14 to FY 2014-15

CESTAT, BBSR

33

The Finance Act, 1994

Service Tax

39.43

FY 2009-10 to FY 2016-17

Commissioner, Ranchi

34

The Finance Act, 1994

Service Tax

0.10

FY 2015-16 & FY 2017-18

Commissioner Appeal, Ranchi

35

Central Sales Tax, 1956

Central Sales Tax

0.64

FY 2010-11 & FY 2012-13

DCCT, Ramgarh

36

Central Sales Tax, 1956

Central Sales Tax

0.73

FY 2014-15

Commissioner of Commercial Tax, Ranchi

37

Jharkhand VAT Act

State Sales Tax

1.32

FY 2012-13 & FY 2014-15

Commissioner of Commercial Tax, Ranchi

38

Jharkhand VAT Act

State Sales Tax

0.30

FY 2013-14

DCCT, Ramgarh

39

Central Sales Tax, 1956

Central Sales Tax

8.62

FY 2011-12 to FY 2013-14

DCCT, Ramgarh

40

Central Sales Tax, 1956

Central Sales Tax

0.10

FY 2011-12

Commissioner of Commercial Tax, Ranchi

41

Central Excise Act, 1944

Excise Duty

11.39

FY 2010-11

Commissioner of Central Excise, Raipur

42

The Finance Act, 1994

Service Tax

0.15

FY 2015-16 to FY 2016-17

Assistant Commissioner of Central Excise, Raipur

43

Central Excise Act, 1944

Excise Duty

0.28

FY 2015-16 to FY 2016-17

Assistant Commissioner of Central Excise, Raipur

44

The Finance Act, 1994

Service Tax

17.76

FY 2016-17 to FY 2017-18

Director General of Goods & Service Tax, Bhubaneshwar

(viii) 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) to banks and financial instituti ons at various days during the year. The maximum amount of default on a particular date was Rs.1915.74 Crore (including default of Rs.22.10 Crore w.r.t. debentures) and maximum delay (no. of days) noticed was less than 90 days (maximum delay of less than 90 days w.r.t. debentures). As at 31 March, 2018, there was no overdue financial obligations to banks/ financial institutions/ debenture holders.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). Money raised on term loans have been applied for the purposes for which loans were raised.

(x) Based on the audit procedure performed and according to the information and explanations given to us by the management, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Companies Act, 2013, except for Remuneration paid to Key Management Personnel, subject to Shareholders and Central Government’s approval, as stated in footnote to Note No. 54 B.

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

(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Secti ons 177 and 188 of the Companies Act, 2013 where applicable, for all transacti ons with the related parties and the details of related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards [Read with Note No. 54 B].

(xiv) In our opinion and according to the information and explanations given to us, the Company is in compliance with the Section 42 of the Companies Act, 2013 with respect to preferenti al allotment and/or private placement of shares during the year as stated in Note No. 21(a) [allotment of equity shares and converti ble warrants to promoter group entities on preferential basis and allotment of equity shares by way of Qualified Institutional Placement] and the amounts raised have been used for the purposes for which the funds were raised except for Rs.482 Crore which is unutilized and has been parked in working capital. The Company has not made allotment of any fully or partly convertible debentures during the year.

(xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into non-cash transactions with its Directors or persons connected to its directors and hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

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

For LODHA & CO.

Chartered Accountants

ICAI-FRN: 301051E

N.K. LODHA

Place: New Delhi Partner

Date: 9th May, 2018 Membership No. 085155


Mar 31, 2017

TO THE MEMBERS OF JINDAL STEEL & POWER LIMITED

Report on the standalone Ind AS financial Statements

We have audited the accompanying standalone Ind AS financial statements of JINDAL STEEL & POWER LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 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.

Basis of Qualified Opinion:

We draw attention regarding impact on the net carrying value of fixed assets/investment made in mining assets not been considered for the reason stated in the Note No. 58 to the standalone financial statements of the company for the year ended 31st March 2017 and the management''s view about additional levy paid of amounting to Rs, 1,274.46 crore (being differential amount between Gross and Net) as stated in the Note No. 57 to the standalone financial statements of the Company for the year ended 31st March 2017, which shown as good and recoverable.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects/ possible effects of our observation stated in "Basis of Qualified Opinion paragraph" above, 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 31st March, 2017, and its loss (financial performance including other comprehensive income/loss) ), its cash flows and the changes in equity for the year ended on that date.

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 changes in equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, except for the effect / possible effect of the matters described in ''Basis of Qualified Opinion'' paragraph above, 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) The Matters described in ''Basis of Qualified opinion'' paragraph above in our opinion, may not have an adverse effect on the functioning of the Company.

(f) 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 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) 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''.

(h) 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. 41 to 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 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. 15 to the standalone Ind AS financial statements.

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 included in fixed assets are held in the name of the Company.

2. The inventories of the Company [except stock lying with the third parties (read with footnote of Note no. 55 (a)) 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 not accepted any deposit from the public within the meaning of 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). 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 except electricity duty / cess 1.65 crore, CST Rs, 4.66 crore, VAT Rs, 5.93 crore, Royalty Rs, 0.86 crore, TDS/TCS Rs, 1.04crore, Development & Env. Tax Rs, 0.78 crore, service tax Rs, 0.21 crore, Excise duty Rs, 0.12 crore & Professional tax Rs, 0.01 crore.

(b) According to the records and information & explanations given to us, the dues in respect of income tax, service tax duty of customs, duty of excise, sales tax 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:-

S.no

Name of Statute

Nature Of Dues

Amount (Rs, crore)

Period to which amount relates

Closing Forum where dispute is pending

1

The Income Tax Act, 1961

Income Tax

921.16

FY 2004-05 to FY 2010-11

Income Tax Appellate Tribunal, New Delhi

2

The Income Tax Act, 1961

Income Tax

350.08

FY 2007-08 to FY 2008-09

Punjab & Haryana High Court, Chandigarh

3

The Income Tax Act, 1961

Income Tax

42.26

FY 2003-04 to FY 2004-05

Punjab & Haryana High Court, Chandigarh

4

Central Excise Act, 1944

Excise Duty

100.43

FY 2001-02 to FY 2013-14

CESTAT - Delhi

5

Custom Act, 1962

Custom Duty

13.98

FY 2013-14

CESTAT - Hyderabad

6

The Finance Act, 1994

Service Tax

9.78

FY 2003-04 to FY 2010-11

CESTAT - Delhi

7

The Finance Act, 1994

Service Tax

0.41

FY 2011-12 to FY 2015-16

Additional Commissioner, Raipur

8

Tamil Nadu Sale Tax Act

State Sales Tax

0.72

FY 2008-09 to FY 2009-10

The Appellate Deputy Commissioner-III, Chennai

9

The Odisha Entry Tax Act & Rules

Entry Tax

73.14

FY 2007-08 to FY 2010-11

Sales Tax Tribunal Cuttack, Odisha

10

The Odisha Entry Tax Act & Rules

Entry Tax

8.53

November 2010 to july 2011

Hon''ble High Court of Orissa

11

The Odisha Entry Tax Act & Rules

Entry Tax

0.16

FY 2007-08

Add. Commissioner of Sales Tax, Cuttack

12

The Odisha Entry Tax Act & Rules

Entry Tax

0.01

FY 2006-07

Deputy

Commissioner, Commercial Tax (Appeals),Cuttack

13

Central Sales Tax, 1956

Central Sales Tax

0.09

FY 2005-06

Deputy Commissioner, Sales tax, Rourkela

14

Central Sales Tax, 1956

Central Sales Tax

0.45

FY 2006-07

Deputy

Commissioner, Commercial Tax, Cuttack

15

The Odisha Value Added Tax Act, 2004

State Sales Tax

0.16

FY 2006-07

Deputy

Commissioner, Commercial Tax (Appeals),Cuttack

16

The Odisha Entry Tax Act & Rules

Entry Tax

22.04

FY 2007-08 to FY 2010-11

Additional CCT of Cuttack

17

The Finance Act, 1994

Service Tax

0.59

FY 2015-16

Commissioner of Central Excise (Appeal), Raipur

18

Custom Act, 1962

Custom Duty

3.66

FY 2013-14

CESTAT - Kolkata

19

Custom Act, 1962

Custom Duty

1.86

FY 2005-06

CESTAT - Mumbai

20

The Chattisgarh Entry Tax Act & Rules

Entry Tax

0.08

FY 2013-14

Joint Commissioner of Commercial Tax, Cuttack

21

Central Excise Act, 1944

Excise Duty

0.50

FY 2014-15 to FY 2015-16

Commissioner Appeal, Ranchi

22

Central Excise Act, 1944

Excise Duty

0.33

FY 2010-11

CESTAT, New Delhi

23

Central Excise Act, 1944

Excise Duty

11.33

FY 2011-12

Commissioner of Central Excise, Raipur

24

Central Excise Act, 1944

Excise Duty

0.01

FY 2006-07 to FY 2016-17

Assistant Commissioner of Central Excise, Raigarh

25

Central Excise Act, 1944

Excise Duty

1.69

FY 2015-16

Commissioner of Central Excise (Appeal), Raipur

26

Central Excise Act, 1944

Excise Duty

55.24

FY 2007-08 to FY 2016-17

Commissioner of Central Excise, Raipur

27

Central Excise Act, 1944

Excise Duty

20.71

FY 2004-05 to FY 2015-16

CESTAT, New Delhi

28

Central Excise Act, 1944

Excise Duty

0.71

FY 2007-08 to FY 2013-14

Hon''ble High Court, Bilaspur

29

Central Sales Tax, 1956

Central Sales Tax

7.52

FY 2012-13 to FY 2013-14

Hon''ble Orissa High Court

30

Central Sales Tax, 1956

Central Sales Tax

0.11

FY 2005-06

Deputy Commissioner of Commercial Tax, Cuttack

31

Central Sales Tax, 1956

Central Sales Tax

23.66

FY 2010-11 to FY 2014-15

Deputy Commissioner of Commercial Tax, Ramgarh

32

Central Sales Tax, 1956

Central Sales Tax

0.09

FY 2010-11

Revision Board (Tribunal)

33

Central Sales Tax, 1956

Central Sales Tax

0.16

FY 2011-12 to FY 2012-13

Joint Commissioner

34

Central Sales Tax, 1956

Central Sales Tax

0.01

FY 2013-14

Joint Commissioner

35

The Odisha Value Added Tax Act, 2004

State Sales Tax

17.07

FY 2006-07 to FY 2013-14

Hon''ble High Court of Orissa

36

The Odisha Value Added Tax Act, 2004

State Sales Tax

0.16

FY 2006-07

Deputy Commissioner of Commercial Tax, Cuttack

S.no

Name of Statute

Nature Of Dues

Amount ('' crore)

Period to which amount relates

Closing Forum where dispute is pending

37

The Jharkhand Value Added Tax Act, 2005.

State Sales Tax

2.75

FY 2011-12 to FY 2013-14

Deputy Commissioner of Commercial Tax, Ramgarh

38

The Jharkhand Value Added Tax Act, 2005.

State Sales Tax

0.07

FY 2015-16

Commissioner of Commercial Tax, Ranchi, Jharkhand.

39

West Bengal Sales Tax ACT

State Sales Tax

0.05

FY 2010-11

Revision Board (Tribunal)

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) to banks and financial institutions at various days during the year (read with note nos. 23 & 27). The maximum amount of default on a particular date was Rs, 1,657.98 crore (including default of Rs, 66.85 crore w.r.t. outstanding debentures) and maximum delay (no. of days) noticed was less than 90 Days (maximum delay of less than 90 Days w.r.t. outstanding debentures). As at March 31, 2017, the overdue financial obligations to banks/ financial institutions/debenture holders was Rs, 544.39 crore with maximum delay of less than 90 Days, the lender wise detail of amount of default at year-end is as follows:

Bank Name

Amount of Default as at balance , r r ,

, , _ Period of Default sheet date Rs, In crore

Andhra Bank

3.80

Less than 90 Days

Axis Bank

44.32

Less than 90 Days

Bank of America

2.12

Less than 90 Days

Bank of Baroda

0.40

Less than 90 Days

Bank of India

0.87

Less than 90 Days

Bank of Maharashtra

10.65

Less than 90 Days

Canara Bank

11.30

Less than 90 Days

Central Bank of India

4.69

Less than 90 Days

_ Corporation Bank....................

9.34

....................Less than _90 Days............

Credit Agricole

9.05

Less than 90 Days

DBS

0.19

Less than 90 Days

Deutsche Bank

7.85

Less than 90 Days

Exim Bank

6.93

Less than 90 Days

Franklin Templeton Asset Management

27.81

Less than 90 Days

(India) Private Limited *

HDFC Bank

11.65

Less than 90 Days

ICICI Bank

54.73

Less than 90 Days

ICICI Bank (Hong kong)

36.80

....................Less than 90 Days............

IDBI Bank Limited

1.32

Less than 90 Days

IDFC Limited

18.78

Less than 90 Days

Indian Bank

9.59

Less than 90 Days

L&T Infra

5.30

Less than 90 Days

LIC OF INDIA

36.80

Less than 90 Days

Mizuho Bank Limited

32.60

Less than 90 Days

Punjab & Sindh Bank

7.22

Less than 90 Days

Punjab National Bank

18.41

....................Less than 90 Days............

Standard Chartered Bank

2.96

Less than 90 Days

State Bank of Bikaner & Jaipur

11.03

Less than 90 Days

State Bank of Hyderabad

8.19

Less than 90 Days

State Bank of India

13.90

Less than 90 Days

State Bank of Mysore

6.27

Less than 90 Days

State Bank of Patiala

43.04

Less than 90 Days

State Bank of Travancore

7.58

Less than 90 Days

Syndicate Bank

35.59

Less than 90 Days

UCO Bank

9.89

Less than 90 Days

Union Bank of India

19.80

Less than 90 Days

Vijaya Bank

13.62

Less than 90 Days

Grand Total

544.39

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. 54 B

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. 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 [Read with note no. 54 B].

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 STEEL & POWER 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

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. 21(e); except allotment of equity shares under employees share purchase scheme 2013 of the Company 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 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. 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 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weaknesses has been identified in the operating effectiveness of the Company''s internal financial controls over financial reporting as at 31st March 2017:

(a) Adjustment/provision to be made in regard to expense relating to additional coal levy could potentially result in the Company recording lower expense. (Note No...)

(b) Provision/Impact of the net carrying value of fixed assets/ investment made in mining assets not been considered (presently not determinable); which may result in carrying the assets at higher value. (Note No.)

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the effects / possible effects of the material weaknesses described above in (a) and (b)under Qualified Opinion paragraph on the achievement of the objectives of the control criteria, 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 of 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.

We have considered material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March31, 2017 standalone financial statements of the Company and these material weaknesses affect our opinion on standalone financial statements of the Company for the year ended 31st March 2017 [our audit report dated May 23, 2017, which expressed an qualified opinion on those standalone financial statements of the Company].

For ODHA & CO.

Chartered Accountants FRN:301051E

N.K. LODHA

Partner

Membership No. 085155

Place: New Delhi

Dated: 23rd May 2017


Mar 31, 2016

We have audited the internal financial controls over financial reporting of Jindal Steel & Power Limited ("the Company") as of March 31, 2016, in conjunction with our audit of the 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. 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 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 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 as specified 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.

An 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 qualified audit opinion on the internal financial controls 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 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

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.

QUALIFIED OPINION

According to the information and explanations given to us and based on our audit, the following material weakness has been identified in the operating effectiveness of the Company''s internal financial controls over financial reporting as at March 31, 2016:

(a) The Company''s internal financial controls over adjustment and provision to be made in regard to expense relating to additional coal levy were not operating effectively which could potentially result in the material mis-statement in the Financial Statements by way of company recording lower expenses.

(b) The Company''s internal financial controls over adjustment and provision to be made in carrying value of investment in mining assets including land, infrastructure and clearance etc. were not operating effectively which could potentially result in material mis-statement in the Financial Statements by way of the Company valuing assets on higher side.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of 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, and except for the effects of our observation stated in (a) above and possible effects of our observation in (b) above of the material weakness described above on the achievement of the objectives of the control criteria, the Company''s internal financial controls over financial reporting were operating effectively as of March 31, 2016.

EXPLANATORY PARAGRAPH

We also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the standalone financial statements of Jindal Steel & Power Limited, which comprise the Balance Sheet as at March 31, 2016, and the related Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 standalone financial statements of Jindal Steel & Power Limited and this report affect our report dated May 4, 2016, which expressed an qualified opinion on those financial statements.

To the Board of Directors of Jindal Steel & Power Limited

The accompanying abridged standalone financial statements, which comprise the abridged standalone balance sheet as at March 31, 2016, the abridged standalone statement of profit and loss and abridged standalone cash flow statement for the year then ended, and related notes, are derived from the audited standalone financial statements of Jindal Steel & Power Limited (''the Company'') as at and for the year ended March 31, 2016. We expressed a qualified audit opinion on those standalone financial Statements in our report dated May 4, 2016.

The abridged standalone financial statements do not contain all the disclosures required by the accounting principles generally accepted in India, including the Accounting Standards notified under Section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 issued by Ministry of Corporate Affairs. Reading the abridged standalone financial statements, therefore, is not a substitute for reading the audited standalone financial statements of the Company.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Board of Directors is responsible for the preparation of a summary of the audited standalone financial statements in accordance with the Accounting Standards notified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 issued by Ministry of Corporate Affairs and accounting principles generally accepted in India.

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on the abridged standalone financial statements based on our procedures, which were conducted in accordance with Standard on Auditing (SA) 810, "Engagements to Report on Summary Financial Statements" issued by the Institute of Chartered Accountants of India.

QUALIFIED OPINION

In our opinion, the abridged financial statements derived from the audited standalone financial statements of the Company as at and for the year ended March 31, 2016 are a fair summary of those financial statements, in accordance with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and accounting principles generally accepted in India. However, the abridged financial statements are misstated to the equivalent extent as the audited standalone financial statements of the Company as at and for the year ended March 31, 2016.

a) As detailed in note 40 (i) of the standalone financial statements, based on the Order of Hon''ble Supreme Court of India, the Company paid an additional levy of Rs.295 per metric ton on gross coal extracted from operational mines. Through March 31, 2015, such levy on the gross extraction amounts to Rs.2,082.23 crore. Based on legal opinion, the Company had recorded Rs.807.77 crore in the previous year as an exceptional item representing the levy on net extraction (run of mines less shale, rejects and ungraded middling) of coal. Had the gross levy been recorded, net loss before tax for the year ended March 31, 2016, would have been higher by Rs.1,274.46 crore and reserves and surplus as at March 31, 2016, would have been lower by Rs.1,274.46 crore. In respect of above matter, our audit report for the year ended March 31, 2015 was similarly qualified.

b) As detailed in note 40 (ii) of the standalone financial statements and referred above note, the Company has not made adjustment in the net carrying value of investment made in mining assets including land, infrastructure and clearance, etc., of Rs.425 crore as at March 31, 2016, pending finalization of the compensation claim filed by the Company with the Government authorities. Accordingly, we are unable to comment on the matter including any consequential adjustments that may be required in this regard in these financial statements. In respect of above matter, our audit report for the year ended March 31, 2015 was similarly qualified.

Our adverse audit opinion stated that except for the effects of our observation stated in (a) above and possible effects of our observations in (b) above, those 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.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm registration number: 301003E/E300005

per Anil Gupta

Partner

Membership no.: 87921

Place: New Delhi

Date: May 4, 2016


Mar 31, 2015

We have audited the accompanying financial statements of Jindal Steel & Power Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 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 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Basis for Qualified Opinion

a) As detailed in note 40(i) and (ii) of the financial statements, based on the Order of Hon''ble Supreme Court of India, the Company is to pay an additional levy of Rs. 295 per metric ton on gross coal extracted from operational mines. Through March 31, 2015, such levy on the gross extraction amounts to Rs. 2,082.23 crore of which Rs. 1,989.83 crore has been paid under protest and Rs. 38.86 crore has been accrued. Of the total amount paid or accrued, based on legal opinion the Company has recorded Rs. 807.77 crore as an exceptional item representing the levy on net extraction (run of mines less shale, rejects and ungraded middling) of coal. Had the gross levy been recorded, exceptional items and net loss before tax for the year ended March 31, 2015 would have been higher by Rs. 1,274.46 crore.

b) As detailed in note 40 (iii) of the financial statements and referred above note, the Company has not made adjustment in the net carrying value of investment made in mining assets including land, infrastructure and clearance, etc., of Rs. 419.72 crore as at March 31, 2015, pending finalization of the compensation claim filed by the Company with the Government authorities. We are unable to comment on the matter including any consequential adjustments that may be required in this regard in these financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us except for the effects of our observation stated in (a) above and possible effects of our observations in (b) above, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015,and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in 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 the law have been kept by the Company so far as it appears from our examination of those books.

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

(d) Except for the effects of matter (a) and possible effect of matter (b) described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid 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) The matters described in the Basis for Qualified opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements;

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

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

Annexure referred to in paragraph under the heading "Report on Other Legal and Regulatory requirements" of our report of even date

Re: Jindal Steel and Power Limited (''the Company'')

(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 but there is a regular programme of verification 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.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed for significant inventory balance as at the year end.

(b) 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) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, 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. Accordingly, the provisions of clause 3(iii) (a) and (b) of the Order are not applicable to the Company and hence not commented upon.

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

(v) The Company has not accepted any deposits from the public.

(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 section 148(1) of the Companies Act, 2013, related to the manufacture/generation of Mineral Products, Iron & Non alloy Steel, Power and other products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) (i) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

(ii) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty of excise, value added taxes, cess and any other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:

Name of the Nature of dues Amount Amount of statue (Rs.in Crore) deposit (Rs.in crores)

Income tax Income Tax 751.52 296.57 Act,1961

Income tax Income Tax 4.20 4.20 Act,1961

Income tax Income Tax 42.26 - Act,1961

Central Excise Act, Excise duty 132.19 - 1944

Central Excise Act, Excise duty 0.10 - 1944

Central Excise Act, Excise duty 0.64 - 1944

Building & Other Building Cess 3.72 0.05 Construction Workers Welfare Cess Act, 1996

Clean Energy Cess Clean Energy 29.72 Rules, 2010 Cess Finance Act,1994 Service tax 0.11 -

Finance Act,1994 Service tax 0.01 -

Finance Act,1994 Service tax 0.35 -

Chhattisgarh Energy 333.06 38.17 Upkar Adhiniyam development 1981 Cess

Odisha Entry Tax Entry Tax 96.66 23.52 Act & Rules

Odisha Entry Tax Entry Tax 11.37 2.84 Act & Rules

Odisha Entry Tax Entry Tax 0.07 0.04 Act & Rules

Odisha Entry Tax Entry Tax 0.01 0.00 Act & Rules

Central Sales Tax Central Sales 0.24 0.15 Act, 1956 Tax

Central Sales Tax Central Sales 0.48 0.03 Act, 1956 Tax

Central Sales Tax Central Sales 0.45 0.45 Act, 1956 Tax

Odisha value State Sales Tax 0.20 0.04 added Tax

Odisha value State Sales Tax 0.30 0.17 added Tax

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

Income tax FY 2005-06 to Income Tax Appellate Act,1961 FY 2009-10 Tribunal

Income tax FY 2004-05 Commissioner of income Act,1961 Tax (Appeals), Rohtak

Income tax FY 2003-04 Punjab and Haryana High Act,1961 and FY 2004-05 Court, Chandigarh

Central Excise Act, FY 2001-02 to CESTAT, Delhi 1944 FY 2013-14

Central Excise Act, FY 95-96 Madhya Pradesh High Court 1944 Jabalpur

Central Excise Act, FY 2003-04 High Court Bilaspur 1944

Building & Other FY 2007-08 to Odisha High Court Construction 2013-14 Workers Welfare Cess Act, 1996

Clean Energy Cess FY 2010-11 to CESTAT, delhi Rules, 2010 FY 2011-12 Finance Act,1994 FY 2003-04 to CESTAT, delhi 2009-10

Finance Act,1994 FY 2006-07 Asst.Commissioner Bilaspur

Finance Act,1994 FY 2001-02, Additional Commissioner, FY 2002-03 & Raipur 2013-14

Chhattisgarh FY 2004-05 to Supreme Court Upkar Adhiniyam 2014-15 1981

Odisha Entry Tax FY 2007-2008 Sales Tax Tribunal Cuttack Act & Rules to 2010-2011 Odisha

Odisha Entry Tax Nov2010 to Odisha High Court, Cuttack Act & Rules July2011

Odisha Entry Tax FY 2007-2008 Add. Commissioner of Sales Act & Rules Tax, Cuttack

Odisha Entry Tax FY 2006-2007 deputy Commissioner, Act & Rules Commercial Tax (Appeals), Cuttack

Central Sales Tax FY 2005-2006 deputy Commissioner, Sales Act, 1956 tax, Rourkela

Central Sales Tax FY 2006-2007 deputy Commissioner, Act, 1956 Commercial Tax, Cuttack

Central Sales Tax FY 2004-2005 Odisha High Court, Cuttack Act, 1956

Odisha value FY 2006-2007 deputy Commissioner, added Tax Commercial Tax (Appeals), Cuttack

Odisha value FY 2007-2008 Add. Commissioner of Sales added Tax Tax, Cuttack

(c) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

(viii) The Company has no accumulated losses at the end of the financial year. It has incurred cash losses in the current year after considering the effect of matter stated in paragraph (a) of ''Basis for qualified Opinion'' of our auditor''s report and the Company has not incurred cash losses in the immediately preceding financial year.

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(x) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks/ financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xi) Based on the information and explanations given to us by the management, term loans taken during the current year were applied for the purpose for which the loans were obtained.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S.R.Batliboi & Co. LLP Chartered Accountants ICAI Firm Registration No. 301003E

Anil Gupta Partner Membership No. 87921

Place : new Delhi Dated: 27th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Jindal Steel & Power Limited(''the Company'') which comprises the Balance Sheet as at 31st March, 2014 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and Notes to the Financial Statements comprising of a summary of 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 fair view of the financial position, financial performance and cash flows of the Company in accordance with the 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 controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, 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 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 the 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by 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:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

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

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

EMPHASIS OF MATTER

We draw attention to sub note (a) of Note 4 regarding accounting for sales tax included in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy/Capital Reserve Account in the circumstances as explained in the Note. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), as amended, issued by the Central Government of India in terms of subsection(4A) of section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order;

2. As required by section 227(3) of the Companies Act, 1956, 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;

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

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

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

Annexure Re: Jindal Steel & Power Limited Referred to in clause 1 of paragraph on ''Report on Other Legal and Regulatory Requirements of our report of even date,

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records were not material, and have been properly adjusted in the books of account.

(c) Fixed assets disposed off during the year were not substantial so as to impact going concern status of the Company.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31st March, 2014 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly, clauses (iii) (a) to (d) of paragraph 4 of order are not applicable to the company.

(b) The Company has taken an unsecured loan (year-end balance Rs. 2,455 crore) from a company covered in the register maintained under section 301 of the Act.

(c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions of such unsecured loan taken by the Company is, prima facie, not prejudicial to the interest of the Company.

d) The Company is regular in payment of interest on such loan which is payable on demand.

4. In our opinion and according to the information & explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis 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 nor have we been informed of any instance of a major weakness in the 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 into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions entered into in pursuance of contracts or arrangements, with whom transactions exceeding the value ofRs. five lacs in respect of each party have taken place during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6 In respect of fixed deposits accepted from the public in earlier years, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975 have been complied with. 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 any other Tribunal in this regard.

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

8 We have broadly reviewed the cost accounting records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (l)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records have been made & maintained. We are, however, not required to carry out a detailed examination of the same.

9 (a) In our opinion and according to the information and explanations given to us and according to the records of the Company, 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, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2014 except for collection of sales tax which have been collected pending receipt of necessary certificates from the customers.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess which have not been deposited on account of any dispute, except the following which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Name of the Nature of Amount Forum where dispute is statue dues (Rs. in Crore) pending

Income tax Income Tax 11.38 Punjab & Haryana High Act, 1961 Court

Income tax Income Tax 539.59 Income Tax Appellate Act, 1961 Tribunal, New Delhi

Income tax Income Tax 4.2 Commissioner of income Act, 1961 tax(Appeals), Rohtak

Building & Other Building cess 3.35 Odisha High Court Construction Workers Welfare Cess Act, 1996.

Odisha Entry Tax Entry tax 5.44 Supreme Court Act & Rules

Odisha Entry Tax Entry tax 28.83 Odisha High Court Act & Rules

Odisha Entry Tax Entry tax on 84.14 Commissioner of Act & Rules imported Commercial Taxes, Cuttack, goods Odisha

Odisha Entry Tax Entry Tax 0.07 Additional Act & Rules Commissioner,Commercial tax (Appeals), Cuttack

Odisha Entry Tax Entry Tax 0.01 Deputy Commissioner, Act & Rules Commercial Tax(Appeals), Cuttack

Central Excise & Excise duty 1.03 High Court, Bilaspur Salt Act, 1944

Central Excise & Excise duty 0.10 Madhya Pradesh High Salt Act, 1944 Court, Jabalpur

Central Excise & Excise duty 168.95 CESTAT, New Delhi Salt Act, 1944



Name of the Statue Amount Period to which deposited the amount (Rs. in Crore) relates

Income tax Act, 1961 NIL AY 04-05

Income tax Act, 1961 214.93 AY 05-06 to 09-10

Income tax Act, 1961 4.2 AY 05-06

Building& Other Construction Workers Welfare Cess Act, 1996. 0.05 FYs 08-14

Odisha Entry Tax Act & Rules NIL FY 13-14

Odisha Entry Tax Act & Rules 2.84 FYs 10-14

Odisha Entry Tax Act & Rules 12.52 FYs07-10

Odisha Entry Tax Act & Rules 0.02 FY 07-08

Odisha Entry Tax Act & Rules 0.00 FY 06-07

Central Excise & Salt Act, 1944 NIL FY 94-95 to 07-08

Central Excise & Salt Act, 1944 NIL FY 95-96

Central Excise & Salt Act, 1944 13.74 FY 02-03 to 13-14

Name of the Nature of Amount Forum where dispute is statue dues (Rs. in Crore) pending

Central Sales Tax Central Sales 0.45 Odisha High Court Act, 1956 Tax

Central Sales Tax Central Sales 0.24 Deputy Commissioner, Act,1956 Tax Commercial Tax, Rourkela

Central Sales Tax Central Sales 0.48 Deputy Commissioner, Act,1956 Tax Commercial Tax, Cuttack

Odisha Value State Sales 0.20 Deputy Commissioner, added tax Tax Commercial Tax (Appeals), Cuttack

Odisha Value State Sales 0.30 Additional Commissioner added tax Tax Commercial Tax (Appeals), Cuttack

Chhattisgarh State Energy 227.17 Supreme Court Govt. Law Development cess

Name of the Statue Amount Period to which deposited the amount (Rs. in Crore) relates

Central Sales Tax Act, 1956 0.45 FY 04-05

Central Sales Tax Act, 1956 0.15 FY 05-06

Central Sales Tax Act, 1956 0.14 FY 06-07

Odisha Value added tax 0.04 FY 06-07

Odisha Value added tax 0.09 FY 07-08

Chhattisgarh State Govt. Law Nil FY 04-05 to 12-14

10 The Company does not have accumulated losses as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11 According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 According to the information and explanations given to us and as per the books and records examined by us, adequate documents and records are maintained in cases where the Company has granted loan and advances on the basis of security by way of pledge of shares. The Company has not granted any loans and advances on the basis of security of debentures or other securities.

13 The Company does not fall within the category of Chit fund/ Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14 According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15 The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16 In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17 According to the information and explanations given to us and as per the books and other records including sanctions by the lenders examined by us, on an overall examination of the Balance Sheet of the Company combined with underlying nature, movement, maturity pattern of the funds and funds deployment policy of the Company, the funds raised by the Company on short term basis during the yearhave not been applied for long-term investment.

18 The Company has made preferential allotment of equity shares under an employee stock purchase scheme to its Managing Director, being a party covered in the register maintained under section 301 of the Companies Act, 1956, the terms whereof are not prejudicial to the interest of the Company.

19 According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the secured debentures.

20 The Company has not raised any money by way of 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 fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. Kothari Mehta & Co.

Chartered Accountants Firm Registration No. 000756N

K. K. Tulshan

Place : New Delhi Partner

Dated : 29th April, 2014 Membership No. 85033


Mar 31, 2013

We have audited the accompanying financial statements of Jindal Steel & Power Limited (''the Company'') which comprises the Balance Sheet as at 31st March, 2013,and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and Notes to the Financial Statements comprising of a summary of 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 fair view ofthe financial position, financial performance and cash flows of the Company in accordance with the 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 controls relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from material misstatements, 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 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 the 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 reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation ofthefinancial 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 said accounts 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 generallyaccepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

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

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

EMPHASIS OF MATTER

We draw attention to sub note (a) of Note 4 regarding accounting forsales taxincluded in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy/ Capital Reserve Account in the circumstances as explained in the Note. Our opinion is not qualified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

2. As required by section 227(3) ofthe 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 ofthose books;

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

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

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

Annexure

Re: Jindal Steel & Power Limited

Referred to in clause 1 of paragraph on ''Report on Other Legal and Regulatory Requirements of our report of even date,

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records were not material, and have been properly adjusted in the books of account.

(c) Fixed assets disposed off during the year were not substantial so as to impact going concern status ofthe Company.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31st March, 2013 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, reasonable and adequate in relation to the size ofthe Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books ofaccount.

3. (a) The Company has neithergranted nor taken any loans, secured or unsecured, to/ from companies, firms or other parties listed in the register maintained under section 301 ofthe Companies Act, 1956. Accordingly, clauses (iii) (a) to (g) of paragraph 4 of CARO are not applicable.

4. In our opinion and according to the information & explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size ofthe Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination ofthe books and records ofthe Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of a major weakness in the 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 into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions entered into in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rupees five lacs in respect of each party have taken place during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public in earlier years, the provisions of section 58A and 58AA or any other relevant provisions ofthe Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975 have been complied with. 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 any other Tribunal in this regard.

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

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (l)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records have been made & maintained. We are, however, not required to carry out a detailed examination ofthe same.

9. (a) In our opinion and according to the information and explanations given to us and according to the records ofthe Company, 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, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2013 except for collection of Sales tax which have been collected pending receipt of necessary certificates from the customers.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess which have not been deposited on account of any dispute, except the following which have not been deposited as on 31st March, 2013 on account of disputes are given below:

Name of Statute Nature of Dues Amount Forum where dispute is pending Rs. in Crore

Central Excise and Salt Excise Duty 0.04 Appellate Commissioner, Raipur Act, 1944

156.69 CESTAT, NewDelhi

1.03 Chhattsgarh High Court, Bilaspur

0.10 Madhya Pradesh High Court, Jabalpur

Central Sales Tax Act/ Entry Tax 48.46 Deputy Commissioner, Local Sales Tax Act/ Commercial Tax (Appeals), Entry Tax Rourkela

0.01 Deputy Commissioner, Commercial tax (Appeals), Cuttack

0.15 Additional Commissioner, Commercial tax (Appeals), Cuttack

Central Sales Tax Act/ State Sales Tax/ 0.20 Deputy Commissioner, Value added Tax Commercial Tax (Appeals), Cuttack

Local Sales Tax Act/ 0.60 Additional Commissioner, Entry Tax Commercial tax (Appeals), Cuttack

Central Sales Tax Act/ Central Sales 0.45 Orissa High Court, Cuttack Local Sales Tax Act/ Tax 0.48 Deputy Commissioner, Commercial Tax, Cuttack

Entry Tax 0.24 Deputy Commissioner, Commercial Tax, Rourkela

Chattisgarh State Govt. Energy 183.19 Honourable Supreme Court Law Deveploment Cess

Business & Other Cess 2.94 Orissa High Court, Cuttack Construction workers welfare cess Act, 1996

Income Tax Act,1961 Income Tax 11.38 Punjab and Haryana High Court

176.86 Income Tax Appellate Tribunal, New Delhi

4.75 Commissioner of Income Tax (Appelas), Rohtak

Name of Statute Amount Period to which Deposited the amount Rs. in Crore relates

Central Excise and Salt Act, 1944 NIL FY 11-12 to 12-13

13.93 FYs 99-13

NIL FY 94-95 to 07-08

NIL FY 95-96

Central Sales Tax Act 16.06 FY 10-11

0.00 FY 06-07

0.02 FY 07-08

Central Sales Tax Act 0.04 FY 06-07 Local Sales Tax Act 0.09 FY 07-08

Central Sales Tax Act 0.45 FY 04-05

Local Sales Tax Act 0.14 FY 05-06

Entry Tax 0.15 FY 06-07

Chattisgarh State Govt Law NIL FY 04-05 to 12-13

Business & Other Construction workers welfare cess Act 1996 0.05 FYs 08-13

Income Tax Act 1961 NIL AY 04-05

2.90 AY 05-06 to 08-09

NIL AY 05-06 & 07-08

10. The Company does not have accumulated losses as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements ofthe Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements ofthe Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest ofthe Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

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

19. According to the information and explanations given to us and on the basis ofthe records examined by us, the Company has created necessary securities for the debentures issued in earlier years.

20. The Company has not raised any money by way of public issue during the years.

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 fraud on or by the Company, noticed and reported during the year, nor have we been informed ofsuch case bythe management.

For S. S. KOTHARI MEHTA & COMPANY

Chartered Accountants

Firm Registration No. 000756N

K. K. Tulshan

Place: New Delhi Partner

Date : 25th April, 2013 Membership No. 85033


Mar 31, 2012

1. We have audited the attached Balance Sheet of JINDAL STEEL & POWER LIMITED, as at 31st March, 2012, the Statement of Profit & Loss and the Cash Flow statement 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.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order 2004 (Collectively 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 as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) 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;

(ii) 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;

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

(iv) In our opinion and read with sub note (a) of Note 4 regarding accounting for sales tax included in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy / Capital Reserve account in the circumstances as explained in the Note, the Balance Sheet, Statement of Profit & Loss and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub - section (3C) of section 211 of the Companies Act, 1956;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the 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:

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

(b) in the case of Statement of the Profit & Loss of the Profit 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.

Annexure Re: Jindal Steel & Power Limited Referred to in paragraph 3 of our report of even date

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records were not material and have been properly adjusted in the books of account.

(c) Fixed assets disposed off during the year were not substantial.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31st March, 2012 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, comments regarding terms & conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms & conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information & explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis 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 nor have we been informed of any instance of a major weakness in the 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 into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions entered into in pursuance of contracts or arrangements, with whom transactions exceeding the value of Rs. Five lacs in respect of each party have taken place during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposits) Rules, 1975 have been complied with. We have been informed that no Order has been passed by the Company Law Board or National Company Law Tribunal or RBI 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 and nature of its business.

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (l)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records have been made & maintained. We are however, not required to carry out a detailed examination of the same.

9. (a) In our opinion and according to the information and explanations given to us and according to the records of the Company, 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, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2012.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty and Wealth tax which have not been deposited on account of any dispute, except the following in respect of disputed Excise duty, Sales tax, Service tax, Cess, Entry tax, Income tax and the forum where dispute is pending:

Name of the Statute Nature of dues Amount (Rs. in Crore)

Central Excise and Salt Excise Duty 1.55 Act, 1944 0.70

92.41 2.54 0.10

Central Sales Tax Act/ Entry Tax 45.93 Local Sales Tax Act/

Entry Tax Entry Tax 0.15

Central SalesTax Act/ State Sales Tax/Value 0.20 Local Sales Tax Act/Entry added tax Tax 0.60

Central Sales Tax Act/ Central Sales Tax 0.44 Local SalesTax Act/Entry 0.72 Tax 0.26

Chhattisgarh State Govt. Energy Development 136.75 Law Cess

Business & Other Cess 2.28 Construction Workers Welfare Cess Act, 1996

Income Tax Act, 1961 Income Tax 186.56 1.20



Name of the Staatue Forum where dispute is pending Amount deposited (Rs. in Crore)

Central Excise and Salt Act, 1944 Chhattisgarh High Court, Bilaspur 1.00

Appellate Commissioner, Raipur NIL

CESTAT, New Delhi 0.47

Chhattisgarh High Court, Bilaspur NIL

Madhya Pradesh High Court, NIL Jabalpur

Central Sales Tax Act/ Local SalesTax Act/ Entry Tax Deputy Commissioner, Commercial 14.36 Tax (Appeals), Rourkela

Additional Commissioner, 0.02 Commercial tax (Appeals), Cuttack

Central SalesTax Act/ Local Sales Tax Act/Entry Tax Deputy Commissioner, Commercial 0.04 Tax (Appeals), Cuttack

Additional Commissioner, 0.09 Commercial Tax (Appeals), Cuttack

Central Sales Tax Act/ Local Sales Tax Act/Entry Tax Orissa High Court, Cuttack 0.44

Deputy Commissioner, Commercial 0.29 Tax, Cuttack

Deputy Commissioner, Commercial 0.13 Tax(Appeals), Rourkela

Chhattisgarh State Govt. Law Honorable Supreme Court NIL

Business & Other Construction Workers Welfare Cess Act, 1996 Orissa High Court, Cuttack 0.05

Income Tax Act, 1961 Income Tax Appellate Tribunal, 1.22 New Delhi

Commissioner of Income Tax 0.64 (Appeals), Rohtak

10. The Company does not have accumulated losses as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17 According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term investment.

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

19. According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the debentures issued in earlier years.

20. The Company has not raised any money by way of public issue during the years.

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 fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants FRN No. 000756N

(Arun K. Tulsian) Place: New Delhi Partner

Dated: 27th April, 2012 Membership No. 89907


Mar 31, 2011

1. We have audited the attached Balance Sheet of Jindal Steel & Power Limited, as at 31st march, 2011, the Profit & Loss account and the Cash Flow statement 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.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These 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 the management, as well as evaluating the overall financial statement presentation. we believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) order, 2003 as amended by the Companies (Auditors' Report) (Amendment) order, 2004 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 as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) 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;

(ii) 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;

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

(iv) In our opinion and read with note no. B.3 of schedule 20 regarding accounting for sales tax included in sales price of products sold out of sales tax exempted unit under Sales Tax Subsidy Reserve account, the Balance Sheet, Profit & Loss account and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub - section (3C) of section 211 of the Companies Act, 1956;

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the 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:

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

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

(c) in the case of the Cash Flow statement, of the Cash Flows for the year ended on that date.

Annexure to Auditors' Report Referred to in paragraph 3 of our report of even date

1. (a) The Company has maintained proper records

showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. discrepancies noticed on such verification as compared to book records, which were not material, have been properly adjusted in the books of account.

(c) Fixed assets disposed off during the year were not substantial.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stock in the possession and custody of third parties and stock in transit as at 31st march, 2011 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. in our opinion, the frequency of such verification is reasonable.

(b) the procedures for the physical verification of inventories followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information and explanations given to us during the course of audit, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis 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 nor have we been informed of any instance of a major weakness in the aforesaid internal control system.

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 transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions with parties, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have been entered into during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. in respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 includingthe Companies (Acceptance of deposit) Rules, 1975 have been complied with. We have been informed that no order has been passed by the Company Law Board or National Company Law tribunal or RBi 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 and nature of its business.

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the rules prescribed bythe Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and 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 and according to the records of the Company, 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, wherever applicable, have been regularly deposited with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st march,2011.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty and Wealth tax which have not been deposited on account of any dispute, except the following in respect of disputed Excise duty, Sales tax, Service tax, Cess, Entry tax and Income tax :

Name of the Statute Nature of dues Amount (Rs. in Lacs)

Central Excise and Salt Act, Excise duty 155.00 1944

63.68

24,506.22 253.88

10.38

Central Sales tax Act/Local Entry Tax 3455.99 Sales Tax Act / Entry Tax

Entry Tax 0.88

Central Sales tax Act/Local State Sales Tax 20.21 Sales Tax Act/Entry Tax

Central Sales tax Act/Local Central Sales 44.05 Sales Tax Act/Entry Tax Tax

71.93

Chhattisgarh State Govt. Law Energy 10406.66 development Cess

Business & other Cess 6922.00 Construction Workers Welfare Cess Act, 1996

Income Tax Act, 1961 Income Tax 11,103.17

7,617.38

Name of the Statue Forum where dispute is Amount pending deposited (Rs. in Lacs)

Central Excise and Salt Act, 1944 Chhatisgarh High Court, 100.00

Bilaspur

Appellate Commissioner, NIL

Raipur

CESTAT, Delhi 113.08

Chattisgarh High Court, NIL

Bilaspur

Madhya Pradesh High court, NIL Jabalpur

Central Sales tax Act/Local Sales Tax Act / Entry Tax Deputy Commissioner, 1152.00

Commercial Tax (Appeals) ,Rourkela

Deputy Commissioner 0.36 , Commercial Tax (Appeals),Cuttack

Central Sales tax Act/Local Sales Tax Act/Entry Tax Deputy Commissioner, 3.79 Commercial Tax (Appeals), Cuttack

Central Sales tax Act/Local Sales Tax Act/Entry Tax Orissa High Court, Cuttack 44.05

Deputy Commissioner, 28.72 Commercial Tax, Cuttack

Chhattisgarh State Govt. Law Honorable Supreme Court NIL

Business & other Construction Workers Welfare Cess Act, 1996 Orissa High Court,Cuttack 5.00

Income Tax Act, 1961 Income Tax Appellate 121.97 Tribunal, New Delhi

Commissioner of Income Tax NIL (Appeals), Rohtak

10. The Company does not have accumulated losses as at the end of the financial year. there are no cash losses during the financial year under report and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company does not fall within the category of Chit fund / Nidhi / mutual benefit fund / Society and hence the related reporting requirements of the order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term purposes.

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

19. According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the debentures issued in earlier years.

20. The Company has not raised any money by way of 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 fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. KOTHARI MEHTA & CO.

Chartered Accountants Registration No. 000756N

(ARUN K. TULSIAN)

Place: New Delhi Partner

Dated: 21st April, 2011 Membership No. 89907


Mar 31, 2010

1. We have audited the attached balance sheet of JINDAL STEEL & POWER LIMITED, as at 31st March, 2010, and also the profit & loss account and the cash flow statement 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.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. These 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 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 as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

(i) 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; (ii) 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; (iii) The balance sheet, profit & loss account and cash flow statement dealt with by this report are in agreement with

the books of account; (iv) In our opinion and read with note no. B.4 of schedule 20 regarding accounting for sales tax included in sales price

of products sold out of sales tax exempted Unit under Sales Tax Subsidy Reserve account, the balance sheet, profit

& loss account and cash flow statement dealt with by this report comply with the accounting standards referred

to in sub - section (3C) of section 211 of the Companies Act, 1956; (v) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record

by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being

appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956; (vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the 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:

(a) in the case of the balance sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Annexureto Auditors Report Referred to in paragraph 3 of our report of even date

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records, which were not material, have been properly adjusted in the books of account.

(c) Fixed assets disposed off during the year were not substantial.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stock in the possession and custody of third parties and stock in transit as at 31st March, 2010 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information and explanations given to us during the course of audit, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis 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 nor have we been informed of any instance of a major weakness in the aforesaid internal control procedures.

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 transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions with parties, with whom transactions exceeding the value of Rupees Five Lacs in respect of each party have been entered into during the financial year, are at prices which are reasonable having regard to the prevailing market prices at the relevant time where such market prices are available.

6. In respect of fixed deposits accepted from the public, the provisions of section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 including the Companies (Acceptance of Deposit) Rules, 1975 have been complied with. We have been informed that no Order has been passed by the Company Law Board or National Company Law Tribunal or RBI 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 and nature of its business.

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and 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 and according to the records of the Company, 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, wherever applicable, have been regularly deposited with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2010.

(b) According to the information and explanations given to us and as per the books and records examined by us, there are no dues of Custom duty and Wealth tax which have not been deposited on account of any dispute, except the following in respect of disputed Excise duty, Sales tax, Service tax, Cess, Entry tax and Income tax:

Amount Amount Forum where Name of the Statute Nature of dues deposited (Rsin Lacs) dispute is pending (Rs.in Lacs)

Central Excise and Salt Act Excise Duty 155.00 High Court, Chhattisgarh 100.00 217.11 Appellate Comm- issioner, 60.89 Raipur

23,301.30 Excise Tribunal, Delhi 132.20

Finance Act, 1994 Service Tax 34.84 CESTAT,New Delhi 1.00

Central Sales Tax Act/Local Entry Tax 0.88 Deputy Commiss- ioner, NIL

Sales Tax Act / Entry Tax Commercial Tax (Appeals), Cuttack Central Sales Tax Act/Local State Sales Tax 6.21 Deputy Commissioner 6.21 Sales Tax Act/Entry Tax Commercial Tax (Appeals), Raipur

Central Sales Tax Act/Local State Sales Tax 20.21 Deputy Commissioner, NIL

Sales Tax Act/Entry Tax Commercial Tax (Appeals), Cuttack Central Sales Tax Act/Local Central Sales Tax 44.05 High Court,Cuttack 44.05 Sales Tax Act/Entry Tax 74.26 Deputy Commissioner, NIL Commercial Tax, Cuttack Chhattisgarh State Govt. Energy Devel- opment 8,233.73 Honorable Supreme Court NIL Law Cess Customs Act, 1962 Customs Duty 3.16 Joint Secretary, NIL Government of India

Business & Other Cess 11,750.00 Orissa High Court 5.00 Construction Workers Welfare Cess Act,1996

Income Tax Act, 1961 Income Tax 11,066.36 Income Tax Appellate NIL Tribunal 36.82 Commissioner of Income NIL Tax (Appeals)

10. The Company does not have accumulated los ses as at the end of the financial year. There are no cash losses during the financial year under report and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company does not fall within the category of Chit fund / Nidhi / Mutual Benefit fund / Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. The Company has given guarantees against loans taken by others from banks and financial institutions; the terms and conditions of such guarantees are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loans raised during the year by the Company have been applied for the purpose for which the said loans were obtained, where the lenders have stipulated such end use.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the Balance Sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long-term purposes.

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

19. According to the information and explanations given to us and on the basis of the records examined by us, the Company has created necessary securities for the debentures issued.

20. The Company has not raised any money by way of 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 fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management.

For S. S. Kothari Mehta & Co. Chartered Accountants

Registration No. 000756N

J. Krishnan Partner

Membership No. 84551

Place : New Delhi Dated : 4th May, 2010

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