THIRTY THIRD ANNUAL GENERAL MEETING. Date : 29 th September, 2004 Day : Wednesday Time : Noon Place : Registered Office, Delhi Road, Hisar

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2 THIRTY THIRD ANNUAL GENERAL MEETING Date : 29 th September, 2004 Day : Wednesday Time : Noon Place : Registered Office, Delhi Road, Hisar CONTENTS Letter From The Chairman... 4 Notice... 5 Directors Report... 7 Report on Corporate Governance... 9 Management Discussion & Analysis Report Auditors Report Balance Sheet Profit & Loss A/c Schedules & Notes to Accounts Cash Flow Statement Statement pursuant to section Accounts of Subsidiary Companies - Jindal Holdings Limited Jindal Steel & Alloys Limited Jindal Stainless (Mauritius) Limited Massillon Stainless Inc., USA Consolidated Financial Statements General Shareholder Information... 96

3 B O A R D O F D I R E C T O R S Chairman & Managing Director O.P. Jindal Directors Ratan Jindal R.G. Garg Rajinder Parkash H.V. Mishra Rakesh Garg Company Secretary Bhartendu Harit Bankers State Bank of India Standard Chartered Bank Statutory Auditors Messrs N.C. Aggarwal & Co., Chartered Accountants Registered Office Delhi Road, Hisar (Haryana) REGISTERED OFFICE Delhi Road, Hisar (Haryana) India. Phone: (01662) Fax : (01662) / , jslhsr@nde.vsnl.net.in CORPORATE OFFICE Jindal Centre, 12 Bhikaiji Cama Place, New Delhi , India. Phone:(011) Fax: (011) , jindalsteel@del2.vsnl.net.in

4 L E T T E R F R O M T H E C H A I R M A N Dear Stakeholders I am very pleased in writing to you again in the Jindal Strips Annual Report for I would like to start by saying that I am very optimistic about the outlook for all the Jindal Group companies that Jindal Strips has investments in. A lot has happened in the steel sector in the past year, but I m glad to say that our group companies have all done well this year too. Jindal Strips has built a solid foundation that should enable our companies to deliver sustained, strong performances into the future. We are well on the way to achieve our long stated goal of creating value for our stakeholders As we enter our next year of strong growth, we see many opportunities that we are well geared to take full advantage of. Last but not the least, I would like to thank you for your continued support and look forward to another good year together. O.P. Jindal 4

5 NOTICE is hereby given that the 33 rd ANNUAL GENERAL MEETING of the shareholders of JINDAL STRIPS LIMITED will be held on Wednesday, 29 th September, 2004 at noon at Registered Office of the company at DELHI ROAD, HISAR (Haryana) to transact the following business: ORDINARY BUSINESS: 1. To receive, consider and adopt the balance sheet as at 31 st March, 2004 and the profit and loss account for the year ended on that date and the reports of the auditors and the Board of directors. 2. To appoint a director in place of Sh. Ratan Jindal, who retires by rotation and being eligible, offers himself for re-appointment. 3. To appoint a director in place of Sh. R.G. Garg, who retires by rotation and being eligible, offers himself for re-appointment. 4. To re-appoint M/s. N.C. Aggarwal & Co., Chartered Accountants as Statutory Auditors of the company, to conduct audit of books of accounts of the company and to hold office from the conclusion of this annual general meeting to the conclusion of the next annual general meeting and to fix their remuneration. By order of the Board NOTICE Outside Directorship : Jindal Stainless Ltd. (Vice Chairman & Managing Director), Jindal Steel & Power Ltd. (Director), Shalimar Paints Ltd. (Director), Cross-Border IT (India) Ltd. (Director), Jindal Equipment Leasing & Consultancy Services Ltd. (Director), Nalwa Farms Pvt. Ltd. (Director), Sonabheel Tea Ltd. (Director), Massillon Stainless Inc., USA (Director) and Jindal Stainless (Mauritius) Ltd. (Director). Committee Membership : Audit Committee of Jindal Strips Limited. (Member). Brief Profile of Sh. R.G. Garg, who retires by rotation and is eligible for re-appointment: Sh. R.G. Garg is Dy. Managing Director of Jindal Stainless Limited. He holds a degree in mechanical engineering from Punjab Engineering College, Chandigarh. He has over 36 years of experience in the steel industry. Outside Directorship : Jindal Stainless Ltd. (Director) Committee Membership : Shareholders /Investors Grievance Committee of Jindal Stainless Limited (Member). FOR ATTENTION OF SHAREHOLDERS 1. The register of members and share transfer books of the company will remain closed from Tuesday, 21 st September, 2004 to Tuesday, 28 th September, 2004 (both days inclusive). Registered Office: Delhi Road, HISAR st September, 2004 NOTES: A (BHARTENDU HARIT) Company Secretary A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND A PROXY NEED NOT BE A MEMBER. B. A blank proxy form is sent herewith. C. The instrument appointing the proxy should be deposited at the registered office of the company not less than 48 hours before the commencement of the meeting. Additional Information : As required in terms of para VI(A) of clause 49 of the listing agreement. Brief Profile of Sh. Ratan Jindal, who retires by rotation and is eligible for re-appointment: Sh. Ratan Jindal is a commerce graduate and he has attended the Advanced Management Program at Wharton Business School. He is Vice Chairman & Managing Director of Jindal Stainless Limited. He has over 20 years of experience in the steel industry. 2. Members are requested to immediately notify to the Registrar any change in their address, in respect of equity shares held in physical mode and to their depository participants (DPs) in respect of equity shares held in dematerialised form. 3. The company has already transferred, unclaimed dividend declared upto the financial year ended on 31 st March, 1995 of Jindal Strips Limited and upto the financial year ended on 31 st March, 1994 of erstwhile Jindal Ferro Alloys Limited (merged with Jindal Strips Limited) to the general revenue account of the Central Government as required by the Companies Unpaid Dividend (Transfer to the General Revenue Account of the Central Government) Rules, Those shareholders who have so far not claimed or collected their dividend upto the aforesaid financial years may claim their dividend from the Registrar of Companies, Delhi & Haryana, Paryavaran Bhavan, C.G.O. Complex, Lodi Road, New Delhi Pursuant to the provisions of section 205A of the Companies Act, 1956, as amended, dividend for the financial year ended on 31 st March, 1997 and thereafter, which remain unpaid or unclaimed for a period of 7 years will be transferred to the Investor Education and Protection Fund of the Central Government. Shareholders who have not encashed the dividend warrants so far for the financial year ended on 31 st March, 1998 or any subsequent financial year are requested to make their claim to the Registrar namely Abhipra Capital Ltd., situated at Ground Floor Abhipra Complex, Dilkhush Industrial 5

6 Area, A-387, G.T. Karnal Road, Azadpur, New Delhi It may also be noted that once the unclaimed dividend is transferred to the Central Government, as above, no claim shall lie in respect thereof. 5. Members holding shares in the same name under different ledger folios are requested to apply for consolidation of their folios and send relevant share certificates to the Registrar of Company. 6. Section 109A of the Companies Act, 1956 extends nomination facility to all shareholders. They may like to avail it. 7. The Securities & Exchange Board of India has made compulsory trading in the company s equity shares in dematerialised form by all investors w.e.f. 29 th November, Shareholders are requested to get the shares dematerialised in their own interest. REQUEST TO THE MEMBERS * Members having old share certificates of Jindal Strips Limited issued prior to the Scheme of Arrangement between Jindal Strips Limited and Jindal Stainless Limited and members having share certificates of erstwhile Jindal Ferro Alloys Limited are hereby requested to surrender their share certificates to THE COMPANY SECRETARY, JINDAL STRIPS LIMITED, DELHI ROAD, HISAR (HARYANA) INDIA, to enable both Jindal Strips Limited and Jindal Stainless Limited to issue new share certificates. Members having share certificates of Jindal Strips Limited having distinctive numbers in the range of are not required to surrender their share certificates. * Members desiring any information/clarification on the accounts are requested to write to the company at least seven days in advance, so as to enable the management to keep the information ready at the annual general meeting. * As a measure of economy, copies of the annual report will not be distributed at the meeting. Members are requested to bring along their copies. * Members/proxies are requested to bring the attendance slip, duly filled in. * Members are requested to inform immediately their bank account particulars in the following manner, if not informed earlier, to the Registrar, in respect of equity shares in physical mode and to their depository participants (DPs) in respect of equity shares held in dematerialised form, so that the same could be incorporated in payment warrants after their names to avoid fraudulent encashment : Folio No. / Client Id No. Name Bank A/c. No. Name of the Bank Signature of Shareholder IN DEFERENCE TO THE GOVT. POLICY, NO GIFTS WILL BE DISTRIBUTED AT THE A.G.M. 6

7 During the year ended 31 st March, 2004, the company has earned income by way of dividend and interest amounting to Rs crore. After payment of interest on loans, other expenses and provisions, net loss for the year amounted to Rs crore as against profit of Rs.2.70 crore in the previous year. In view of the Accounting Standard (AS-13) and norms as prescribed by Reserve Bank of India, provision for diminution in value of investments amounting to Rs crore in one subsidiary company, Jindal Stainless (Mauritius) Ltd. has been made considering the erosion in the net worth of its subsidiary company. Provision for Non Performing Loans and Advances amounting to Rs.1.08 crore (pervious year Rs. Nil) has been made considering prudential norms prescribed by Reserve Bank of India. In view of the net loss during the year, the directors do not recommend declaration of any dividend. PAYMENT OF LISTING FEE In the last annual general meeting of the company held on 29th November, 2003, shareholders of the company had approved delisting of equity shares of the company from the stock exchanges at Delhi, Ahmedabad, Kolkata and Chennai. In pursuance to the above, the company applied for voluntary delisting of its equity shares to these four stock exchanges. The Madras Stock Exchange Ltd., Chennai and The Delhi Stock Exchange Association Ltd., New Delhi have delisted the company s shares with effect from 7th June, 2004 and 12th July, 2004 respectively. On the other two stock exchanges, application for voluntary delisting is in process. Presently, the equity shares of your company are listed on stock exchanges at Mumbai, Ahmedabad, Kolkata and National Stock Exchange. DIRECTORS REPORT TO THE MEMBERS, Your directors have pleasure in presenting the thirty third annual report of your company together with the audited statement of accounts for the year ended 31 st March, FINANCIAL RESULTS (Rs. in Crore) Description Year Ended Year Ended Interest and dividend income/ Other Income Profit before Interest, Depreciation and Tax Less: Interest/Bank Charges Depreciation Exceptional Items: - Provision for diminution in investments Provision for Non Performing Assets 1.08 Provision for Tax Provision / (Withdrawal) for Deferred Tax 1.27 Net Profit / (Loss) after Tax (44.20) 2.70 Add: Surplus brought forward Transferred to Jindal Stainless Ltd. as per Scheme of Arrangement & Demerger. (1.97) Previous year s taxation adjustment 0.29 Profit / (Loss) available for Appropriation (39.35) Less: Dividend on Equity Shares (Interim) 3.08 Corporate Tax on Dividend 0.39 General Reserve 5.00 Transferred from General Reserve (39.35) Balance carried to Balance Sheet 4.84 FINANCIAL RESULTS & DIVIDEND The annual listing fee for the year has been paid to all the four stock exchanges where equity shares of your company are presently listed. 7 REGISTRATION AS NON-BANKING FINANCE COMPANY Consequent upon sanctioning of the Scheme of Arrangement & Demerger between Jindal Strips Limited and Jindal Stainless Limited, the stainless steel undertaking of Jindal Strips Limited with all the properties, assets, rights and powers have been transferred to and vest in Jindal Stainless Limited, without further act and deed w.e.f Henceforth, all the manufacturing activities of stainless steel are being carried out by Jindal Stainless Limited. The Scheme of Arrangement & Demerger inter alia provides that upon coming into effect of this scheme, Jindal Strips Limited shall be deemed to be an investment company and shall be registered as a non-banking finance company under the provisions of section 45 IA of the Reserve Bank of India Act, In pursuance of the Scheme, your company has already applied for registration as a non-banking finance company, which is in advance stage. CONSOLIDATED FINANCIAL STATEMENTS As required under clause 32 of the listing agreements with the stock exchanges, audited consolidated financial statements form part of the Annual Report. FIXED DEPOSIT The company has not accepted any deposit from the public. Hence, no information is required to be appended to this report. AUDITORS M/s. N.C. Aggarwal & Co., Statutory Auditors of the company retire at the conclusion of the ensuing annual general meeting. The company has received intimation from them to the effect that their appointment, if made, would be within the limit prescribed

8 under section 224(l-B) of the Companies Act, Accordingly, they are proposed to be re-appointed as Statutory Auditors of the company for the year AUDITORS REPORT The annual accounts for the year have been audited by the statutory auditors. The auditors in their report have invited attention to notes no.3 and 5 of the notes to accounts in schedule 15 of balance sheet. The position is further explained as under: i) Note No.3: This is regarding non-provision of loss against investment of Rs lacs fraudulently sold by a broker. In the opinion of directors and as per legal advice, the claim of the company is good. Hence no provision has been made. ii) Note No.5: These are regarding non-provision of diminution in value of one subsidiary company and diminution in value of investments. The company has not considered any provision for diminution in the value of the investments, including investment in one subsidiary company. In the opinion of the management, these investments are long-term strategic investments and any diminution in the value is of temporary nature. PARTICULARS REGARDING THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO This being an investment company, the details regarding conservation of energy, technology absorption etc. are not required to be appended to this report: Foreign exchange earnings : Rs.0.89 lacs Foreign exchange outgo : Nil PARTICULARS OF EMPLOYEES As required by the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the annexure to the directors report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the report and accounts are being sent to all the shareholders of the company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to the Company Secretary at the registered office of the company. SUBSIDIARY COMPANIES The company has four subsidiaries namely Jindal Holdings Limited, Jindal Steel & Alloys Limited, Jindal Stainless (Mauritius) Limited and Massillon Stainless Inc., USA. The annual accounts of the aforesaid subsidiary companies alongwith a statement pursuant to section 212 of the Companies Act, 1956 are attached with this report. DIRECTORS Sh. Ratan Jindal and Sh. R.G. Garg, Directors, will retire at the annual general meeting by rotation and being eligible offers themselves for reappointment. DEMATERIALISATION OF SHARES The members are aware that the company s equity shares are under compulsory trading in dematerialised form for all categories of investors. The members are, therefore, again advised to get their shares dematerialised as trading of the shares will have to be in the electronic form only. 8 UNCLAIMED / UNPAID DIVIDEND The company has already transferred, unclaimed dividend declared upto the financial year ended 31 st March, 1995 of Jindal Strips Limited and up to the financial year ended 31 st March, 1994 of erstwhile Jindal Ferro Alloys Limited (merged with Jindal Strips Limited) to the general revenue account of the Central Government as required by the Companies Unpaid Dividend (Transfer to the General Revenue Account of the Central Government) Rules, The members who have not encashed their dividend warrants for or earlier years and members of erstwhile Jindal Ferro Alloys Limited who have not encashed their dividend warrants for or before may claim their dividend from the Registrar of Companies, Delhi and Haryana, Paryavaran Bhawan, C.G.O. Complex, Lodi Road, New Delhi The members who have not encashed their dividend warrants for the years and onwards are requested to encash the same after getting the same revalidated by the company. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 with respect to directors responsibility statement, it is hereby confirmed: (a) that in the preparation of the annual accounts for the financial year ended 31 st March, 2004, the applicable accounting standards had been followed alongwith proper explanation relating to material departures; (b) that the directors had selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for the year under review; (c) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) that the directors had prepared the accounts for the financial year ended 31 st March, 2004 on a going concern basis. CORPORATE GOVERNANCE With increasing globalisation, there has been a renewed thrust on corporate governance in India. Your company continues to be a pioneer in benchmarking its corporate governance policies with the best in the industry and its efforts are widely recognized by investors. A report on corporate governance as per listing agreement is provided in the corporate governance section in this report. The auditors certificate on compliance with the mandatory recommendations of the committee is annexed to this report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report as required under the listing agreements with the stock exchanges is enclosed with this report. ACKNOWLEDGEMENT Your directors would like to express their deep sense of appreciation for the continued assistance and co-operation by the Central and State Governments, banks during the year under review. For and on behalf of the Board of directors O.P. JINDAL Chairman & Managing Director Place : Hisar Date : 1 st September, 2004

9 CORPORATE 9 GOVERNANCE Your company recognizes communication as a key element of the overall corporate governance framework and therefore, emphasis continuous, efficient, and relevant communication to all external constituencies. Your company follows the principles of fair representation and full disclosure in all its dealings and communications. The company s annual reports, results presentations and other forms of corporate and financial communications provide extensive details and convey important information on a timely basis. Your company has fully complied with all mandatory requirements of corporate governance in all material aspects. A report on corporate governance as per listing agreement is given below: 1. Company s philosophy on the code of corporate governance: Your company s philosophy on corporate governance envisages the alignment of the highest levels of transparency, accountability and equity, in all facts of its operations and in all its interactions with its stakeholders including shareholders, government and lenders. The company believes that all its operations and actions must serve the underlying goal of enhancing overall shareholders value, over a sustained period of time. 2. Board of directors: The composition of Board of directors presently consists of 6 directors as detailed hereunder indicating their status as independent or otherwise against their respective names: Executive Directors: Sr. No. Name of Director Particulars Status 1. Sh. O.P. Jindal Chairman-cum-Managing Director Promoter Non Executive Directors: Sr. No. Name of Director Particulars Status 1. Sh. Ratan Jindal Director Promoter 2. Sh. R.G. Garg Director Independent 3. Sh. Rajinder Parkash Director Independent 4. Sh. H.V. Mishra Director Independent 5. Sh. Rakesh Garg Director Independent During the financial year , 9 Board meetings were held on 16 th April, 2003, 16 th July, 2003, 21 st August, 2003, 29 th August, 2003, 9 th October, 2003, 29 th October, 2003, 30 th October, 2003, 20 th November, 2003 and 31 st January, The maximum time gap between any two meetings was not more than 4 calendar months. Attendance of the directors at the Board meetings, last annual general meeting and number of other directorships and chairmanships / memberships of committee of each director in various companies: Sr. Name of the Director Attendance No. of total directorships and committee No. Particulars memberships/chairmanships in public limited companies Board Last Total Committee Committee meetings AGM Directorships Memberships Chairmanships 1. Sh. O.P. Jindal 6 No Sh. Ratan Jindal 6 No Sh. R.G. Garg 7 No Sh. Rajinder Parkash 8 Yes Sh. H.V. Mishra 5 No Sh. Rakesh Garg 7 Yes Sh. Naveen Jindal* 1 * * * * 8. Sh. Suman J. Khaitan* 2 * * * * 9. Sh. Subir Bisht ^ 1 ^ ^ ^ ^ 10 Sh. S. Ravi ~ - ~ ~ ~ ~ 11. Sh. S. Lahiri ^^ - ^^ ^^ ^^ ^^ 12. Sh. N.C. Mathur ## 2 ## ## ## ## 13. Dr. B.C. Jain ** 1 ** ** ** ** 14. Dr. L.K. Singhal $ 1 $ $ $ $ * Ceased to be director w.e.f. 31 st July, ^ Ceased to be director w.e.f. 9 th September, 2003 ~ Ceased to be director w.e.f. 6 th May, 2003 ^^ Ceased to be director w.e.f. 5 th June, 2003 ## Ceased to be director w.e.f. 23 rd July, 2003 ** Nominated as director of IDBI Bank Ltd. w.e.f. 6 th May, 2003 and ceased to be director w.e.f. 9 th October, $ Appointed as director w.e.f. 2 nd June, 2003 and ceased to be director w.e.f. 31 st July, 2003.

10 None of the directors on the Board is a director on more than 15 companies (as specified in section 275 of the Companies Act, 1956) and is a member of more than 10 committees and chairman of more than 5 committees (as specified in clause 49 of the listing agreement) across all the companies in which he is a director. 3. Audit Committee: Composition and attendance: An Audit Committee constituted in terms of section 292A of the Companies Act, 1956 as introduced by the Companies (Amendment) Act, 2000 and as per requirement of clause 49 of the Listing Agreement, comprises following independent non-executive directors: 1. Sh. H.V. Mishra - Chairman 2. Sh. Ratan Jindal - Member 3. Sh. Rakesh Garg - Member Sh. Bhartendu Harit, Company Secretary, is the Secretary of the audit committee. During the financial year , 6 Audit Committee meetings were held on 16 th April, 2003, 16 th July, 2003, 9 th October, 2003, 29 th October, 2003, 30 th October, 2003 and 31 st January, Sh. H.V. Mishra and Sh. Rakesh Garg were present in 4 meetings and Sh. Ratan Jindal attended 2 meetings. Terms of Reference: Terms of reference of the Audit Committee are as per section 292A of the Companies Act, 1956 and the guidelines set out in the listing agreement with the stock exchanges. 4. Remuneration Committee: Composition and attendance: The Board of directors, it its meeting held on 30 th October, 2003 constituted a Remuneration committee which comprises the following directors: 1. Sh. Rajinder Parkash - Chairman 2. Sh. H.V. Mishra - Member 3. Sh. Rakesh Garg - Member During financial year , one meeting of Remuneration Committee was held on 10 th November, 2003, which was attended by all the members. Terms of Reference: To determine the remuneration packages of the executive directors. Remuneration of Executive Directors: Details of the remuneration paid to the Managing / Executive Directors for the financial year ended 31 st March, 2004 is given below : (Amount in Rs.) Name of Designation Salary Contribution Total Director to PF Sh. O.P. Jindal Chairman 48,00,000 5,76,000 53,76,000 & Managing Director There are no performance linked incentives payable to any of the directors. At present, the company does not have any stock option plan as part of remuneration package for any director. 10 Sitting fees paid to Non Executive Directors : The sitting fees paid for the year ended 31 st March, 2004 to the directors are as follows: Sh. Naveen Jindal Rs.5,000 Sh. Suman Jyoti Khaitan Rs.20,000 Sh. Subir Bisht Rs.5,000 Dr. B.C. Jain Rs.5,000 Dr. L.K. Singhal Rs.10,000 Sh. S. Ravi Rs.5,000 No commission has been paid to the non-executive directors. 5. Shareholders / Investors Grievance Committee: Shareholders / Investors Grievance Committee of the company comprises the following directors: 1. Sh. Rajinder Parkash - Chairman 2. Sh. H.V. Mishra - Member 3. Sh. Rakesh Garg - Member Shareholders /Investors Grievance Committee looks into the grievances of the shareholders concerning transfer of shares, payment of dividend and non receipt of annual report and recommend measure for expeditious and effective investor service. Sh. Bhartendu Harit, Company Secretary is the Compliance Officer. The total number of complaints received and replied to the satisfaction of shareholders during the year under review was 450. Outstanding complaints as on 31 st March, 2004 were 50, which were attended / replied to by 10 th April, requests for transfers were pending for approval as on 31 st March, 2004, which were approved and dealt with by 1st April, Share Transfer Committee: The Board of directors has delegated the power of approving transfer of securities and other related formalities to the share transfer committee comprising Sh. Ratan Jindal, Director, Sh. Rajinder Parkash, Director and Sh. Bhartendu Harit, Company Secretary and Sh. V.M. Joshi, Vice President, Abhipra Capital Limited. 6. General Body Meetings: The last three annual general meetings were held at registered office of the company at Delhi Road, Hisar (Haryana), as per details given below: Year Date Day Time Friday a.m Thursday a.m Saturday a.m. No special resolution was put through postal ballot last year nor it is proposed to put any special resolution to vote through postal ballot this year. 7(a) Disclosures on materially significant related party transactions i.e. transactions of the company of material nature, with its promoters, the directors of the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of company at large: The company has not entered into any transaction of material nature with the promoters, the directors or the management, their subsidiaries or relatives etc. that may have any potential conflict with the interests of the company.

11 7(b) Details of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. The company has complied with the requirements of the stock exchanges, SEBI and other statutory authorities on all matters related to capital markets during the last three years; no penalties or strictures have been imposed on the company by the stock exchanges or SEBI or any other statutory authorities relating to the above. 8. Means of Communication: (a) In compliance with the requirements of listing agreement, the company regularly intimates unaudited as well as audited financial results to the stock exchanges immediately after they are taken on record by the Board. These financial results are normally published in the Business Standard and Amar Ujala / Dainik Jagran (Haryana edition) and are displayed on the website of the company: The results are not sent individually to the shareholders. (b) The Management Discussion & Analysis Report forms part of the Report of the Directors. AUDITORS CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCE UNDER CLAUSE 49 OF THE LISTING AGREEMENT(S) To the members of Jindal Strips Limited We have examined the compliance of conditions of Corporate Governance Procedure implemented by Jindal Strips Limited for the year ended on March 31, 2004 as stipulated in clause 49 of the Listing Agreement of the said company with the Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of procedures and implementation thereof, adopted by the company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the company. We further state that such compliance is neither an assurance as to the further viability of the company nor the efficiency or effectiveness with which the management has conducted the affairs of the company. On the basis of our review and according to the information and explanations given to us, the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement(s) with the Stock Exchanges have been complied with in all material respect by the company and that no investor grievance(s) is/are pending for the exceeding one month against the Company as per the records maintained by the Shareholders Grievance/Allotment & Transfer Committee of the Board. For N.C. AGGARWAL & Co. Chartered Accountants Place: Hisar Dated: Ist September, 2004 (N.C. Aggarwal) Partner MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE AND DEVELOPMENT Since recently, the stock market has started showing signs of revival with the investors regaining faith in the market. Notwithstanding the current uncertain capital market situations, conditions look conducive enough to make it to go further up in the near future. Your company is well equipped with all infrastructure and resources to grab the various opportunities. OPPORTUNITIES AND THREATS The management of your company does not foresee any threats in the near future. The financial industry is on the up these days and in the bundling effect with a growth of geometric progression, there lie opportunities galore. The inflow of foreign institutional investments, delocking of sectoral gaps of foreign direct investments, in different sectors, free trade and investment scenario on WTO 2005 era, would make the Indian Capital Market more vibrant. SEGMENT WISE OR PRODUCT WISE PERFORMANCE After restructuring, the company has become non-banking finance company and after getting registration with Reserve Bank of India, the company would explore the various opportunities in the capital market. OUTLOOK The financial industry is on the up these days and your company has all infrastructure and resources to grab the available and emerging opportunities in the Indian and Global markets. RISK AND CONCERNS The company has been resilient to the fluctuations of economic and industry cycles/downturns. The company s conscious efforts on maintaining a judicious mix of markets proved to be effective. ADEQUACY OF INTERNAL CONTROL SYSTEM Your company s internal control systems and procedures are commensurate with the size of operations and adequate enough to meet the following objectives: Efficient use and safeguarding of resources Compliance with statutes, policies and procedure Transactions being accurately recorded and promptly reported. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE During the year , the company earned income by way of dividend and interest amounting to Rs crore. After payment of interest on loans, other expenses and provisions, net loss for the year amounted to Rs crore. HUMAN RESOURCE DEVELOPMENT Human resource development continues to be a core organizational objective of the company. The company recognizes that its human resource is its greatest strength in realizing its goals and objectives. 11

12 AUDITORS REPORT TO THE MEMBERS OF JINDAL STRIPS LIMITED We have audited the attached Balance Sheet of JINDAL STRIPS LIMITED as at 31 st March 2004 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report that- A) As required by the Companies (Auditor s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure hereto, a statement on the matters specified in paragraphs 4 and 5 of the said Order, so far as applicable to the Company. B) Further to our comments in Annexure referred to in paragraph (A) above, we also report that: (a) We have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit; (b) In our opinion, the Company has kept proper books of accounts as required by law so far as appears from our examination of books. (c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company. (d) In Our opinion,the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, except to the extent stated in Note No 3 of notes to accounts. (e) Based on representation made by all the directors of the company to the Board and the information and explanations as made available to us by the company, none of the directors of the company is disqualified as on 31 st March, 2004 from being appointed as director of the company as referred to in clause (g) of sub section (1) of section 274 of the companies act (f) Attention is invited to the following notes of Schedule 15: (i) Note No 3 regarding non provision of shares worth Rs lacs fraudulently sold, as these are treated good for recovery by the management. 12 (ii) Note No 5 regarding diminution in value of certain unquoted investments (including investment in one subsidiary company) (amount unascertained) in view of the long-term involvement of the Company and long term strategic investments as stated in the said notes. Without considering item f(ii) above, the effect of which could not be determined, had the impact of item f (i) above been considered, loss for the year would be Rs lacs (instead of Rs lacs) and reserves and surplus would have been Rs lacs (instead of Rs lacs) and investment would have been Rs lacs (instead of Rs lacs) Subject to above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India. i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2004, and ii) In the case of the Profit and Loss Account, of the Loss for the year ended on that date subject to remark given above; and iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date. ANNEXURE TO AUDITORS REPORT REFERRED TO IN PARAGRAPH (A) IN OUR REPORT OF EVEN DATE FOR THE YEAR ENDED a) The Company has maintained proper records in respect of its Fixed Assets showing full particulars including quantitative details and situation of fixed assets. b) We have been informed that fixed assets of the Company have been physically verified by the management during the year, which in our opinion is reasonable. No discrepancies between the book records and the physical inventory were noticed. c) No fixed assets were disposed off during the year. d) According to the information and explanations given to us, no discrepancies have been noticed on physical verification of inventories as compared to the books of record. 2. a) The Company has taken loan from a company covered in the register maintained under section 301 of the Companies Act, The maximum amount involved during the year in respect of said company and the year end balance of such loan is Rs lacs and Rs lacs respectively. The Company has given loan to three Companies covered in the register maintained under section 301 of the Companies Act, The maximum amount involved during the year in respect of said companies and the year end balance of such loan is Rs lacs and Rs lacs respectively.

13 b) In our opinion and according to information and explanations given to us, the rate of interest and other terms and conditions on which loan has been taken/ given are not, prima facie, prejudicial to the interest of the Company. c) In respect of the aforesaid loan, the amount (principal as well as interest) is repayable on demand, the Company and the parties are regular in repaying the amounts as and when demanded. d) The aforesaid loan is repayable on demand and therefore the question of overdue amounts does not arise. 3. In our opinion and according to information and explanations given to us, the internal control procedure with regard to purchase of fixed assets is adequate and commensurate with the size of the company and the nature of its business. There were no purchase and sale of inventories. 4. a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered. b) In our opinion and according to the information and explanations given to us, the transactions with parties with whom transactions exceeding the value of Rs five lacs have been entered into during the financial year are at prices, which are reasonable, having regard to the prevailing market prices at the relevant time. 5. The Company has not accepted any fixed deposit from the public. Therefore the provisions of Section 58A and rules framed thereunder are not applicable to the Company. 6. The Company has an adequate internal audit system, commensurate with its size and nature of business. 7. a) The company is regular in depositing with the appropriate authorities undisputed statutory dues including Employees Provident Fund, Investor Education and Protection Fund and Income Tax. There is no arrears as at 31 st March 2004 for a period of more than six months from the date it become payable. b) According to the information and explanations given to us, Income tax amounting to Rs lacs for the year ended has not been deposited on account of Appeal pending with Income Tax Appellate Tribunal. 8. The accumulated losses of the Company as at 31 st March, 2004 are not more than fifty per cent of its net worth. The Company has not incurred cash losses in the current financial year and previous financial year also. 9. The Company has not taken any loan from banks, financial institution or debenture holders. Accordingly paragraph 4(xi) of the order is not applicable. 10. According to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. 11. According to the information and explanations given to us, the company has given guarantee for loan taken by others from banks, the terms and conditions of which are prima facie, not prejudicial to the interest of the company. 12. The Company has maintained proper records of transactions and contracts in respect of dealing and trading in shares and other securities and that timely entry have been made therein. All shares and other securities have been held by the Company in its own name except investment in a subsidiary company pursuant to section 49(3) of the Companies Act, According to the information and explanations given to us and on an overall examination of the balance sheet of the company, in our opinion, there are no funds raised on short-term basis which have been used for longterm investment and vice versa. 14. According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act, The company has not issued any debentures. Accordingly paragraph 4(xix) of the order is not applicable. 16. The Company has not raised any money by Public issue during the year. Accordingly paragraph 4(xx) of the order is not applicable. 17. During the course of our examination of the books and records of the Company, and according to the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit. For N.C. AGGARWAL & CO., Chartered Accountants (N.C. AGGARWAL) Partner M.No Place : Hisar Dated : 1st September,

14 BALANCE SHEET AS AT 31st MARCH, 2004 (RS. IN LACS) (RS. IN LACS) D E S C R I P T I O N SCHEDULE SOURCES OF FUNDS SHAREHOLDERS FUNDS Share Capital Reserve and Surplus 2 24, , , , Unsecured Loans 3 4, TOTAL 29, , APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Depreciation INVESTMENTS 5 17, , CURRENT ASSETS, LOANS AND ADVANCES Cash and Bank Balances Loans and Advances 7 12, , , , LESS:CURRENT LIABILITIES AND PROVISIONS Liabilities Provisions , NET CURRENT ASSETS 12, , Deferred Tax Assets : MISCELLANEOUS EXPENDITURES (To the extent not written off or adjusted) TOTAL 29, , Notes forming part of accounts 15 AUDITORS REPORT In terms of our report of even date annexed hereto For N.C. Aggarwal & Co. O.P. JINDAL RAJINDER PARKASH Chartered Accountants Chairman & Managing Director Director ( N.C. Aggarwal ) RAKESH GARG BHARTENDU HARIT Partner Director Company Secretary M.N Place : Hisar Dated : 1st September,

15 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2004 (RS. IN LACS) (RS. IN LACS) D E S C R I P T I O N SCHEDULE INCOME Interest and Dividend Income 11 1, , , , EXPENDITURE Personnel Administrative and Selling Interest and Bank Charges Miscellaneous Expenditure written off Depreciation PROFIT BEFORE EXCEPTIONAL ITEMS AND TAX Less : Exceptional Items Provision for Diminution in Investments 4, Provision for Non Performing Assets PROFIT(LOSS) AFTER EXCEPTIONAL ITEMS (4,280.54) Less : Provision for Taxation Provision/(Withdrawal) for Deferred Tax (0.12) PROFIT(LOSS) AFTER TAXATION (4,419.55) Add/(Less) Surplus brought forward , Transferred to Jindal Stainless Ltd. as per - (196.71) Scheme of Arrangement & Demerger Previous year Taxation Adjustment PROFIT AVAILABLE FOR APPROPRIATION (3,935.39) 1, Interim Dividend on Equity Shares Coprorate Tax on Equity Dividend General Reserve Transfer from General Reserve (3,935.39) - Balance Carried to Balance Sheet (3,935.39) 1, Notes forming part of accounts 15 Earning Per Share ( in Rs.) (Note no. 13) Basic and Diluted (86.05) 5.26 AUDITORS REPORT In terms of our report of even date annexed hereto For N.C. Aggarwal & Co. O.P. JINDAL RAJINDER PARKASH Chartered Accountants Chairman & Managing Director Director ( N.C. Aggarwal ) RAKESH GARG BHARTENDU HARIT Partner Director Company Secretary M.N Place : Hisar Dated : 1st September,

16 (RS. IN LACS) (RS. IN LACS) D E S C R I P T I O N SCHEDULE 1 SHARE CAPITAL AUTHORISED 60,00,000 Equity shares of Rs.10/- each ISSUED, SUBSCRIBED AND PAID UP 51,36,163 Equity Shares of Rs.10/- each fully paid up TOTAL Of the above: Equity shares allotted as fully paid up bonus shares by capitalising General Reserves of Rs lacs and Share Premium of Rs lacs Equity shares were allotted as fully paid up for consideration other than cash to a non resident at a premium of Rs.5/- per share Equity shares were converted out of conversion of 1990 Euro Bonds of US$ 5000 each at a premium of Rs.342/- per share Equity shares are allotted as fully paid up shares to the share holders of erstwhile Jindal Ferro Alloys Ltd. pursuant to Scheme of amalgamation without payment being received in cash Equity Shares alloted to Shareholders of Jindal Steel & Power Ltd. Pursuant to Scheme of Arrangement dt sanctioned by Hon ble Punjab & Haryana High Court, Chandigarh Equity Shares alloted to Shareholders of Jindal Stainless Ltd. w.e.f pursuant to Scheme of Arrangement and Demerger sanctioned by Punjab & Haryana High Court effective w.e.f SCHEDULE 2 RESERVES AND SURPLUS a) Share Premium Account As Per Last Account 3, , Less : Transferred to Jindal Stainless Ltd. - 8, as per scheme of Arrangment & Demerger 3, , b) GENERAL RESERVE As per last account 8, , Add : Transferred from Profit and Loss Account , , Less : Transferred to Jindal Stainless Ltd. as - 21, per scheme of Arrangment & Demerger Less : Transfer to Profit and Loss Account (3,935.39) - 4, , c) DEBENTURE REDEMPTION RESERVE As per last account Less : Transferred to Jindal Stainless Ltd. As per scheme of Arrangment & Demerger - - d) CENTRAL / STATE SUBSIDY RESERVE As per last account (Against fulfilment of certain stipulations) Less : Transferred to Jindal Stainless Ltd. as per scheme of Arrangment & Demerger - - e) Amalgamation Reserve As per last account - 1, Less : Transferred to Jindal Stainless Ltd. as - 1, per scheme of Arrangment & Demerger - - f) Capital Redemption Reserve Account As per last account Less : Transferred to Jindal Stainless Ltd. as per scheme of Arrangment & Demerger - - g) Capital Reserve Demerger Account as per Scheme 17, , of Arrangement and Demerger 17, , h) SURPLUS Profit and Loss Account GRAND TOTAL 24, ,

17 (RS. IN LACS) (RS. IN LACS) D E S C R I P T I O N SCHEDULE 3 UNSECURED LOANS Short Term Loan from Body Corporate 4, TOTAL 4, SCHEDULE 4 FIXED ASSETS 17 Rs. in lacs GROSS BLOCK DEPRECIATION NET BLOCK D E S C R I P T I O N COST ADDITIONS SALES/ TOTAL UPTO DURING WRITTEN TOTAL AS ON DURING TRFD AS ON THE YEAR BACK AS ON THE YEAR DURING THE YEAR FURNITURE & FIXTURES OTHER ASSETS TOTAL SCHEDULE 5 INVESTMENTS - LONG TERM - NON TRADE (AT COST) DETAILS OF INVESTMENTS AS AT 31ST MARCH,2004 AS AT 31ST MARCH,2003 SR. PARTICULARS SHARES/ FACE & AMOUNT SHARES/ FACE & AMOUNT NO. DEB./ PAID UP (Rs. in DEB/ PAID UP (Rs. in BONDS VALUE Lacs) BONDS VALUE Lacs) (NOs.) PER SHARE/ (NOs.) PER SHARE/ DEB/ BOND DEB/BOND LONG TERM-OTHER THAN TRADE EQUITY SHARES OF A SUBSIDIARY COMPANY UNQUOTED : 1 JINDAL HOLDING LIMITED JINDAL STEEL & ALLOYS LTD JINDAL STAINLESS (MAURITIUS) LTD US$ US$ LESS : PROVISION FOR DIMINUTION OF INVESTMENTS ( ) - SUB TOTAL (A) B EQUITY SHARES - FULLY PAID UP a) QUOTED 1 SAW PIPES LTD SHALIMAR PAINTS LTD JINDAL IRON & STEEL CO. LTD JINDAL STAINLESS LTD * SUB TOTAL B (a) b) UNQUOTED 1 SUN INVESTMENTS LTD ROHIT BUILDING LTD STAINLESS INVESTMENTS LTD MANSAROVER INVESTMNENTS LTD JINDAL EQUIP. LEAS. & CONS. SER. LTD JINDAL OVERSEAS LTD SING$ SING$ BRAHMPUTRA CAPITAL & FINANCIAL SERVICES LTD SARASWAT CO. OP. BANK MIDLAND STEEL PROCESSORS LTD JINDAL TRACTEBEL POWER CO. LTD JINDAL STAINLESS LTD SUB TOTAL B (b) C 10% REDEMABLE CUMULATIVE PREFERENCE SHARES : 1 JINDAL EQUIP. LEAS. & CONS. SER. LTD SUB TOTAL (C) G. TOTAL (A TO C) AGGREGATE VALUE OF QUOTED INVESTMENTS MARKET VALUE OF QUOTED INVESTMENTS AGGREGATE VALUE OF UNQUOTED INVESTMENTS NOTE: Equity Shares of Saw Pipes Limited and Equity Shares of Jindal Iron & Steel Co. Ltd. have been pledged with Bank /Financial Institutions in respect of Guarantee/credit facilities availed by other Body Corporate. 2. *Face value of Rs.10/- each sub-divided into Rs.2/- each.