BOARD OF DIRECTORS · another 55 MW of power plant. Your Company is producing power at a low cost...

JINDAL STEEL & POWER LIMITED 23rd ANNUAL REPORT, 2001-02

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BOARD OF DIRECTORSChairman O. P. JindalExecutive Vice Chairman& Managing Director Naveen JindalVice Chairman &Chief Executive Officer Vikrant GujralDirectors Ratan Jindal

Arvind ParakhAmir Z. Singh PasrichRajendra SinghHarsh Vardhan LodhaSubir Bisht (Nominee � ICICI Bank Ltd.)Raj Kumar Kapoor (Nominee � IDBI)

Whole-time Directors Anand GoelS. N. Singh

Executive Directors C. S. TewaryG. D. S. Sohal

Vice President (Corporate Finance) Sushil K. MarooCompany Secretary T. K. SadhuBankers State Bank of India

Punjab National BankState Bank of PatialaICICI BankLtd.

Statutory Auditors M/s S. S. Kothari & Co.9 A, Atma RamHouse,1, TolstoyMarg,New Delhi 110 001

Cost Auditors M/s Ramanath Iyer & Co.,4/4 Singh Sabha Road,Shakti Nagar,Delhi 110 007

CONTENTSBoard of Directors 1Chairman�s message 2Executive Vice-Chairman 4& Managing Director�s messageNotice 6Directors� Report 13Corporate Governance 19

Management Discussion & Analysis 27Auditors� Report 30Balance Sheet 32Profit & Loss Account 33Schedules & Notes 34to accountsCash Flow Statement 51


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CHAIRMAN�SMESSAGE

Dear Shareholders,The financial year 2001-02 witnessed signs of recoveryfrom the recession in the steel industry, with a marginalgrowth in demand and increasing trend in prices, bothin the domestic and international markets. But the growthin the demand was lower than expected due to the overalleconomic slow down in the country.However, your Company has once again declared goodfinancial results, which are testimony to the robustnessof the Company. Our aspiration to create enduring valuefor the shareholders has led to another year of creditableand record-breaking performance. Your Companyattained a total revenue of Rs.654 crore registering agrowth of 13% over the previous year, with a profit beforetax of Rs.123 crore, representing an increase of 10%over the previous year. Your Company has thus emergedas the most profitable steel company in the country forits size of operations. The Board has recommended alltime high dividend of 70% as against 50% declared inthe previous year.Your Company continued to implement its forwardintegration programme. Erection work at the Rail andUniversal Beam Mill project is progressing at fast paceand production of the world�s longest 120 meter railsand large-sized parallel flange beams and columns isscheduled to commence during the current financialyear. A long-term technical collaboration agreement hasbeen signed with NKK Corporation of Japan inDecember 2001. NKK is one of the leading manufacturerof rails and a major supplier of rails for high-speed BulletTrains in Japan.Rails manufactured from this plant would usher a newera in rail safety and make the introduction of fast trainsin India a reality. A huge potential for these rails exists,not only in India but in other countries of the world,particularly the neighbouring countries.Universal beams and columns in large sizes would beproduced for the first time in India. These are the most-preferred choice of designers, architects and buildersthe world over, as they not only save upto 40% on steelbut also on transport cost, fabrication and erectioncharges. These products would provide an addedimpetus to the growth of the construction andinfrastructure industry in the country.Your Company achieved its highest ever powergeneration of 720 million units, a growth of 28% over the


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120 meter long rails being transported

The Electric Arc Furnace at the Steel Melting Shop

The steam turbine generating set

previous year. A 55 MW power plant was successfullycommissioned during the year, six months ahead ofschedule. Plans have been drawn up for addition ofanother 55 MW of power plant. Your Company isproducing power at a low cost by utilizing waste hotgases and coal rejects. Apart from captive use, yourCompany is supplying surplus power to the ChhattisgarhState Electricity Board.Your Company�s philosophy is sustained plannedgrowth. As always, the focus is on improving quality,reducing costs and enhancing customer satisfaction,with a view to make our products readily acceptable inboth domestic and international markets. In this direction,the Company has set up a 351 m3 mini blast furnace,which would reduce cost of production of steel. A coalwashery of 2.5 million MT capacity is being set up atcoal mine to further improve the operational efficiencies.I take this opportunity to express my sincere thanks tothe Central Government, the State Government ofChhattisgarh, financial institutions, banks, employeesand other business associates for their cooperation,guidance and wholehearted support. In our quest forexcellence, I look forward to your continued support sothat together we can achieve our aims and objectives.

O. P. Jindal


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Dear Shareholders,The year just completed was a year of challenges withmany undulations and upheavals. The businessenvironment in India and worldwide experienced adowntrend and registered slowdowns. Despite a globaltrend of economic troughs, your Company�sdetermination helped it to once again achieve goodresults and continue its status as the most profitablesteel company in the country for its size of operations,with net profit to turnover ratio of 18%. A net turnover ofRs. 584 crore was attained during the year 2001-02, agrowth of 15%over the previous year. Even after providingfor deferred tax liability of Rs. 47 crore, the reservesstand at a comfortable level of Rs. 452 crore.Projects executedA Memorandum of Understanding was signed with theState Government of Chhattisgarh inMay 2001 for variousinvestments in the State in the power and steel sectors.The 55 MW power plant was successfullycommissioned in October 2001, 6 months ahead of theschedule. The Company achieved its highest ever powergeneration of 720 million units as against 560 million

units last year, a growth of 28%. Apart from captive use, the Company is supplying surplus power to the ChhattisgarhState Electricity Board.The 351 m3 Mini Blast Furnace (MBF) was completed in a record time of 14 months, making it one of the fastestexecuted MBF projects in the country. The 2.5 lakh MT capacity MBF would significantly improve productivity andreduce cost of production of steel. The 24 MVA Submerged Arc Furnace was installed in the steel plant in a recordtime of seven months; making it the fastest indigenously-built Submerged Arc Furnace project in the country. Theproduction of High Carbon Ferro Chrome during the year was 19,743 MT, an increase of 14% over previous year. Aninvestment of Rs. 125 crore has been made in the Mini Blast Furnace and the Submerged Arc Furnace.With a view to further increase productivity and coal efficiency, a new coal washery of 2.5 million MT capacity hasbeen installed at a cost of Rs. 36 crore at the coal mine. Your Company has made an investment of Rs. 350 croreduring the financial year 2001-02 in the state of Chhattisgarh and providing employment opportunities to about10,000 people directly/indirectly in the backward and tribal district of Raigarh.Projects under implementationThe Rail and Universal Beam Mill is at an advanced stage of implementation and is expected to be commissionedin the current financial year. The mill is being established at a cost of Rs. 396 crore and will manufacture the world�slongest 120 meter rails and parallel flange beams and columns in larger sizes, for the first time in the country.Indian Railways currently have a backlog of track renewal of 12,600 kms and a demand increase by 2,50,000 MTPAof rails is projected for the next 5 years. Your Company has already received export enquiries from a number ofcountries and is taking further action in this regard. These long rails would result in considerable savings for theIndian Railways, besides ensuring safety. The use of universal beams and columns would be cost effective to theconstruction and infrastructure sectors.Future plansYour Company has the world�s largest coal-based sponge iron manufacturing capacity and recorded its highestever production of sponge iron of 5.61 lakh MT this year. The Company has plans to enhance the production of steel

EXECUTIVE VICE CHAIRMAN AND MANAGING DIRECTOR�S MESSAGE


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up to 1 million tonne with the setting up of another SteelMelting Shop, adjacent to the Rail & Universal beamMill. One more 55 MW power plant is being set up and isexpected to start generation of power in about 18months.Utmost importance is being given to all aspects of qualityin our business operations and strict adherence to soundpolicies and practices of quality management. Effortsare being made in the fields of research anddevelopment to reduce costs and achieve high levels ofoperational efficiency.Your Company has successfully implemented the ERP,SAP-R3 in all units at Raigarh. This has tremendouslyhelped the Company in not only integrating the variousfunctions and improving coordination but also cuttingdown on costs of production and enhancing productivityand profitability.Award and recognitionDuring the year your Company was awarded first prizefor quality by Indian Institute of Metals and also the firstprize for energy conservation instituted by the Ministry ofPower, Government of India in the integrated steel plantscategory.New areas of growthContinuing its thrust towards planned growth anddiversification, your Company is planning to enter thearea of diamond exploration and mining. Negotiationshave been initiated with international majors, who haveevinced interest for joint ventures.To maintain leadership in the field of sponge iron, powerand steel, the Company has made plans to invest in theState of Orissa, where adequate reserves of iron oreand coal are available. In this connection, aMemorandum of Understanding is to be signed with theGovernment of Orissa shortly.The credit for achieving these milestones goes to thecontinuous support and cooperation of shareholders,state/central government departments, financialinstitutions, banks, dedicated employees of theCompany and all partners in business. I, on my behalfand on behalf of the Board of Directors, express mysincere gratitude for their support and look forward toreceiving the same in the future as well.

Naveen Jindal

A view of the Mini Blast Furnace

Twin-strand bloom caster at existing SMS

Rotary kilns for manufacture of sponge iron


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ToThe Members,Jindal Steel & Power Limited.Notice is hereby given that the 23rd Annual GeneralMeeting of the members of the Company will be held onThursday, the 26th of September, 2002 at 12.00 noon atthe registered office of the Company at Delhi Road, Hisar125 005, Haryana to transact the following business.Ordinary Business1. To receive, consider and adopt the Balance Sheet

as at 31st March 2002 and Profit & Loss Account forthe financial year ended on that date and the Reportsof Directors and Auditors thereon.

2. To declare dividend on equity and preference sharecapital.

3. To note payment of dividend on 10.5% 10,00,000Cumulative Redeemable Non-Convertible PreferenceShares of Rs.100/- each.

4. To appoint a Director in place of Shri O. P. Jindal whoretires by rotation and being eligible offers himselffor re-appointment.

5. To appoint a Director in place of Shri Ratan Jindalwho retires by rotation and being eligible offers himselffor re-appointment.

6. To appoint M/s S.S. Kothari & Co., CharteredAccountants asAuditors of the Company to hold officefrom the conclusion of this meeting to the conclusionof the next meeting and to fix their remuneration.

Special Business7. To consider and, if thought fit, to pass with or without

modification(s), the following resolution as anOrdinary Resolution:�RESOLVED THAT in accordance with the provisionsof Section 257 and all other applicable provisions, ifany, of the Companies Act, 1956, Shri RajendraSingh, an Additional Director of the Company whoholds office upto the date of this Annual GeneralMeeting, as per provisions of Section 260 of theCompanies Act, 1956 and in respect of whom theCompany has received a notice in writing from amember proposing his candidature for the office ofDirector, be and is hereby appointed as a Director ofthe Company, liable to retire by rotation.�

8. To consider and, if thought fit, to pass with or withoutmodification(s), the following resolution as anOrdinary Resolution:

NOTICE�RESOLVED THAT in accordance with the provisionsof Section 257 and all other applicable provisions, ifany, of the Companies Act, 1956, Shri Amir Z. SinghPasrich , an Additional Director of the Company whoholds office upto the date of this Annual GeneralMeeting, as per provisions of Section 260 of theCompanies Act, 1956 and in respect of whom theCompany has received a notice in writing from amember proposing his candidature for the office ofDirector, be and is hereby appointed as a Director ofthe Company, liable to retire by rotation.�

9. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as anOrdinary Resolution:�RESOLVED THAT in accordance with the provisionsof Section 257 and all other applicable provisions, ifany, of the CompaniesAct, 1956, Shri H. V. Lodha, anAdditional Director of the Company who holds officeupto the date of this Annual General Meeting, as perprovisions of Section 260 of the CompaniesAct, 1956and in respect of whom the Company has receiveda notice in writing from a member proposing hiscandidature for the office of Director, be and is herebyappointed as a Director of the Company, liable toretire by rotation.�

10.To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as anOrdinary Resolution:�RESOLVED THAT in accordance with the provisionsof Section 257 and all other applicable provisions, ifany, of the CompaniesAct, 1956, Shri S. N. Singh, anAdditional Director of the Company who holds officeupto the date of this Annual General Meeting, as perprovisions of Section 260 of the CompaniesAct, 1956and in respect of whom the Company has receiveda notice in writing from a member proposing hiscandidature for the office of Director, be and is herebyappointed as a Director of the Company, liable toretire by rotation.�

11. To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as anOrdinary Resolution:�RESOLVED THAT pursuant to Sections 198, 269,309 and other applicable provisions, if any, ScheduleXIII to the Companies Act, 1956 and Article 139 ofArticles of Association of the Company approval beand is hereby given to the appointment of ShriS.N.Singh as Wholetime Director of the Company


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for a period of five years with effect from 01.05.2002on terms and conditions including remuneration asgiven below with liberty to the Board of Directors toalter or vary the same so as not to exceed the limitsset out in Sections 198 and 309 and Schedule XIII tothe Companies Act, 1956 or any amendmentsthereto, as may be agreed to between the Board ofDirectors and Shri S. N. Singh:1. Period of agreement: 5 years with effect from

01.05.2002 to 30.04.2007.2. Remuneration

(a) Basic Salary: Rs.60,000/-(Rupees sixtythousand only) per month.(b) Allowances:i) Responsibility allowance: Rs.21,000/- (Rupeestwenty one thousand only) per month.ii) Special allowance: Rs.21,600/- (Rupees twentyone thousand six hundred only).iii) Children education allowance: Rs.200/-(Rupees two hundred only) per month.iv) Uniform maintenance allowance: Rs.200/-(Rupees two hundred only) per month.v) Leave Travel allowance: 8.33% of the basicsalary, subject to a maximum of Rs.15,000/-(Rupees fifteen thousand only) per annum.He shall also be entitled to the followingperquisites:i) Company�s accommodation at Raigarh as perCompany housing rules.ii) Reimbursement of expenses for professionalpursuits not exceeding Rs.300/- (Rupees threehundred only) per month.iii) Reimbursement of medical expenses upto8.33% of the basic salary, but not exceedingRs.15,000/- (Rupees fifteen thousand only) perannum.iv) Payment of bonus/ ex-gratia amount as maybe declared by the Company each year.v) Reimbursement of discretionery perquisites /allowances of Rs.2,00,000 per annum.vi) Provident Fund in accordance with the rules ofthe Company.vii) Gratuity in accordance with the rules of theCompany.viii) Company�s car with actual running andmaintenance by the Company.ix) Free telephone facility at residence for officialpurposes only.

3. He shall also be entitled to reimbursement ofexpenses actually and properly incurred by himfor the business of the Company.

4. He shall not be paid any sitting fees for attendingthe meetings of the Board of Directors orCommittees thereof.

5. He shall be entitled to and paid any otherallowance/perquisite/incentive/facility as may bepayable to him under the rules of the Companyfrom time to time provided however, that the totalremuneration does not exceed the limitsprescribed in Sections 198 and 309 and ScheduleXIII to the Companies Act, 1956.

RESOLVED FURTHER THAT Shri S. N. Singh, in thecapacity of Wholetime Director, will report to the ViceChairman and Chief Executive Officer of theCompany and will be entrusted with the powers,authorities, functions, duties, responsibilities etc. byhim from time to time.�

12.To consider and, if thought fit, to pass with or withoutmodification(s) the following resolution as anOrdinary Resolution:�RESOLVED that pursuant to Sections 309, 310 andall other applicable provisions, if any, and ScheduleXIII to the Companies Act, 1956,approval be and ishereby given to the revision of remuneration of ShriNaveen Jindal, Executive Vice Chairman andManaging Director of the Company in the followingmanner with effect from 1st April, 2002.Basic Salary: Rs.5,00,000/- (Rupees five lac only)per month.Commission: 1% of net profits subject to a maximumof 50% of annual basic salary.Perquisites and allowances:In addition to the salary and commission, he shallalso be entitled to the following:i) Residential accommodation for which 10% of hissalary shall be deducted as rent or allow himHouse Rent Allowance in lieu thereof.

ii) Reimbursement of medical expenses for self andfamily.

iii) Leave travel allowance for self and family inaccordance with the rules of the Company.

iv) Payment of club fees including life membershipfees.

v) Contribution to Provident Fund and/orSuperannuation Fund in accordance with therules of the Company.

vi) Personal Accident Insurance, the annual premiumfor which does not exceed Rs.10,000/-.

vii)Gratuity payment computed at half a month�ssalary for each completed year of service.

viii) Free use of car with driver for the business of theCompany.


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ix) Free telephone facility at residence.x) Earned leave on full pay and allowance as perrules of the Company.

1. He shall also be entitled to reimbursement ofexpenses actually incurred by him for the businessof the Company.

2. He shall not be paid any sitting fees for attendingthe meetings of the Board of Directors orCommittee thereof.�

13.To consider and, if thought fit, to pass with or withoutmodification(s), the following resolution as anOrdinary Resolution:�RESOLVED THAT pursuant to Section 309, 310 andall other applicable provisions, if any, and ScheduleXIII to the Companies Act, 1956,approval be and ishereby given to the revision of remuneration of ShriVikrant Gujral, Vice Chairman and Chief ExecutiveOfficer of the Company in the following manner witheffect from 1st April, 2002.1. Remuneration:

Basic Salary: Rs.1,15,000/- (Rupees one lacfifteen thousand only) per month.Special Allowance: Rs.60,200/- (Rupees sixtythousand two hundred only) per month.

2. He shall also be entitled to and paid any otherallowance / perquisite / incentive / facility as maybe payable to him under the rules of the Companyfrom time to time.

RESOLVED FURTHER that all other terms andconditions of remuneration as contained in theresolution passed by the shareholders in theirmeeting held on 28.09.2001 shall remainunchanged.�

14. To consider and, if thought fit, to pass with or withoutmodifications, the following resolution as an OrdinaryResolution.�RESOLVED THAT pursuant to Section 309, 310 andall other applicable provisions, if any, and ScheduleXIII to the Companies Act, 1956, approval be and ishereby given to the revision of remuneration of ShriAnand Goel, Wholetime Director of the Company inthe following manner with effect from 1st April, 2002.1. Remuneration:a) Basic Salary: Rs.55,500/- (Rupees fifty five

thousand five hundred only) per month.b) Allowance: Special allowance not exceeding

Rs.11,000/- (Rupees eleven thousand only) permonth.

2. He shall also be entitled to and paid any otherallowance / perquisite / incentive / facility as maybe payable to him under the rules of the Companyfrom time to time.

RESOLVED FURTHER that all other terms andconditions mentioned in the resolutions passed bythe shareholders in their meetings held on14.09.2000 and 28.09.2001 shall remainunchanged.�

By order of the Board

T.K. Sadhu(Company Secretary)

Registered Office:Delhi Road,Hisar 125 005.Dated : 02-08-2002.

Notes:1. A MEMBER ENTITLED TO ATTENDAND VOTE IS

ENTITLEDTOAPPOINTAPROXYTOATTENDANDVOTEINSTEADOFHIMSELFANDTHEPROXYNEEDNOTBEAMEMBER.

2. A blank proxy form is sent herewith.3. The instrument appointing proxy should be

deposited at the registered office of the Companynot less than 48 hours before the commencementof the meeting.

4. An Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956, in respect of items 7to 14 of the Notice is annexed hereto.

5. All documents referred to in the accompanyingNotice and Explanatory Statement are open to

inspection at the registered office of the Companyduring office hours on all working days upto the dateof Annual General Meeting between 11:00 AM and1:00 PM.

EXPLANATORYSTATEMENTPURSUANTTOSECTION173OFTHECOMPANIESACT, 1956.

Resolution no.7Shri Rajendra Singh was appointed as an AdditionalDirector of the Company on 13.11. 2001. As perprovisions of section 260 of the CompaniesAct, 1956,he holds office as an Additional Director upto thedate of the ensuing Annual General Meeting. TheCompany has received a notice in writing from amember proposing his candidature as a Directorliable to retire by rotation in terms of section 257 of


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the Companies Act, 1956.Shri Rajendra Singh is a civil engineer and MBA fromDelhi University. He has varied experience of around38 years in the fields of energy and power generation.He has held prestigious positions includingChairman and Managing Director of NationalThermal Power Corporation and is presentlyChairman of Gujrat Positra Port Infrastructure Ltd.He has been awarded the Urja Ratna for lifetimecontribution to the energy sector by Hitkarini Sabha,Jabalpur. He has also been honoured by the Boardof Irrigation & Power with their Diamond Jubileeaward as the �Best Power Man� in 1995. He wasalso felicitated by National Foundation of IndianEngineer (NAFEN) in 1996 with the �Power Man ofthe Decade� Award.The Board recommends this resolution to theshareholders for their approval.None of the Directors except Shri Rajendra Singh isinterested or concerned in the said resolution.Resolution no. 8Shri Amir Z. Singh Pasrich was appointed as anAdditional Director of the Company on 13.11. 2001.As per provisions of section 260 of the CompaniesAct, 1956, he holds office as an Additional Directorupto the date of the ensuingAnnual General Meeting.The Company has received a notice in writing from amember proposing his candidature as a Directorliable to retire by rotation in terms of section 257 ofthe Companies Act, 1956.Shri Amir Z. Singh Pasrich is a leading advocate anda member/office bearer of the International BarAssociation and a member of the Supreme CourtBar Association and Delhi High Court BarAssociation. He has practiced law for over 10 yearsand specialises in a broad spectrum of legal areasincluding commercial litigation, banking, aviation law,company law, labour and industrial laws,commercial arbitration and laws relating to property.He has been appointed as the counsel (in India) tothe Government of Singapore and agent of the Crownfor the Government of Canada. He is also an advisorto the Embassies of Greece and Finland (Delhi) aswell as several multinational companies.The Board recommends this resolution to theshareholders for their approval.None of the Directors except Shri Amir Z. SinghPasrich is interested or concerned in the saidresolution.Resolution no. 9Shri H. V. Lodha was appointed as an Additional

Director of the Company on 13.11.2001. As perprovisions of section 260 of the CompaniesAct, 1956,he holds office as an Additional Director upto thedate of the ensuing Annual General Meeting. TheCompany has received a notice in writing from amember proposing his candidature as a Directorliable to retire by rotation in terms of section 257 ofthe Companies Act, 1956.Shri H. V. Lodha is a Chartered Accountant and hasaround 16 years of vast experience in the field ofdomestic and international finance, projectstructuring, capital mobilisation, joint ventures /collaborations, mergers, reconstruction etc.The Board recommends this resolution to theshareholders for their approval.None of the Directors except Shri H. V. Lodha isinterested or concerned in the said resolution.Resolution no.10Shri S.N. Singh was appointed as an AdditionalDirector of the Company on 23.04.2002. As perprovisions of section 260 of the CompaniesAct, 1956,he holds office as an Additional Director upto thedate of the ensuing Annual General Meeting. TheCompany has received a notice in writing from amember proposing his candidature as a Directorliable to retire by rotation in terms of section 257 ofthe Companies Act, 1956.Shri S. N. Singh is a B Tech. from Bihar Institue ofTechnology, Sindri (Ranchi University) and has over31 years of working experience in the steel industry.Before joining the Company he was ExecutiveDirector, Lloyds Steel Industries Ltd., where heworked for a period of seven years.The Board recommends this resolution to theshareholders for their approval.None of the Directors except Shri S. N. Singh isinterested or concerned in the said resolution.Resolution no.11Shri S . N. Singh joined the Company as ExecutiveDirector from 19.02.2002. Keeping in view his vastexperience and knowledge, the Board appointed himas Wholetime Director of the Company on the termsand conditions as mentioned in the said resolutionfrom 01.05.2002.As per Sections 198, 269, 309, otherapplicable provisions and Schedule XIII to theCompanies Act, 1956, his appointment and paymentof remuneration requires the approval ofshareholders.Section I of Part II of Schedule XIII to the CompaniesAct, 1956, provides that a company having profits ina financial year may pay any remuneration by way of


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salary, dearness allowance, perquisites,commission and other allowances to its managerialpersonnel. However, as per Section 198 read withSection 309 of the Companies Act, 1956 the totalmanagerial remuneration payable by the companyshall not exceed 10% of its net profit. As per auditedaccounts for 2001-02, the Company has earned anet profit of Rs. 107.55 crore, which is consideredsufficient for payment of remuneration to themanagerial personnel of the Company. Therefore,the Board recommends this resolution to theshareholders for their approval.The terms and conditions of appointment andremuneration given in the said resolution may betreated as an abstract of terms of remuneration underSection 302 of the Companies Act, 1956.None of the Directors, except Shri S. N. Singh, isinterested or concerned in the said resolution.Resolution no.12Shri. Naveen Jindal was appointed as ManagingDirector of the Company with effect from 08.05.1998for a period of five years. Considering the statusattached to the position of Executive Vice Chairmanand Managing Director in the industrial sector, thetime, attention and labour he puts in managing theaffairs of the Company, the emoluments drawn bythe Executives in similar positions in steel industryand rising cost of living, the Board has, subject to theapproval of shareholders revised the remunerationof Shri Naveen Jindal as given in the resolution witheffect from 1st April,2002.Section I of Part II of Schedule XIII to the CompaniesAct, 1956, provides that a company having profits ina financial year may pay any remuneration by way ofsalary, dearness allowance, perquisites,commission and other allowances to its managerialpersonnel. However, as per Section 198 read withSection 309 of the Companies Act, 1956 the totalmanagerial remuneration payable by the Companyshall not exceed 10% of its net profit. As per auditedaccounts for 2001-02, the Company has earned anet profit of Rs 107.55 crore, which is consideredsufficient for payment of remuneration to themanagerial personnel of the Company. In terms ofSection 310 and Schedule XIII to the CompaniesAct,1956, the approval of the shareholders is requiredfor the proposed revision. Therefore, the Boardrecommends this resolution to the shareholders fortheir approval.The terms of revision of remuneration given in thesaid resolution may be treated as an abstract of terms

of remuneration under Section 302 of theCompanies Act, 1956.Except Shri Naveen Jindal, Shri O.P. Jindal and ShriRatan Jindal no other Director is interested orconcerned in this resolution.Resolution no.13 & 14Shri. Vikrant Gujral was appointed as Vice ChairmanandChief ExecutiveOfficer of the Companywith effectfrom 17.04.2001 and Shri Anand Goel was appointedas Wholetime Director from 1st August, 2000 for aperiod of five years each. Keeping in view the cost ofliving and their status in the industry, the time andefforts they put in the performance of the functionsthe Board has, subject to approval of theshareholders, revised their remuneration with effectfrom 1st April, 2002 as contained in their respectiveresolutions at No.13 & 14.Section I of Part II of Schedule XIII to the CompaniesAct, 1956, provides that a company having profits ina financial year may pay any remuneration by way ofsalary, dearness allowance, perquisites,commission and other allowances to its managerialpersonnel. However, as per Section 198 read withSection 309 of the Companies Act, 1956 the totalmanagerial remuneration payable by the Companyshall not exceed 10% of its net profit. As per auditedaccounts for 2001-02, the Company has earned anet profit of Rs 107.55 crore which is consideredsufficient for payment of remuneration to themanagerial personnel of the Company. . In terms ofSection 310 and Schedule XIII to the CompaniesAct,1956, the approval of the shareholders is requiredfor the proposed revision. Therefore, the Boardrecommends these resolutions to the shareholdersfor their approval.The terms of revision of remuneration given in thesaid resolutions may be treated as an abstract ofterms of remuneration of the said Directors underSection 302 of the Companies Act, 1956.Except Shri Vikrant Gujral and Shri Anand Goel, noother Director is interested or concerned in therespective resolutions.

By order of the Board

T.K. Sadhu(Company Secretary)

Registered Office:Delhi Road,Hisar 125 005.Dated: 02-08-2002


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For Attention of Shareholders1. Register of members and share transfer books of

the Company will remain closed form 03/09/2002 to14/09/2002 (both days inclusive).

2. Apart from National Securities Depository Ltd. theequity shares of your Company have also beenadmitted for dematerialisation on Central DepositoryServices (India) Ltd. (CDSL), Mumbai and AlankitAssignments Ltd. has been appointed as Registrarand Transfer Agent (R & T Agents) for this purpose.The shareholders have the option to hold theirshareholding in the depository mode bydematerialising their share certificates on either ofthe depositories. The shares of the Company havecome under Compulsory Dematerialisation w.e.f. 24thJuly, 2000.

REQUESTTOTHESHAREHOLDERS3. Please bring alongwith a copy of the Annual Report

and duly filled in attendance slip for attending the

Annual General Meeting.4. Members desiring any information / clarification on

the accounts are requested to write to the Companyat least ten days in advance so as to enable themanagement to keep information ready at theAnnualGeneral Meeting.

5 As per Income Tax Act 1961, tax will be deducted atsource if the amount of dividend exceedsRs 2,500/- unless the Shareholder has sent Form15G to the Company. Please, therefore, send Form15G in duplicate to reach the Company on or before15th September, 2002.

5. MEMBERSAREREQUESTEDTONOTETHATTHECOMPANYHAS CHANGEDTHETRANSFERAGENTINRESPECTOFTHEPHYSICALSHAREHOLDING.THENAMEANDADDRESSOFNEWTRANSFERAGENTISMAS SERVICES PVT. LTD., AB-4, SAFDARJUNGENCLAVE,NEWDELHI 110 029.

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Payment of Dividend through Electronic ClearingService � Invitation LetterDear shareholder,The Reserve Bank of India has introduced a newmethodof payment of dividend which provides you an option tocollect your dividend directly through your bank accountrather than receiving them through post. Under the newmethod, your bank account would be directly creditedthrough the new payment mechanism and an advicethereof would be issued by us after the transaction iseffected. Your bank branch will credit your account andindicate the credit entry as �ECS� in your pass book /statement of account. Payment of dividend upto anamount of Rs.1,00,000/- would be covered under theScheme. The advantages of this service to theshareholders are as under:a. Prompt service of dividend is assured.b. Instant credit to the bank account of the Investors

through electronic clearing at no extra cost.c. Delay in postal service is eliminated.d. No chance of fraudulent encashment of instrument.e. Collection charges for outstation warrants not

required.This would be an additional mode of payment. You would

have the right to withdraw from this mode of payment bygiving an advance notice of six weeks. If you like to availof this new method of payment, you are requested togive mandate in the manner explained hereinbelow. Theinformation provided by you will be kept confidential andwould be utilised only for the purpose of effecting thepayment of dividend.I) FOR SHAREHOLDERS HOLDING SHARES IN

PHYSICAL FORM: PLEASE FILL THE �MANDATEFORM�, PROFORMAOFWHICH ISATPAGE12. THEMANDATE FORM SHOULD BE SENT TO THECOMPANYATTHEFOLLOWINGADDRESS:SHAREDEPARTMENT, JINDALSTEEL&POWERLIMITED,28, NAJAFGARHROAD,NEWDELHI 110 015, TEL.:011-5111838 (5 LINES) BY 15/09/2002.

II) FORSHAREHOLDERSHOLDINGSHARESINDEMATFORM:PLEASEENSURETHATYOUHAVEGIVENTHEFOLLOWINGPARTICULARSTOYOURDEPOSITORYPARTICIPANTA)ACCOUNTTYPE:SAVING/CURRENTB) LEDGERNO./LEDGERFOLIOC) ACCOUNTNO.D)NAMEOFBANKE)ADDRESSOFTHEBRANCHF)BRANCHCODE (9DIGITSASAPPEARINGONTHEMICRBANDOFTHECHEQUEBOOK)


9

ELECTRONICCLEARINGSERVICE(ECS)MANDATEFORMATToThe Company Secretary,Jindal Steel & Power Limited28, Najafgarh Road,New Delhi 110 015Dear Sir,

MANDATEFORELECTRONICCLEARINGSERVICETORECEIVEPAYMENTOFDIVIDENDPlease fill-in the information in CAPITAL LETTERS in ENGLISH ONLY. Please TICK wherever applicable.For shares held in physical formFolio No. --------- For Office use only --------

ECSRef No.

Name of FirstHolderBank NameBranchBranch Code

(9 Digits Code Number appearing on the MICR Band of the cheque by the Bank). Pleaseattach a xerox copy of a chque or a blank cheque of your bank duly cancelled forensuring accuracy of the banks name, branch name and code number.

Account type Saving Current Cash Credit

Ledger No. Ledger Folio No.

A/c No. (as appearing in the cheque book)

Effective date of this mandate

I hereby, declare that the particulars given above are correct and complete. If any transaction is delayed or noteffected at all for reasons of incomplete or incorrect information supplied as above, the company, will not be heldresponsible. I further undertake to inform the Company about change in my Bank account particulars.

Date: (Signature of First Holder)

Note: 1. Jindal Steel & Power Limited retains the right to pay dividend by a warrant / cheque / demand draft,even if the shareholder has enrolled into the ECS.

2. ECS allows credit of dividend into shareholders bank account if their bank branch is covered underECS as per the RBI Regulations.

(FOR SHAREHOLDERS HOLDING SHARES IN PHYSICAL FORM)


10

ToThe MembersJindal Steel & Power LimitedYour Directors are pleased to present the 23rd Annual Report together with the Statement of Accounts for the yearended 31st March, 2002.Financial results

(Rs crore)Particulars Financial year Financial year Growth

ended ended %31.3.2002 31.3.2001

Sales & other income 654.22 577.20 13.34Profit before interest and depreciation 209.57 181.68 15.34Profit after tax 107.55 101.25 6.22Appropriations: Debenture redemption reserve 31.50 15.30

Preference dividend 8.98 8.65Equity dividend 9.03 6.36Corporate tax on dividend 0.11 1.60General reserve 12.50 16.10

DIRECTORS� REPORT

Issue of Share Capital: Employees Stock PurchaseSchemeDuring the year under report, your Company has issued1,83,850 equity shares of Rs.10/- each at a premium ofRs.90/- per share to the employees of the Company interms of SEBI (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Regulations, 1999.These shares were allotted on 29th June�2001. Thedetails of shares allotted to Senior Management is givenin Annexure I. No employee was issued equity sharesunder this scheme which is equal to or in excess of 5%of the shares allotted under this scheme or 1% of theissued share capital of the Company. The Companyhas received full consideration of Rs.1,83,85,000(Rupees one crore eighty three lac and eighty fivethousand only) on allotment from this issue including apremium amount of Rs.1,65,46,500 (Rupees one croresixty five lacs forty six thousand five hundred only). Theearning per share (EPS) as on 31st March 2002 wasRs 76.62.Preferential Issue of Optional WarrantsAs per section 81(1A) of the Companies Act, 1956 andChapter XIII of SEBI (Disclosure & Investor Protection)Guidelines, 2000 the Company has issued 25,00,000warrants to its two promoter companies on 19.04.2002.Each warrant contains an option entitling the holdersthereof to apply for and seek allotment of one equityshare at a price of Rs.155/- (including premium ofRs.145/- per share).

Redemption of Preference SharesThe Company has since redeemed its 13% redeemablenon-convertible preference shares to the extent ofRs.11.0 crore out of total paid-up preference share capitalof Rs.71.0 crore. This redemption was made out ofinternal accruals.Issue of Non-Convertible DebenturesThe Company has issued the following three series ofprivately placed secured redeemable non-convertibledebentures (NCDs) of Rs.100/-each to UTI Bank Ltd.Sl. Particulars of Date of AmountNo. NCDs allotted allotment (Rs.)1 13% 20,00,000 18.05.2001 20,00,00,000/-2 13% 20,00,000 18.10.2001 20,00,00,000/-3 9.5% 40,00,000 13.03.2002 40,00,00,000/-The Company has utilized Rs.40.0 crore received byplacement of 9.5% NCDs (stated in sl.no.3, above) forpre-payment to ICICI Limited to retire high cost debt.This has resulted into substantial saving of interest.DividendYour Directors recommend that interim dividend of 10.5%per annum declared on 25th March 2002 on redeemablenon-convertible preference share capital of Rs.10 croreallotted on 15.09.2000 to UTI Bank Ltd., be treated asfinal dividend for the year 2001-02. Further, dividend forthe year 2001-02 in respect of Equity /Preference sharesis recommended in the following manner for yourconsideration.


11

I. 13% per annum i.e. Rs.13/- per preference shareof Rs.100/- each, on 60,00,000 CumulativeRedeemable Non Convertible Preference Shares.

II. 13% per annum on pro-rata basis, on the20,00,000 partly paid (Rs.5/- per share paid up)Cumulative Redeemable Non-ConvertiblePreference Shares.

III. 70% i.e. Rs 7/- per equity share of Rs.10/- eachon 1,28,96,112 equity shares.

Operational reviewDuring the year, the Company has achieved grossrevenue of Rs.654.22 crore representing 13.34%increase over the previous year and the profit after taxhas increased to Rs.107.55 crore from previous year�sRs.101.25 crore representing an increase of 6.22%. TheReserves and Surplus have swelled to Rs. 452.33 crore,which is a strong indication of sound financial health ofthe Company. Your Company has become a largerplayer in the field of sponge iron, being the largestproducer of sponge iron in the country. It holds about22% of the market share in the country.Sponge IronYour Company has achieved record production of spongeiron of 5,61,504 MT in the year under report, therebyachieving 86.4% capacity utilization. The production ishigher by 12% than that of the last year. All the six kilnsoperated efficiently during the year.The price of sponge iron showed a steady rise duringthe year and the market was vibrant and responsive. It isa matter of great satisfaction that we have sold 4.96 lacMT of sponge iron during the year, which is about 22%higher than that of the last year.SteelYour Company is also manufacturing value-added steelproducts � rounds, billets, blooms and slabs. Productionof these products is decided on the basis of marketabilityand profit margins. This has also resulted in keepingthe inventory at affordable levels. The total production ofslabs, rounds and blooms during the year was 54,724MT as against last year�s production of 1,09,028 MT.The production during the year was low because Slaband Round Caster Shop was undergoing upgradation/modernisation which has been completed in May �02.Ferro ChromeYour Company manufactured 19,743 MT of HC FerroChrome during the year as against 17,251 MT in the lastyear registering an increase of 14.45%.PowerYour Company has increased the generation of powerto 7195.38 lac KWH during the year from 5603.19 lac

KWH from the last year. The major increase in thegeneration has been achieved due to earlycommissioning of additional 55 MW power plant. TheCompany has entered into an arrangement withChhattisgarh State Electricity Board to sell an additional70 MW of power from October 2001.RaipurUnitThe Raipur Unit produced 11243 MT of MS ingots, 742MT of castings and has done machining of 3169 MT asagainst last year�s production of 10,760 MT, 439 MT and948 MT respectively.MiningThe thrust given to scientific mining and reinforcing themining activities by adding more equipment has resultedinto higher production of iron ore and coal at coal mineat Mand Raigarh coal field (Chhattisgarh) and iron oremine at Tensa (Orissa). During the year under report,the production of iron ore in the captive mine at Tensaincreased by 8.66% to 5,54,715MT, as against last year�sproduction of 5,10,527 MT. Your Company has for thefirst time sold iron ore Fines of 1,29,596MT in themarket,thereby generating additional profit. The Company isalso exploring the export potential of this product. Thesale of iron ore Fines is expected to increase to 0.5million tonnes in the current year. The captive coal minehas produced 15.94 lac MT of coal as against last year�sproduction of 14.16 lac MT registering an increase of13%.The captive availability of iron ore, coal and power hasgiven a formidable cushion and added a greater degreeof resilience to your Company. Despite varying degreesof uncertainties in the steel sector in the country duringthe year, the strong fundamentals of your Company havecatapulated it to a commanding position in the steelsector. Good performance can be attributed to an allround growth by way of higher production, higherrealizations, ongoing process of modernization,innovation, effective management of costs andexpenses, improvement in product quality and increasedproductivity.Projects: Completeda) Power Plant: The captive power plant of 55 MW

was commissioned in October 2001, in a recordtime of 18 months and about six months ahead ofscheduled commissioning date in March 2002.The project has been completed within theappraised project cost.

b) Mini Blast Furnace: Your Company hassuccessfully commissioned 2.5 lac MT Mini BlastFurnace in April 2002 within the appraised project


12

cost. This will ensure production of good qualitysteel products of international standards at a lowercost of production giving a strong edge inmarketing of steel products.

Projects: Under Implementationa) Coal Washery: The work on setting up of coal

washery plant with an annual production capacityof 2.5 million MT is going ahead at a fast paceand is expected to be commissioned in July 2002.This Washery is envisaged to treat coal with ashcontent of upto 48% and provide good grade coalhaving 25% ash for production of DRI. Theproduction of high-grade low ash content coal willsubstantially reduce cost of production of spongeiron and increase the productivity of the kilns.

b) Rail & Universal Beam Mill: With a view to improvethe revenues of the Company by addingsynergetic product lines in the existing business,the Company is implementing Rail & UniversalBeam Mill Project at Raigarh with a productioncapacity of 5,50,000 TPA. This project will be firstof its kind in the country to produce world�s longestrails of 120 mtr. length. The implementation ofthis project is progressing satisfactorily and isexpected to start production in March�2003.Indian Railways is the main consumer of rails.Railways world over prefer installation of longerrails in the tracks to add to safety and efficiency intheir operations. There is a huge potential for therails of longer lengths. The demand for rails isincreasing on account of track renewals andincreasing track kms. in the country. Besides, thereis a huge potential for exporting these rails.The mill will also be capable of rolling H-Beams(which are also called Parallel flange beams) anduniversal columns in large sizes providing greatervalue for money to the customer, for the first timein India. The generic advantage of H-Beams islower steel consumption for similar applicationalong with greater choice of products andfacilitating direct bolting/welding construction torender efficiency in construction. The Company,with the proposed Rail & Universal Beam millproject, proposes to enter into the high valueadded product segment. This is a growth strategyof moving from intermediate product to high valueadded item.

Future outlookThe price of sponge iron is firming up due to the overallincrease in demand and low availability of steel scrap.The Government of India has increased the custom duty

on the ship for breaking in the budget-2002 and that willalso help in sustaining higher prices of the sponge iron.Outlook of the iron and steel industry has turned fromnegative to positive due to demand pick up. Higherdemand of steel results into higher demand of spongeiron and better prices. Completion of 2.5 lac MT MiniBlast Furnace and 2.5 million MT Coal Washery wouldreduce the cost of production of steel and sponge ironand that would further enhance the profitability of theCompany in the next year. Because of reduction in thecost of steel making, the Company is planning to marketits steel products, rounds, billets, slabs, blooms etc.,aggressively in the next year.ListingThe equity shares of your Company are listed on TheDelhi Stock Exchange Assn. Ltd., The Stock Exchange,Mumbai, The Chennai Stock Exchange Assn. Ltd., TheCalcutta Stock ExchangeAssn. Ltd., The Stock Exchange,Ahmedabad and the National Stock Exchange of IndiaLtd. The Company has paid listing fee for 2002-03 to allthe aforesaid Stock Exchanges. The shares are undercompulsory dematerialisation and are traded in rollingsettlement mode of trading from July 2, 2001.Corporate GovernanceYour Company has voluntarily complied with certainprovisions of the corporate governance code in thefinancial year 2001-02 through constitution/reconstitution of various committees and since then hastaken adequate steps to ensure that all mandatoryrequirements of corporate governance are duly compliedwith. A separate report each on corporate governanceand management discussions and analysis givenelsewhere in the annual report are annexed hereto asannexure IV and V respectively as part of Annual Reportalong with Auditors� Certificate on its due compliance.FixedDepositsFixed Deposit schemes, which were introduced in Feb.2000, have received tremendous response from thepublic. The number of Fixed Deposit holders hasincreased to over 20,000 and aggregate amount ofoutstanding Fixed Deposits as on 31.03.2002 wasRs.24.33 crore. The number of deposits that havematured but were unclaimed as on 31.03.2002 wasRs.21.04 lac representing 128 deposit holders. Sincethen 71 deposits, totaling Rs.11.94 lac, havesubsequently been paid / renewed.DirectorsShri Rajendra Singh, Shri Amir Z. Singh Pasrich andShri Harsh Vardhan Lodha have joined the Board from13.11.2001 as Additional Directors of the Company.


13

Besides, Shri S. N. Singh, who joined the Company asExecutive Director (Operations) on 19.02.2002 has beenappointed as an Additional Director from 23.04.2002.He has been appointed asWholetime Director with effectfrom 01.05.2002.All theseAdditional Directors hold officeupto the date of forthcoming Annual General Meeting ofthe Company. We have received notices fromshareholders under Section 257 of the Companies Act,1956 proposing their candidature for appointment asDirectors of the Company.Shri M. L. Gupta and Shri G. D. S. Sohal have resignedfrom the Directorship of the Company with effect from11.11.2001 and 15.03.2002 respectively and ceased tobe Wholetime Directors from the respective dates. TheBoard places on record its appreciation of the servicesrendered by them during their tenure on the Board.Shri O. P. Jindal and Shri Ratan Jindal retire by rotationat the forthcoming Annual General Meeting and beingeligible offer themselves for re-appointment.Particulars of conservation of energy, technologyabsorption and foreign exchange earnings and outgoInformation pursuant to Section 217(1) (e) of theCompaniesAct, 1956 read with Rule 2 of the Companies(Disclosure of Particulars in the Report of Board ofDirectors) Rules 1988 regarding conservation of energy,technology absorption and foreign exchange earningsand outgo is given in the Annexure II forming part of thisreport.Particulars of employeesThe particulars of employees as required under Section217 (2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules 1975, asamended, are set out in Annexure III to the Directors�Report. However, as per the provisions of Section219(1)(b)(iv) of the Companies Act, 1956 the AnnualReport and Accounts are being sent to all theshareholders of the Company excluding the aforesaidinformation. Any shareholder of the Company interestedin obtaining such particulars may write to the Company.AuditorsM/s S.S.Kothari & Co., Auditors of the Company holdoffice upto the conclusion of the ensuing Annual GeneralMeeting. The Company has received communicationfrom them to the effect that their appointment, if made,would be within the limits prescribed under Section224(1B) of the CompaniesAct, 1956. They are proposedto be appointed as Auditors of the Company for thefinancial year 2002-03.Environmental protectionWe believe that human beings and other living organism

have a legitimate claim to clean environment includingpollution free air and water. Due to fast industrialisationin the country, it has become imperative to takenecessary steps to prevent the pollution of air and waterand preserve natural surroundings by employing varioustechnical as well as other devices. At the plants inRaigarh and Raipur, the need to protect the environmentand creating and protecting vegetation and naturalsurroundings have become a way of life and integralpart of the plant. During the year 35,000 trees wereplanted in the factory premises and it is proposed toplant another 1,00,000 trees during the current year.Technical devices have been installed to prevent pollutionof air and water. This is a continuous process and willalways receive the highest attention and priority of themanagement. The Company has been accredited withISO 14001 by the British Standard Institution.Human resource developmentIt is the natural urge of your Directors to reach and stayat the top. They are aware that human resource is playinga vital role in shaping the destiny of your Company, whichis endowed with experienced and knowledgeable bandof technical, management and financial experts. Humanresource development is the key area, which is beingstrengthened to meet the ever growing challenges inmotivating and retaining talent. Rules, policies,strategies and procedures are streamlined with a viewto achieve this end. Training programmes are organisedon various subjects to update their knowledge and makethem aware of latest management techniques inhandling human power. During the year, your Companysponsored 33 middle level management executives inbatches for 10 weeks training programme withManagement Development Institute (MDI), Gurgaon.Such training programmes are being organised regularlyfor enhancing the skills of employees. With a view tocreate a sense of belongingness, the employees wereoffered shares of the Company under the EmployeesStock Purchase Scheme.Directors� responsibility statementPursuant to the requirement under sub Section 2AA ofSection 217 of the Companies Act, 1956 with respect tothe Directors Responsibility Statement, it is herebyconfirmed:i) that in preparation of the annual accounts for the

financial year ended 31.03.2002, the applicableaccounting standards have been followed alongwith proper explanations relating to materialdepartures.

ii) that the Directors had selected such accountingpolicies and applied them consistently and made


14

judgements and estimates that are reasonableand prudent so as to give a true and fair view ofthe state of affairs of the Company at the end offinancial year and of the profit of the Company forthe year under report.

iii) that the Directors had taken proper and sufficientcare for the maintenance of adequate accountingrecords in accordance with the provisions of theCompanies Act, 1956 for safeguarding the assetsof the Company and for preventing and detectingfraud and other irregularities.

iv) that the Directors had prepared the accounts forthe financial year ended 31.03.2002 on a �goingconcern basis�.

AppreciationWe wish to place on record our appreciation of theservices of the sincere workers, staff and executives of

the Company, which have largely contributed to itsefficient management. Yours Directors also wish toplace on record their appreciation for the valuablecooperation and support received from the FinancialInstitutions, Banks, the Government of India and variousState Government departments. We would also like toexpress thanks to our Shareholders andDebentureholders for their confidence andunderstanding.

For and on behalf of the Board

(O.P.Jindal)Chairman

Date: 12.06.2002Place: New Delhi

ANNEXUREIDIRECTORS�REPORTThe details of shares allotted to Senior Management is given below:

Sl.No. Name Designation No. of Shares1 Mr. Vikrant Gujral Director 50002 Mr.Anand Goel Director 25003 Mr.M.L.Gupta Director 20004 Mr. G.D.S. Sohal Executive Director 25005 Mr. C.S. Tewary Executive Director 15006 Mr. Rajesh Kumar Jha Executive Vice President 30007 Mr. Brij Mohan Goel Sr. Vice President 15008 Mr. Sushil Kumar Maroo Vice President 4000

ANNEXUREIIDIRECTORS�REPORTPARTICULARSREQUIREDUNDER THECOMPANIES(DISCLOSUREOFPARTICULARS IN THEREPORTOFBOARDOFDIRECTORS)RULES, 1988A. Conservation of energy:(a) Energy conservation measures taken:1. Action plan on the basis of energy audit was

executed and less efficient electrical machineswere replaced.

2. Air pre-heater in WHRBNo.1 (Kiln No.1) has beeninstalled

3. Utilisation of in-house generated producer Gaswill replace petro fuel in coal dryer and ladle pre-heating.

4. Cooling tower installed for DRI coolers.5. Mini blast furnace has been installed and

commissioned in April 2002. Action initiated to

utilize the gas which has considerable calorificvalue for the running of the boiler.

6. New energy efficient submerged arc furnace hasbeen installed.

7. Turbine No.1 of power plant has been renovatedresulting in lower steam consumption for powergeneration.

(b) Additional investments and proposals, if any,being implemented for reduction of consumptionof energy:

1. WHRB-1 Air preheater installed at a cost of Rs.12lac.

2. Machine replacement as per energy audit actionplan carried out at a cost of Rs.20 lac.

3. Duel fuel burners for producer gas/furnace oil inareas of coal dryer & ladle pre-heater installed.


15

4. Producer gas holder has been installed.5. Cooling Tower for DRI installed at a cost of Rs.62

lac.(c) Impact of the measures at (a) and (b) for reduction

of energy consumption and consequent impacton the cost of production of goods:Implementation of above measures at (a) & (b)have resulted in saving of 35 lac KW hr annually.

(d) Total energy consumption and energyconsumption per unit of production.As per Form A given below

FORM A: Form for Disclosure of particulars withrespect to conservation of energya. Power and fuel consumption

Current year Previous yearended ended

31.03.2002 31.03.20011. Electricity(a) PurchasedUnits (�000 Kwh) 22,076.54 23,444.00Total amount (Rs lac) 1,113.16 1,121.79Rate/unit (Rs.) 5.04 4.78b) Own generationi) Through dieselgeneratorUnits (�000 Kwh) 1,773.36 92,800.00Units per ltr. of diesel oil 3.54 1.65Cost/unit (Rs.) 5.08 10.25ii) Through steamturbine/generatorUnits (�000 Kwh) 2,58,142.96 2,93,277.00Units per ltr. of fueloil/gas NIL NILCost/unit (Rs.) N.A. N.A.2. CoalQuantity (MT) 12,41,451.03 10,49,352.00Total cost (Rs lac) 5,767.83 4,641.42Average rate (Rs/PMT) 464.60 442.003. FurnaceOilQuantity (K ltrs) 1,171.98 1,567.17Total amount (Rs lac) 109.41 171.35Average rate (Rs/P ltr) 9.34 10.934. Other internal generationQuantity N.A. N.A.Total cost (Rs lac) N.A. N.A.Average rate/Kg. (Rs.) N.A. N.A.

b. Consumption per unit of productionParticulars Current year Previous year

ended ended31.03.2002 31.03.2001

1.ElectricityFor sponge iron mfg. 76.341 73.244(unit/ton)For Ferro Chrome mfg. 3,856.805 3,830.562(unit/ton)For slabs/ingots 1,152.904 1,178.127(unit/ton)For steel melting (ingots 867.000 850.000& castings) (unit/ton)For machine/machinery 1,038.000 357.000parts mfg. (unit/ ton)2. Fuel oilsFor sponge iron mfg. N.A. N.A.(litre/ton)3. CoalFor sponge iron mfg. 1.445 1.393(unit/ton)For Ferro Chrome (unit/ton) 0.362 0.405Power Plant (Unit/000 kwh) 0.562 0.624B. TechnologyAbsorption(e) Efforts made in Technology absorption

As per Form B given belowFORM B: Form for disclosure of particulars withrespect to absorptionResearch and development (R&D)1) Specific areas in which R&D carried out by the

Companyi) Selection of iron ore for DRIii) Development of high tensile grades of steel for

transmission tower making.iii) Adjustment of PCD (distance between electrodes)

in EAF.iv) Reinforcement of lime kiln burners.v) Standardization of fly ash brick making and

increase in productivity.2) Benefits derived as a result of the above R&D:i) By proper selection of Iron Ore for DRI, productivity

of Rotary Kilns has increased and coalconsumption for producing sponge iron has comedown.

ii) By development of high tensile grade of steel fortransmission tower making, value addition ofproduct has been achieved and prospectivemarkets for sale of such steel have beendeveloped.

iii) Power consumption in steel making has come


16

down by adjustment of PCD in EAF.iv) By reinforcement of burners, productivity of lime

Kiln has gone up and quality of lime has improved.Now plant does not use lime from outside source.Moreover, dolo-lime is being produced throughthe kiln thereby avoiding its purchase fromoutside.

v) By standardization and mechanization of fly-ashbrick making, benefits derived are: utilization ofwaste, production of better quality bricks andmeeting the huge requirement of bricks in theplant and construction of housing complex.

3. Future plan of actioni) Standardization of process parameters for mini

blast furnace.ii) Establishing the different properties of Rails as

per Indian Railway�s specification.iii) Standardization of beam blank caster parameters

and product development.iv) Standardization of new coal washery at mine

head.v) Measurement of gases in steel and reducing the

O, N & H content.vi) Standardization of rolling parameter for rails &

beam/structurals4. Expenditure on R&Di) Capital Rs.10.42 lacii) Recurring Rs.71.29 laciii) Total Rs.81.71 laciv) Total R&D expenditure as a percentage of total

turnover: 0.13%Technology absorption, adaptation and innovation1. Efforts in brief, made towards technology

absorption, adaptation and innovation:Plant has adopted technology of Mini Blast furnace

to produce hot metal from iron ore. This has beenimplemented with the assistance from MECON.

2. Benefits derived as a result of the above effortse.g. product improvement, cost reduction, productdevelopment, import substitution, etc.:Reduction in power consumption in steel making,thereby reducing the cost. This has also resultedin quality improvement by reducing gas content,particularly, nitrogen in steel. The reduced nitrogencontent has helped in development of forgingquality steel grades.

3. In case of imported technology (imported duringthe last 5 years reckoned from the beginning ofthe financial year) following information may befurnished.

a) Technology Imported: Nilb) Year of Import: N.A.c) Has technology been fully absorbed: N.A.d) If not fully absorbed, areas where this has not

taken place, reason therefore and future plans ofaction: N.A.

C. Foreign Exchange Earnings andOutgoa) Activities relating to export: initiatives taken to

increase export: development of new exportmarket for products and services and exportplans.The company has exported Sponge Iron toBangladesh. Efforts are being made to identifymore export markets.

b) Foreign Currency used Rs.5,124.32 lacForeign Currency earned Rs.323.09 lac

ANNEXUREIVDIRECTORS�REPORTCORPORATEGOVERNANCEIntroductionThe Securities and Exchange Board of India (SEBI) hasintroduced a code of corporate governance forimplementation by companies listed at the stockexchanges by effecting amendments in clause 49 of thelisting agreement. The above mentioned code isapplicable to your Company from the financial year 2001-2002 and latest by 31st March 2002. Your Company hascomplied in all material respects with the features ofcorporate governance. The following is a report on theCorporate Governance Code as implemented by yourCompany.

1) Company�s philosophy onCorporate GovernanceYour Company�s philosophy on corporate governanceenvisages the attainment of the highest levels oftransparency, accountability and equity in all spheres ofoperations of the Company and conduct of its businessinternally and externally, including its interaction withemployees, shareholders, deposit holders, creditors,consumers and institutional and other lenders andplaces due emphasis on regulatory compliance. TheCompany aims at achieving the highest internationalstandards of corporate governance.The Company believes that all its systems, operations,decisions and actions must be directed towards the


17

attainment of the underlying goal of enhancing Corporateperformance by achievement of maximum standards ofcost efficiency, product quality, customer satisfaction andmaximising shareholder value over a sustained periodof time.2) Board of DirectorsPresently the Company�s Board consists of 12members, out of which 8 are Non-Executive Directors.All Directors, Executive or Non-Executive, areprofessionally competent and highly experienced in theirrespective fields.i) Present structure of Board of DirectorsSl. Name Designation Executive/No. Non-Exec.1. Shri O.P.Jindal Chairman Non-

Executive2. Shri Ratan Jindal Director Non-

Executive3. Shri Naveen Executive Vice Executive

Jindal Chairman &ManagingDirector

4. Shri Vikrant Gujral Vice Chairman Executive& Chief ExecutiveOfficer

5. Shri Subir Bisht Director Non-Nominee Executive(ICICI Bank Ltd.)

6. Shri R. K. Kapoor Director Non-Nominee (IDBI) Executive

7. Shri H. V. Lodha Director Non-Executive

8. Shri Rajendra Director Non-Singh Executive

9. Shri Amir Z. Singh Director Non-Pasrich Executive

10.Shri Arvind Director Non-Parakh Executive

11. Shri Anand Goel Wholetime ExecutiveDirector

12. Shri S. N. Singh Wholetime ExecutiveDirector

The Chairman of the Board is a Non-Executive Directorand the number of independent Directors on theBoard meets the requirements of CorporateGovernanceii) BoardmeetingsThe Board of Directors as well as its variousspecialised committees constituted by the Board heldas many as 33 meetings including 24 meetings of

the local committee of Directors, 2 meetings of AuditCommittee and 7 meetings of the Board during 2001-2002.Detailed agenda notes and the information requiredto be given in terms of business on the agenda werecirculated in advance to the Directors and all matterswith explanatory notes/reports relating to therespective committees were circulated to themembers of the committees sufficiently in advanceof their meetings.The Directors, including Non-Executive Directors,actively participated in the deliberations of the Board.The maximum interval between any two meetingswas 65 days. The Board held the meetings on thefollowing dates, viz., 04.04.2001, 17.04.2001,12.05.2001, 25.07.2001, 29.10.2001, 13.11.2001 and30.01.2002.iii) Attendance of DirectorsThe overall attendance of the Directors for the year2001-02 is shown hereunder:

Name of Meetings Meetings Attendancethe Director held during attended at the last

the tenure during AGM heldof the the tenure on 28thDirector Sept., 2001

Shri O.P.Jindal 7 - YesShri Ratan Jindal 7 1 YesShri Naveen Jindal 7 7 YesShri Anand Goel 7 7 -Shri Arvind Parakh 7 6 Yes*Shri Vikrant Gujral 6 6 Yes*Shri Amir Z. SinghPasrich 2 2 -*Shri Harsh VardhanLodha 2 - -*Shri Rajendra Singh 2 2 -*Shri R.K. Kapoor 3 2 -Shri Subir Bisht 7 4 -**Shri G.D.S. Sohal 1 - -**Shri M. L. Gupta 5 - -* Joined during the year** Resigned during the year


18

iv) Other DirectorshipsThe number of Directorships held in other corporatebodies by the Directors is as follows:Name No. of No. of

Directorships memberships ofin other committees in

Companies other CompaniesPrivate Public Chair- Member-Comp- Comp- man- shipanies anies ship

Shri O. P. Jindal - 4 - -Shri Ratan Jindal 1 8 - -Shri Naveen Jindal 4 4 1 1Shri Anand Goel 1 2 - -Shri Arvind Parakh - - - -Shri Vikrant Gujral - - - -Shri Subir Bisht - 1 - -Shri R. K. Kapoor - 4 - -Shri RajendraSingh 1 2 - -Shri Amir Z. SinghPasrich 2 - - -Shri H. V. Lodha - 13 4 5Shri S.N. Singh - - -v) Membership of Board Committees:None of the Directors hold membership in more than10 committees or Chairmanship of more than 5committees across all companies in which he is aDirector.vi) Details of Directors being appointed/re-appointed at the forthcoming Annual GeneralMeeting:Shri O. P. Jindal and Shri Ratan Jindal retire by rotationand being eligible have offered themselves to be re-appointed as Directors of the Company. ShriRajendra Singh, Shri H. V. Lodha, Shri Amir Z SinghPasrich and Shri S. N. Singh were appointed asAdditional Directors and hold office upto the ensuingAnnual General Meeting. Shri S.N. Singh has beenappointed as Wholetime Director of the Companyw.e.f. 01.05.2002. The particulars as to theirexperience, expertise and Directorships in othercompanies are given below:SHRI O.P. JINDAL is the founder of the Jindal Groupand has been in the field of steel industry for the lastfour decades. He is a visionary and has successfullyguided this Group to the present level of eminence inthe steel sector. He has a passion for in-housedevelopment of new technologies and products,which has resulted in import substitution of some

critical equipments for steel industry, enabling settingup of new projects in India at low cost. He has beenresponsible for formulation of major new projects ofthe Group, overseeing their implementation,marketing of steel products, arranging of funds fromfinancial institutions/banks and expansion/modernization, etc. He is Chairman of Jindal StripsLimited and Jindal Industries Limited and holdsDirectorship in Jindal Strips Limited, Jindal IndustriesLimited, Rohit Tower Buildings Limited and NalwaSponge Iron Limited. He has been a Member of LokSabha from Kurukshetra, Haryana, and is currently amember of State Legislative Assembly, representingHisar constituency in the State of Haryana, for thesecond time.SHRI RATAN JINDAL is an industrialist and has morethan 22 years of experience in the field of steelindustry. He is presently the Vice-Chairman andManaging Director of Jindal Strips Ltd. and has beenholding the position of the Managing Directorhipsince1994. He is on the Board of the Company since1980 and has guided the Company to its presentlevel of growth and development. He is a Director ofJindal Strips Limited, Shalimar Paints Ltd., JindalEquipment and Leasing Consultancy Services Ltd.,Aseem Travels Ltd., Massillon Stainless Inc., USA,Jindal Stainless Mauritius Ltd. Sonabheel Tea Ltd.,Cross Border IT (India) Ltd. and Nalwa Farms Pvt.Ltd.SHRI RAJENDRA SINGH is a civil engineer and MBAfrom Delhi University. He has varied experience ofaround 38 years in the fields of energy and powergeneration. He has held prestigious positionsincluding Chairman and Managing Director ofNational Thermal Power Corporation and is presentlyChairman of Gujarat Positra Port Infrastructure Ltd.He is a Director in Gujrat Positra Port InfrastructureLtd., Jaypee Greens Ltd. and KSK Energy VenturesPvt. Ltd. He is also on the Board of IIM, Indore. Hehas been awarded the Urja Ratna for lifetimecontribution to the energy sector by Hitkarini Sabha,Jabalpur. He has also been honoured by the Boardof Irrigation & Power with their Diamond Jubilee awardas the �Best Power Man� in 1995 He was alsofelicitated by National Foundation of Indian Engineer(NAFEN) in 1996 with the �Power Man of the Decade�Award.SHRIAMIR Z. SINGHPASRICH is a leading advocateand a member/office bearer of the International BarAssociation and a member of the Supreme CourtBar Association and Delhi High Court BarAssociation.


19

He specialises in a broad spectrum of legal areasincluding commercial litigation, banking, aviation law,company law, labour and industrial law, commercialarbitration and laws relating to property. He has beenappointed as the counsel (in India) to the Governmentof Singapore and agent of the Crown for thegovernment of Canada. He is also an advisor to theembassies of Greece and Finland (Delhi) as well asseveral multinational companies. He is a Director ofStandard Data Pvt. Ltd. and Cashco India Pvt. Ltd.SHRI H. V. LODHA is a CharteredAccountant and hasaround 16 years of vast experience in the field ofdomestic and international finance, projectstructuring, capital mobilisation, joint ventures/collaborations, mergers, reconstruction etc. He is aDirector of Alfred Herbert (India) Ltd., AdvanceBusiness Services Ltd., Bihar Caustic and ChemicalsLtd., Birla Corporation Ltd., Birla DLW Ltd., Central

Business Services Ltd. (Alternate), Citi ConsultantsLtd.(Alternate), Elco Consultants Ltd. (Alternate),Fenner (India) Ltd..(Alternate), Harsh Chemicals Ltd.(Alternate), HGI Industries Ltd., Manoraj InvestmentLtd. (Alternate), OCL India Ltd., Optic Fiber Goa Ltd.,Shree Guru Carbide and Chemicals Ltd. (Alternate),Sicpa India Ltd., Swiss India Financial ServicesCompany Ltd., TI Diamond Chain Ltd., Thai CarbonBlack Public Company Ltd. and Universal Cables Ltd.He is also a member of the main committee of FICCI.SHRI S. N. SINGH is a B Tech. from Bihar Institue ofTechnology, Sindri (Ranchi University) and has over31 years of working experience in the steel industry.Before joining the Company, he was ExecutiveDirector, Lloyds Steel Industries Ltd. and worked therefor a period of seven years. He does not holdDirectorship in any other company.

3) Remuneration of Directors:Details of remuneration paid to the directors of the company for the year ended 31.03.2002 are as follows:

Sl. Name Of Directors Positions Held Sitting Fees Salary & Commission TotalNo. Perquisites1 Shri O.P. Jindal Chairman - - - -2 Shri Ratan Jindal Director 4,000 - - 4,0003 Shri Naveen Jindal Executive Vice - 27,04,984 - 27,04,984

Chairman andManaging Director

4 Shri Vikrant Gujral Vice Chairman & - 15,77,233 - 15,77,233Chief Executive Officer

5 Shri Rajendra Singh Director 7,000 - - 7,0006 Shri Amir Z. Singh Director 7,000 - - 7,000

Pasrich7 Shri H. V. Lodha Director - - - -8 Shri R. K. Kapoor Nominee Director 7,000 - - 7,0009 Shri Subir Bisht Nominee Director 11,000 - - 11,00010 Shri Anand Goel Wholetime Director - 8,88,000 - 8,88,00011. Shri Arvind Parakh Director 49,000 - - 49,00012 Shri M. L. Gupta * Wholetime Director - 2,87,648 - 2,87,64813 Shri G. D. S. Sohal** Wholetime Director - 10,46,385 - 10,46,385* Resigned from 10.11.2001 ** Resigned from 15.03.2002.Note: Salary and perquisite include all elements of remuneration i.e. salary, other allowances andbenefits.Incase of nominees of ICICI Bank Ltd. and IDBI, the sitting fee was directly paid to the respective institutions.

Details of Service Contracts of DirectorsName of Directors Period of contract Date of appointment Notice periodShri Naveen Jindal 5 years 09.05.1998 NilShri Vikrant Gujral 5 years 17.04.2001 NilShri Anand Goel 5 years 01.08.2000 NilShri S. N. Singh 5 years 01.05.2002 Nil


20

Grant of equity shares to directors under theEmployee Share Purchase Scheme in terms of SEBI(Employee Stock Purchase Scheme & EmployeeStock Option Scheme) Guidelines, 1999.Name Number Grant priceof Directors of SharesShri Vikrant Gujral 5000 Rs100/- including

a premium ofRs.90/-

Shri Anand Goel 2500 Rs100/- includinga premium ofRs.90/-

4) Audit CommitteeThe Audit Committee of the Company was constitutedby the Board on 22nd January 2001 as per section 292Aof the Companies Act, 1956. In order to comply with theconditions of clause 49 of the listing agreement, it wasreconstituted on 13.11.2001 and now consists of 4 Non-Executive Directors, namely Shri Arvind Parakh, Shri H VLodha, Shri Rajendra Singh and Shri Subir Bisht, all ofwhom are independent Directors.The members of the Committee have substantialknowledge of project finance, accounts and corporateaffairs. The terms of reference of the Audit Committeeare as follows:a) Holding of discussions with the auditors

periodically about internal control systems, thescope of the audit including the observations ofthe auditors and review the half yearly and annualfinancial statements before submission to theBoard.

b) Overseeing of the Company�s financial reportingprocess and the disclosure of its financialinformation to ensure that the financial statementis correct, sufficient and credible.

c) Recommending the appointment and removal ofexternal auditor, fixation of audit fee and alsoapproval for payment for any other services.

d) Reviewing with the management the annualfinancial statements before submission to theBoard focussing primarily on:- Any changes in the accounting policies andpractices.- Major accounting entries based on exercise ofjudgement on management.

- Qualifications in draft Audit Report.- Significant adjustment arising out of audit- Going concern assumption.- Compliance with Accounting Standard.- Compliance with Stock Exchange and Legal

requirements concerning financial statements.- Any related party transactions i.e. transactions ofthe Company of material nature, with promotersor the management, their subsidiaries or relativesetc. that may have potential conflict with the interestof the Company at large.

e) Reviewing with the management, external andinternal auditors, the adequacy of internal controlsystem.

f) Reviewing the adequacy of internal audit function,including the structure of the internal auditdepartment, staffing and seniority of the officialheading the department, reporting structurecoverage and frequency of internal audit.

g) Discussion with internal auditors of any significantfinding and follow up thereon.

h) Reviewing the findings of any internalinvestigations by the internal auditors into matterswhere there is suspected fraud or irregularity orfailure of internal control systems of a materialnature and reporting the matter to the Board.

i) Discussions with external auditors before theaudit commences, nature and scope of audit aswell as post audit discussion to ascertain anyarea of concern.

j) Reviewing the Company�s financial and riskmanagement policies.

k) To look into reasons of substantial defaults in thepayment to the depositors, debentureholders,shareholders (in the case of non payment ofdeclared dividend) and creditors.

l) To ensure compliance of internal control systems.m) The Chairman of the Audit Committee shall attend

the annual general meeting of the Company toprovide clarifications on matters relating to auditsought by the members of the Company.

To perform the above mentioned functions, the AuditCommittee has been given the following powers:1) To conduct investigations in connection with the

performance of the functions as mentioned above.2) Call for, inspect and examine books of account,

records, registers, papers and other documentsof the Company and cause production of copiesof original or copies thereof.

3) Have access to any information contained in thebooks of account , registers, records, papers andother documents of the Company.

4) Enter into any office premises or places ofbusiness of the Company and make necessaryenquiry.

5) Make or cause to be made copies of the records,


21

registers, papers and other documents of theCompany.

6) Call and enforce the attendance of the officersand employees of the Company.

7) Obtain legal or other expert professional advicefrom outsiders and secure their attendance, ifnecessary.

The Audit Committee held meetings on 12.05.2001,29.10.2001 during the year under report and on30.04.2002 and 12.06.2002 during the current year.5) Shareholders/Investors Grievance CommitteeThe Board of Directors of the Company has constitutedShareholders/Investors Grievance Committee on13.11.2001. It consists of Shri Anand Goel, WholetimeDirector and Shri Amir Z Singh Pasrich, Director. TheCompany has duly appointed share transfer agents(R&T Agents) for servicing the shareholders holdingshares in physical or dematerialised form. All requestsfor dematerialisation of shares are likewise processedand confirmations thereof are normally communicatedto the depository participants within 10 working days ofreceipt thereof.The Committee also monitors redressal of investors�grievances. The Board of Directors has delegated thepower of approving transfer of securities to a committeecalled Local Committee of Directors, which meetsfrequently.As required by the stock exchanges, the Company hasappointed Shri T K Sadhu, Company Secretary as theCompliance Officer to monitor the transfer process andliaise with the regulatory authorities.

6) General BodyMeetings:The last threeAnnual General Meetings of the Companywere held at the registered office at Delhi Road, Hisar125 005 on the following dates and times:20thAGM Monday, 18th Oct., 1999 11.30 am21stAGM Thursday, 14th Sept., 2000 10.00 am22ndAGM Friday, 28th Sept., 2001 12.30 pmIn addition to the above, an Extraordinary GeneralMeeting of the members of the Company was held on11.03.2002There were no special resolutions passed by theCompany through postal ballot at any of the abovemeetings.7) DisclosuresNeither has any non compliance with any of the legalprovisions of law been made by the Company nor anypenalty or stricture imposed by the stock exchanges orSEBI or any other statutory authority, on anymatter related

to the capital markets, during the last 3 years8) Means of CommunicationInformation like quarterly/half yearly/annual financialresults and press releases on significant developmentsin the Company that have been made available fromtime to time, to the press is hosted on the Company�swebsite www.jindalsteelpower.com and has also beensubmitted to the stock exchanges to enable them to putthem on their websites and communicate to theirmembers. The quarterly/half-yearly/annual financialresults are published in English and Hindi languagenewspapers. Moreover, a report on managementdiscussion and analysis has been given elsewhere inthis report.9) General Shareholders Information

Financial Calender 2002-03First Quarter Results July 2002Second Quarter Results October 2002Third Quarter Results January 2003Fourth Quarter Results April 2003Alternatively,Annual Results for the year On or before 30thending 31st March 2003 June, 2003A) Listing of Shares on stock exchanges and stockcodeSl. Name of the Stock Stock codeno. Exchange1 The Delhi Stock 10140

ExchangeAssociation Ltd.

2 The Stock Exchange, 532286Mumbai

3 The Calcutta Stock 20246ExchangeAssociation Ltd.

4 The Stock Exchange 28532Association Ltd.Ahmedabad

5 Madras Stock JSPWExchange Ltd.

6 National Stock JINDALSTEL.EQExchange of India Ltd.


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B) Market Price DataNSE BSE

Month HIGH LOW Volume HIGH LOW VolumeApr-01 268.30 155.55 1,425,986 268.10 155.00 933,124May-01 258.00 205.10 2,644,682 260.00 206.20 18,96,443Jun-01 244.45 153.35 1,093,282 244.00 152.00 722,973Jul-01 175.00 142.00 121,819 172.85 141.15 25,968Aug-01 166.00 145.00 122,081 160.00 146.15 13,991Sep-01 151.60 113.05 197,389 151.70 111.00 32,695Oct-01 167.75 139.00 87,252 165.00 137.00 28,511Nov-01 175.00 144.00 139,125 174.65 145.00 28,812Dec-01 189.00 149.00 145,576 215.00 148.15 31,885Jan-02 162.00 148.00 75,538 169.95 152.30 29,036Feb-02 169.90 150.00 266,226 169.00 152.10 52,102Mar-02 165.00 146.60 85,225 168.80 147.30 27,008C) Stock performance on NSE and BSE

300

250

200

150

100

50

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NSE BSE

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D) Share Transfer AgentsFor shares held in physical form:MAS Services Pvt. Ltd.,AB-4, Safdarjung Enclave,New Delh 110 029Tel: 011-6104142/4326. Fax: 011-6181081For shares held in dematerialised form:Alankit Assignments limited205-208, Anarkali Complex,Jhandewala Extension,New Delhi 110 055Tel: 011-3610220-24. Fax: 011-3552001E) Share Transfer SystemPresently, the share transfer instruments, which arereceived in physical form, are processed and theshare certificates returned within a period of 30 daysfrom the date of the receipt subject to the documentsbeing complete and valid in all respects. The

Company has, as per SEBI guidelines, also offeredthe facility of transfer of shares underdematerialisation cum transfer. Under the system,after the share transfer is effected, an option letter issent to the transferee indicating the details of thetransferred shares and requesting him in case hewishes to dematerialise the shares, to approachDepository Participant (DP) with the option letter. TheDP, based on the option letter, generates aDematerialisation request and sends the same tothe Company along with the option letter issued bythe Company. On receipt of the same, the Companydematerialises the shares. In case the transfereedoes not wish to dematerialise the shares, he neednot exercise the option and the Company despatchesthe share certificates after 30 days from the date ofsuch option letter.


23

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Category No. of Shares % of HoldingPromoters 45,60,328 35.36NRI 3,24,541 2.52FIs/Bank/MF/UTI 1,35,027 1.05Corporate Bodies 36,10,914 28.00Public 42,65,302 33.07Total 1,28,96112 100.00

F) Distribution of ShareholdingThe shareholding distribution of Equity Shares as on 31.03.2002 is given hereunder:Nominal value of each share/unit Rs 10.00No. of % to total Shareholding of No. of shares Amount in Rs. % to totalshareholders nominal value of Rs.56521 98.37 Up to 5,000 3387081 33870810 26.27505 .88 5,001 to 10,000 362359 3623590 2.81192 .33 10,001 to 20,000 280388 2803880 2.1765 .11 20,001 to 30,000 165619 1656190 1.2832 .06 30,001 to 40,000 113877 1138770 .8823 .04 40,001 to 50,000 106844 1068440 .8343 .07 50,001 to 1,00,000 305792 3057920 2.3782 .14 1,00,001and above 8174152 81741520 63.3957463 100.00 TOTAL 12896112 128961120 100.00

Categories of Shareholders (as on 31.03.2002)The categories of shareholders is shown hereunder:

G) Dematerialisation of shares:As on 31st May 2002, the number of shares held indematerialised form was 65,26,631 equity sharesand in physical form 63,69,481equity shares.H) Plant Locations:Works:Raigarh: Karsia Road, Post Box No. 16, Raigarh496 001. ChhattisgarhRaipur: 30 K M Stone, G E Road, Mandir Hasaud,Raipur 492 001, ChhattisgarhMines:Tensa: TRB Iron Ore Mines, P O Tensa 770 04, Dist.Sundergarh, OrissaRaigarh: Gare Coal Fields, Mand, Raigarh,ChhattisgarhI) Investor Correspondence:Company SecretaryJindal Steel & Power Limited28, Najafgarh RoadNew Delhi-110015Ph: 5111838-45

10) Auditor�s Certificate on Corprate GovernanceThe auditor�s certificate on compliance of clause 49 of

the listing agreement relating to corporate governanceis given on the next page.Non-mandatory Requirements

a) Chairman: The Company has a Non-ExecutiveChairman and is therefore entitled to maintainingan office at the Company�s expense and is alsoentitled to reimbursement of expenses incurred inthe performance of his duties.b) Remuneration Committee: The Company has notset up a Remuneration Committee. However, theCompany pays only sitting fees to Non-ExecutiveDirectors for attending the meetings of the Boardand its Committees. Remuneration to the ExecutiveDirectors is decided by the Board in accordance withthe provisions of Section 198,309,310 and ScheduleXIII to the Companies Act, 1956 and other applicableprovisions, if any and approved by the shareholders.c) Shareholders Rights: The quarterly/half yearlyfinancial results are published in two newspapersof English and Hindi language and hosted on theCompany�s website. The same is alsocommunicated to the stock exchanges within thestipulated time period.


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Auditors� Certificate on Compliance of CorporateGovernance Under Corporate Governance Clause ofthe Listing Agreement(s).ToThe MembersJindal Steel & Power Ltd.We have reviewed the implementation of CorporateGovernance procedures by Jindal Steel & Power Ltd.during the year ended 31st March 2002, as stipulated inClause 49 of the Listing Agreement of the said Companywith Stock Exchanges, with the relevant records anddocuments maintained by the Company, furnished tous for our review and the report on Corporate Governanceas approved by the Board of Directors.The compliance of conditions of Corporate Governanceis the responsibility of the management. Our examinationwas limited to a review of procedures andimplementation thereof, adopted by the Company forensuring the compliance of the conditions of CorporateGovernance. It is neither an audit nor an expression ofopinion on the financial statements of the Company.As per Schedule of Implementation stipulated in Clause49 of the Listing Agreements with Stock Exchanges, theCompany is supposed to comply with all the conditionsbyMarch 31, 2002. During the year, the Company initiated

steps to set up various committees and comply with theother requirements of Clause 49 of the ListingAgreements. The Company started complying with suchrequirements during the course of the year in stages.On the basis of our review and according to theinformation and explanations given to us, the conditionsof Corporate Governance as stipulated in CorporateGovernance Clause of the Listing Agreement(s) with theStock Exchange(s) have been substantially compliedwith by the Company and that no Investor Grievance(s)is/are pending for a period exceeding one month againstthe Company as per the records maintained by theInvestors Grievance Committee.We further state that such compliance is neither anassurance as to the future viability of the Company northe efficiency or effectiveness with which themanagement has conducted the affairs of the Company.

ForS.S.KOTHARI&CO.Chartered Accountants

Place: New Delhi (ARUNK.TULSIAN)Date: 12th June, 2002 Partner

APPENDIXVDIRECTORS�REPORTMANAGEMENTDISCUSSIONANDANALYSISBusiness Review2001-02 was another year of slow down for economy ingeneral and steel industry in particular. Global slowdown, slump in US, over capacity in steel, tensions onthe borders, etc. adversely affected the steel industry inIndia, putting pressure on domestic steel prices.However, the first quarter of 2002-03 has shown somesigns of recovery. The prices are gradually rising onaccount of increase in export of steel from the country.The availability of credit at lower interest rates coupledwith low inflation is expected to increase demand ofsteel products in the country.Performance Review of the CompanyAmidst all this, the Company has concluded anotheryear with excellent results. Overall operationalperformance improved substantially during the year. TheCompany has achieved higher production and increasein net profit during the year. The business has beenfurther consolidated with a view to neutralise adverseeffects of any negative factors.

i. Sponge iron: The production of sponge iron was 5.62lakh MT which was 12% higher than that of the lastyear. All the six kilns operated efficiently. The marketfor sponge iron was quite responsive and the salestouched 4.96 lac MT registering 22% growth ascompared to previous year. The sale price of spongeiron was steady and showed a gradual improvementtowards the close of the year.

ii. Steel: The Company is manufacturing steel products,like special quality rounds, billets, blooms and slabs.A combination of products has enabled the Companyto choose an improved product mix in order tomaximise profit margins. The production of theseproducts in the year was lower (54,724 MT) ascompared to the previous year (109,028MT) becauseslab and round Caster Shop was undergoingupgradation. The Company also produced 19,743MT of H.C. Ferro Chrome as against last year�sproduction of 17,251 MT.

iii. Power: A 55 MW Power plant was commissionedduring the year enhancing the power generation


25

capacity to 150MW.As against generation of 5,603.19lac KWH of power in the last year, 7,195.38 lac KWHwere generated in this year registering an increaseof 28.42%. Cost of generation of power continues tobe low as coal rejects and waste hot gases areutilised for generation of power.

iv Mining: The Company is operating an iron ore mineat Tensa (Orissa) and coal mine at Raigarh(Chhattisgarh). The captive availability of these twokey raw materials has been instrumental incontaining the cost of sponge iron and steel. With aview to provide good-grade coal and further reducecost of production of sponge iron, a Coal washery of2.5 million MT is being set up at the coal mine. Theproduction of iron ore and coal was 5.55 lac MT and15.94 lac MT respectively as against that of last year�s5.11 lac MT and 14.16 lac MT respectively. TheCompany has, for the first time, sold 1.30 lac MT IronOre Fines that has added to profits. There is a goodpotential for exporting Iron Ore Fines. Efforts arebeing made to increase the sale of Iron Ore Fines inthe current year.

Opportunities & ThreatsSponge iron is a substitute to steel scrap and is acceptedin the market accordingly. Steel scrap required for steelmaking remains in short supply. Besides, theGovernment of India has increased custom duty on shipsfor breakings in the budget 2002-03. Therefore,shortage of steel scrap will further increase the demandfor Sponge Iron and the prices are expected to remainfirm in the near future. The Company is the lowest costproducer of coal based sponge iron in the country withcaptive availability of three key raw materials i.e. ironore, coal and power.The Company is capable of converting sponge iron intosteel to utilise surplus stocks of sponge iron that mayarise on account of any change in demand-supplyposition in future. A varied product line has addedstrength to the Company because, depending on themarket position and profit margins, a balanced productmix of sponge iron and steel can be chosen to meetdemand of the market. Thus any transient price variationin sponge iron and steel can be adjusted without anymaterial squeeze on the profit margins.There is a scope for augmenting facilities for spongeiron. The management, will at an appropriate time,consider setting up of additional facilities formanufacturing of sponge iron. The Company is settingup another 55 MW power plant to augment powergeneration capacity to 205 MW..

The spurt in demand of sponge iron has led someentrepreneurs in the country to enter into this field thusadding to the overall capacity of sponge iron. This mayput some pressure on the margins in the short run.However, the measures to contain costs, improvedquality and productivity, expansion of geographic areasfor marketing and capability to produce value addedsteel products will not materially impact the performanceof the Company in the long run. In view of the thrustgiven by the Central Govt. to the infrastructure sectorand recovery in the economy, the demand for steel isbound to improve in the country.OutlookThe Company�s profitability has improved in the pastbecause of backward integration. The Company hasset up 2.5 lakh MT Mini Blast Furnace to reduce the costof production of steel and setting up 2.5 million MT CoalWashery at coal mine to improve productivity of spongeiron. The Coal Washery is likely to be completed by theend of August 2002. To achieve forward integration, theCompany is setting up Rail & Universal BeamMill projectat a cost of Rs.396 crore. The project is at an advancedstage of implementation and is likely to be completed inthe current financial year. This mill will be unique, as itwill produce the world�s longest rails of 120-meter lengthand parallel flange beams and columns in larger sizesfor the first time in the country. These types of rails arepreferred by the Railways world over as it adds to thesafety of rail journey. The results of these projects willbe felt during the current year and onwards and will bereflected in the turnover and profits, which are bound tosurge ahead.The Company has completed 55 MW power plant in themonth of October 2001. The full potential of this powerplant would be realised in the current year and it willfurther add to the profits. The Company is expected toproduce more steel in the form of rounds, billet, blooms,and slabs. This will further increase the turnover andthe profits of the Company.Internal Controls & SystemsThe Company has proper and adequate internal controlsystems for the business operations, processes andfinancial management. Financial reporting andManagement Information Systems are in place and thereis due compliance with applicable laws and regulations.These controls ensure that the property of the Companyis well protected against any loss from unauthoriseduse or disposition. The internal control system issupported by internal audit conducted by an outsideAgency. The periodical internal audit is conducted to


26

review the adequacy and effectiveness of internalcontrols and suggest improvements for strengtheningthem. An Audit Committee of the Board is also in placewhich meets periodically and reviews the financial/management reporting system and other relatedmatters.The Company has successfully implemented the ERP,SAP-R3 in all units at Raigarh which is duly customisedand incorporates authorisation controls. This hassignificantly helped the Company in integrating thevarious functions and improving co-ordination. It hasalso resulted in cutting down costs of production andpromoting productivity and profitability.The Company has a Financial Management InformationSystem in place which involves preparation of a detailedAnnual Business plans and a broad forecast ofprojections for next five years, which is reviewed everyyear. Capital expenditure commitments and borrowingplans are based on these forecasts and are strictlyadhered to by the management.Financial ManagementThe Company�s financial management is governed byprudent business policies and accounting principles.In fact, the financial strength of the Company isattributable to proper management of borrowed fundsand internal accruals. The Company periodically reviewsits borrowing profile. The high cost funds are beingswapped with low cost borrowings in order to reducethe burden of interest payment. The Company hasreplaced Rs.60 crore high cost debts during the yearwith low cost debts. As on 31st March, 2002, the debt-equity ratio was 1.49:1, which is high due to the projectsbeing undertaken by the Comapny in the last 2 years.However, with the completion of the projects and therevenues from them, the Company�s debt equity ratiowill come down in the future. The Company has very lowforeign exchange exposure which is adequately covered.The Company has working capital limit of Rs.70 crorewith various banks to meet its working capitalrequirements. Credit lines are utilised depending onneed and availability of alternate means of finance tominimise interest cost. Further, the working capitaldemand loan component of working capital limit hasbeen converted into FCNR(B) to reduce interest cost onaccount of lower rate of LIBOR.Financial PerformanceThe Company has improved its performance in the year2001-02 compared to the year 2000-01. The grossturnover has gone up from Rs.570.15 crore to Rs.648.36

crore and net profit after deferred taxation fromRs 101.25crore to Rs.107.55 crore. The cash profit has alsoincreased from 133.06 crore to Rs.151.90 crore. Theincreased profit has added to the book value of equityshares which has gone up from Rs.325 to Rs.360.Earning per share has also increased from Rs.72.09 inthe year 2000-01 to Rs.76.62 in the year 2001-02. Thereserves are also steadily growing and after makingfirst time provision of Rs.47.21 crore for deferred taxliability, stand at Rs.452.33 crore. The Company�s grossasset stand at Rs.1128.27 crore and are adequatelyinsured against risks.Statutory ComplianceThe Company Secretary, as Compliance Officer,ensures compliance of the SEBI regulations andprovisions of the Listing Agreement. Compliancecertificates are obtained from various units of theCompany and the Board is informed of the same atevery Board meeting.Industrial Relations & Human ResourceManagementOver the years, the Company has created talented anddedicated pool of technical, management andadministrative personnel and reserve of dependableskilled and unskilled workforce. Their skills and energiesare being oriented periodically to meet the growingneeds of proper management of plants, processes andsystems. The training programmes are organisedregularly at all levels to keep them posted with the latesttechnological and management developments.Cautionary StatementStatements in the Management Discussion and AnalysisReport describing the Company�s objectives,projections, estimates, expectations may be �forward-looking statements� within the meaning of applicablelaws and regulations. Actual results could differmaterially from those expressed or implied. Importantfactors that could make a difference to the Company�soperations include economic conditions affectingdemand/supply and price conditions in the domesticand overseas markets in which the Company operates,changes in the Government regulations, tax laws andother statutes and other incidental factors. The Companyassumes no responsibility to publicly amend, modify orrevise any forward looking statements on the basis ofany subsequent developments, information or events.


27

TOTHEMEMBERS,JINDALSTEEL&POWER LIMITEDWehaveaudited theattachedBalanceSheetofJINDALSTEEL&POWERLIMITEDas at 31stMarch, 2002andalso theProfitand Loss Account for the year ended on that date annexedthereto. These financial statements are the responsibility of theCompany�s management. Our responsibility is to express anopinion on these financial statements based on our audit.We conducted our audit in accordancewith auditing standardsgenerally accepted in India. Those standards require that weplan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis,evidencesupporting theamountsanddisclosures in the financialstatements.An audit also includes assessing the accountingprinciplesusedandsignificantestimatesmadebymanagement,aswell asevaluating theoverall financial statementpresentation.We believe that our audit provides a reasonable basis for ouropinion.A) As required by the Manufacturing and other Companies

(Auditors� Report) Order, 1988 issued by Company LawBoard in terms of section 227(4A) of the CompaniesAct,1956, we enclose in the Annexure a statement on thematters specified in paragraphs 4 and 5 of the said orderto the extent applicable to theCompany.

B) Further to our comments in the Annexure referred to inparagraph 1 above, we report that:a) We have obtained all the information and explanationswhich, to the best of our knowledge and belief, werenecessary for the purpose of our audit;

b) In our opinion, proper books of account, as required by

law, have been kept by theCompany so far as appearsfromour examination of the books;

c) TheBalanceSheet andProfit & LossAccount dealt withby this Report are in agreement with the books ofaccount;

d) In our opinion, the Balance Sheet and Profit & LossAccount comply with the mandatory accountingstandards referred to in sub-section (3C) of section 211of theCompaniesAct, 1956.

e) On the basis of written representations received fromtheDirectorsason31stMarch, 2002and takenon recordby the Board of Directors, we report that none of theDirectors is disqualified as on 31st March, 2002 frombeing appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the Companies Act,1956.

f) In our opinion, and to the best of our information andaccording to the explanations given to us, the saidstatement of accounts read together with Notesappearing inSchedule 20 , give the information requiredby theCompaniesAct, 1956, in themanner so requiredand give a true and fair view in conformity with theaccounting principles generally accepted in India:(i) in case of Balance Sheet, of State of affairs of theCompany as at 31stMarch, 2002 and(ii) in case of Profit & LossAccount, of the profit of theCompany for the year ended on that date.

ForS.S.KOTHARI&CO.CharteredAccountants

Place:NewDelhi (ARUNK. TULSIAN)Date: 12th June, 2002 Partner

ANNEXURETOAUDITORS�REPORTREFERREDTOINPARAGRAPH(A)OFOURREPORTOFEVENDATE1. The Company has maintained records showing full

particulars including quantitative details and situation offixed assets pending updation for the current year.As perprogramme , major portion of the fixed assets has beenphysically verified by themanagement during the year. Nomajor discrepancies were noticed as compared to bookrecords. In our opinion the frequency of verification isreasonable having regard to the size of theCompany andthe nature of its fixed assets.

2. The Company has not revalued any of its fixed assetsduring the year.

3. As explained to us, physical verification has beenconducted by themanagement at reasonable intervals inrespect of finished goods, stores & spare parts and rawmaterials. Stocks in the possession and custody of third

parties and stock in transit as at 31st March,2002 havebeen verified by the management with reference toconfirmations or statement of account or correspondenceof the third parties or subsequent receipt of goods.

4. According to the information and explanations given to us,the procedures of physical verification of stocks followedby themanagementare reasonableandadequate in relationto the size of the Company and nature of its business.

5. Thediscrepancies noticedonphysical verificationof stocksas compared to book records were not material and thesamehavebeenproperly dealtwith in thebooksof account.

6. On the basis of our examination of stock records, thevaluation of stock is fair and proper and in accordancewith the normally accepted accounting principles and is onthe same basis as it was in the immediately precedingprevious year.

7. The Company has not taken any loans, secured orunsecured, fromCompanies, firms or other parties listed in

AUDITORS� REPORT


28

the registermaintainedunder section301of theCompaniesAct, 1956. In terms of the provisions of sub-section (6) ofsection 370 of the CompaniesAct, 1956, the provisions ofthe said sectionarenot applicable to theCompanyafter thecommencementofCompanies (Amendment)Act, 1999wef31.10.1998.

8. The Company has not granted any loans, secured orunsecured, to companies, firms or other parties listed inregister maintained under section 301 of the CompaniesAct, 1956. In terms of the provisions of sub-section (6) ofsection 370 of the CompaniesAct, 1956, the provisions ofthe said sectionarenot applicable to theCompanyafter thecommencementofCompanies (Amendment)Act, 1999wef31.10.1998.

9. TheCompany has given interest free loans and advancesin the nature of loans to its employees and interest bearingloans/advances/deposits to other parties,whoare repayingthe principal amount and interest, wherever applicable oras stipulated where such stipulations exist.

10. In our opinion and according to the information andexplanations given to us, having regard to the explanationsthat someof the itemspurchased are of special nature andsuitable alternative sources do not exist for obtainingcomparable quotations , thereareadequate internal controlprocedures commensurate with the size of the Companyand the nature of its business for the purchase of stores,rawmaterials , includingcomponents , plant andmachinery,equipments and other assets and for the sale of goods.

11. In our opinion and having regard to our comments inparagraph (10) aboveandaccording to the information andexplanations given to us , there were no transactions ofpurchase of goods and materials and sale of goods,materials and services in pursuance of contracts orarrangements required to be entered in the registermaintained under section 301 of theCompaniesAct, 1956and aggregating during the year to Rs.50,000/- ormore inrespect of each party.

12. As explained to us, theCompany has a regular procedurefor determination of unserviceable or damaged stores, rawmaterials and finishedgoodsandadequateprovisionshavebeenmade inaccounts for the losson itemssodetermined.

13. In our opinion and according to the information andexplanations given to us, theCompany has compliedwiththe directives issued by theReserveBank of India and theprovisions of section 58Aof theCompaniesAct, 1956 andRules framed thereunder with regard to the depositsaccepted frompublic.

14. In our opinion, reasonable records have beenmaintainedby the Company for the sale and disposal of realisablescrap. However , maintenance of these records needs tobe further strengthened. We are informed by themanagement that there is no by-product arising out of themanufacturing process of theCompany.

15. In our opinion, the Company has an internal audit system

commensurate with the size and nature of its business.16. Wehavebroadly reviewed thebooksof accountmaintained

by the Company in respect of manufacture of steel andsteel products pursuant to the order made by the CentralGovernment for maintenance of cost records prescribedunder section 209 (1) (d) of CompaniesAct, 1956 for thecompany�s products andareof theopinion that, prima facie,theprescribed recordsaremadeandmaintained.However,we have not made a detailed examination of said recordswith a view to determine their accuracy or completeness.

17. According to the records of the Company, EmployeesProvidentFunddues andEmployees State Insurancedueshave generally been regularly deposited during the yearwith the appropriate authorities.

18. According to the information and explanations given to us ,no undisputed amounts payable in respect of IncomeTax,Wealth Tax , Customs Duty, Excise Duty and Sales Taxwere outstanding as at the last day of the financial year foraperiodofmore thansixmonths from thedate theybecamepayable.

19. During thecourseofourexaminationof thebooksofaccountcarried out in accordancewith generally accepted auditingpractices, we have not come across any personalexpenses which have been charged to revenue accountother than those payable under contractual obligations orin accordancewith generally accepted business practice.

20. The Company is not a Sick Industrial Company within themeaningof section3(1)(o) of theSick IndustrialCompanies(Special Provisions)Act, 1985.

21. As explained to us by the management , the serviceactivities of the Company were insignificant as comparedto total volume and as such no separate records weremaintained for recording receipts, issues and consumptionof rawmaterials and stores and allocation of man- hours,materials and labour to relative jobs as the samewas notconsiderednecessaryandeconomical by themanagement.Moreover, these activities are undertaken at rates agreedto with the parties.

22. In respect of theCompany�s tradingactivity,weare informedthat there are no damaged stocks at the year end.


Place:NewDelhi (ARUNK. TULSIAN)Date: 12th June, 2002 Partner

JINDALSTEEL&POWERLIMITED 23rdANNUALREPORT, 2001-02

31


32

BALANCE SHEETAs at 31st March, 2002

Description Schedule As at As at31st March 2002 31st March 2001

(Rs. in lacs) (Rs. in lacs)

SOURCESOFFUNDSSHAREHOLDERS�FUNDS

Share Capital 1 8,389.61 8,371.23Reserves and Surplus 2 45,232.80 40,186.86

53,622.41 48,558.09LOANSFUNDS

Secured 3 65,399.19 38,902.86Unsecured 4 4,352.10 1,550.58

69,751.29 40,453.44DEFERREDTAXLIABILITY (NET) 20 4,721.06 -

TOTAL 128,094.76 89,011.53APPLICATIONOF FUNDSFIXEDASSETS

Gross Block 5 80,944.30 56,857.32Less: Depreciation (12,163.69) (8,340.92)

68,780.61 48,516.40Add: Capital work in progress (including preoperative expensespending allocation/capitalization and Capital goods lying in stores) 31,883.16 21,352.15

100,663.77 69,868.55INVESTMENTS 6 4,545.23 3,982.45CURRENTASSETS, LOANSANDADVANCES

Inventories 7 8,703.17 5,127.68Sundry Debtors 8 13,115.26 11,988.33Cash and Bank balances 9 1,197.50 987.07Loans and Advances 10 15,924.32 11,088.28

38,940.25 29,191.36LESS: CURRENTLIABILITIESANDPROVISIONS

Liabilities 11 12,266.85 11,381.57Provisions 12 3,969.34 2,860.40

16,236.19 14,241.97NETCURRENTASSETS 22,704.06 14,949.39MISCELLANEOUSEXPENDITURE

(to the extent not written off or adjusted) 13 181.70 211.14TOTAL 128,094.76 89,011.53

Significant Accounting Policies & Notes to Accounts20The accompanying schedules 1 to 20 form an integral part of these accountsIn terms of our report of even date For and on behalf of the BoardFor S.S.KOTHARI & CO.Chartered Accountants

ARUNK. TULSIAN NAVEENJINDAL VIKRANTGUJRAL ANANDGOELPartner Executive Vice Chairman Vice Chairman Whole Time Director

& Managing Director & Chief Executive OfficerPlace: New Delhi SUSHIL K. MAROO T.K.SADHUDated: 12-06-2002 V. P. (Corporate Finance) Company Secretary


33

PROFIT AND LOSS ACCOUNTFor the year ended 31st March 2002

Description Schedule For the Year ended For the Year ended31st March 2002 31st March 2001

(Rs. in lacs) (Rs. in lacs)

INCOMESales and Operational Income 14 64,835.79 57,015.51Other Income 15 586.21 704.58

65,422.00 57,720.09EXPENDITURE

Material, Manufacturing and others 16 31,384.78 28,355.87Excise Duty 6,472.00 6,242.48Personnel 17 1,961.12 1,698.84Administration and Selling 18 4,495.07 3,219.43Interest 19 4,787.52 3,844.03Employees compensation expenses (under ESPS scheme) 123.18 -Miscellaneous Expenditure written off 29.46 34.92Depreciation 3,900.08 3,181.16

53,153.21 46,576.73

PROFITBEFORETAXATION 12,268.79 11,143.36LESS: Provision for taxation(a) Current tax 974.00 1,017.00(b) Deferred tax 534.78 -Provision for Wealth tax 5.00 1.00

PROFITAFTER TAXATION 10,755.01 10,125.36ADD:Surplus brought forward 21,309.13 10,081.35Debenture Redemption Reserve written back 1,203.62 5,903.38

PROFITAVAILABLE FORAPPROPRIATION 33,267.76 26,110.09Interim Dividend on Preference Shares 105.00 56.96Corporate tax on Interim Dividend 10.71 12.87Proposed Dividend on Equity Shares 902.73 635.61Proposed Dividend on Preference Shares 793.00 808.25Corporate tax on Proposed Dividend - 147.27General Reserve 1,250.00 1,610.00Debenture Redemption Reserve 3,150.00 1,530.00Balance carried to Balance Sheet 27,056.32 21,309.13

33,267.76 26,110.09

Basic Earning per share (in Rs.) } (See Note 12 of Schedule 20) 76.62 72.09Diluted Earning per share (in Rs.) } (See Note 12 of Schedule 20) 64.14 -Significant Accounting Policies & Notes to Accounts 20The accompanying schedules 1 to 20 form an integral part of these accountsIn terms of our report of even date For and on behalf of the BoardFor S.S.KOTHARI & CO.Chartered Accountants

ARUNK. TULSIAN NAVEENJINDAL VIKRANTGUJRAL ANANDGOELPartner Executive Vice Chairman Vice Chairman Whole Time Director

& Managing Director & Chief Executive OfficerPlace: New Delhi SUSHIL K. MAROO T.K.SADHUDated: 12-06-2002 V.P. (Corporate Finance) Company Secretary


34

SCHEDULESforming part of the Balance Sheet as at 31st March, 2002 and the Profit & Loss Account for the year ended on that date

Description As at As at31st March 2002 31st March 2001

(Rs in lacs) (Rs in lacs)

SCHEDULE1SHARECAPITALAUTHORISED

20,000,000 (Previous year 20,000,000) Equity Shares of Rs. 10/- each 2,000.00 2,000.0010,000,000 (Previous year 10,000,000)RedeemableCumulative PreferenceShares of Rs. 100/- each 10,000.00 10,000.00

12,000.00 12,000.00ISSUED,SUBSCRIBEDANDPAIDUP

EQUITYSHARES12,896,112 (Previous year 12,712,262) Equity Shares of Rs. 10/- each 1,289.61 1,271.23PREFERENCESHARES6,000,000 (Previous year 6,000,000) 13%Redeemable cumulativePreference shares of Rs. 100/- each 6,000.00 6,000.002,000,000 (Previous year 2,000,000) 13%Redeemable cumulativePreference shares of Rs. 100/- each (Rs. 5/- per Preference share paid up) 100.00 100.001,000,000 (PreviousYear 1,000,000 ) 10.5%Redeemable cumulativePreference Shares of Rs. 100/- each 1,000.00 1,000.00

8,389.61 8,371.23

SCHEDULE2RESERVESANDSURPLUS(A)SHAREPREMIUM

As per last account 10,422.00 10,422.00Addition during the year 288.65 -

10,710.65 10,422.00(B)GENERALRESERVE

As per last account 3,780.52 2,170.52Add: Transfer from Profit and LossAccount 1,250.00 1,610.00

5,030.52 3,780.52Less:Amount transferred to Deffered tax liability 4,186.28 -

844.24 3,780.52(C)DEBENTUREREDEMPTIONRESERVE

As per last account 4,502.55 8,875.93Add: Transfer from Profit and LossAccount 3,150.00 1,530.00Less:Written back during the year (1,203.62) (5,903.38)

6,448.93 4,502.55(D)CENTRAL/STATESUBSIDYRESERVE

As per last account 17.00 12.00Add: Received during the year - 5.00

17.00 17.00(E)CAPITALRESERVE

As per last account 155.66 155.66(F)SURPLUSINPROFITANDLOSSACCOUNT 27,056.32 21,309.13

45,232.80 40,186.86


35



SCHEDULE3SECUREDLOANS(A)DEBENTURES

i) 16%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 1,000.00 1,000.00ii ) 16%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 2,000.00 2,000.00iii) 12.50%SecuredRedeemableNonConvertible Debentures of Rs. 100/- each 2,222.85 4,445.05iv ) 15.50%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 1,500.00 1,500.00v ) 14%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 1,575.00 1,800.00vi )14%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 1,000.00 1,000.00vii )14%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 500.00 500.00viii) 14%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 300.00 300.00ix ) 13%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 4,000.00 -x ) 9.50%SecuredRedeemable NonConvertible Debentures of Rs. 100/- each 4,000.00 -

18,097.85 12,545.05(B)TERMLOANSFrom Financial Institutions

i) ICICILimited 14,753.87 13,000.00ii ) Industrial Development Bank of India 10,000.00 4,000.00iii) IFCI Limited (Foreign currency Loan) 1,016.02 1,939.38iv ) Industrial Investment Bank of India Limited 610.00 1,270.00v)HousingDevelopment FinanceCorporation Limited 619.92 678.29

From Banksi ) Export-Import Bank of India 2,000.00 -ii) PunjabNationalBank 3,000.00 -iii) Jammu&KashmirBankLimited 3,000.00 -iv) CanaraBank 3,000.00 -v) IndianOverseas Bank 1,000.00 -vi) BankOf Baharin & Kuwait B.S.C. 750.00 -vii) Lord KrishnaBank Limited 1,075.00 660.00

40,824.81 21,547.67(C)OTHERS 1,228.80 1,111.23(D)WORKINGCAPITALBORROWINGSFROMBANKS 5,247.73 3,698.91

65,399.19 38,902.86NOTES:(A) Debenturesi) The Debentures are allotted to GIC & its subsidiaries on private placement basis redeemable at par in three equal annual

installments commencing from the end of the 5th year from the date of allotment i.e. 10th July 1998. The debentures aresecured by a pari-passu charge by way of mortgage of immovable properties and hypothecation of movable assets of thecompany in favour of Debenture Trustees.

ii) TheDebentures are allotted to LICon private placement basis redeemable at par in three equal annual installments commenc-ing from the end of the 5th year from the date of allotment i.e 11th May 1998. The debentures are secured by a pari-passucharge by way of mortgage of immovable properties and hypothecation of movable assets of the company in favour ofDebenture Trustees.

iii)TheDebentures privately placedwith ICICI Ltd. are redeemable at par in 18 equal quarterly installments (14 instalments havebeen redeemed). The Debentures are secured by pari-passu charge by way of mortgage of immovable properties andhypothecation of movable assets of the company in favour of Debenture Trustees.

iv) Debentures placedwithUTI onprivate placement basis are redeemable at par in 3equal annual installments commencing fromthe end of 5th year from the date of allotment i.e 30th November 1999. The debentures are secured by pari-passu charge byway of mortgage of immovable properties and hypothecation of movable assets of the company in favour of the DebentureTrustees.


36

v) Debentures placedwith IIBI on private placement basis are redeemable at par in 16 equal quarterly installments commencingfrom the end of one year from the date of disbursement i.e 29 th September 2000. The debentures are secured by pari-passucharge by way of motgage of immovable properties and hypothecation of movable assets of the company in favour of theDebenture Trustees.

vi) Debentures placedwith LIConprivate placement basis are redeemable at par in 3equal annual installments commencing fromthe end of fifth year from the date of allotment i.e 14th November 2000. The debentures are secured by pari-passu charge byway of mortgage of immovable properties and hypothecation of movable assets of the company in favour of the DebentureTrustees.

vii) Debentures placedwith GIC on private placement basis are redeemable at par in 3 equal annual installments commencingfrom the end of fifth year from the date of allotment i.e 14th December 2000. The debentures are secured by pari-passucharge by way of mortgage of immovable properties and hypothecation of movable assets of the company in favour of theDebenture Trustees.

viii)Debentures placedwith LICMutual Fund on private placement basis are redeemable at par at the end of third year from thedate of allotment i.e 26th December 2000. The debentures are secured by pari-passu charge by way of mortgage ofimmovable properties and hypothecation of movable assets of the company in favour of the Debenture Trustees.

ix) Debentures placed with UTI Bank Limited on private placement basis are redeemable at par in 3 equal annual installmentscommencing from the end of fourth year from the date of allotment i.e 18th May 2001 and 18th October 2001 (two series ofRs.2000 lacs each). The debentures are secured by pari-passu charge by way of mortgage of immovable properties andhypothecation of movable assets of the company in favour of the Debenture Trustees (Security has been created for firstseries and is pending for second series).

x) Debentures placedwithUTI Bank Limited on private placement basis are redeemable at par in 8 equal quarterly installmentscommencing from 31st May 2002. The debentures are to be secured by English mortgage of immovable properties of thecompany situated in the state ofGujarat andguarantee of ICICI Limited. (Englishmortgage is pending). Theguarantee given byICICI Limited is secured by hypothecation ofmovable assets except the charges in favour of company�s bankers for securingworking capital facilities.

B)TERMLOANSFrom Financial Institutionsi, ii), iii) & iv)Secured by pari-passu charges in favour of the Financial Institutions by way of mortgage of Company�s immovable

properties and hypothecation of movable assets except the charges in favour of Company�s bankers for Securing workingCapital facilities.

I) Secured against equitablemortgage of specific dwelling units at Raigarh. (Security for loan of Rs. 500 lacs yet to be created)From Banksi) secured by guarantee given by ICICI Limited. The guarantee given by ICICI Limited is secured by way of hypothecation of

movable assets except those charged in favour of company�s bankers for securing working capital limits.iii), vi) & vii)Secured by pari-passu charges in favour of the Banks by way ofmortgage of Company�s immovable properties and

hypothecation of movable assets except those charged in favour of Company�s bankers for Securing working Capitalfacilities.(Mortgage for loan of Rs.595 lacs from Lord Krishna Bank Limited yet to be created)

ii), iv) & v) Secured by pari-passu charges in favour of the Banks by way of mortgage of Company�s immovable properties andhypothecation of movable assets except those charged in favour of Company�s bankers for Securing working Capitalfacilities.(Mortgage for these loans yet to be created)

C)OTHERSSecured by hypothecation of the assets financed.

D)WORKINGCAPITALBORROWINGFROMBANKERSSecured by hypothecation by way of first charge against hypothecation of stocks of finished goods, rawmaterials, work inprogress, stores and spares and book debts, and guaranteed by Directors and Second charge in respect of other movableand immovable assets.


(Rs in lacs) (Rs in lacs)SCHEDULE4UNSECUREDLOANS

Inter CorporateDeposits - 52.38FixedDeposits fromPublic 2,433.33 946.10Short Term Loan fromBanks 1,666.67 300.00SalesTaxDeferment Loan 252.10 252.10

4,352.10 1,550.58


37

SCHEDULE5FIXEDASSETS

(Rs. in lacs)GROUPOFASSETS GROSSBLOCK DEPRECIATION NETBLOCK

As at Additions Sales/Tfr. Asat As at Additions Sales/Tfr. Asat Asat As at01.04.01 during during 31.03.2002 01.04.01 during during 31.03.2002 31.03.2002 31.03.2001

the year the year the year the year

Land - freehold 1,068.09 142.76 - 1,210.85 - - - - 1,210.85 1,068.09Land - leasehold 148.58 - - 148.58 17.60 5.61 - 23.21 125.37 130.98Live Stock 7.19 7.20 - 14.39 - - - - 14.39 7.19Building 5,853.64 3,151.88 - 9,005.52 330.82 173.37 - 504.19 8,501.33 5,522.82Plant & Machinery 46,575.46 20,512.57 456.37 66,631.66 7,522.54 3,395.89 91.29 10,827.14 55,804.52 39,052.92Electrical Installation 452.34 62.49 - 514.83 62.63 22.96 - 85.59 429.24 389.71Furniture & Fixtures 350.62 61.72 0.65 411.69 60.11 25.19 0.01 85.29 326.40 290.51Vehicles 2,401.40 614.95 9.57 3,006.78 347.21 294.50 3.44 638.27 2,368.51 2,054.19TOTAL 56,857.32 24,553.57 466.59 80,944.30 8,340.91 3,917.52 94.74 12,163.69 68,780.61 48,516.41Capital Work in Progress 31,883.16 21,352.15(includingpre-operativeExpenses pendingallocation/capitalisationandCapital goodslying in stores)

Previous Year 50,079.15 6,792.89 14.70 56,857.33 5,155.37 3,188.41 2.84 8,340.95 48,516.38 44,923.78

Note: 1. Depreciation during the year includes Rs 17.44 Lacs ( Previous Period 7.24 Lacs) taken under Pre Operative Expenses. 2. Capital Work inProgress includes Rs. 5,434.46 lacs (Previous year Rs. 3,173.55 lacs) being Pre-operative Expendeture and Rs. 1100.81 lacs Capital stores.



SCHEDULE6INVESTMENTS-LONGTERM

(a)UNQUOTEDEQUITYSHARESi) Stainless Investments Limited 605.24 605.241,242,000 (Previous year 1,242,000) Equity Shares of Rs. 10/- eachii) JindalHoldingLimited 1,448.40 1,448.402,414,000 (Previous year 2,414,000) Equity Shares of Rs. 10/- eachiii) BrahamputraCapital andFinanceLimited 1,920.00 1,920.0019,200,000 (Previous year 19,200,000) Equity Shares of Rs. 10/- eachiv) Infovergix Technologies Limited 36.00 -36,00,000 (Previous year Nil ) Equity Shares of Rs.10/- each

4,009.64 3,973.64b) INVESTMENTINGOVERNMENTANDTRUSTSECURITIESi) National SavingCertificates 0.01 0.01Rupees 1,000/- (Previous year Rupees 1,000/-) 0.01 0.01

INVESTMENTS-CURRENT(a) INVESTMENTINUNITSOFMUTUALFUNDS

i) 3802784.707 Units (previous year 44377.970) Units of 530.04 5.73Liquid Plan of Prudential ICICIMutual Fund (face valueRs.10/- per unit)ii) Nil units (PreviousYear 23700.973) Units of - 3.08Growth Plan of Templeton India Liquid Fund (face value Rs.10/- per unit)iii) 393.792 units (PreviousYear Nil) Units of 5.54 -T.M.AGrowth of Pioneer ITI Mutual Fund (face value Rs.1000/- per unit)

535.58 8.81TOTAL 4,545.23 3,982.46


38

NOTE: During the year, the Company has purchased and sold the following investments:Purchase Sale

Description Units/Shares Value Units/Shares Value(A)UNITS:

1.Prudential ICICILiquidPlan 99,838,906.983 13,550.00 96,080,500.246 13,063.912. Templton India Liquid FundGrowthPlan 1,132,092.560 150.00 1,155,793.533 153.373.Pinoeer ITIMutual FundT.M.A 159,850.503 2,200.00 159,456.711 2,200.004. KotakMahindra Liquid SchemeGrowth 4,456,606.027 500.00 4,456,606.027 500.725. Pioneer ITI IncomeBuilder PlanAGrowth 2,745,744.097 500.00 2,745,744.097 498.026. K BondUnit Scheme 99-Growth 3,721,899.658 500.00 3,721,899.658 499.257.GSSGGSSIF-InvestmentPlan 8,058,017.728 1,000.00 8,058,017.728 996.77

(B)SHARES8. Infovergix Technologies Limited 750,000.000 75.00 390,000.000 39.00

120,863,117.556 18,475.00 116,768,018.000 17,951.04



SCHEDULE7INVENTORIES

i) Stores and Spares (including in transit) 3,784.04 1,688.20ii) RawMaterials 3,685.21 2,307.27iii) FinishedGoods 867.99 700.25iv)Work in Progress 364.54 430.69v) Scrap 1.39 1.27

8,703.17 5,127.68

SCHEDULE8SUNDRYDEBTORS(Unsecured)

i)Exceeding six monthsConsideredGood 5,019.43 3,984.71ConsideredDoubtful 74.49 74.49Less: Provision for bad and doubtful debts (74.49) (74.49)

5,019.43 3,984.71ii)OthersConsidered good 8,095.83 8,003.62

13,115.26 11,988.33

SCHEDULE9CASHANDBANKBALANCES

Cash, Cheques, T T andDemandDrafts in hand 59.78 443.10Balances with Scheduled Banksi) In Current Accounts 669.86 403.34ii) MarginMoneyAccounts 7.07 7.24iii) Fixed DepositsAccounts 460.79 133.39

1,197.50 987.07


39



SCHEDULE10LOANSANDADVANCES

(Unsecured, considered good unless otherwise stated)Advance recoverable in cash or in kind or for value to be received

- Considered good 5,571.99 2,815.39- Considered doubtful - -Less: Provision for doubtful advances - -

5,571.99 2,815.39Loans to Bodies Corporate 6,356.72 5,961.88Advance against ShareApplicationMoney 200.00 75.00Security Deposits 460.28 471.95Balances with Govt.Departments & others 1,223.33 646.84Advance IncomeTax (IncludingTDS) 2,110.30 1,117.22AdvanceWealth Tax 1.70 -

15,924.32 11,088.28

SCHEDULE11CURRENTLIABILITIES

Sundry Creditors 9,687.41 8,817.78(Includes Rs.4601.47 Lacs (previous year Rs.4599.14 lacs)creditors against capital supplies)OtherOutstanding Liabilities 1,138.37 1,351.29Advances from customers and others 288.24 554.07Security Deposits 329.43 333.95Interest accrued but not due 823.39 324.48

12,266.84 11,381.57

SCHEDULE12PROVISIONS

ForProposedDividend 1,695.73 1,443.86For Corporate Tax onDividend - 147.27For Provision for Taxation 2,123.00 1,149.00For Provision forWealth Tax 6.00 1.00For LeaveEncashment 115.32 96.34ForGratuity 29.29 22.93

3,969.34 2,860.40

SCHEDULE13MISCELLANEOUSEXPENDITURE

(To the extent not written off or adjusted)PreliminaryExpenses 33.22 38.55IronOremines/Railway plot development expenses 13.20 17.60CoalMine development expenses 135.28 154.99

181.70 211.14


40

Description For the year ended For the year ended31st March 2002 31st March 2001


SCHEDULE14SALESANDOPERATIONALINCOME

Sales 57,272.15 51,019.53Inter Division Transfer 7,280.79 5,966.20JobChargesReceived 282.85 29.78

64,835.79 57,015.51

SCHEDULE15OTHERINCOME

MiscellaneousReceipts 547.26 695.77Profit on Sale/discard of FixedAssets 0.13 -Profit on sale of Investment 38.82 8.81

586.21 704.58

SCHEDULE16MATERIAL,MANUFACTURINGANDOTHERS

RawMaterial consumed 10,042.62 10,278.60Goods Purchased for resale - 1.09Inter Division Transfer 7,280.79 5,966.20Stores andSpares consumed 5,910.24 5,133.74Power and Fuel 5,581.03 4,773.65OtherManufacturing expenses 502.34 401.37Royality &Cess 894.12 803.34Repairs to Buildings 290.48 137.01Repairs to Plant andMachinery 629.36 451.28LeaseRent for Plant andMachinery 355.50 306.93

TOTAL (A) 31,486.48 28,253.21(INCREASE)/DECREASEINSTOCKS

OpeningStock - FinishedGoods 700.25 970.08- Scrap 1.27 18.06-Work in Progress 430.69 246.73

1,132.21 1,234.87ClosingStock - FinishedGoods 867.98 700.25

- Scrap 1.39 1.27-Work in Progress 364.54 430.69

1,233.91 1,132.21TOTAL (B) (101.70) 102.66

GRANDTOTAL(A+B) 31,384.78 28,355.87

SCHEDULE17PERSONNEL

Salary,Wages, Bonus and other benefits 1,754.14 1,516.73Contribution to Provident and other funds 122.71 105.95Workmen and staff Welfare 84.27 76.16

1,961.12 1,698.84


41

Description For the year ended For the year ended31st March 2002 31st March 2001


SCHEDULE18ADMINISTRATIONANDSELLING

Rent 22.39 11.07Rates andTaxes 70.99 99.31Insurance 134.07 111.26Lease rent 320.70 108.51Auditors� Remuneration 4.91 3.46MiscellaneousExpenses 1,068.24 824.18Loss on sale of FixedAssets 183.81 0.60Donation 24.76 6.92Directors� meeting fees 0.84 0.24SellingExpenses 516.50 583.98CommissiononSales 420.13 318.17Discount on Sales 1,094.84 715.10BankCharges 294.25 220.71Financial Expenses 336.25 215.87PriorPeriodAdjustment 2.39 0.05

4,495.07 3,219.43

SCHEDULE19INTEREST

Interest Expenses-Debentures andOther Fixed loans 4,340.72 3,047.75-Others 1,028.57 932.15

5,369.29 3,979.90Less: Interest Received

-Interest on Inter Corporate Deposits (203.35) (131.75)-Others (378.42) (4.12)

(581.77) (135.87)Net Interest 4,787.52 3,844.03

SCHEDULE20SIGNIFICANTACCOUNTINGPOLICIES&NOTESTOACCOUNTSA. SIGNIFICANTACCOUNTINGPOLICIES

i) Basis of Preparation of Financial StatementsThe financial statements are prepared under the historicalcost convention, on going concern concept and incompliance with theAccounting Standards issued by theInstitute of CharteredAccountants of India. The companyfollows Mercantile system of accounting and recognizesIncome & Expenditure on accrual basis to the extentmeasurable and where there is certainty of ultimaterealisation in respect of incomes.Accounting policies notspecifically referred to otherwise, are consistent and inconsonance with the generally accepted accountingprinciples.

ii) Fixed Assets & Depreciation:a) Fixed AssetsFixedAssets are stated at Cost of acquisition inclusive ofincidental expenses related thereto and are net of CENVATcredit. Fixed assets acquired by the company pursuant tothe Scheme of Arrangement are stated at their transfervalues.b) Expenditure during construction periodExpenditure related to and incurred during implementationof new/expansion-cum-modernisation projects is includedunder CapitalWork-in-progress and the same is allocatedto the respective Fixed Assets on completion of itsconstruction/erection. Interest on borrowings and otherpreoperative expenditure allocable to new/expansion-cum-modernisation projects is included in Capital Work-in-progress and capitalised with the relevant fixed assets


42

on completion of the respective projects. Interest onborrowing costs related to qualifying asset is worked outon the basis of actual utilisation of funds out of projectspecific loans and/or other borrowings to the extentidentifable with the qualifying asset.c) Depreciation & AmortisationDepreciation on fixed assets has been provided on straightlinemethod (SLM) at the rates and in themanner specifiedin Schedule XIV to the CompaniesAct, 1956. Leaseholdland is being amortised over the period of lease.iii) Foreign Exchange TransactionsForeign currency transactions are recorded at the rate ofexchange prevailing on the date of transaction. Allexchange differences are dealt within profit and lossaccount except those pertaining to long term liabilitiesrelating to acquisition of fixed assets, which are adjustedin the cost of fixed assets. Current assets and currentliabilities in foreign currency outstanding at the year endare translated at the rate of exchange prevailing at theclose of the year and resultant gains/losses are recognisedin the profit and loss account of the year except in caseswhere they are covered by forward foreign exchangecontracts in which cases these are translated at thecontracted rates of exchange and the resultant gains/losses recognised in profit and loss account over the lifeof the contract.iv) InvestmentsLong term investments are stated at cost. Provision ismade when, in the opinion of management, diminution invalue of investment is other than temporary in nature.Current investments are stated at lower of cost or marketvalue.v) Valuation of InventoriesRawMaterials and Stores and Spares are valued at lowerof cost or net realisable value. Cost includes the purchaseprice as well as incidental expenses. Scrap is valued atestimated realisable value.Work in progress is valued at lower of estimated cost andnet realisable value and finished goods are valued at lowerof cost or net realisable value. Cost for this purposeincludes direct cost and appropriate administrative andother overheads.vi) Inter-Divisional TransfersInter-divisional transfer of goods, as independentmarketable products produced by separate divisions forcaptive consumption, are transferred at approximateprevailing market price. The same is shown as a contraitem to reflect the true working of the respective Divisionsin the Profit & Loss Account. Any unrealised profit onunsold stocks is eliminated while valuing the inventories.This accounting treatment has no impact on the profits oftheCompany. Inter-divisional transfer/captive consumptionto Fixed Assets is at cost.

vii) Retirement BenefitsLiability in respect of retirement benefits is provided forand/or funded and charged to profit & loss account asfollows:Gratuity: Liability in respect of gratuity to employees iscovered under the Group Gratuity scheme with the LifeInsurance Corporation of India and yearly premium ischarged to profit & loss account. Liability towards theyear end liability not covered by premium is accounted foron actuarial valuation basis.Leave Encashment: As determined on the basis ofaccumulated leave to the credit of employees at the yearend.viii) Excise Duty and Custom DutyExcise Duty liability on finished goods lying in factory isaccounted for and the corresponding amount is consideredfor the valuation thereof. Custom duty in respect ofmaterials lying in bonded premises and in transit isaccounted for as and when the property in goods passesto the company.ix) Miscellaneous ExpenditureThe following expenditure shown under miscellaneousexpenditure is amortised as follows:a) Share issue expenses are written off over a period often years.b) Debenture/Bonds issue expenses and premium onredemption are written off over the period of Debentures/Bonds.c) Iron Oremines/Railway plot development expenditure/Coal mines development expenditure etc., is written offover a period of ten years.x) SalesSales are inclusive of excise duty and Inter-divisionaltransfer but net of returns and sales tax. Materialsreturned/rejected are accounted for in the year of return/rejection.xi) Research and Development ExpenditureRevenue expenditure is charged to profit & loss accountand capital expenditure is added to the cost of fixed assetsin the year in which it is incurred.xii) Taxes on IncomeProvision for current tax is made considering variousallowances and benefits available to the Company underthe provisions of the Income TaxAct, 1961.In accordance with Accounting Standard AS-22�Accounting for Taxes on Income� issued by the Instituteof Chartered Accountants of India, Deferred Taxesresulting from timing differences between book and taxprofits are accounted for at the current rate of tax to theextent the timing differences are expected to becrystalised.xiii) Contingent LiabilitiesContingent liabilities are not provided for in the books ofaccounts and are disclosed by way of notes.


43

B. NOTESTOACCOUNTS1.Contingent Liabilities not provided for in respect of

(Rs in Lacs)Description FortheyearFor the year

ended ended31stMarch, 31st March,

2002 2001a) Estimated amount of contracts 9048.99 14830.76remaining to be executed oncapital account and not providedfor (net of advances)

b) Counter guarantee given to 599.68 429.70Company�s bankers for theguarantee given by them onbehalf of Company

c) Letter of credit opened by banks 4491.94 4691.51d) Bills/chequespurchased/Discounted 1001.59 1399.99by bank under BP/BD limit andL/C bills discounted

e) Disputed Excise Duty demands 324.75 970.22f) Company�s share in guaranteegiven 1096.57 1180.46by JSL to Foreign Lender for loangranted by them to a body corporate.

g) Future liability on account of lease 1784.04 2447.79rent for unexpired period.

h) Bonds executed for machinery 329.48 60.05imports underEPCGScheme

2.Since it is not possible to ascertain with reasonable certaintythe quantum of accruals in respect of certain claims ofRailways, Insurance, Electricity, Customs, Excise etc., thesame are continued to be accounted for on acceptancebasis.

3 (a) Provision for current income tax has been madeconsidering various benefits and allowances available tothe Company under the provisions of the Income TaxAct,1961.(b) Movement of deferred Tax provision/Adjustment inaccordance with Accounting Standard � 22 �Accountingfor Taxes on Income� issued by the Institute of CharteredAccountants of India:

(Rs. In lacs)Particulars Balance as Charge/(Credit) Balance as

on 1st April, during on 31st March,2001 the year 2002

1) Difference 4153.83 541.82 4695.65between Book & taxDepreciation2) Misc. 61.60 (7.04) 54.56Expenditurewritten off3)Provision for (29.15) - (29.15)Doubtful Debtors

4186.28 534.78 4721.06

Deferred tax balance as on 01. 04. 2001 has been adjustedout of General Reserves.4.Certain Plant & Machinery have been considered ascontinuous process plant on technical assessment anddepreciation on the same is provided for accordingly.5.Additions to Plant & Machinery/Capital work-in-progressincludes Rs.75.35 lacs (previous year Rs.169.12 lacs) onaccount of ForeignExchangeFluctuation on long term liabilitiesrelating to acquisition of FixedAssets.6.Pre-operative expenditure forming part of capital work-in-progress is as under:

(Rs in lacs)Description Fortheyear For the year

ended ended31stMarch.2002 31stMarch2001

Amount brought forward 3173.55 258.98from last yearAdd: Expenditure incurredduring the year

Personnel Expenses 351.02 122.53Professional Charges - 24.14Consultancy Charges 1358.72 398.68Financial cost 2204.54 2079.68Depreciation 17.44 7.24Miscellaneous Expenses 1174.43 282.30

8279.70 3173.55Less: Capitalised as part of

Plant &Machinery 2575.77 -Building 251.67 -Other fixed assets 17.80 -

Amount carried forward in 5434.46 3173.55capital work-in-progress7.The company has unquoted investment of Rs.3973.64 lacsin body corporates (Previous year Rs.3973.64 lacs) wherethe fair value (amount unascertained) is less than the cost.Considering the future prospects and asset base of theinvestee companies of these body corporates andimprovement in secondary capital market and in economy ingeneral, such decline, in the opinion of themanagement, hasbeen considered to be of a temporary nature and hence noprovision, therefore, is considered in these accounts.8. In the opinion of the Board, Current Assets, Loans &Advances have a value on realisation in the ordinary courseof business at least equal to the amount at which they arestated and provision for all known liabilities has been made.9. a) Sundry Creditors include Rs.24.74 lacs (Previous yearRs.4.00 lacs) payable to small scale industrial undertakings.To the extent of information available to the Company, thenames of small scale industrial undertakings to whom thecompany owes sums remaining outstanding for more than 30days as at 31.03.2002 areGrind-ChemandACME Industries.b) Themanagement is of the opinion that theCompany does

not have any liability under Interest on delayed payments to


44

Small Scale & Ancillary Undertakings Act, 1993 as thepayments aremadewithin the period agreedwith the suppliers.10.Segmental Reporting as required byAccounting Standard17 issued by the Institute of CharteredAccountants of India:

(Rs in Lacs)Sl Particulars For the yearNo. ended

31st March, 20021 Segment Revenue

a) Iron&Steel 50,852.53b) Power 15,460.92c) Others 3,976.03SubTotal 70,249.48Less Inter-segment Revenue 5,453.69NetSegmentRevenue 64,835.79

2 Segment Results(Profit before Tax andinterest from each segment)a) Iron&Steel 9,174.97b) Power 9,764.70c) Others 349.92SubTotal 19,289.59Less: Interest 5,942.07Other un-allocable expenditure 1,078.73(net of un-allocable income)Profit Before Tax 12,268.79Provision for Taxation- Current Tax 974.00- Deferred Tax 534.78Provision forWealth tax 5.00Profit after tax 10,755.01

3 Other InformationI) Segment Assetsa) Iron&Steel 44,056.73b) Power 53,126.49c) Others 6,482.07d) UnnallocatedAssets 40,665.66Total Assets 144,330.95II) Segment Liabilitiesa) Iron&Steel 4,951.95b) Power 531.46c) Others 254.82d)Unallocated Liabilities 84,970.31Total Liabilities 90,708.54III) (i) Capital Expenditurea) Iron&Steel 14,290.16b) Power 20,747.46c) Others 29.52

(including Capital work in progress)

IV) Depreciationa) Iron&Steel 2,089.00b) Power 1,710.00c) Others 101.08

Total 3,900.08V) Non Cash expenditureother than depreciationa) Iron&Steel 29.46b) Power -c) Others -

Total 29.4611. Related party disclosure as required by AccountingStandard-18 issued by the Institute of CharteredAccountantsof India:A. List of related parties & Relationships (As identifiedby the management)a) Parties where control exists:Nilb) KeyManagement personnel:1. Shri Naveen Jindal (Exec.ViceChairman andManagingDirector)2. Shri VikrantGujral (ViceChairman andCEO)3. ShriAnandGoel (Whole TimeDirector)4. Shri G.D.S. Sohal (ExecutiveDirector)5. Shri C.S. Tewary (Executive Director)6. Shri Sushil KMaroo (Vice President-Corporate Finance)c) Enterprises over which keyManagement Personnel andtheir relatives exercise significant influence with whomtransactions have been taken place during the year:1. Jindal Strips Limited2. Infovergix Technologies Limited3. Jindal Iron andSteelCo. Limited4. BrahamputraCapital andFinanceLimited5. NalwaSponge Iron Limited6.Bir PlantationPvt. Limited7. Jindal SystemsPvt. Limited

B. Transactions(Rs in Lacs)

Description Subsidiaries Key EnterprisesManagement controlledPersonnel by Key

ManagementPersonnel&their relatives

Purchase of - 85.48 998.01goods/ServicesSales of goods/ - - 5,205.06Services

Sl Particulars For the yearNo. ended

31st March, 2002


45

Purchase of fixed - - 2,864.24assetsSales of fixed assets - - 15.75RentPaid - - 8.13ShareApplication - - 200.00moneypaidInterest paid/received - - 174.52Dividend received/paid - - 3.07Outstanding Balance as on 31.3.2002Loan &Advances - - 153.98(Including interest)Security Deposit given - - 25.00Debtors - - 1,612.64Creditors - - 359.32

Note: Details relating to investment in the above related partieshas been disclosed in Schedule �6� Investments.12. Earning per Share as required byAccounting Standard �20 issued by the Institute of CharteredAccountants of India:

(Rs. in lacs)Profit after Taxation 10,755.01Less:Preference Dividend 908.71including Tax thereonProfit attributable to ordinary shareholders 9,846.30Number of Equity SharesIssued and subscribed as on 1.4.2001 1,27,12,262Shares issued under ESPS on 29.6.2001 1,83,850WeightedAverage shares as 1,28,50,150on 31.3.2002Number of Potential Equity Shares 25,00,000Basic earning Per Share (Rs.) 76.62Diluted Earning per Share (Rs.) 64.14

13.Balances in respect of some of the sundry debtors, sundrycreditors and other advances are subject to confirmation andreconciliation, if any.14. Advances recoverable in cash or in kind or for value to bereceived includes Rs.0.52 Lacs (previous year nil). Maximumamount outstanding at any time during the year Rs.3.06 Lacs(previous year 0.57 Lacs) being the amount due fromdirectors/officers of the company.

15. Prior period adjustment (net) includes:(Rs in lacs)

FortheYear FortheYearended ended

31stMarch,2002 31stMarch,2001Income relating to earlier years - 0.15Expenses relating to earlier 2.39 0.19years16.A) Auditors�Remuneration

includes the following:A) Payment to StatutoryAuditorsAudit Fee 3.68 2.63TaxAudit Fee 0.78 0.52Out of Pocket expenses 0.45 0.31

4.91 3.46B) Payment to Cost AuditorsAudit Fee 0.21 0.16Out of Pocket expenses 0.34 0.10

0.55 0.26C) Directors Remunerationincludes the following:Remunerationpaid toDirectorsIncludingManagingDirectorandWhole timeDirectors- Salary 62.92 28.51-Commission - -- Contribution to ProvidentFund 5.31 3.27& other funds-Monetaryvalueofperquisites* 3.02 1.64* Valuation as per provisions of Income TaxAct, 1961The above includes remuneration to Executive ViceChairman& Managing Director which has been paid according to theapproval letter No.1/145/99-CL VII dated 5.8.99 from theDepartment of Company Affairs, Ministry of Law, Justice &CompanyAffairs, Government of India effective for a periodof 5 years from 9th May, 1998. However, remuneration to thewhole time Directors have been paid in accordance withSection II, Part II, of Schedule XIII to theCompaniesAct, 1956.Computation of profits under section 349 of the CompaniesAct, 1956 has not been furnished as the above Managerialpersonnel are not entitled for any commission on net profits.17. Previous year figures have been regrouped andrearranged wherever considered necessary to facilitatecomparison with Current Year figures.

Description Subsidiaries Key EnterprisesManagement controlledPersonnel by Key

ManagementPersonnel& theirrelatives


46

18.Additional Information pursuant to paragraph 3 & 4 of the Schedule VI of the CompaniesAct, 1956[A] INSTALLED CAPACITY (PERANNUMWHEREVERAPPLICABLE) (monetary figures in Rs. Lacs)Sl.No. Particulars Unit As at 31st March, 2002 As at 31st March, 2001ATRAIGARH1 Sponge Iron M.T 650,000 650,0002 MildSteel M.T 400,000 400,0003 FerroAlloys M.T 30,000 30,0004 OxygenGas M.CUM 4.75 4.755 Power M.W. 150 94.70ATRAIPUR6 Machinery andCastings M.T 11,500 11,5007 Ingots M.T 30,000 30,000NOTE: Installed capacity is as certified by themanagement.[B]RAWMATERIALCONSUMPTIONSl. Description Unit For the Year ended 31st March, 2002 For the Year ended 31st March, 2001No. Quantity Amount (Rs) Quantity Amount (Rs)1 IronOre M.T 376,519 4,619.45 353,908 4,016.192 ChromeOre M.T 50,719 1,092.07 45,070 1,160.363 Coke M.T 11,035 544.14 10,232 588.854 Pig Iron M.T 10,355 708.62 33,966 2,175.915 Others M.T - 3,078.34 - 2,337.29

Grand Total 10,042.62 10,278.60The above consumption does not include 554,715 MT (Previous year 510,527MT) valued at Rs.1,414.52 lacs (Previous YearRs.1,301.85 lacs) of Iron Ore received from captive mines at Tensa (Orissa)

[C]QUANTITATIVE INFORMATIONOFSTOCK[01] MANUFACTUREDFINISHEDGOODSSl. Particulars Unit OpeningStock OpeningStock Closing StockNo. As at 1stApril, 2000 As at 1stApril, 2001 As at 31st March, 2002

Quantity Amount Quantity Amount Quantity Amount1 Sponge Iron M.T 10,345.810 364.60 3,648.572 127.48 12,506.972 532.932 Ash/Char M.T 19,111.377 29.43 28,059.977 36.48 28,489.467 0.283 Slab/Ingot M.T 2,814.610 301.91 1,129.530 128.85 143.800 18.854 Round M.T - - 1,359.020 160.47 56.515 6.765 SteelTyre NOS 3.000 - 3.000 - 3.000 -6 H.C.FerroCrome M.T 965.000 197.36 795.677 163.92 446.551 101.787 SilicoManganese M.T 294.050 - - - - -8 M.S.Billet/ Bloom M.T 102.110 8.90 - - 755.422 105.819 Machineries M.T 65.110 45.82 46.361 46.32 36.743 36.7010 M.S.Ingot M.T 95.000 6.45 30.151 2.52 96.060 8.1011 RunnerRisers M.T 34.760 3.20 22.978 2.07 32.931 1.3912 Castings M.T 31.730 12.41 101.903 32.14 174.543 55.38

970.08 700.25 867.98[D]PRODUCTIONSl. Particulars Unit For the Year ended 31st March, 2002 For the Year ended 31st March, 2001No. Quantity Quantity1 Sponge Iron M.T 561,503.840 502,614.0002 Ash/Char M.T 117,797.940 106,455.6003 Slab/Ingot M.T 3,643.640 76,400.0604 Round M.T 48,217.330 32,410.0305 Bloom M.T 2,863.036 53.400


47

6 M.S.Billet M.T - 165.2807 H.C.FerroCrome M.T 19,743.000 17,251.0008 Oxygen CUM. 1,679,309.009 1,667,200.0009 Power KWH 719,537,550.000 560,319,250.00010 Machineries M.T 3,168.820 948.09111 M.S. Ingot M.T 11,243.198 10,760.19112 RunnerRisers M.T 9.953 38.64013 Castings M.T 741.863 438.651The following items used for internal / captive consumption during the year1 Sponge Iron M.T 48,407.500 94,182.9382 Ash/Char M.T 111,756.130 87,675.7903 H.C.FerroCrome M.T 128.106 45.0434 OxygenGas CUM. 1,661,704.000 1,662,034.0005 Power KWH 245,344,735.000 293,277,086.0006 M.S.Slab M.T 6.950 127.0007 Casting M.T 423.409 258.5668 SilicoManganese M.T - 294.0509 M.S.Round M.T 459.920 -10 MS Ingot MT 11.440[E]SALES&INTERDIVISIONALTRANSFER

[A]SALESSl. Particulars Unit For the Year ended 31st March, 2002 For the Year ended 31 st March, 2001No. Quantity Amount (Rs) Quantity Amount (Rs)I] MANUFACTUREDGOODS

FINISHEDGOODS:1 Sponge Iron M.T 495,522.140 29,503.60 406,665.750 24,263.582 Ash/Char M.T 5,612.320 3.26 9,831.210 6.463 M.S.Slab M.T 4,620.810 569.93 77,958.140 9,331.584 Round M.T 49,059.915 7,099.15 31,051.010 4,614.095 Bloom M.T 2,107.614 292.98 53.400 6.136 H.C.FerroCrome M.T 19,959.020 4,681.92 17,375.280 4,593.177 OxygenGas M.CUM. 16,632.000 2.51 5,166.000 0.308 M.S.Billets M.T - - 267.390 33.939 Power KWH. 461,394,590.000 10,671.73 256,486,224.000 5,950.4810 IronOre Fines M.T 129,596.000 203.70 - -11 CoalFines M.T 104,534.140 538.54 39,350.910 168.0312 Machineries M.T 3,178.438 1,933.92 966.840 798.0013 M.S.Ingot M.T 11,165.850 1,278.03 10,825.050 1,202.0714 RunnerRisers M.T - - 50.420 4.5915 SteelCasting M.T 245.814 102.91 109.912 45.8716 Others 389.98

Total [I] 57,272.15 51,018.28III] TRADINGGOODS

Machineries M.T 0.00 0.00 7.67 1.25Total [III] - 1.25TOTALOF [I]+[II]+[III] 57,272.15 51,019.53

Sl. Particulars Unit For the Year ended 31st March, 2002 For theYear ended 31st March, 2001No. Quantity Quantity


48

[B] INTERDIVISIONALTRANSFERS1 Sponge Iron -Raipur M.T 8,715.800 525.52 8,462.550 520.752 M.S.Slab/Ingot -Raipur M.T 1.610 0.13 - -3 H.C.FerroCrome M.T 5.000 1.17 - -4 Scrap M.T - - 120.250 7.675 Power - Raipur KWH 12,798,225.000 420.81 10,555,940 392.686 Coal M.T 1,549,173.000 4,647.52 1,416,003.000 3,610.817 IronOre M.T 554,714.900 1,414.52 510,527.300 1,301.858 Steam M.T 233.43 124,992.000 131.579 Others 37.70 0.87

7,280.79 5,966.20[C]OTHEROPERATIONSJobCharges 282.85 29.78

TOTALOF [A]+[B]+[C] 64,835.79 57,015.51NOTES:SALESINCLUDESTHEFOLLOWINGGOODSISSUEDFORCAPTIVE/INTERNALCONSUMPTIONASDETAILEDBELOW:1 Machineries M.T 3,040.174 1,710.85 400.088 317.492 SteelCastings M.T 9.014 3.09 2.526 2.02

1,713.94 319.51[F]C.I.F. VALUEOF IMPORTS

RawMaterial 1,059.05 48.07Component&SpareParts 189.46 52.17Capital Goods and others 3,458.75 2,699.52

4,707.26 2799.76[G]BREAKUPOFCONSUMPTIONOFRAWMATERIALANDSTORES&SPARESINTOIMPORTED&INDIGENEOUSSl. Particulars For the Year ended 31st March, 2002 For the Year ended 31st March, 2001No. Amount (Rs.) % Amount (Rs.) %(A) RAWMATERIALi) Imported (includes purchased through - - 79.09 0.77

Canalising agencies, HighSeaSalesand others)

ii) Indigeneous 10,042.62 100.00 10,199.51 99.2310,042.62 100 10,278.60 100

(B) STORESANDSPARESi) Imported (includespurchased through 165.36 2.80 47.64 0.93

Canalising agencies, HighSeaSalesand others)

ii) Indigeneous 5,744.88 97.20 5,086.10 99.075,910.24 100.00 5,133.74 100.00

[H]EXPENDITUREINFOREIGNEXCHANGE(As remitted)Travelling (Others) 32.23 54.28Interest 323.13 464.89Others 61.70 49.64

417.06 568.81[I]EARNINGSINFOREIGNCURRENCYExport sales (Sponge Iron) 323.09 24.19

323.09 24.19

Sl. Particulars Unit For the Year ended 31st March, 2002 For the Year ended 31 st March, 2001No. Quantity Amount (Rs) Quantity Amount (Rs)


49

19.BALANCESHEETABSTRACTANDCOMPANY�SBUSINESSPROFILEPURSUANTTOPARTIVOFSCHEDULEVITOTHECOMPANIESACT, 1956.

I. Registration DetailsRegistration no. 0 5 - 9 9 1 3 StateCode 5 5

BalanceSheetDate 3 1 0 3 0 2

Date Month Year

II. Capital Raised during the year (Amount in Rs. Thousands).Public Issue ��NIL�� Rights Issue ��NIL��

Bonus Issue ��NIL�� PrivatePlacement 1 8 3 8

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Total Liabilities Total Assets

1 2 8 0 9 4 7 6 1 2 8 0 9 4 7 6

Sources of Funds

Paid-upCapital Reserve & Surplus

8 3 8 9 6 1 4 5 2 3 2 8 0

Secured Loans Unsecured Loans

6 5 3 9 9 1 9 4 3 5 2 1 0

Other Liabilities

4 7 2 1 0 6

Application of Funds

Net FixedAssets Investments

1 0 0 6 6 3 7 7 4 5 4 5 2 3

Net CurrentAssets Misc. Expenditure

2 2 7 0 4 0 6 1 8 1 7 0

Accumulated Losses

��NIL��

IV. Performance of company (Amount in Rs. Thousands)Turnover (Total Income) Total Expenditure

6 5 4 2 2 0 0 5 3 1 5 3 2 1

Profit Before Tax Profit After Tax

1 2 2 6 8 7 9 1 0 7 5 5 0 1

EarningPer Share inRs. Dividend%

7 6 / 6 2 7 0


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V. Generic Names of Three Principal Products / Services of Company (as per monetary terms)ItemCodeno. (ITCCode) 7 2 . 0 3

ProductionDescription SPONGEIRONItemCodeNo. (ITCCode) 7 2 . 0 2

ProductionDescription FERROCHROMEItemCodeNo. (ITCCode) 7 2 . 0 7

ProductDescription MILDSTEEL

In terms of our report of even date Signatures to Schedules 1 to 20For and on behalf of the Board


ARUNK.TULSIAN NAVEENJINDAL VIKRANTGUJRAL ANANDGOELPartner Executive ViceChairman ViceChairman WholeTimeDirector

&ManagingDirector & Chief Executive OfficerPlace:NewDelhi SUSHILK.MAROO T.K.SADHUDated: 12th June, 2002 V.P (Corporate Finance) CompanySecretary


51

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2002(Rupees In Lacs)

PARTICULARS For the Year ended For the Year ended31st March 2002 31st March 2001

A. CASHINFLOW(OUTFLOW)FROMTHEOPERATINGACTIVITIESNETPROFITBEFORETAXANDEXTRAORDINARYITEMS 12,391.97 11,143.36Adjustment for

Depreciation 3,900.08 3,181.16Miscellaneous expenditure written off during the year 29.46 34.92Loss (Profit) on sale of FixedAssets 183.81 0.60InterestPaid 4,787.52 3,844.03

OperatingProfit beforeWorkingCapital Changes 21,292.84 18,204.07Adjustment for

Inventories (3,575.49) (1,438.89)Sundry Debtors (1,126.93) 2,158.13Other Current Assets (3,246.42) (1,103.22)IncomeTaxpaid (994.78) (998.96)OtherCurrent Liabilities 411.71 3,900.02InterestPaid (4,288.61) (3,816.53)

Cash generated fromOperations 8,472.32 16,904.62CASHFLOWBEFOREEXTRAORDINARYITEMS

ExtraOrdinary Items (123.18) -Net Cash Inflow from Operating Activities 8,349.14 16,904.62

B. CASH INFLOW/ (OUTFLOW)FROMINVESTMENTACTIVITIESCapitalExpenditure (35,067.14) (24,227.62)Sale Proceeds of FixedAssets 188.04 11.26Loans &Advances (394.84) (550.40)MiscellaneousExpenditure - -Share applicationmoney (200.00)

Cash outflow from Investment Activities (35,473.94) (24,766.76)C. CASH INFLOW/ (OUTFLOW)FROMFINANCINGACTIVITIES

StateSubsidy - 5.00Issue of Preference Shares - 1,000.00Issue of Equity Shares 307.03 -Proceeds from Borrowings 38,778.97 22,386.30WorkingCapital Loan fromBanks 1,548.82 (461.66)Increase in Investment (562.77) (8.81)Repayment/Adjustment of Borrowings (11,029.98) (13,153.36)Dividend (1,548.86) (1,198.33)Corporate Tax onDividend (157.98) (138.42)

Net cash inflow/(outflow) from Financing Activities 27,335.23 8,430.72NETCHANGESINCASH&CASHEQUIVALENTS(A+B+C) 210.43 568.58

Cash&Cash equivalents (OpeningBalance) 987.07 418.49Cash&Cash equivalents (Closing Balance) 1,197.50 987.07

Note: The figures have been regrouped/ rearranged, wherever necessary, for comparison purposes


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For and on behalf of the Board

NAVEENJINDAL VIKRANTGUJRAL ANANDGOELExecutive ViceChairman ViceChairman WholeTimeDirector

&ManagingDirector & Chief Executive OfficerPlace:NewDelhi SUSHILK.MAROO T.K.SADHUDated: 12th June, 2002 V.P (Corporate Finance) CompanySecretary

Auditors� CertificateThe Board of DirectorsJindal Steel &Power LimitedWe have examined the Cash Flow Statement of JINDALSTEEL& POWER LIMITED, for the year ended 31st March,2002.TheStatement has been prepared by theCompany in accordancewith the requirement of Clause 32 of the Listing agreement with theStock Exchanges and is based on and is in agreement with the Corresponding Balance Sheet and Profit & LossAccount of theCompany covered by our report of 12th June,2002 to theMembers of the Company.


ARUNK.TULSIANPartner

Place:NewDelhiDated: 12th June, 2002

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