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You can view full text of the latest Director's Report for the company.

BSE: 532286ISIN: INE749A01030INDUSTRY: Steel - Sponge Iron

BSE   ` 198.60   Open: 193.80   Today's Range 193.80
199.40
+6.60 (+ 3.32 %) Prev Close: 192.00 52 Week Range 128.15
294.15
Year End :2017-03 

Dear Members,

The Board of Directors are pleased to present the Company's 38th Annual Report along with the Audited Financial Statements, both standalone and consolidated, for the Financial Year ended March 31, 2017.

FINANCIAL RESULTS

The Company's financial performance for the year ended March 31, 2017 is summarized below:

_(Rs,in crore)

Particulars

Standalone

Consolidated

2015-16

2015-16

Total Income

15,502.49

14,716.81

22,706.23

20,524.82

EBITDA

2,441.08

1,552.05

4,658.03

3,436.87

Profit/(Loss) before tax after exceptional items

(1,456.98)

(2,330.07)

(3,042.90)

(3,963.71)

Less: Provision of Tax

470.53

911.54

502.68

877.46

Profit/(Loss) after tax

(986.45)

(1,418.53)

(2,540.22)

(3,086.25)

Balance brought forward from previous year

20,112.44

21,768.51

28,254.16

32,049.18

Surplus carried to Balance Sheet

(983.76)

(1,407.69)

(2,662.42)

(3,831.54)

INDIAN ACCOUNTING STANDARDS

Ministry of Corporate Affairs (MCA) has vide its notification dated February 16, 2015, notified the applicability of Indian Accounting Standards ("Ind AS") to be applicable on listed companies and certain class of companies, for the Accounting period beginning from April 1, 2016, with comparatives to be provided for the period ended on March 31, 2016.

The Company has adopted Indian Accounting Standard ('Ind AS') with effect from April 1, 2016 and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 read with the relevant rules issued there under.

MATERIAL CHANGES AFFECTING FINANCIAL POSITION

There have been no material change(s) and commitment(s) affecting the financial position of the Company between the end of the financial year and date of this Report. There has been no change in the nature of business of the Company.

OPERATIONAL HIGHLIGHTS

Your Company has always aspired to enhance its participation in the socio- economic development of the nation and will continue to dream bigger with continuously working towards building a nation of our dreams. In May 2017, your Company dedicates to the nation 6 MTPA Integrated Steel Plant at Angul, Odisha.

Sale of Steel Product in the domestic market was 28.41 Lakhs MT as compared to 30.59 Lakhs MT in the previous year showing a decrease of 7% and total export was 5.09 Lakhs MT as compared to 2.35 Lakhs MT in the previous year showing an increase of 117%.

The Company completed all major iron and steel making installations at the 6 MTPA Integrated Steel Plant at Angul, Odisha.

It comprises :

- India's largest 4 MTPA Sinter Plant, 4554 cum Blast Furnace and

0.9 MTPA Coke Oven.

- World's first 1.8 MTPA Direct Reduced Iron (DRI) Plant based on Coal Gasification Process (CGP).

- World' largest 225,000 Nm3/ Hr Coal Gasification Plant for Steel making.

- Steel Melting Shop (SMS) with 250 T EAF.

- A 1.4 MTPA Bar Mill.

- India's most advanced 1.2 MTPA Plate Mill, capable of producing plates unto 5 Meter width.

- World's fastest 2.3 MTPA Billet Castor, (capacity speed 3.6 Meters/ Minute).

- A 810 MW Captive Power Plant.

- Air Separation Unit (2x1200 TPD)

- Lime Dolomite Plant (2x500 TPD)

- Coal Washery (6 MTPA) and

- Process Boilers (3x1800 TPH)

The completion of the 4554 cum Blast Furnace was done at a significantly lower capital investment as compared to projects of similar scale. The capacity addition would further enhance the cost efficiencies of steel making. The economies of scale imparted by the capacity additions and their optimum utilization would effectuate Company's debt reduction roadmap.

PRODUCTION HIGHLIGHTS

Steel: Production of finished Steel products during the year under review was 29.71 Lakh MT, as against 29.48 Lakh MT in the previous year whereas production of semi steel products was 34.75 Lakh MT as against 34.65 Lakh MT in the previous year.

Power: During the year under review, 5465 million Kwh of Power was generated, as against 5882 million Kwh of power in the previous year.

Sponge Iron: Production of Sponge Iron during the year under review was 17.66 Lakh MT, as against previous year's production of 19.94 Lakh MT.

Pellet: 64.63 Lakh MT of Pellets were produced during the year under review, as against 45.89 Lakh MT in the previous year

Machinery: Machinery division in Raipur unit produced 998 MT of castings and has done production of 11317 MT, as against 1931 MT and 13966 MT respectively in the previous year

Mining: The Mining of sized ore and fines at Tensa in Odisha was 5.96 Lakh Ton and 21.27 Lakh Ton respectively as against previous year mining of 6.22 Lakh Ton and 23.01 Lakh Ton respectively.

Detailed discussion on the operations have been given elsewhere in the report.

PROJECTS COMPLETED

Steel Plant at Angul, Odisha- Phase- l

Your Company has completed following operational facilities under Phase - l of 6 MTPA integrated Steel plant at Angul in the state of Odisha:

a) Steel Melting Shop: Your Company has 250 T capacity Electric Arc Furnace, is one of the largest in India. This art of technology Steel melt shop is equipped with Laddle furnace, RH, VD, Billet Caster and Slab Caster facility which can produce most of the grades available in the world.

b) Direct Reduced Iron Plant (DRI) and Coal Gasification Plant:

The 1.8 MTPA DRI Plant is unique one in the world which utilizes Syngas (Gas produced from Non coking coal through Coal Gasification Plant) for reduction process and has facilities for discharging Hot DRI as well as Cold DRI.

c) Plate Mill: Your Company has one of the widest plate mill (5mtrs. wide) plants with 1.2 MTPA capacity. This plate mill has various certification for different grades of Plates for sectors such as Defense, Wind Mill, Ship Building, Sour Application Pipe Lines, Yellow Goods etc. Plate mill has successfully developed number of different special grade plates. There are very few manufacturers available in the world who can produce similar kind of grade plates.

These plants are supported by 810MW Captive Power Plant (6x135 MW), Air Separation Unit (2x1200 TPD), Lime Dolomite

Plant (2x500 TPD), Coal Washery (6 MTPA) and Process Boilers (3x1800 TPH).

Steel Plant at Angul, Odisha -Phase lB

Your Company is expanding the steel plant (Phase IB) at Angul at brisk pace from the present 1.5 MTPA to 6 MTPA through the conventional integrated steel plant route i.e Coke Oven and by product plant, sinter plant, blast furnace, steel melting shop - II, bar mill and other allied units.

Following operational facilities under Phase - IB were commissioned during the FY 2016-17:

a) Bar Mill: State of the art 1.4 Million Ton per annum Bar Mill with Integrated Hot Charging Billet arrangement which can produce Rebar's from 8mm to 40 mm. It was commissioned on July 9, 2016.

b) Coke Oven: 1st Battery of 2 MTPA Coke Oven was commissioned on February 16, 2017 and being set up with latest technology supplied by Sinosteel Equipment & Engineering Co. Ltd., China. The technology is suitable of handling Coal blend VM up-to 2930% and maximum Sulphur of 1.2%. This will help in reducing the cost of Blend and provide us with wider options for coal sourcing.

Also, India's biggest Blast Furnace (4554 M3) along with Sinter Plant and 2nd Coke Oven Battery Plant have been commissioned in May, 2017.

Your Company is in advance stage of completion for our BOF Plant and expected to be completed in September, 2018.

Steel Plant at Raigarh, Chhattisgarh

To enhance the plant's productivity and output, your Company has completed the following new project in Raigarh during the financial year under review:

Rail Head Hardening project for producing rail of high speed application and metro rails and for export market . The technology has been supplied by SMS Meer of Germany.

Machinery Division at Raipur, Chhattisgarh

Your Company has implemented following facilities during the financial year under review:

1. Installed shield (steel door) to safeguard the welding process at time of production in Process Equipment Division .

2. Installed new 90 degree attachment for Sanco Machine in Machine Shop to cater to burgeoning requirements of Machinery Equipment Division customers.

3. Sewage Treatment plant (of capacity 500 KLD) has been installed at Machinery Division, Raipur. The treated water is utilized for Green belt development in and around the unit.

4. Enhanced capability of Quality Lab by procuring equipment such as 360 degree Laser Machine.

5. Enhanced capability of Paint Shop by procuring equipment to carry out Salt contamination test and Dolly test.

Shadeed Iron & Steel, Oman Rolling Mill:

Jindal Shadeed Iron & Steel LLC, Oman, a Subsidiary Company, has started commercial production of the world's largest and most modern state-of-the-art 1.4 MTPA Rebar Mill from May 1, 2016 to supply finished steels, the first time in its five-year-history with the imminent production of Rebar's for the construction industry to cater mainly to domestic and middle east countries.

Highlights:

- Total production of Steel Melting Shop (SMS) increased from 10.54 lakh tons in FY 2015-16 to 13.26 lakh tons in FY 2016-17;

- Production of value added grade rounds increased from 0.83 lakh tons in FY 2015-16 to 1.43 lakh in FY 2016-17;

- Highest monthly production in SMS was recorded in March 2017 at 143,831 tons whereas highest monthly production till end of FY 2015-16 was 126,311 tons;

- Rejection in SMS reduced from 0.93% in FY 2015-16 to 0.54% in FY 2016-17;

- Rebar mill started commercial production in April 2016 and total production was 4.54 lakh tons in FY 2016-17;

- Rebar mill has received product certification from Cares U.K., Dubai Commercial Laboratories (DCL), SASO and BIS which enables rebar product to qualify for prestigious projects and command premium in the market;

- Highest monthly production in Rebar mill was recorded in March, 17 at 71,302 ton. Jindal Shadeed has established itself as Oman's largest rebar producer and seller in Q4 FY 2016-17;

- DRI Production decreased slightly from 15.09 lakh tons in FY 2015-16 to 14.39 lakh tons in FY 2016-17. This was due to sharing of allocated natural gas quota with Rebar mill;

- Cut & Bend Plant of 3,000 tons per month capacity commissioned in February 2017.

Patratu, Jharkhand

- Successfully completed "Railway Overhead Electrification Project" from Bhurkunda to Plant premises resulting in reduction by 8 Hours during inward rake movement;

- PGP plant fully completed (automation and balance erection jobs). All the 10 asifiers successfully commissioned and both mill furnaces are successfully fed by Producer Gas.

- WRM furnace maintenance carried out in 28 days against a plan of 35 days with in-house fabrication of skids and posts. Modification of burners for feeding producer gas also completed during the same period.

- Coil straightening and cutting machine installed in rebar service centre which resulted in increase in production by 200%.

PROJECTS UNDER IMPLEMENTATION

Steel Plant at Raigarh, Chhattisgarh

Your Company has the following projects under implementation with a view to increase the efficiency of steel plants at Raigarh:

1. Installation of new reheating furnace in Rail and Universal Beam Mill to increase the output. The furnace shall be using Blast Furnace gas to reduce the fuel cost.

2. Up gradation of Rail Finishing Facility at RUBM for Capacity and dispatch Enhancement.

Machinery Division at Raipur, Chhattisgarh

In order to enhance the capacity and productivity of the division, your Company has planned the following additional equipment/ facilities:

- Plate Bending Machine for Higher Thickness bending of plates up to 90 mm (Thk) & 3100 mm (Wid)

DIVIDEND

The Board of Directors of your Company had approved the Dividend Distribution Policy in line with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is uploaded on the Company's website at http:// www.jindalsteelpower.com.

The Board of Directors of your Company has not recommended any Dividend during the year in view of losses.

The unclaimed dividend of ' 93,57,733/- (Rupees Ninety Three Lakh Fifty Seven Thousand Seven Hundred and Thirty Three Only) pertaining to the Financial Year 2008-09, has been transferred to the Investor Education and Protection Fund, (IEPF), Government of India. The details including last date for claiming of unclaimed / unpaid dividend amount are given at the end of the Notice of the Annual General Meeting.

CREDIT RATING

Your Company's domestic credit rating is "D" for the long-term debt/facilities/non-convertible debentures, short term debt/ facilities including working capital facilities rated by Credit Analysis & Research Ltd. (CARE), CRISIL and ICRA Limited.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of your Company for the Financial Year 2016-17, is prepared in compliance with the applicable provisions of the Companies Act, 2013, Indian Accounting Standards (Ind AS) and SEBI (LODR) Regulations, 2015.

SHARE CAPITAL

The Authorized Share Capital of the Company is ' 200,00,00,000/-(Rupees Two Hundred Crore only) divided into 200,00,00,000 (Two Hundred Crore) equity shares of ' 1/- (Rupee One) each.

As the Company is exploring various possibilities of raising funds including issuance of capital through various means and modes, the Board of Directors of your Company has recommended to increase the Authorized Share Capital from Rs, 200,00,00,000/- (Rupees Two Hundred Crore only) divided into 200,00,00,000 (Two Hundred Crore) equity shares of Rs, 1/-(Rupee One) each to Rs, 300,00,00,000 (Rupees Three Hundred Crore only) comprising 200,00,00,000 (Two Hundred Crore) equity shares of Rs, 1/-(Rupee One) each and 1,00,00,000 (One Crore) Preference Shares of Rs, 100/- (Rupees One Hundred) each.

Necessary resolutions in this regard have been included in the notice convening the ensuing Annual General Meeting of the Company.

During the year the paid up share capital of the Company has increased from Rs, 91,49,03,800/- (Rupees Ninety One Crore Forty Nine Lakh Three Thousand and Eight Hundred only) comprising of 91,49,03,800 (Ninety One Crore Forty Nine Lakh Three Thousand and Eight Hundred) equity shares of Rs, 1/- (Rupee One) each to Rs, 91,50,24,234/- (Rupees Ninety One Crore Fifty Lakh Twenty Four Thousand Two Hundred and Thirty Four only) comprising of 91,50,24,234 (Ninety One Crore Fifty Lakh Twenty Four Thousand Two Hundred and Thirty Four) equity shares of Rs, 1/- (Rupee One) each.

Your Company has an Employee Share purchase Scheme namely JSPL ESPS 2013. Relevant disclosures pursuant to Securities and Exchange Board of India (Share Based Employee Benefits) Regulation, 2014 are given as Annexure - A to this report.

NON-CONVERTIBLE DEBENTURES

The aggregate outstanding amount of Non-Convertible Debentures (NCDs) of the Company as on March 31, 2017 was Rs, 3612 crore.

During the year under review, NCDs amounting to Rs, 300 crore have been redeemed and paid on due date. There are delays in servicing the interest on NCDs The Company had paid all the dues including interest on the NCDs during the financial year 2016-17. Necessary disclosures in this connection under SEBI (LODR) Regulations, 2015 have been made to the Stock Exchanges where the shares of the Company are listed.

DEPOSITS

The Company has not accepted/received any deposits during the year under report falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

RELATED PARTY TRANSACTIONS

In terms of Section 188 of the Companies Act, 2013 read with rules framed thereunder and Regulation 23 of SEBI (LODR) Regulations,

2015 your Company has a Related Party Policy in dealing with related party transactions. The policy may be accessed under corporate governance section on the website at the following link:

http://www.jindalsteelpower.com/img/admin/report/pdf/RPT_

Policy.pdf

Particulars of Contracts or arrangements entered into by the Company with the related parties referred to in Section 188(1) of the Companies Act, 2013 read with Regulation 23 of SEBI (LODR) Regulations, 2015, in prescribed Form AOC - 2 is attached herewith as Annexure - B.

All the related party transactions that were entered and executed during the year under review were on arm's length basis and in the ordinary course of business and within the permissible framework of Section 188 of the Companies Act, 2013, and Rules made thereunder read with Regulation 23 of SEBI (LODR) Regulations, 2015.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees, Securities and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

Your Company follows its global ambition to build a premium brand name for its quality steel solutions, expertise and with a view of expansion and diversification; it has created multiple subsidiaries, domestic and abroad, associates and joint ventures for facilitating these operations in various countries.

A separate statement containing salient features of Financial Statements of Subsidiaries, Associates and Joint Ventures of your Company forms part of the Consolidated Financial Statements in terms of Section 129 of the Companies Act, 2013.

Name of the Companies which have become or ceased to be its subsidiaries, joint ventures or associate companies have been mentioned in the notes to the accounts.

The Financial Statements of Subsidiary Companies are kept open for inspection by the shareholders at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (AGM) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office or Corporate Office. The Financial statements including the consolidated Financial statements and all other documents required to be attached to this report have been uploaded on the website of your Company viz. www.jindalsteelpower.com

Your Company has framed a policy for determining "Material Subsidiary" in terms of Regulation 16(c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy on Material Subsidiary has been uploaded on the Company's website at the following link:

http://www.jindalsteelpower.com/img/admin/report/pdf/Policy_

on_determining_material_subsidiary.pdf

The details of business operations / performance of major subsidiaries are as below:

JINDAL POWER LIMITED

Jindal Power Limited, a subsidiary company (JPL) is operating 3,400 MW power plant at Tamnar, Chhattisgarh.

During the year under review :

- 1000 MW (4x250 MW) power plant generated 4,483 million units of power representing 51.17% Plant Load Factor (PLF) as against 5,169 million units of power representing 58.85% PLF in the previous year.

- 600 MW of the 2,400 MW (4X600 MW) thermal power plant generated 4694 million units of power in FY 2016-17.

Jindal Power Limited (JPL) 258 km, 400 kV double-circuit transmission line is being used as an interstate transmission line belonging to the Western Region Interstate Transmission System. The Central Electricity Regulatory Commission (CERC) has granted a transmission license to the Company for carrying on business activity and has fixed provisional tariff for its use. During the year under review, JPL has earned transmission income of Rs, 45.44 crore from this line.

Total revenue of JPL during the year under review was Rs, 3,516.27 crore and the loss after tax was Rs, 667.84 crore.

SHADEED IRON & STEEL LLC, OMAN

Shadeed, Iron & Steel LLC, Oman, a subsidiary of Jindal Steel & Power Ltd., is operating 1.5 MTPA Brigutted Iron plant and Steel Melt Shop. It has recorded sales of Rs, 3,487.50 crore in the Financial Year 201617 and earned a profit after tax of Rs, 191.57 crore.

JINDAL MINING SA (PTY) LIMITED, SOUTH AFRICA

The operating coal mine, recorded sales of Rs, 202.75 crore in Financial Year 2016-17 and incurred a loss of Rs, 13.75 crore.

JSPL MOZAMBIQUE MINERALS LDA, MOZAMBIQUE

The operating coal mine, recorded sales of Rs, 129.84 crore in Financial Year 2016-17 and incurred a loss of Rs, 2.45 crore.

WOLLONGONG COAL LIMITED (FORMERLY GUJARAT NRE COKING COAL AUSTRALIA LIMITED)

The operating coal mine recorded sales of Rs, 181.44 crore in Financial Year 2016-17 and incurred a loss of Rs, 290.46 crore.

With a view to ensure availability of coal and other raw materials, the Company has, through its other subsidiaries, acquired exploration / mining interests in Botswana, Indonesia, Madagascar, Namibia, Liberia, Mauritania, Zambia and Tanzania.

DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENT/RE- APPOINTMENT

Directors

The Board of Directors of your Company co-opted:

i. Mr. Deepak Sood (DIN: 02331191) as Nominee Director of IDBI Bank Limited w.e.f. December 8, 2016.

ii. Mr. Anjan Barua, (DIN: 01191502) as a Nominee Director of State Bank of India w.e.f. February 14, 2017

iii. Dr. Amar Singh (DIN: 07800513) as an Additional Director in the category of Independent Director w.e.f. April 25, 2017

iv. Mr. Kuldip Chander Sood (DIN: 01148992) as an Additional Director in the category of Independent Director w.e.f. April 25, 2017

Wholetime Directors

On the recommendation of the Nomination & Remuneration Committee and in terms of Sections 196, 197, 198 and 203 read with Schedule V and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Company recommends the re-appointment of :

i. Mr. Naveen Jindal (DIN: 0001523) as Wholetime Director, designated as Chairman of the Company, for a period of 3 (three) years w.e.f. October 1, 2017.

ii. Mr. Rajeev Rupendra Bhadauria (DIN 00376562) as Wholetime Director of the Company for a period of 3 (three) years w.e.f., May 27, 2018.

iii. Mr. Dinesh Kumar Saraogi (DIN 06426609) as Wholetime Director of the Company for a period of 3 (three) years w.e.f., November 9, 2017.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, Mr. Naveen Jindal and Mr. Rajeev Rupendra Bhadauria are retiring by rotation at the ensuing Annual General Meeting and being eligible, seek re-appointment.

Necessary Resolutions in respect of the appointment of Directors mentioned above are included in the Notice convening the ensuing Annual General Meeting. Your Board recommends the appointment/ re-appointment of Mr. Naveen Jindal, Mr. Rajeev Rupendra Bhadauria, Mr. Dinesh Kumar Saraogi, Mr. Kuldip Chander Sood, Dr. Amar Singh, Mr. Deepak sood and Mr. Anjan Barua. The particulars in respect of these Directors as required under Regulations 36(3) of SEBI (LODR) Regulations 2015, are mentioned elsewhere in the Notice of Annual General Meeting.

RESIGNATIONS

Directors

i. Mr. Chandan Roy and Mr. Haigreve Khaitan resigned from the position of Independent Directors of the Company w.e.f. June, 7, 2016 and December 7, 2016 respectively.

ii. Mr. Shalil Mukund Awale, Nominee Director of IDBI Bank Ltd., resigned from the Board of the Company w.e.f December 8,

2016 consequent to withdrawal of his nomination from IDBI Bank Limited.

Key Managerial Personnel

During the period under review:

i. Mr. Murli Manohar Purohit was appointed as Company Secretary & Compliance Officer of the Company w.e.f. October

10, 2016 to fill the vacancy caused by the resignation of the Company Secretary appointed earlier. He subsequently resigned from the Company w.e.f. May 31, 2017.

ii. Mr. Kannabiran Rajagopal, resigned from the position of Group Chief Financial Officer of the Company w.e.f. November 21,

2016. Mr. Rajesh Bhatia, who was appointed in his place as the Chief Financial Officer of the Company resigned from the Company w.e.f. June 27, 2017.

Your Directors would like to record their deep sense of appreciation for the contributions made by the above Directors and Key Managerial Personnels during their respective tenures.

MEETINGS OF THE BOARD AND COMMITTEES

The Board of Directors met 10 (ten) times during the period under review. The details of number of Meetings of the Board and various Committees of your Company are set out in the Corporate Governance Report which forms part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards on Meeting of the Board of Directors as issued by The Institute of Company Secretaries of India.

REMUNERATION POLICY

In accordance with the provisions of Section 178 of the Companies Act, 2013 and Part D of Schedule II of SEBI (LODR) Regulations,

2015, the policy on Nomination and Remuneration of Directors, KMPs and Senior Management of your Company is uploaded on the website at the following link:

http://www.jindalsteelpower.com/img/admin/report/pdf/

Remuneration_Policy.pdf

PARTICULARS OF EMPLOYEES RELATED DISCLOSURES

Details as required under Section 197(2) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the statement showing the name of the employees drawing remuneration in excess of the limits set out in Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-C.

Members and other entitled persons who have not registered their email address with the Company may access the full version of the Annual Report of the Company or by physically inspecting the full version of the Annual Report at the Registered office and at the Corporate office of the Company on all working days of the Company between 10.00 a.m. to 1.00 p.m. or by requesting a physical copy by writing to the Company Secretary.

STATUTORY AUDITORS

M/s Lodha & Co., Chartered Accountants (ICAI Firm Registration No. 301051E), New Delhi, were appointed as the Statutory Auditors at previous Annual General Meeting (AGM) for a period of 5 years from the conclusion of 37th Annual General Meeting till 42nd Annual General Meeting of the Company, subject to ratification at each Annual General Meeting by the shareholders of the Company.

In terms of the first proviso to Section 139 of the Companies Act, 2013, appointment of M/s Lodha & Co., Chartered Accountants, as the Statutory Auditors of the Company, is recommended for ratification at the ensuing AGM.

Explanations on qualification, reservation or adverse remark by Statutory Auditors

A) During the financial year 2014-15, the Hon' ble Supreme Court vide its judgment dated August 25, 2014 read with its order dated September 24, 2014 had cancelled the allocation of certain Coal Blocks, which were allotted from year 1993 onwards through Screening Committee. The Supreme Court also directed the Coal block allottees to pay an additional levy of Rs, 295 per MT on the coal extracted from the operational mines. The review petition filed by the Company and its subsidiary company JPL before the Hon'ble Supreme Court of India against the order challenging cancellation of coal blocks and imposing additional levy of Rs, 295 per MT on coal extracted with retrospective effect, is still pending.

I n the meanwhile, the Company has paid Rs, 3,267.43 crore (including Rs, 1,185.20 crore paid by its subsidiary company JPL) under protest on the Run of Mine coal extracted from the operational mines from the commencement of coal mining in the year 1993 to September 30, 2014. Out of the said amount, on the basis of the legal advice obtained by the Company that additional levy of Rs, 295 per MT is payable only on coal extracted and is not payable on shale, rejects and ungraded middlings, an amount of Rs, 1,911.64 crore (including Rs, 1,103.87 crore related to its subsidiary company JPL) computed on coal extracted excluding shale, rejects and ungraded middling has been shown as an exceptional item in the Statement of Profit and Loss. The balance amount of Rs, 1,355.79 crore (including Rs, 81.33 crore related to its subsidiary company JPL) being additional levy of Rs, 295 per MT on shale, rejects and ungraded middlings has, accordingly, been shown as recoverable. On the same principle, the Company has accrued additional levy of Rs, 178.18 crore (including Rs, 85.78 crore payable by its subsidiary company JPL) based on coal extracted excluding shale, rejects and ungraded middling from October 1, 2014 to June 30, 2015.

The Board of the Company, based on the legal advice, is sanguine of obtaining appropriate relief in respect of the same.

B) The Board is of the view that as of now there is no requirement for adjustment to the carrying value of investment made in mining assets by the company and difference, if any shall be accounted for when the matter is finally settled.

SECRETARIAL AUDITORS

M/s RSMV & Co., Company Secretaries, New Delhi (CP No. 11571) were appointed to conduct the Secretarial Audit of the Company as required under Section 204 of the Companies Act, 2013 and Rules there under. The Secretarial Audit Report i.e. MR-3 forms part of the Annual Report as Annexure-D to the Board's Report.

Observation of Secretarial Auditors on composition of Board is explained elsewhere in the report.

COST AUDITORS

M/s Ramanath Iyer & Co., (FRN 00019), Cost Accountants, were appointed as Cost Auditors of the Company for auditing the cost records of the Company for the Financial Year 2017-18.

The Cost Audit Report for the Financial Year ended March 31, 2016 of the Company was filed on September 7, 2016.

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, appropriate resolution seeking ratification of the remuneration of M/s Ramanath Iyer & Co., (FRN 00019), Cost Accountants, approved by the Board, is included in the Notice convening the 38th AGM of the Company.

RISK MANAGEMENT

The Company has in place a robust risk management framework which identifies and evaluates business risks and opportunities. The Company recognizes that these risks need to be managed and mitigated to protect the interest of the shareholders and stakeholders, to achieve business objectives and enable sustainable growth. The risk management framework is aimed at effectively mitigating the Company's various business and operational risks, through strategic actions. Risk management is embedded in our critical business activities, functions and processes. The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risk and future action plans.

The Company has a Risk Management Committee of the Board, which looks after the identification of risks and their mitigation planning. More details about this Committee and its role and responsibilities are given in the Corporate Governance Report.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate Internal Financial Controls with reference to financial statements and such internal financial controls are operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 of the Act, the Company has constituted a committee to formulate, implement and monitor the CSR Policy of the Company.

The Annual Report on the Corporate Social Responsibility (CSR) activities for the Financial Year 2016-17 as required under Section 134 and 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014 is attached to this Report as Annexure-E.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operation during the year under review except the following:

De-Allocation of Coal Blocks:

Following the petition in M L Sharma vs The Principal Secretary & Ors and subsequent other Writs, the Hon'ble Supreme Court vide its judgment dated August 25, 2014 read with its order dated September 24, 2014 had cancelled the allocation of Coal Blocks allotted from 1993 onwards through Screening Committee Route.

Subsequently, the Company's subsidiary, Jindal Power Limited (JPL), despite having made winning bids during the auction of Gare Palma IV/2 and IV/3 Coal Mine in February, 2015, was not declared a successful bidder by the office of Nominated Authority. This was challenged by JPL before Hon'ble Delhi High Court, which decided the matter on March 9, 2017 and the proceedings arising from the same are presently sub-judice before the Hon'ble Supreme Court.

However, since de-allocation of Coal Blocks, the Company is fully geared and catering to its coal requirements through coal linkage, e-auctions etc. Further, the Company also intends to participate in future Coal Block Auctions.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Directors state:

(a) that in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards and Schedule III to the Companies Act, 2013, have been followed and there are no material departures from the same;

(b) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31,

2017 and of the loss of the Company for the year ended on that date;

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

(d) that the annual accounts have been prepared on a going concern basis;

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

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

OTHER INFORMATION

Business Responsibility Report

As stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describing the initiatives taken by the Company from environmental, social and governance perspective is attached as part of the Annual Report.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed herewith as Annexure - F to this Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

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

Certificate on Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The requisite certificate issued by M/s RSMV & Co., Company Secretaries in Practice confirming compliance with the conditions of Corporate Governance (Annexure - I) is annexed with Corporate Governance Report.

Whistle Blower and Vigil Mechanism

Your Company has formulated a vigil mechanism to deal with instances of unethical behavior, actual or suspected, fraud or violation of Company's code of conduct or ethics policy. The details of policy is explained in Corporate Governance Report and also uploaded on Company's website at the following link: http://www.jindalsteelpower.com/img/admin/report/pdf/whistle.pdf

Prevention of Sexual Harassment at Workplace

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made there under, your Company has constituted Internal Complaints Committee having designated independent member(s) to redress complaints regarding sexual harassment. During the year, no complaint regarding Sexual Harassment has been reported.

Extract of the Annual Return

The details forming part of the extract of the Annual Return in Form No. MGT - 9 in accordance with the provisions of Section 92 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure-H to this Report.

Cautionary Statement

Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objectives, expectations or forecasts may be forward looking within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in Government Regulations, Tax Laws, Economic Developments within the country and other factors such as litigation and industrial relations.

Acknowledgements

The Directors wish to place on record their appreciation for the sincere services rendered by employees of the Company at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, various State Governments, the Banks/ Financial Institutions and other stakeholders such as, shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Company's success. The Directors look forward to their continued support in future.

For and on behalf of the Board of Directors

Naveen Jindal

Place: New Delhi Chairman

Dated: August 8, 2017 DIN: 00001523