INFORMATION MEMORANDUM Jindal Thermal … Karnataka Power Transmission Corporation Limited 3 ....

PRIVATE & CONFIDENTIAL

INFORMATION MEMORANDUM

Jindal Thermal Power Company Limited (A Company incorporated under the Companies Act, 1956)

Registered Office: 5-A. G. Deshmukh Marg, Mumbai 400 026. Tel. No. (022) 2351-3000 Fax: (022) 2352-6400 Website:www.jtpcl.com

PRIVATE PLACEMENT OF 500 REDEEMABLE SECURED NON-CONVERTIBLE

DEBENTURES OF RS. 10,00,000 EACH FOR CASH AT PAR AGGREGATING RS. 50 CRORES

General Risk Investment in debt instruments involves a degree of risk and investors should invest any funds in the issue only after reading the risk factors on page no.5 in the Information Memorandum carefully, including the risk involved. The Securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Issuer’s Absolute Responsibility The issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this offer document contains all information with regard to the issuer and the issue, which is material in the context of the issue, that the information contained in the Information Memorandum is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. Listing The Debentures of the Company are proposed to be listed on the The Stock Exchange Mumbai (BSE). Credit Rating: FITCH Ratings has assigned rating F1 (ind) to these Debentures which indicates highest credit quality and strongest capacity for timely payment of financial commitments. DEBENTURE TRUSTEE REGISTRAR AND TRANSFER AGENT

UTI Bank Limited Corporate Office: Maker Tower, “F” 111, 13th Floor, Cuffe Parade, Mumbai 400 005

Karvy Consultants Limited Corporate Office: No. 51/2, T.K.N. Complex, Vanivilas Road, Opp. National College, Basavanagudi, Bangalore–560 004.

Issue Opening Date: 29th March, 2005

Issue Closing Date: 29th March 2005

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TABLE OF CONTENTS CONTENTS PAGE NO. TABLE OF CONTENTS ..................................................................................... 2 DEFINITIONS / ABBREVIATIONS USED ............................................................. 3 RISK FACTORS .............................................................................................. 5 HIGHLIGHTS ................................................................................................. 6 IMPORTANT NOTICE....................................................................................... 6 I. GENERAL INFORMATION.......................................................................... 8 II. TERMS OF THE PRESENT ISSUE...............................................................13 III. PARTICULARS OF THE ISSUE...................................................................20 IV. ISSUER PROFILE .................................................................................200 V. STOCK MARKET DATA ..........................................................................344 VI. MANAGEMENT DISCUSSION & ANANLYSIS OF THE FINANCIAL STATEMENT FOR THE LAST Four FINANCIAL YEARS:.........................................................344 VII. FINANCIALS OF GROUP COMPANIES PROMOTED BY PROMOTERS ...............355 VIII. CAPITAL ISSUES DURING LAST THREE YEARS: ..........................................38 IX. OUTSTANDING LITIGATIONS OR DEFAULTS ..............................................39 HIGHLIGHTS.........................................................................................55 X. DISCLOSURE ON INVESTOR GRIEVANCES AND REDRESSAL SYSTEM ............55 XI. GENERAL INFORMATION.........................................................................57 XII. AUDITORS REPORT & FINANCIAL INFORMATION........................................58 XIII. STATUTORY AND OTHER INFORMATION....................................................62 XIV. RELATED PARTY DISCLOSURE ...............................................................633 XV. OTHER DETAILS ..................................................................................633 XVI. MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS..........................64 TRANSFER AND TRANSMISSION OF SHARES .............................................64

DIVIDENDS ........................................................................................667 FORFEITURE OF SHARES ........................................................................69 LIEN..................................................................................................700

DECLARATION ......................................................................................72

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DEFINITIONS / ABBREVIATIONS USED JTPC : Jindal Thermal Power Company Limited JPL : JSW Power Limited JVSL : Jindal Vijayanagar Steel Limited KPTCL : Karnataka Power Transmission Corporation Limited BSE : Bombay Stock Exchange CAR : Capital Adequacy Ratio CARE : Credit Analysis & Research Limited CEO : Chief Executive Officer MD : Managing Director ED : Executive Director FI : Financial Institution NAV : Net Asset Value NPA : Non-Performing Assets NSDL : National Securities Depository Limited RBI : Reserve Bank of India SEBI : Securities and Exchange Board of India

AC Alternating Current ADSCR Average Debt Service Coverage Ratio APIL Alstom Power India Limited ATNW Adjusted Tangible Networth BFG Blast Furnace Gas BHEL Bharat Heavy Electricals Limited BOF Basic Oxygen Furnace COG Coke Oven Gas COD Commercial Operation Date DDITL Demag Delaval Industrial Turbomachinery Limited (Siemens) DRI Direct Reduced Iron DSCR Debt Service Coverage Ratio EBIDTA Earnings Before Interest, Depreciation, Tax & Other Adjustments FM Force Majeure FSA Fuel Supply Agreement(s) Gcal Gross Calories GCA Gross Cash Accruals GCV Gross Calorific Value GoK Government of Karnataka HP High Pressure HRSG Heat Recovery Steam Generator HRC Hot Rolled Coils IRR Internal Rate of Return JISCO Jindal Iron & Steel Company Limited JPL JSW Power Limited JPOCL Jindal Praxair Oxygen Company Private Limited JTPCL Jindal Thermal Power Company Limited JVSL Jindal Vijayanagar Steel Limited Kcal Kilo Calories KPTCL Karnataka Power Transmission Corporation Limited

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KSIIDCL Karnataka State Industrial Investment & Development Corporation Limited

KV Kilo Volt KVA Kilo Volt Ampere KERC Karnataka Electricity Regulatory Commission KW Kilo Watt kWh Kilo Watt Hour LDO Light Diesel Oil LE Lenders’ Engineer MDSCR Minimum Debt Service Coverage Ratio MTPA Million Tonnes Per Annum MUs Million units (million kWh) MW Mega Watt NCA Net Cash Accruals NTP Notice to Proceed O&M Operations & Maintenance PAT Profit After Taxes PBT Profit Before Taxes PLF Plant Load Factor PPA Power Purchase Agreement PTC Power Trading Corporation Limited ROE Return on Equity RTL Rupee Term Loan SHR Station Heat Rate SPV Special Purpose Vehicle STG Steam Turbine Generator TOL Total Outstanding Liabilities TRA Trust & Retention Agreement TPD Tonnes Per Day

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RISK FACTORS Internal Factors (a) Redemption Reserve: For the existing debentures, the balance in the

Debenture Redemption Reserve as on 31 March 2004 is Rs.1913.65 lakhs. Creation of Debenture Redemption Reserve is envisaged for the proposed issue of Debentures as per the provisions of Companies Act, 1956.

(b) It is proposed that the Debentures shall be secured by way of First mortgage

and charge on pari passu basis on the Assets of JTPCL. (c) Market Risk: As JVSL is the major customer; power cannot be generated/sold

if JVSL’s plant is shutdown.

The Electricity Act 2003 contemplates multi buyer model in place of single buyer model and open access to Transmission & Distribution network, which may have impact of participation of Private Sector in electricity distribution business. (d) Credit Rating: JTPC has obtained credit rating for an amount of Rs. 50 crores from FITCH Ratings.

The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision.

(d) Contingent Liabilities: Securities provided to banks/financial institutions against credit facilities extended to other bodies corporate is Rs.10890.30 lacs as on the date of March 31, 2004.

(f) Pending Grievances: There are no investor grievances. (g) Non-Performing Assets (NPA): JTPCL does not have any NPA. (h) Foreign Exchange Risk: JTPCL has borrowed in foreign currency from Power

Finance Corporation and State Bank of India, New York. The principal and interest are payable quarterly and half-yearly respectively at the exchange rate prevailing on the date of payment.

External Factors (a) Changes in Government policies may impact the performance of the Steel

sector, which may in turn affect JTPCL, as 60% of the company’s power supplies are to JVSL and JVSL is the only fuel supplier to JTPCL.

(b) Risk of Competition: Competition in the power sector has increased and is

likely to increase further with the entry of independent power producers.

While focusing attention on cutting cost to be competitive, JTPC has been able to meet its operating norms and reduce its finance charges to meet the level of tariff requirements of KPTCL. JTPC is taking further steps to bring its costs down and remain competitive.

JTPCL may not face competition, as it intends to supply power to one of its

group companies and KPTCL.

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General Risks Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, the investor must rely on his/her own examination of the issuer and the issue including the risks involved. The Debentures have not been recommended or approved by BSE nor does BSE guarantee the accuracy or adequacy of this document. Notes 1. Allotment against all valid applications for the JTPCL debentures will be made on

a full and firm allotment basis. 2. The reserves and surpluses as on March 31, 2004 are Rs.29587.56 lakhs,

however, the loans outstanding as on the said date were 54213.87 lakhs. The present issue is for an amount of Rs. 5000 lakhs.

HIGHLIGHTS • •

•

• •

JTPCL has been formed under the Companies Act, 1956. The paid up equity share capital of JTPC as on date is Rs. 289,00,00,000 and is owned by Jindal Vijayanagar Steel Limited – 50%, other companies of JSW group - 42.39%, IDBI - 7.61%. Total assets = Rs. 112701.43 Lakhs, out of which own funds constitute Rs. 58487.56 Lakhs. Profit/Loss after tax for the F.Y. March 31, 2004 = Rs. 19555.89 Lakhs. NPA in the books of JPL = Nil

IMPORTANT NOTICE No part of this document is intended for the use of any recipient located outside India or any recipient who is not resident in India. This document is also not intended for the use of Non-Resident Indians ('NRIs') (except on non-repatriation basis as stated elsewhere), Overseas Corporate Bodies ('OCBs') or Foreign Institutional Investors ('FIIs') This issue by JTPCL (the "Issuer") of Redeemable Secured Non-Convertible Debentures in the nature of Non-Convertible Debentures ("Debentures") is being made strictly on a private placement basis. It is not and should not be deemed to constitute an offer to the public in general or any section or class thereof. This Memorandum ("Information Memorandum") is neither a prospectus nor a statement in lieu of prospectus. It cannot be acted upon by any person other than to whom it has been specifically addressed, neither can this document be circulated, reproduced or redistributed in any form whatsoever. This Information Memorandum is not intended to provide the sole basis of any credit decision or other evaluation and should not be considered as a recommendation that any recipients of this Information Memorandum should invest in the Debentures. Each potential investor should make its own independent assessment of the investment merit of the Debentures and the Issuer. The Arrangers have relied upon the information supplied by JTPCL. The Arrangers neither have verified independently, nor assume responsibility for the accuracy and completeness of this Information Memorandum, or any other information or documents supplied or approved by JTPCL. The Arrangers hold no responsibility for any misstatement in or omission from the Issuer in publicly available information or

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any other information about the Issuer available in the market. JTPCL and the Arrangers do not undertake to update this Information Memorandum to reflect subsequent events and thus it should not be relied upon without first confirming its accuracy with JTPCL. The potential investors acknowledge that the Arrangers do not owe the investors any duty of care in respect of this offer to subscribe for and purchase of the Debentures. This Information Memorandum is made available to potential Debentures investors on the strict understanding that it is confidential. Recipients shall not be entitled to use any of the information otherwise than for the purpose of deciding whether or not to invest in the Debentures. No person including any employee of the Issuer has been authorised to give any information or to make any representation not contained in this Information Memorandum. Any information or representation not contained herein must not be relied upon as having being authorised by or on behalf of the Issuer. Neither the delivery of this Information Memorandum at any time nor any statement made in connection with the offering of the Debentures shall under the circumstances imply that any information/representation contained herein is correct at any time subsequent to the date of this Information Memorandum. The distribution of this Information Memorandum and the offering of the Debentures in certain jurisdictions may be restricted by law. Persons into whose possession this Information Memorandum comes are required by the Issuer to inform themselves about, and observe any such restrictions.

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PART – I

JINDAL THERMAL POWER COMPANY LIMITED (A Company incorporated under the Companies Act, 1956)

Registered Office Registered Office: 5-A. G. Deshmukh Marg, Mumbai 400 026. Tel. No. (022) 2351-3000 Fax: (022) 2352-6400

Website:www.jtpcl.com I. GENERAL INFORMATION Information Memorandum for Private Placement of 500 Redeemable Secured Non-Convertible Debentures of Rs. 10,00,000 each for cash at par aggregating Rs. 50 crores by JTPCL.

Government Approval Power Generation is de-licensed under The Electricity Act, 2003. It is to be distinctly understood that the submission of the IM should not in any way be deemed or construed that the Information Memorandum has been cleared or approved by Central/State Government. Central/State Government does not take any responsibility either for the financial or other soundness of this Issuer, or the achievement of the object for which placement is proposed to be made or for the correctness of the statement made or opinions expressed in the Information Memorandum. No other approvals are required for the current private placement Authority for the Issue These Debentures are being issued in accordance with the resolution passed by the Board of Directors of JTPCL in its meeting held on 28th March 2005. Stock Exchange Disclaimer Clause It is to be distinctly understood that the submission of the Information Memorandum to the Stock Exchange should not in any way be deemed or construed that the Information Memorandum has been cleared or approved by the Stock Exchange. Stock Exchange does not take any responsibility either for the financial or other soundness of this Issuer, or the achievement of the object for which placement is proposed to be made or for the correctness of the statement made or opinions expressed in the Information Memorandum. General Disclaimer The issuer accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisement or any other material issued by or at the instance for the issuer and that anyone placing reliance on any other source of information would be doing so at his own risk. Listing The Debentures will be listed on The Stock Exchange, Mumbai (BSE). Underwriting The present issue of Debentures is not underwritten.

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http://www.aptransco.in/




Minimum Subscription Pursuant to the notification no. SEBI/MRD/SE/AT/46/2003 dated 22nd December 2003 issued by SEBI minimum subscription clause is not applicable to the privately placed debt securities. Impersonation Any person who- a) makes in a fictitious name an application to a company of acquiring, or

subscribing for any Securities therein, or b) otherwise induces a company to allot or register any transferor of Securities

therein to him, or any other person in a fictitious name shall be punishable under the extant laws.

Issue of Letter of Allotment/ Allotment Advice and Debenture Certificates The Issuer will execute and despatch Letters of Allotment/ Allotment advice in favour of the allottees or Refund Letter along with refund amount, not later than 15 days after the Deemed Date of Allotment. After completion of all legal formalities, the Issuer will issue the Debentures certificate(s) / credit the DP account of the allottees against surrender of the letter(s) of allotment within three month(s) of the Deemed Date of Allotment, or such extended period subject to obtaining the approvals, if any. Interest at applicable coupon rate will be paid via interest warrants on the application money to the applicants for the relevant option applied. Such interest will be paid for the period commencing from the date of realisation of the cheque(s) / demand drafts (s) up to but excluding the Deemed Date of Allotment. The interest warrants for interest payable on application money will be despatched by Registered Post/ Courier the next working day after the Deemed Date of Allotment. The letters of allotment/ allotment advice/refund orders, as the case may be, will be sent by Registered Post/ Courier /Hand Delivery within 15 days from the Deemed Date of Allotment to the first/sole applicant, at the sole risk of the applicant. The payment will be subject to deduction of tax at source at the rates prescribed under the provisions of the Income Tax Act, 1961 or any other statutory modification or re-enactment thereof. Issue Schedule Offer Opening Date 29th March 2005 Offer Closing Date 29th March 2005 Deemed Date of Allotment

Within 7 days from the issue closure date

The issuer reserves the right to close the issue earlier than the aforesaid date or change the issue time table including the Deemed Date of Allotment at its sole discretion, without giving any reasons or prior notice. Names and Addresses of Auditors, Debenture Trustees, Banker to JTPCL, Banker to the Issue, Auditors Lead Arranger To be finalized during actual launch of the issue if necessary.

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Co-Arrangers To be finalized during actual launch if necessary. Auditors M/s Lodha & Company Charted Accountants No. 6, Karim Chambers 40, Ambalal Doshi Marg Hamam Street Mumbai – 400 023 Debenture Trustees UTI Bank Limited Corporate Office: Maker Tower “F” 111, 13th Floor, Cuffe Parade, Mumbai 400 005 Registrar to the Issue Karvy Consultants Limited Corporate Office: No. 51/2, T.K.N. Complex, Vanivilas Road, Opp. National College, Basavanagudi, Bangalore – 560 004. Banker to JTPCL Punjab National Bank Vokkaligara sangha Building, Hudson circle Bangalore - 560027 ICICI Bank Limited ICICI Towers 1st floor (West Wing), Commissariat Road, 1 Bangalore – 560025 Banker to the Issue ICICI Bank Limited Free Press House, Nariman Point Mumbai CREDIT RATING a. FITCH Ratings has assigned rating of F1 (ind) [F one (ind)] to these

Debentures vide there letter dated 28th March, 2005. The Rating Letter has been enclosed.

b. Details of Ratings done in the Last Three Years. JTPCL had issued Infrastructure Debentures of Rs. 42 crores, in March 1998, for which CARE had assigned AAA (SO), indicating that it is of the best quality and negligible investment risk.

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Thereafter, CARE has assigned the following ratings to these debentures: 1. AA+ (SO) rating in April 2002. 2. AA + (SO) rating in April 2003.

Compliance Officer Ms. Mansi Toprani Company Secretary Jindal Thermal Power Company Limited Jindal Mansion, 5-A. G. Deshmukh Marg, Mumbai 400 026. Tel: 022-2351-3000 Fax: 022-2352-6400 The Investor may contact the compliance officer in case of any pre-issue / post–issue related problems such as non-receipt of letters of allotment / debenture certificates / refund orders. CAPITAL STRUCTURE OF THE COMPANY as at 31st December, 2004 Amount

(Rs. Crores) A. Authorised Capital 400.00 (40,00,00,000 Nos. of share at Rs. 10 each) B. Issued Subscribed and Paid-up Equity Share Capital 289.00 (28,90,00,000 Nos. of shares of Rs. 10 each) D. Secured Loans 467.42 E. Unsecured Loans NIL Details regarding Shareholders Details of Shareholdings as on 12th December 2004

Name of the Shareholder No.of Shares Amount Paid-up Rs.

% of Total

Jindal Strips Limited 100 1,000 0.00%Jindal Iron & Steel Co. Limited

100 1,000 0.00%

Mr. Sajjan Jindal 100 1,000 0.00%Mr. Prithvi Raj Jindal 100 1,000 0.00%Mr. Ratan Jindal 100 1,000 0.00%Jindal Vijayanagar Steel Limited

144,499,400 1,444,994,000 50.00%

Gagan Trading Company Limited

12,655,100 126,551,000 4.38%

Sun Investments Pvt. Limited

102,160,000 1,021,600,000 35.35%

Vrindavan Services Pvt. Limited

7,685,000 76,850,000 2.66%

IDBI Limited 22,000,000 220,000,000 7.61%Total 289,000,000 2,890,000,000 100.00%

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Details of Shareholdings as on 31st March 2004


% of Total

Jindal Strips Limited 100 1,000 0.00%Jindal Iron & Steel Co. Limited

100 1,000 0.00%

Mr. Sajjan Jindal 100 1,000 0.00%Mr. Prithvi Raj Jindal 100 1,000 0.00%Mr. Ratan Jindal 100 1,000 0.00%Jindal Vijayanagar Steel Limited

144,499,400 1,444,994,000 50.00%

Gagan Trading Company Limited

12,655,100 126,551,000 4.38%

Sun Investments Limited 36,160,000 361,600,000 12.51%Vrindavan Services Limited 7,685,000 76,850,000 2.66%ICICI Limited 55,000,000 550,000,000 19.03%IDBI Limited 33,000,000 330,000,000 11.42%

Total 289,000,000 2,890,000,000 100.00% Top Ten Shareholders two-year prior to the date of stock exchange filing (that is 2 years prior to 31st March 2005) As on 31st March 2003


% of Total

Jindal Strips Limited 100 1,000 0.00% Jindal Iron & Steel Co. Limited 100 1,000 0.00% Mr. Sajjan Jindal 100 1,000 0.00% Mr. Prithvi Raj Jindal 100 1,000 0.00% Mr. Ratan Jindal 100 1,000 0.00% Jindal Vijayanagar Steel Limited 144,499,400 1,444,994,000 50.00% Gagan Trading Company Limited 12,655,100 126,551,000 4.38% Sun Investments Limited 25,160,000 251,600,000 8.71% Vrindavan Services Limited 7,685,000 76,850,000 2.66% ICICI Limited 55,000,000 550,000,000 19.03% IDBI Limited 44,000,000 440,000,000 15.22% Total 289,000,000 2,890,000,000100.00% As on 31st March 2002


% of Total

Jindal Strips Limited 100 1,000 0.00% Jindal Iron & Steel Co. Limited 100 1,000 0.00% Mr. Sajjan Jindal 100 1,000 0.00% Mr. Prithvi Raj Jindal 100 1,000 0.00% Mr. Ratan Jindal 100 1,000 0.00% Jindal Vijayanagar Steel Limited 144,499,400 1,444,994,000 50.00% Gagan Trading Company Limited 7,035,100 70,351,000 2.43%

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Sun Investments Limited 19,780,000 197,800,000 6.84% Vrindavan Services Limited 7,685,000 76,850,000 2.66% ICICI Limited 55,000,000 550,000,000 19.03% IDBI Limited 55,000,000 550,000,000 19.03% Total 289,000,000 2,890,000,000100.00% II. TERMS OF THE PRESENT ISSUE Instrument Taxable, Redeemable, Secured, Non-Convertible Debentures (“NCDs”) Issue Size Rs 50 crore Security Pari-passu charge on fixed assets for 1.25 times Rating F1 (ind) by Fitch Maturity 366 days Redemption Bullet Put / call option On any day starting from June 28, 2005; notice of 1 working day to be

provided to exercise the option Interest Rate 6.50% p.a. payable on redemption or on exercise of the option Face value Rs. 10 lacs per Bond Day Count basis Actual/365 Issue & Redemption Price

At par

Interest on application money

At the applicable coupon rate payable from the date of realisation of the cheque by the Issuer till one day before the Date of Allotment. Interest on application money will be payable on the Date of Allotment.

Minimum Application The Application should be for a minimum of 10 Debentures and in multiples of 10 Debentures thereafter. Security The Debentures are secured by way of Pari-passu charge on the fixed assets of the company for 1.25 times Put / call option The Debentures have an put/ call option facility. On any day starting from June 28, 2005; notice of 1 working day to be provided to exercise the option Payment of Interest The debentures carry a coupon rate of 6.50% p.a. payable on redemption or on exercise of the option from the Date of Allotment. The interest payable to each Debentureholder shall be paid by cheques bearing the interest payment dates. Such cheques shall be dispatched to the debenture holders whose names appear in the Register of Debenture holders/ or as provided by the Depositories on the record date, and in case of joint holders, to the one whose name appears first in the Register of Debentureholders on the record date. In the event of the Issuer/ Registrar not receiving any notice of transfer from the investor’s Depository Participant, by the record date for the payment of interest/ repayment of principal, the transferee(s) for the Debenture holder (s) shall not have any claim against JTPCL in respect of interest/ principal paid to the registered Debenture holders.

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No interest / interest on interest shall accrue on the Debentures after the date of maturity / redemption of the instrument. No tax on interest will be paid to the debenture holders. Redemption The NCDs, will be fully redeemed at par on the redemption date, which will be at the end of 366 days or on exercise of the put/call option. Interest on the Debentures shall, in any case, cease on redemption. Payment on Redemption Payment on maturity of Debentures will be made by cheque(s) / warrant(s) only on surrender of Debenture Certificate(s), duly discharged by the Sole/all Joint Holders {signed at the reverse of the Debenture Certificate(s)}. The payment will be made in the name of the sole holder or the first holder (in case of Joint Holders) whose name appears on the Register of Bondholders as on the record date to be fixed by JTPCL for this purpose i.e. 30 days prior to the redemption date. In the event of the issuer/registrar not receiving any notice of transfer along with the original Debenture certificates at least 30 days before the dates of the final redemption, the transferee(s) for the Debenture shall not have any claim against JTPCL in respect of amount so paid to the registered Bondholders. Wherever the signature(s) of such transferor(s) in the intimation sent to the issuer/registrar is/are not in accordance with the specimen signature(s) of such transferor(s) available on the records of JTPCL, all payments on such Bond(s) will be kept at abeyance by JTPCL till such time as it is satisfied in this regard and in such case no interest will be payable after the maturity date. The Debenture certificates are to be surrendered duly discharged for redemption on early redemption/ final maturity and shall be sent by the Bondholder(s) by registered post with acknowledgement due or by hand delivery to the issuer/registrar at the Registered Office or to such other person(s) at such address as may be notified by JTPCL from time to time. The Debentures held in the Dematerialised Form shall be taken as discharged on payment of the redemption amount by JTPCL to the registered Bondholders whose name appears in the Register of Bondholders. Such payment will be a legal discharge of the liability of JTPCL towards the bondholders. In case of debentures being held in the dematerialised form, on such payment being made, JTPCL will inform NSDL and accordingly the Account of the Bondholders with NSDL will be adjusted. JTPCL’s liability to Debentureholders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due date of Redemption in all events. Further, JTPCL will not be liable to pay any interest, income or compensation of any kind from the date of such redemption of the Debentures. On JTPCL dispatching the amount as specified above in respect of the Debentures, the liability of JTPCL shall stand extinguished. Place and Currency of Payment The Debentures are being issued by JTPCL. All obligations under these Debentures are payable solely by the Issuer in Indian Rupees only. Tax Deduction at Source Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source on the debentures. Tax exemption certificate / document / form, under Section 193 of the Income Tax

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Act, 1961, if any, must be lodged at the Registered Office, at least thirty days before the relevant interest payment becoming due. Issue of Debentures in Dematerialised Form The Issuer will issue Debentures in Physical / Demat form. JTPCL has depository arrangements with National Securities Depositories Limited (“NSDL”). The issue of Debentures will be in dematerialised form by having connectivity in NSDL. Investors will hold the debentures in physical / dematerialised form and deal with the same as per the provisions of Companies Act, 1956 and Depositories Act, 1996 and rules as notified by NSDL from time to time. A tripartite agreement has been will be signed between JTPCL, Karvy Consultants Limited and NSDL. Bidders should mention their Depository Participants name, DP-ID and Beneficiary Account Number in the appropriate place in the Application Form. The Issuer shall take the necessary steps to credit the Depository Account of the allottees with the number of debentures allotted. In case of incorrect details provided by the investors and inability of the Issuer to credit the depository account, the allotment of debentures would be held in abeyance till the correct depository account details are furnished by the investors to the Issuer. Responsibility for correctness of applicant’s demographic details given in the application form vis-à-vis his/her depository participant would rest with the applicant and the Issuer would not be liable with regard to the above in any manner whatsoever. On the request of the investor, for conversion into physical form post allotment, JTPCL may consider the same subject to the rules applicable from time to time. Issue of Letter of Allotment/Allotment Advice and Debenture Certificate The Issuer will execute and despatch Letters of Allotment/ Allotment advice in favour of the allottees or Refund Letter along with refund amount, not later than 15 days after the Deemed Date of Allotment. After completion of all legal formalities, the Issuer will issue the Debentures certificate(s) / credit the DP account of the allottees against surrender of the letter(s) of allotment within three month(s) of the Deemed Date of Allotment, or such extended period subject to obtaining the approvals, if any. The letters of allotment/ allotment advice/refund orders, as the case may be, will be sent by Registered Post/ Courier /Hand Delivery within 7 days from the Deemed Date of Allotment to the first/sole applicant, at the sole risk of the applicant. The payment will be subject to deduction of tax at source at the rates prescribed under the provisions of the Income Tax Act, 1961 or any other statutory modification or re-enactment thereof. Right to Re-purchase and Re-issue the Debentures This would be as per the prevailing guidelines/regulations of Companies Act, 1956, Reserve Bank of India and other statutes. Mode of Transfer The Issuer will not register any transfers of the Debentures to any NRIs (except on non-repatriation basis), OCBs, FIIs, or any persons not resident in India, unless appropriate regulatory approvals are obtained. The Issuer shall not be duty bound to take interest or trust in or over the Debentures. The title to the Debentures shall pass by execution of duly stamped transfer deed(s) accompanied by the Debentures certificate(s)/Letter of allotments(s) together with necessary supporting documents. The transferee(s) should deliver the Debenture certificates to the Issuer for registration of transfer in the Register of Debenture holders at the Registered Office. The Issuer on being satisfied will register the transfer of such Debentures in its Register of Debenture holders. The person whose

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name is recorded in the Register of Debenture holders shall be deemed to be the owner of the Debentures. Request for registration of transfer, along with the necessary documents, and all other communications, requests, queries and clarifications with respect to the Debentures should be addressed to and sent to the Registered Office. No correspondence shall be entertained in this regard at any other Branches or any of the offices of the Bank. The request from Registered Debenture holder(s) for splitting/consolidation of Debenture certificates will be accepted by the Issuer only if the original Debentures certificate(s) is/are enclosed along with an acceptable letter of request. No requests for splits below the Market Lot will be entertained. Transfer of debentures in dematerialised form would be in accordance to the rules /procedures as prescribed by NSDL. Succession In the event of demise of a Registered Debenture holder of the Debentures, or the first holder in the case of joint holders, the Issuer will recognize the executor or administrator of the demised Debenture holder or the holder of succession certificate or other legal representative of the demised Debenture holder as the Registered Debentures holder of such Registered Holder’s Debentures if such a person obtains sprobate or letter of administration or is the holder of succession certificate or other legal representation, as the case may be, from a Court of India having jurisdiction over the matter and delivers a copy of the same to the Issuer. The Issuer may in its absolute discretion, where it thinks fit, dispense with the production of the probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Debentures standing in the name of the demised debentures holder on production of sufficient documentary proof or indemnity. In case the debentures are held by person other than individual, the rights in the debentures shall vest with the successor acquiring interest therein, including liquidator or such any person appointed as per the applicable laws. Issue of Duplicate Debenture Certificates If any Debenture certificate(s) is/are mutilated or defaced, then, upon production of such certificates at the Registered Office, the same will be cancelled and a new certificate issued in lieu thereof. If any Debenture certificate is lost, stolen or destroyed then, upon production of proof thereof to the satisfaction of the Issuer and upon furnishing such indemnity as the issuer may deem adequate and upon payment of any expenses incurred by the Issuer in connection thereof, new certificate(s) shall be issued. A fee will be charged by the issuer on each fresh Debenture certificate issued hereunder. Modifications of Rights The rights, privileges, terms and conditions attached to all Debentures may be varied, modified or abrogated with the consent, in writing, of those holders of the Debentures who hold at least three-fourths of the outstanding amount of Debentures or with the sanction accorded pursuant to a resolution passed at a meeting of the Debentureholders, carried by a majority consisting of not less than three-fourths of the persons voting there upon a show of hands or, if a poll is demanded by a majority representing not less than three-fourths in value of the votes cast on such poll, provided that nothing in such consent or resolution shall be operative against the Issuer if the same are not accepted in writing by the Issuer.

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Notices The notices, communications and writings to the Debentureholder(s) required to be given by the Issuer shall be deemed to have been given if sent by Registered Post to the Registered Debentureholder(s) at the address of the Debentureholder(s) registered with the Registered Office. All notices, communications and writings to be given by the Debentureholder(s) shall be sent by Registered Post or by hand delivery to the Issuer at Registered Office or to such persons at such address as may be notified by the Issuer from time to time and shall be deemed to have been received on actual receipt. Application for the Debentures ♦ How to Apply Applications for the Debentures must be made in the prescribed Debenture Application Form attached and must be completed in block letters in English by investors. Debentures Application forms must be accompanied by either a demand draft or cheque drawn or made payable in favour of “Jindal Thermal Power Company Limited”. The full amount of the face value of the Debentures applied for has to be paid along with the delivery of the fully completed and executed Debenture Application Form together with other applicable documents described below. Cheques / demand drafts may be drawn on any bank which is situated and is a member or sub-member of the Banker’s Clearing House located at Mumbai, Calcutta, Chennai, or New Delhi. Investors in centres which do not have any bank which is a member or sub-member of the Banker’s Clearing House located at the above mentioned centres will be required to make payments only through demand drafts payable at Mumbai. ♦ Who can apply Only investors who have been addressed through a communication directly are eligible to apply. Furthermore, NRIs (except on non-repatriation basis), OCBs, FIIs and minors are not eligible to apply or hold the Debentures. ♦ Application by Banks / Companies/Corporate Bodies / FIs /Statutory

Corporations. The applications must be accompanied by certified true copies of (i) Memorandum and Articles of Association Constitution / Bye-laws / Trust Deed, (ii) Resolution authorizing investment and containing operating instructions, (iii) Specimen signatures of authorized signatories, (iv) Necessary form for claiming exemption from deduction of tax at source on interest on application money. Application made by Asset Management Company or custodian of Mutual Fund shall clearly indicate the name of the concerned scheme for which application is being made. ♦ Application under Power of Attorney A certified true copy of the power of attorney or the relevant authority as the case may be along with the names and specimen signatures of all authorised signatories must be lodged along with the submission of the completed Debenture Application form. Further modifications/additions in the power of attorney or authority should be delivered to the Issuer at Registered Office. Interest on Application Money Interest at applicable coupon rate will be paid via cheques on the application money to the applicants for the relevant option applied. Such interest will be paid for the period commencing from the date of realisation of the cheque(s) / demand drafts (s)

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till one day before the deemed Date of Allotment. The interest warrants for interest payable on application money will be despatched by Registered Post/ Courier the next working day after the Deemed Date of Allotment. The letters of allotment/ allotment advice/refund orders, as the case may be, will be sent by Registered Post/ Courier /Hand Delivery within 15 days from the Deemed Date of Allotment to the first/sole applicant, at the sole risk of the applicant. The payment will be subject to deduction of tax at source at the rates prescribed under the provisions of the Income Tax Act, 1961 or any other statutory modification or re-enactment thereof. Tax exemption certificates, if applicable, in respect of non-deduction of tax on interest on application money must be submitted along with the Debentures Application Form. It is clarified that interest shall not be paid on invalid and incomplete applications. Basis of Allotment The Issuer has sole and absolute right to allot the Debentures to any applicant. Right to Accept or Reject Applications The Issuer is entitled at its sole and absolute discretion to accept or reject any application, in part or in full, without assigning any reason. Debenture Application Forms that are not complete in all respects may be rejected at the sole and absolute discretion of the Issuer. Future Borrowings The Company shall be entitled, from time to time, to make further issue of Debentures and / or Bonds and other such instruments to the public / members of the Company / Banks / Financial Institutions / Bodies Corporate and / or any other person(s) and /or to raise further loans, advances and/or avail of further financial and / or guarantee facilities from all or any of the above on security of said properties and having such ranking including ranking in priority to the security to be created in favour of the Trustees as may be decided by the Company from time to time, on such terms as to security or otherwise as may be acceptable to the company and the Trustees without requiring the consent of the Debentureholders. Governing Laws and Jurisdiction The Debentures are governed by and will be construed in accordance with the Companies Act, 1956 and further statutory modifications thereof. The Issuer, the Debentures and Issuer’s obligations under the Debentures shall, at all times, be subject to the directions of the Reserve Bank of India and Securities & Exchange Board of India. The Debenture holders, by purchasing the Debentures, agree that the Mumbai High Court shall have exclusive jurisdiction with respect to matters relating to the Debentures. Despatch of Refund Orders The Company shall ensure despatch of refund orders and Debenture certificates by Registered Post only and adequate funds for the purpose shall be made available to the Registrars by the Issuer Company. EFFECT OF HOLIDAYS Should any of the date(s) defined above or elsewhere in the Information Memorandum, excepting the Date of Allotment, fall on a Sunday or a Public Holiday, the next working day shall be considered as the effective date(s). Undertaking by the Issuer Company:

a. The complaints received in respect of the Issue shall be attended to by the issuer company expeditiously and satisfactorily.

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b. All steps for completion of the necessary formalities for listing and commencement of trading at all stock exchange where the securities are to be listed are taken within 7 working days of finalization of basis of allotment.

c. That the funds required for despatch of refund orders/allotment letters /certificate by registered post shall be made available to the Registrar to the issue by the Issuer Company.

d. No further issue of securities shall be made till the securities offered through this Information Memorandum are listed or till the application moneys are refunded on account of non-listing, under subscription, etc.

e. Necessary co-operation with the credit rating agency shall be extended in providing true and adequate information till the debt obligations in respect of the instrument are outstanding.

f. That the certificates of securities /refund orders to the non-resident Indians shall be despatched within specified time limit.

g. The necessary cooperation will the credit rating agency (ies) shall be extended in providing true and adequate information till the debt obligations in respect of the instrument are outstanding.

h. The Company shall forward the details of utilisation of the funds raised through the debentures duly certified by the statutory auditors of the company, to the debenture trustees at the end of each half-year.

i. The Company shall disclose the complete name and address of the debenture trustee in the annual report.

j. The Company shall provide a compliance certificate to the debenture holders (on yearly basis) in respect of compliance with the terms and conditions of issue of debentures as contained in the Information Memorandum duly certified by the debenture trustee.

k. That the Company shall furnish a confirmation certificate that the security created by the Company in favour of the Debenture holders is properly maintained and is adequate enough to meet the payment obligations towards the debenture holders in the event of default.

l. Details of the monies utilised out of the separate bank account shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such monies had been utilised.

m. Details of all unutilised monies out of the issue of debentures, if any, shall be disclosed under the separate head in the balance sheet of the Company, indicating the form in which such unutilised monies have been invested.

Tax Benefits To the Company The Company being classified as an Infrastructure entity enjoys tax holiday for 10 years from 2003-2004 to 2012-2013 To the Bondholder The Debenture-holder is advised to consider in his own case the tax implications in respect of subscription to the debentures after consulting his tax advisor, as alternate views are possible.

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III. PARTICULARS OF THE ISSUE Objects of the Issue The object of the issue of debentures is for General Corporate purposes. Authority for the Issue These Debentures are being issued in accordance with the resolution passed by the Board of Directors of JTPCL in its meeting held on 28th March 2005. IV. ISSUER PROFILE History, Incorporation and Background Background

The Company was earlier known as “Jindal Tractebel Power Company Limited” and was a Joint Venture between Jindal Vijayanagar Steel Limited and Tractebel, S.A., Belgium with each entity owning 50% stake in the Company. This Company was incorporated on the 10th of March 1994. In December 2001, Tractebel S.A., Belgium sold their entire shareholdings in the Company to Jindal Group of Companies and Financial Institutions. After this change, JVSL continued to hold 50% of the shareholding. The other Group Companies of Jindal held 12% and IDBI & ICICI each held 19% of the Companies equity share capital. Consequently, the name of the Company was changed to Jindal Thermal Power Company Limited (JTPC). There is a Buy-back Agreement under which ICICI and IDBI get an assured return and the shares held by them are to be bought back by JTPC/ Jindal Group Companies by December 2006. Business JTPC is engaged in the business of power generation JTPC has set up a 2X130 MW Thermal Power Plant, in Toranagallu Village, Bellary District, Karnataka, next to the integrated steel plant of Jindal Vijayanagar Steel Limited. While the first unit was commissioned in January 2000, the second unit was commissioned in August 2000 with the power plant achieving commercial operations in August 2000. The primary fuel for the power plant is corex gas, which is a byproduct of the steel making process at JVSL and coal is used as a supplementary fuel. The company has entered into a fuel and water supply agreement with JVSL for supply of adequate amount of corex / coal and water. The power plant has been using a fuel mix of about 75% corex gas and 25% coal and has been operating at a Plant Load Factor (PLF) of about 96% since achieving commercial operations. JTPC consumes about 20 MW as auxiliary consumption and supplies 140 MWs of power to JVSL and 100 MW to (KPTCL) Karnataka Power Transmission Corporation Limited (KPTCL). In this regard, the company has entered into separate Power Purchase Agreements (PPA) with take or pay arrangements. Further, while the PPA with JVSL provides for a cost plus structure for the computation of tariff, the PPA with KPTCL, which was entered into in November 2000 for a term of 5 years, provides a tariff of Rs.2.60 / unit with an escalation of 5% per annum. Further, in case of supply of electricity in excess of 657 million units per annum, the tariff is fixed at Rs.2.20/unit. It may be mentioned that in FY 2004, JTPCL promoted a new company, JSW Power Limited (JPL) for the purpose of implementing a 200 (2x100) MW captive power plant. It is envisaged that the proposed plant being set up by JPL would cater to the entire power requirement of JVSL and JTPCL would thereafter sell power only to the grid. JPL is also now setting up of two 30 MW power plant in SISCOL premises. Accordingly, JTPCL is

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negotiating for a long term PPA with KPTCL / PTC on two part tariff basis. The total operating income of the company increased from Rs. 5215.8 million in FY 2003 to Rs. 5578.4 million in FY 2004 on account of increase in tariff and a marginal increase in generation. While, the total operating income increased by Rs. 362.6 million in FY 2004, the operating profit and profit after tax increased by Rs. 763.7 million and Rs. 1741.0 million respectively. This was primarily on account of recognition of an exceptional revenue amount of Rs. 810.4 million in FY 2004 as explained later in the note.

MANAGEMENT, ORGANISATION AND SHAREHOLDING PATTERN

As per the Articles of Association of the company, the company can have a minimum of 4 directors and a maximum of 12 directors. The board of directors of the company presently comprises eight members viz. Shri Sajjan Jindal, Shri N.K. Jain, Shri Raaj Kumar, Shri Raman Madhok, Shri K. T. Krishna Deshika, Shri Balaji Swaminathan (ICICI Bank nominee) and Shri Jayaraman Iyer (IDBI nominee), and Shri P. Abraham. PROJECT

Location and site The power plant is located at Toranagallu in District Bellary of Karnataka adjacent to the JVSL steel plant. The site is at a distance of 33 Km from Bellary and Hospet and about 340 Kms from Bangalore. The site is well connected by road and rail to various parts of the country. The site is about 45 Kms from Tungabhadra dam reservoir. Fuel Corex gas JVSL has established 1.6 million tonnes (MT) integrated steel plant based on Corex technology, which requires non-coking coal instead of coking coal normally used for steel. The technology is pioneered by Voest Alpine of Austria and JVSL was the first steel plant in the world constructed on this technology. The following diagram depicts the process in brief:

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During the process, the plant produces Corex gas, which is utilized for various purposes including reduction of iron ore and power generation. A typical Corex unit of 1 MTPA produces around 180,000 cubic meter per hour of Corex gas at standard temperature and pressure. This gas is equivalent to 134 MW of power generation capacity. Presently the existing 2x130 MW JTPCL plant is using Corex gas for generating power. A large amount of unutilized gas is being flared by JVSL as is shown in the following table:

Year Total Corex/BOF* gas generated

(NM3)

Quantity of gas consumed

(NM3)

Gas Flared (NM3)

1999-2000 786,679,769 185,362,482 601,317,287 2000-2001 1,456,483,600 987,067,027 469,416,573 2001-2002 3,007,860,826 2,359,919,470 647,941,356 2002-2003 2,680,459,641 2,396,833,982 283,625,659

*Basic Oxygen Furnace As JTPCL's power plant has dual firing abilities and capable of running on 100% coal as well as 100% gas, it is currently using both Corex / BOF gas (75%) as well as coal fines (25%). Coal For steel making through corex process, JVSL requires about 1.3 MTPA of non-coking coal in sizes exceeding 8 mm. Presently JVSL procures all its coal requirement from Australia and the pricing is fixed on a yearly basis depending on the prevalent international prices. Since about 30.0% to 35.0% of the coal so procured has lump size of less than 8 mm (fines) the same cannot be used in the corex plant and thus the quantity of coal required to be procured for meeting the requirements of steel plant is about 2.0 MTPA. The coal fines available with JVSL amounting to about 0.7 MTPA are partly utilised for power generation at JTPCL and the balance is sold in the open market. JVSL also provides storage capacity for 1 month’s of coal requirements of the power plant at 100% capacity on coal.

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JVSL proposes to enhance its steel making capacity from 1.6 MTPA to 3.8 MTPA. As a part of its expansion plans, JVSL is installing two Blast Furnaces of 0.9 MTPA capacity each and two coke-oven batteries of a cumulative capacity of 1.2 MTPA. The proposed coke-oven plant is being implemented with a technology such that it can use 50% non-coking coal as raw material. Further, the Blast Furnace would also be utilising non-coking coal to an extent of 0.4 MTPA. Considering the increased requirement of non-coking coal, JVSL proposes to procure about 3.0 MTPA of non-coking coal for usage at steel plant as well as sale to JTPCL. The estimated requirement of coal at JTPCL is about 0.75 MTPA for generation of 260 MW at a PLF of 90% (assuming a station heat rate of 2500 kCal/kWh and a calorific value of coal at 6200 kCal/kg). Further, pursuant to the commissioning of JSW Power Project, JTPCL would be using a fuel mix of about 75% coal and 25% corex gas. Thus the availability of fuel required for JTPCL operations is considered satisfactory. Evacuation of Power A 220 KV switchyard has been constructed at the power plant, which is connected to the Main Receiving Sub Station (MRSS) of JVSL. The MRSS of JVSL is connected through a 220 KV double circuit overhead transmission line to the 220 KV switching station of KPTCL of Lingapura, located at about 40 km from the proposed site. Physical Performance The physical performance of the company for the three-year period ended March 31, 2004 is as follows: Financial Year ended March 31, 2002 2003 2004 Plant Load Factor (PLF) 96% 95% 96% Gross Generation (Mus) 2184 2161 2185 Net Generation (Mus) 2062 2032 2049 Total Sales (Mus) 2062 2032 2049 Sale to JVSL (Mus) 1095 1129 1269 Sale to KPTCL (Mus) 967 903 780 Sale to JVSL as % of total sales 53.1 55.5 62.0 Sale to KPTCL as % of total sales 46.9 44.5 38.0

As may be noted, the physical performance of the company has been satisfactory. MARKET AND SELLING ARRANGEMENTS Karnataka Power Transmission Corporation Limited Karnataka Power Transmission Corporation Limited (‘KPTCL’) was incorporated on July 28, 1999 pursuant to the restructuring of erstwhile Karnataka Electricity Board. KPTCL is a company wholly owned by the Government of Karnataka. KPTCL was formed for the purpose of bulk supply and Transmission & Distribution. KPTCL purchases power from Karnataka Power Corporation Limited (KPCL), the state owned generationcompany and from other sources including Central Generating Stations (CGS), Independent Power Producers (IPPs) and nonconventional energy sources. Around 50% of the power is purchased from KPCL (which comprises about 35% of hydro generation and 65% of thermal generation). KPTCL also purchases about 16% power from CGS viz. National Thermal Power Corporation (NTPC),

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Neyvelli Lignite Corporation (NLC) and the atomic power stations at Kalpakkam and Kaiga. KPTCL serves about 109 lakh consumers spread all over the State covering an area of about 1.92 lakh square kilometers. It operates about 680 sub-stations, 28,000 kms of transmission lines with voltages of 33 KV and above, about 1,30,000 kms of 11 KV lines, 1,50,000 distribution transformers and 3,57,000 kms of LT lines. GoK vide its order dated February 15, 2002 unbundled KPTCL and formed four Electricity Supply Companies (ESCOM) namely Bangalore Electricity Supply Company (BESCOM), Mangalore Electricity Supply Company (MESCOM), Hubli Electricity Supply Company (HESCOM) and Gulbarga Electricity Supply Company (GESCOM). Consequent to this the function of distribution of power has been separated from KPTCL and it acts as Bulk Supplier and Transmission (BST) company. PPA between JTPCL and KPTCL JTPCL has an existing PPA with KPTCL for sale of 657 Mus @ Rs. 2.60 per unit escalated by 5% every year with effect from November 2000. KERC while giving the approval for the PPA reduced the tariff to Rs. 2.36 per unit with an annual escalation of 2.5%. The KERC order was contested by JTPCL in the Karnataka High Court and the court, vide its order dated April 2004, gave the decision in favour of JTPCL. Since April 2004, JTPCL is being paid @ 3.00 per unit of power sold to KPTCL and currently @ 3.16 per unit, as per the existing PPA Considering that JVSL proposes to source its entire power requirement from the proposed captive power plant being set up by JSW Power Limited, JTPCL is negotiating with KPTCL / PTC for a long term PPA on two part tariff basis. Location of the Plant / Site

Place, Town Toranagallu District, State Bellary District, Karnataka Nearest railway station Toranagallu (South Central Railway) Nearest Port Goa Nearest Airport Bangalore (350 Kms) Nearest Highway State highway (road connecting Bellary &

Sandur) Technical Agreements During the initial stages of incorporation, the Company had placed EPC contracts with BHEL for setting up 2x130 MW Thermal Power Plant at Toranagallu. The plant has been started and has been running efficiently since last 5 years. Financial Agreements In December 2001, Tractebel S.A., Belgium sold their entire shareholdings in the Company to Jindal Group of Companies and Financial Institutions. After this change, JVSL continued to hold 50% of the shareholding. The other Group Companies of Jindal held 12% and IDBI & ICICI each held 19% of the Companies equity share capital. Subsequently, Sun Investments Ltd., Gagan Trading Ltd and Vrindavan Services Pvt. Ltd. have bought the shares from ICICI and IDBI in accordance with the buyback agreement with ICICI & IDBI. Consequent to these buybacks, IDBI holds only 7.61% of JTPCL shares while ICICI has sold its entire holding. As regards, borrowings by way of loan, the Company has entered into contractual obligations mainly with various Financial Institutions, namely: ICICI Bank Limited,

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IDBI, Power Finance Corporation, Punjab National Bank, IFCI, IIBI, State Bank of India, LIC, GIC, its other subsidiaries, etc. The company is also proposing to raise funds to refinance many of its existing high cost debt and to meet general corporate requirements. Infrastructure Facilities for Raw Materials & Utilities like Water, Electricity, etc. The entire fuel requirement is met by JVSL whose Plant is adjacent to JTPC’s power plant. JTPC’s power plant is designed to operate with any combination of coal and corex gas. JVSL has installed water facilities for the Steel Plant and the Power Plant for which JTPC has paid proportionate share of capital cost. JTPC had entered into a Fuel Supply Agreement with JVSL on 7th December 1995. Subsequently, at the time of exit of Tractebel from JTPC, a Second and Restated Fuel & Water Supply Agreement (FSA) was signed on 12th December 2001. Product & Users JTPC has two power generating units. JTPC has signed PPA with Jindal Vijayanagar Steel Limited and KPTCL. At present JTPC supplies 60% of its power to JVSL and 40% of its power to KPTCL. Future Prospects

JTPC, along with the Companies of JSW Group has promoted a new Company called JSW Power Limited (JPL). JPL is setting up a captive power plant of 2x100 MW Power Plant in JVSL’s premises,out of which the first 100 MW plant has already been synchronised with the gird and will commence commercial generation of power will be commissioned in April 2005 and the second 100 MW plant will be commissioned in October 2005. JPL is also now setting up of two 30 MW power plant in SISCOL premises. JTPC will be investing about 50% in equity of JPL. JTPC is also heading towards expansion of additional capacity of 2x250 MWs. Capacity Utilisation The Company operates at a gross capacity of 2x130 MW. The operating efficiency in terms of Plant Load Factor for the previous 4 years is as follows: Year PLF 2000-01 89% 2001-02 96% 2002-03 95% 2003-04 96% Main Objects of the Company The objects for which the Company is established are: • To build, own and/or operate power plants either alone or in joint venture,

especially in India. • To generate, develop and accumulate electrical power at any place or places in

India and to transmit, distribute and supply such power. • To carry on the business of an electric power light and supply Company in all its

branches and in particular to construct, lay down, establish, fix and carry out all necessary power stations, cables, wires, lines, accumulaters, lamps and works, and to generate, accumulate, distribute and supply electricity, and to light cities,

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towns, streets, docks, markets, theatres, buildings and places both public and private.

• To enter into joint venture agreement, either directly or indirectly, with

TRACTEBEL, S.A., a Company incorporated under the Law of Belgium, having its Registered Office at 1 Place Du-Trone, B-1000, Brussels Belgium) for the purpose of carrying out the above objects.

Promoters / Joint Venture Partners

Jindal Vijayanagar Steel Limited (JVSL or the company), promoted by O. P. Jindal group (Sajjan Jindal), has implemented an integrated steel plant with an installed capacity of 1.57 million tonnes per annum (mtpa) at Toranagallu village in the Bellary - Hospet district of Karnataka. The project, proposed to be implemented in stages by September 1997, underwent time over run on account of delay in stabilisation of its critical equipment. The project commenced commercial production in July 2002. On account of delay in commissioning, the cost of the project increased from Rs. 33.00 billion to Rs. 64.95 billion and was financed by debt of Rs. 42.58 billion and equity of Rs. 22.37 billion. Consequent to significant cost and time over run of its original 1.57 mtpa project and due to recession in the steel sector, the company incurred losses and went into corporate debt restructuring programme, which was effected from cut-off date of September 2002. However with the successful implementation of the corporate debt restructuring programme and the recovery of steel sector, the company’s performance has improved considerably. During the half year ended September 30, 2004, the company on a total income of Rs. 21.46 billion (corresponding period during last year – Rs. 15.28 billion), achieved EBIDTA of Rs. 6.42 billion (Rs. 4.80 billion) and cash accruals of Rs. 4.02 billion (Rs. 2.52 billion). The steel business of Jindal Iron and Steel Company (JISCO), a group company of JVSL, is now amalgamated with JVSL with effect from April 1, 2003. Through a scheme of Arrangement and Amalgamation between Jindal Iron & Steel Company Limited (JISCO), Jindal South West Holdings Limited (JSWHL) and JVSL (“scheme”), the steel business of JISCO has been merged with that of JVSL from the Appointed Date 1st April, 2003. The said scheme has been sanctioned by the Hon’ble High Court of Mumbai and Karnataka and has since become effective from 4th February, 2005. After the merger, JVSL as a consolidated entity has acquired significant strength with strong financials, facilitating for organic and inorganic growth. Upon consolidation of results of JISCO and JVSL, the merged entity has reported a gross turnover of Rs. 5941.04 crores and net profit of 465.97 crores for the nine months ended December 31, 2004 the merged entity will be known by the name of Jindal Vijayanagar Steel Limited. In order to bridge the gap between its iron making (1.57 mtpa) and steel making (2.5 mtpa) capacities and to utilise its assets effectively, the company has also entered into tie-ups with Euro Ikon Iron & Steel Private Ltd. (Euro Ikon) for commissioning a blast furnace with capacity of 0.9 mtpa and with Euro Coke & Energy Limited (Euro Coke) for setting up a coke oven plant with capacity of 0.6 mtpa. The blast furnace has commenced trial operations in August 2004 and the coke oven is expected to commence operation in phases from November 2004. These two projects do not have any capital commitment from JVSL.

26


The company has commenced upgrading its Hot Strip Mill (HSM) and the production is expected to increase from 1.6 mtpa of hot rolled coils to 2.5 mtpa. The company has also expanded its pellet capacity from 3.0 mtpa to 4.2 mtpa and the same has commenced operations in May 2004. The expansion proposals have been duly approved by the CDR Empowered group.

With the above mentioned initiatives, the company’s capital cost per tonne is expected to reduce from about Rs. 40,000 per tonne to about Rs. 27,600 per tonne and cost of production from Rs. 17,630 per tonne to Rs. 13,160 per tonne. However, in order to optimise these parameters further and be at par with global benchmarks, the company is enhancing its steel making capacity from 2.5 mtpa to 3.8 mtpa using the Blast Furnace – Basic Oxygen Furnace route. It may be noted that the company’s first project comprising setting up of steel making capacity of 1.57 mtpa is through the Corex – Basic Oxygen Furnace route. The Corex gas generated during the production process is a rich sauce of fuel and is used for generation of electricity. Though the specific investment for Corex – Basic Oxygen Furnace route is higher than the Blast Furnace – Basic Oxygen Furnace route, it was then chosen to augment the power generation capability of the project, as the plant site was power deficit. However, the power availability at the plant site has now improved substantially and therefore the company is adopting the Blast Furnace – Basic Oxygen Furnace route for its expansion program.

The details and financials of Jindal Vijayanagar Steel Limited, is as follows:

Board of Directors

Name Mr. P.R. Jindal – Chairman Mr. Sajjan Jindal – Managing Director Dr. B.N. Singh - Jt. Managing Director & CEO Mr. Raman Madhok - Jt. Managing Director & CEO Mr. Seshagiri Rao M.V.S - Director (Finance) Dr. S.K. Gupta – Director Mr. Balaji Swaminathan (Nominee Director of ICICI) Mr. R.N. Roy (Nominee Director of IDBI) Mr. N.Gokulram, IAS (Nominee Director of KSIIDC) Mr. I,M, Vittal Murthy (Nominee Director of KSIIDC) Mr. S.David Chandrasekaran (Nominee Director of LIC of India) Mr. R.P.Singh (Nominee Director of IFCI Ltd.) Dr. Ramaswamy P.Aiyar Financials (Rs. in Crores)

PARTICULARS JVSL (Merged)

JVSL

Year 9 months 2004 2003 2002 2001 2005 Sales (net of excise) 4496.54 3279.78 2504.76 1,735.75 1160.18Other Income 9.41 25.17 7.50 2.70 3.15Total Income 4505.95 3304.95 2,512.26 1,738.45 1163.33Manufacturing Costs 3012.87 2219.39 1796.97 1457.40 932.47PBIDT 1493.08 1085.56 715.29 281.05 230.86Interest 361.82 409.28 563.45 444.35 194.34

27


Depreciation & Misc. expenditure written off 314.65 376.88 345.10 268.18 86.13Extraordinary Items (3.33) 390.76 (209.57) - -PBT 813.28 690.16 (402.83) (431.48) (49.61)Taxes (including deffered taxes) 347.31 161.48 292.16 (80.41) -PAT 465.97 528.68 (110.67) (351.07) (49.61)Cash Accruals 1091.61 658.39 151.84 (163.30) 36.52Shareholders Funds: Share Capital (includes advance against share capital) 469.13 1631.08 1425.02 1,353.80 1365.17 Reserves & Surplus 2447.76 131.90 (660.58) (549.91) (262.46)Net Worth 2548.07 1089.90 291.16 267.94 516.50Loan Funds: Secured Loans 4040.94 4647.17 5405.00 5168.17 4523.69 Unsecured Loans 2.55 139.86 535.64 444.14 450.91 Contingent Liabilities 2004 2003 Rs.In

Crores Rs. in Crores

Contingent Liabilities not provided for in respect of: a) Claims against the Company not

acknowledged as debts 6.82

2.14

b)

Corporate Guarantees given/securities provided to banks / Financial institutions against credit facilities extended to other bodies corporate

- 184.02

c) Bills Discounted 155.26 174.25

d) Disputed claims, including those pending in Courts, for excise & custom duties, sales tax and other levies(excluding interest)

176.24 299.32

e) Other matters 13.04 3.22 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)

31.98 64.97

Sun Investments Private Limited (SIL) Sun Investments Private Limited was incorporated on June 2, 1981 as a private limited company and converted into a public limited company “Sun Investments Ltd.” with effect from October 15, 1990. The company was reconverted into a private limited company on February 18, 2003. The company is in the business of investing, trading in securities and providing management consultancy services. Its board of directors comprises Mrs. Sangita Jindal (Managing Director), Mr. V. P. Garg, Mr. Deepak Bhat and Mr. Ashok Goel.

Financial performance

The financial performance of the company (Rs. in lacs) is given below:

28


Particulars FY 04 FY 03 FY 02 Equity Share Capital 7149.28 7119.27 5827.30

Reserve and surplus (excluding revaluation reserve)

12649.76 11796.13 11381.94

Income 4051.89 1828.61 4394.33 PAT 733.59 (28.58) 1010.41 Dividend - - - EPS (Rs.) 1.03 (0.04) 1.73 BV (Rs.) 27.68 26.55 29.51 Key Managerial Personnel of JTPCL Sr.No

Name of the Director

Residential Address Qualifications

Experience

1. Mr. Sajjan Jindal

Jindal House, No.32, Walkeshwar Road, Mumbai 400 006

B.E (Mech.) Industrialist Jindal Group of Companies – 23 years

2. Mr. N.K. Jain

302, Suman, Playground Road, Vile Parle (East), Mumbai 400 057

B.Com, F.C.A, F.C.S

Total experience –34 years - Permanent Magnets Ltd. - 23 years, - Jindal Group of Companies – 11 years

3. Mr. Raaj Kumar

802, The Enclave, Appa Saheb Marathe Marg, Bh Old Standard Mill Compound, Prabhadevi, Mumbai 400 025

B. Tech. (Hons.)

Total Experience –28 years JVSL – 1.5 years JPOCL – 4 years Grasim Industries Asian Paints

4. Mr. K.T. Krishna Deshika

No. 14, 2nd Main AECS Layout III Stage Sanjaynagar Bangalore - 560 094

B.COM, LL.B, F.C.A, F.C.S,

Total Experience – 25 yrs. HMT Ltd., B’lore - 16 yrs. Millipore (I) Pvt.Ltd.-1 yr. JTPC – 8 years

Change in Key Managerial Personnel in the preceding one-year • Mr. K.T. Krishna Deshika previously Chief Financial Officer and Company

Secretary have been inducted on the Board as Director, Financew.e.f. 21st February 2004.

• Mr. S.S. Rao, Managing Director of the Company ahs resigned w.e.f 4th January 2004 and in his place Mr. Raaj Kumar, Joint Managing Director & CEO have been appointed, w.e.f. 18th January 2005.

Board of Directors The Present composition of Board is as follows:

29


Sr. No


Residential Address

Qualifications Experience

1 Mr. Sajjan Jindal

Jindal House, No.32, Walkeshwar Road, Mumbai 400 006

B.E (Mech.) Industrialist Jindal Group of Companies – 23 years

2 Mr. N.K. Jain


B.Com, F.C.A, F.C.S

Total experience –34 years Permanent Magnets Ltd. - 23 years, Jindal Group of Companies – 11 years

3 Mr. Raaj Kumar 802, The Enclave, Appa Saheb Marathe Marg, Bh Old Standard Mill Compound, Prabhadevi, Mumbai 400 025

B. Tech. (Hons.)

Total Experience –28 years JVSL – 1.5 years JPOCL – 4 years Grasim Industries Asian Paints

4

Mr. Raman Madhok

3,Nishank Mira, Mira Bang Road, Santacruz (West), Mumbai 400 054

M.S. (IIT-Delhi) PGD IR & PM, (XLRI Jamshedpur) DIP Trg. & Dev.

Total Experience - 23 years Voltas Ltd. – May 81- May 83 Indian Hotels Co. Ltd – May 83 May 86 Pfizer Ltd. – May 86 to Feb 89 Parke Davis- Mar 89 to June 91 Cynamids India Ltd., - June 91- Dec 95 JISCO – Dec 95 till date

5 Mr. Balaji Swaminathan

1301, Radhika Apartments, Off Sayani Road, Prabhadevi, Mumbai 400 025

B.Com, C.A., I.C.W.A.

Total Experience – above 40 years Upto July 2001 – KPMG, Chartered Accountants From August 2001 – ICICI Bank Limited

6 Mr. R. Jayaraman Iyer

Flat No. 32, Jolly Maker Apts.2, Cuffe Parade, Mumbai – 400 005

Post Graduation in Industrial Engineering, Fellow of Institution of Industrial Manager

Total Experience - 34 years Working in IDBI – since 1978

30


7 Mr. P. Abraham C/o. Sh. B. Sam Bob, IAS, D/71, Nivedita Kunj, Type V Quarters, Sector 10, R.K. Puram, New Delhi 110022.

M.A., Diploma in System Management, IAS officer

Total Experience - 36 years: Secretary Municipal Admin., Housing & Urban Development, Govt. of Andhra Pradesh; Secretary to MSEB; Secretary of the Energy Dept. of Government of Maharashtra; Chairman & Managing Director, Maharashtra State Textile Corporation; Joint Secretary, Industries Dept., Government of Maharashtra; Iron & Steel Controller, Ministry of Steel, Govt. of India; Managing Director, Non Resident Indian, Investment Corporation of Andhra Pradesh; Commissioner of Industries, Government of Andhra Pradesh, Secretary; Environmental & Energy Dept. Additional Secretary and Special Secretary; Ministry of Defence, Govt. of India; Secretary, Ministry of Power, Government of India.

8 Mr. K.T. Krishna Deshika

No. 14, 2nd Main AECS Layout III Stage Sanjaynagar Bangalore - 560 094

B.COM, LL.B, F.C.A, F.C.S,

Total Experience – 25 yrs. Millipore (I) Pvt.Ltd.-1 yr. HMT Ltd., B’lore - 16 yrs. JTPC – 8 years

31


Sr.No


Father’s Name

Date of Birth

Designa-tion

Date of appointment

Residential Address

1 Mr. N.K. Jain

Mr. Bradhichand Jain

1-9-46 Dir & VC Appointed in casual vacancy on 6-4-1998, Reappointed on 14-12-1999


2 Mr. Raaj Kumar

Mr. Ratanlal Dharamdas Kumar

20-12-52

JMD & CEO

Appointed as Additional Director & JMD & CEO on 18.01.2005

802, The Enclave, Appa Saheb Marathe Marg, Bh Old Standard Mill Compound, Prabhadevi, Mumbai 400 025

3

Mr. Raman Madhok

Mr.Kuldeep Madhok

16-1-58 Dir Appointed in casual vacancy on 15-6-1998, Reappointed on 26-9-2001

3,Nishank Mira, Mira Bang Road, Santacruz (West), Mumbai 400 054

4 Mr. Balaji Swaminathan

Mr. Dharmaraja Iyer Swaminathan

Nom Dir of ICICI

Nominated by ICICI Bank Limited. To be noted by the Board in its ensuing meeting.

1301, Radhika Apartments, Off Sayani Road, Prabhadevi, Mumbai 400 025

5 Mr. R. Jayaraman Iyer

Mr. Ramaswamy Iyer

13-7-47 Nom Dir of IDBI

8-12-2000 Flat No. 32, Jolly Maker Apts.2, Cuffe Parade, Mumbai – 400 005

6 Mr. Sajjan Jindal

Mr. Omprakash Jindal

5-12-59 Dir & Chairman

20-10-2003 Jindal House, No.32, Walkeshwar Road, Mumbai 400 006

7 Mr. P. Abraham

Mr. P. Sundaram

1-7-1939

Independant Director

20-10-2003 C/o. Sh. B. Sam Bob, IAS, D/71, Nivedita Kunj, Type V Quarters, Sector 10, R.K. Puram, New Delhi 110022.

32


8 Mr. K.T. Krishna Deshika

Mr. K. Thirunarayana Iyyengar

21-10-1955

Director Finance

21-2-2004 No. 14, 2nd Main AECS Layout III Stage Sanjaynagar Bangalore - 560 094

Change in Directors of JTPCL Limited during the Last Three Years (from March 2002 to March 2005)

Sl. No.

Name Status in JTPCL

Date of Appointment

Date of Ceasing

Reason for Change

1. Mr. Rajendra Mohan Malla

Nominee Director of IFCI

- 07-03-2005 IFCI has withdrawn its Nominee, Mr. R.M. Malla, w.e.f. 7th March 2005.

2. Mr. N.D. Pinge

Nominee Director of ICICI Bank Limited

- 13-09-2004

3. Mr. Balaji Swaminathan

Nominee Director of ICICI Bank Limited

13-09-2004 -

ICICI Bank’s Nominee, Mr. N.D. Pinge has been replaced by Mr. Balaji Swaminathan, w.e.f 13th September 2004.

4. Mr. S.S. Rao Managing Director

- 04-01-2005 Resigned as Director & Managing Director

5. Mr. Raaj Kumar

Joint Managing Director & CEO

18-01-2005 - Appointed in place of Mr. S.S. Rao

6. Mr. Sajjan Jindal

Chairman 20.10.2003 - -

7. Mr. P. Abraham

Director 20.10.2003 - To induct an Independent Director on the Board

8. Mr. K.T. Krishna Deshika

Director (Finance)

21.02.2004 - Elevation from CFO & CS

9. Mr. S.S. Rao Additional Director & Managing Director

12.12.2001 - -

10. Mr. S.S. Jha Nominee Director of IFCI

30.4.2002 28.10.2002 Change in nomination by IFCI

11. Mr. R.M. Malla

Nominee Director of

28.10.2002 - Change in nomination by

33


IFCI IFCI 12. Mr. Ratan

Jindal Chairman & Director

- 11.1.2002 Ceased to be Chairman & Director, due to his preoccupation

V. STOCK MARKET DATA The equity shares of JTPCL are not listed on any stock exchange. Hence, no share market data are available. VI. MANAGEMENT DISCUSSION & ANANLYSIS OF THE FINANCIAL

STATEMENT FOR THE LAST Four FINANCIAL YEARS: Summarised Statement of Profit & Loss Account for the year ended (Rs. in Crores)

PARTICULARS

JTPC

Year 9m 2005 2004 2003 2002 2001Income Sales 346.36 557.84 521.57 541.91 397.49Other Income 0.19 0.20 0.35 2.75 0.43Total Income 346.54 558.03 521.93 544.66 397.92Expenditure Cost of Fuel 173.36 242.83 250.25 238.30 169.36Operation, Maintenance & other charges 27.19 36.78 37.12 75.16 25.64Interest and Financial Charges 35.50 61.35 91.85 102.37 95.83Depreciation 43.35 58.86 60.70 60.99 52.44Misc. Expenditure w/off 3.97 27.32 5.70 5.66 5.14Total Expenditure 283.37 427.14 445.62 482.48 348.41Net Profit before Tax & Exceptional item 63.17 130.89 76.31 62.18 49.51Less: Exceptional Item 81.04 (52.43)Profit Before Tax 63.17 211.93 23.88 62.18 49.51Less: Provision for - Wealth Tax 0.006 0.003 0.003 - Current Income Tax(MAT) 5.89 16.36 2.42 5.62 3.63Profit after Tax 57.28 195.56 21.46 56.56 45.88

Summarised Statement of Assets and Liabilities as at (Rs. in Crores) PARTICULARS JTPC Year 9m 2005 2004 2003 2002 2001 Fixed Assets Gross Block 1066.56 1065.97 1120.69 1127.82 1104.43 Less : Depreciation 284.75 241.40 182.57 121.89 60.94 Net Block 781.81 824.57 938.12 1005.94 1043.49 Capital Work in progress 1.19 0.85 0.41 0.26 1.60 Total 783.00 825.42 938.53 1006.19 1045.09 Investments 142.86 111.90 108.90 108.90 0.00 Current Assets Inventories 19.43 19.46 18.19 17.33 9.31

34


Sundry Debtors 165.36 169.30 82.32 86.81 167.19 Cash and Bank Balances 20.94 15.76 1.30 1.09 18.42 Loans and Advances 29.97 23.61 16.24 11.84 19.93 Total 235.71 228.13 118.05 117.06 214.85 Total Assets 1161.57 1165.46 1165.48 1232.15 1259.94 Liabilities Secured Loans 467.42 542.14 650.40 739.99 757.80 Unsecured Loans - - - 25.00 - Current Liabilities and Provisions

53.30 38.44 144.32 115.95 213.10

Advance against share capital

0.00 0.00 0.00 0.00 0.04

Total Liabilities 520.72 580.58 794.72 880.94 970.94 Net Worth 640.85 584.88 370.76 351.21 289.00 Represented By Share Capital 289.00 289.00 289.00 289.00 289.00 Reserves 353.15 295.88 100.32 78.85 22.29 Less: Miscellaneous Exp. not w/off

1.30 0.00 18.56 16.64 22.29

Networth 640.85 584.88 370.76 351.21 289.00 The operating income of the company has shown a growth of 2120 % and 36.33% in 2000-01 and 2001-02, recorded decline of 3.75% in the year 2002-03 but has again shown a growth of 6.95% in 2003-04. In the year 1999-2000, the company has recorded negative PAT of Rs. 23.58 Cr but in next consecutive four years PAT has shown improvement where the company has recorded profit of Rs. 45.87 Cr., 56.56 Cr., Rs. 21.46 Cr., and Rs. 195.56 Cr. The company has shown a YoY profit growth of approximately 23.30% in the year 2001-02 but decline of 62.05% in the year 2002-03 and again shown a YoY profit growth of 811.17% in the year 2003-04. Corporate Governance N.A. as the Company has not listed its shares. Audit Committee

The Audit Committee is constituted of Mr. N.K. Jain, Vice Chairman, Mr. Balaji Swaminathan, Nominee Director of ICICI Bank Limited and Mr. P. Abraham, Independent Director on the Board of the Company.

Human Resources

The total manpower strength of JTPC is approximately 100 persons.

VII. FINANCIALS OF GROUP COMPANIES PROMOTED BY PROMOTERS Companies under the Same Management Please refer to details under the head Promoters / Joint Venture Partners. The additional details are as follows: PUBLIC ISSUES OF JINDAL VIJAYANAGAR STEEL LIMITED

The company had come out with two simultaneous but unlinked public issues of (a) 13,50,00,000 equity shares of Rs. 10 each for cash at par aggregating Rs. 135 crores and (b) 27,25,00,000 14% secured redeemable Partly Convertible Debentures (PCDs) of Rs. 40 each for cash at par aggregating Rs. 1090 crores. These issues

35


opened for subscription on February 10, 1995. A comparison of promises versus performance is given below:

(Rs. in crores)

Six Months Year ending March 31

1997 1997 1998 1998 1999 1999 2000 2000 Particulars

Projections

Actual Projections

Actuals Projections

Actuals Projections

Actuals

Sales and other Income

621.0 0.08 1548.0 180.93 1740.0 537.92 1944.00 931.23

PBIDT 183.0 (0.30) 801.00 34.20 1093.0 78.87 1220.00 129.78 Interest 32.00 0.37 151.00 47.68 317.00 84.43 320.00 197.67 Depreciation

17.00 0.18 126.00 21.30 162.00 23.48 162.00 80.29

PBT 134.0 (0.84) 524.00 (34.77) 614.00 (29.04) 738.00 (148.18) PAT 134.0 (0.84) 530.00 (34.77) 623.00 (29.04) 725.00 (148.18)

The project cost to set up an integrated steel plant of capacity of 1.25 mtpa of HR coils in June 1994 was estimated to be Rs. 3300 crores including margin money for working capital. The actual project cost up to March 31, 2004 was Rs. 6226 crores.

During the initial project implementation, modifications were effected to the basic design of the main plant and additional plant/facilities like pellet plant, converter caster, hot charging systems in Hot Strip Mill were added to enhance the overall capacity of the integrated steel plant to 1.57 mtpa. The commissioning of the plants was delayed due to technological issues. Corex 1 was recommissioned after a lapse of one year by carrying out rectifications/modifications. Delay in disbursal of loans and non-receipt of call money caused a further delay in project implementation. Capitalisation of pre-operative expenses incurred during prolonged trail run, increase in interest during construction and foreign exchange variation also resulted in a cost overrun of the project. When the company started operation of the integrated steel plant after re-commissioning of Corex, the steel industry as a whole witnessed historically low level of selling prices on account of a global down turn.

Jindal Praxair Oxygen Company Private Limited (JPOCL)

JVSL holds about 25% equity in JPOCL. JPOCL was incorporated on September 27, 1995 and manufactures liquid and gaseous Oxygen, Nitrogen and Liquid Argon. The Board of Directors of the company comprises Mr. N.K. Jain, Mr. I. Qureshi, Mr. Moosa Raza, Mr. Asit Gangopadhyay, Mr. Indrajit Mookerjee, Mr. Sharad Madhok, Mr. K. Kalyana Sundaram, Mr. John Panikar, Mr. C. Muralidhara, Mr. Venkatesh Prabhu and Mr. Vikas Sharma.

Financial performance:


Particulars FY 2003 FY 2002 FY 2001 Equity Share Capital (Shares of Rs. 10 each)

15,200.00 15,200.00 7,600.00

Reserves and surplus (excluding revaluation reserves)

4,752.42 3,551.17 1,248.89

Income (incl. other income) 27,571.47 25,877.37 16,718.79 PAT 2,910.10 2,604.01 845.03 Dividend (%) NIL NIL NIL EPS (Rs.) 1.91 2.01 1.11

36


BV per share (Rs.) 13.11 12.31 11.59

Note: Audit for FY 2004 has not been completed yet.

Vijayanagar Minerals Private Limited

JVSL is a major shareholder of VMPL. The company was incorporated on June 17, 1997. It is in the business of mining and extraction of minerals, metals, ores etc. The board of directors comprises Dr. S. K. Gupta, Dr. B. N. Singh, Smt. Jija Madhavan Hari Singh, Dr. M. Basappa Reddy, Mr. Anil Sood, Mr. P. Krishne Gowda, Mr. M. A. Venkateshan and Mr. K. L. Negi.

Financial performance


Particulars FY 04 FY 03 FY 02 Equity Share Capital 1.00 1.00 0.00020 Reserve and surplus (excluding revaluation reserve)

(463.16) (629.55) (568.10)

Sales 2,289.88 1,664.74 1,051.90 PAT 166.39 (61.45) (568.10) Dividend - - - EPS (Rs.) - - - BV (Rs.) 10 10 10 JSW Power Limited Jindal Thermal Power Company Limited is a major equity shareholder in JPL. JPL was incorporated on January 3, 2003. JPL is promoted by Jindal Thermal Power Company Limited and other group companies. JPL is setting up two power plants with the capacity of 100 MW each, namely: Unit I and II, which will be captive to Jindal Vijayanagar Steel Limited (JVSL). The total project cost is Rs. 405 crores of which 30% will be equity and 70% debt. The scheduled time for commissioning of Unit I is April 2005 and for Unit II is October 2005. The company is also now setting up of two 30 MW power plant in SISCOL premises.

Company’s board of directors comprise of the following directors:

Mr. N.K. Jain Chairman Mr. Raaj Kumar Vice Chairman Mr. K.T. Krishna Deshika Director Mr. Upinder Singh Whole time Director Mr. Sanjay Sagar Director Mr. K. J. Varkey Whole time Director

Financial Performance

The financial performance of the company for the first year is given below:

FY 04 Equity Share Capital Rs. 78.2 crores (as on 18.3.05) Reserves and Surplus

NIL

Sales Commercial Operation yet to begin PAT Commercial Operation yet to begin Dividend NIL EPS (Rs.) Commercial Operation yet to begin BV (Rs.) Rs. 9.86

37


Subsidiaries Nil FINANCIALS OF SUBSIDIARIES The company does not have any subsidiaries VIII. CAPITAL ISSUES DURING LAST THREE YEARS:

No public issue of equity shares or debentures has been made by JPL.

Promise vis-a-vis Performance There have been no public issues of shares or debentures. There has just been private placement of debentures, worth Rs. 42 crores in August 1998 and other Rs. 100 crores in December 2004 Outstanding Debt As on 15/02/2005

DETAILS OF FINANCIAL ASSISTANCE STATUS AS ON : 15TH FEBRUARY 2005

Name of the Lender Loan Balance

(1) RUPEE TERM LOANS AND DEBENTURES RS. ICICI Bank (sold to IIBI) 428,408,087 Power Finance Corporation Limited 494,319,183 Industrial Development Bank of India 311,155,137 Punjab National Bank 100,000,000 State Bank of Hyderabad 197,727,273 State Bank of India 162,500,000 Life Insurance Corporation of India 156,250,000 Industrial Investment Bank of India 92,750,000 General Insurance Corporation of India 23,437,500 New India Assurance Co. Ltd 23,437,500 United India Insurance Co. Ltd. 18,750,000 National Insurance Co., Ltd. 14,062,500 Oriental Insurance Co. Ltd. 14,062,500 Total of 1 2,036,859,680 (2) INFRASTRUCTURE DEBENTURES Series I RS. UTI Bank Limited 75,000,000 Canara Bank 100,000,000 HDFC Bank 25,000,000 Series II RS. ICICI Bank Ltd. 10,000,000 Total of 2 210,000,000

38


(3) FOREIGN CURRENCY LOANS Loan Balance USD

PFC (Refinancing of US Exim Loan) 30,951,966

State Bank of India - New York 11,291,667 Total of 3 42,243,633 (4) WORKING CAPITAL RS. Punjab National Bank 400,000,000 OUTSTANDING LITIGATIONS OR DEFAULTS

• Information relating to the Company are as follows: There are no outstanding litigations involving JTPCL that are material in nature and having a bearing on the operational & financial performance of the Company, except as follows: Contingent liabilities not provided for as on March 31, 2004: 1. Security provided to Banks/Financial Institutions by way of pledge of shares of

(JVSL) against credit facilities extended to JVSL for Rs. 10,890.30 lacs. Similarly, JVSL has provided security in favour of the lenders of the company by way of pledge of their investments in the shares of the company for Rs. 14,449.95 lacs.

2. Claim by a Financial Institution against the company disputed by the Power

Finance Corporation Limited on the ground that the same is not due in terms of the loan documents and not acknowledged as debt of Rs. 573.23 lacs, net of Rs. 24.72 lacs claimed by the company towards rebate for prompt payment on another loan from the same Financial Institution.

Outstanding Litigation Sr. No. Case

No. Parties Pending

Before Subject of the

Matter Amount Involved

(Rs.)

Facts

1. Karnataka Electricity Regulatory Commission (KERC) Versus Jindal Thermal Power Company Limited & Ors. (JTPCL)

Supreme Court of India for

Admission

Modification of Power Purchase

Agreement (PPA)

Nil The Govt. of Karnataka had granted permission to JTPCL for selling power directly to industrial units and the balance to KPTCL. JPTCL entered into a Power Purchase Agreement

39


Sr. No. Case No.

Parties Pending Before

Subject of the Matter

Amount Involved

(Rs.)

Facts

with KPTCL in November, 2000 for supply of power. Pursuant to Karnataka Electricity Reforms Act, 1999, Karnataka Electricity Regulatory Commission (KERC) came into existence KERC reduced the contractual rate for supply of electricity and also held that JTPCL was a Captive Power Plant and not an Independent Power Plant. JTPCL filed an appeal against this order before the Karnataka High Court which set aside the order passed by KERC. KPTCL has filed this appeal before the Supreme Court against the Order of the Karnataka High Court.

Labour Matters 2. KID

No.123/ Shaikh Shakeel

Industrial Tribunal,

Reinstatement of Employee

Nil This employee

40


Sr. No. Case No.



Amount Involved

(Rs.)

Facts

2001 Ahmed Mohammad Yousuf Vs. Jindal Thermal Power Company Limited (JTPCL)

Hubli

was terminated from the services of the Company. He had filed this complaint in the Labour Court under Section 10(4A) of the Industrial Disputes Act 1947 against the termination of services. The case has been subsequently transferred to the Industrial Tribunal, Hubli. Award passed, JTPCL will have to pay Rs. 3 lacs to the ex-employee.

Tax Matters 3. Jindal

Thermal Power Company Limited (JTPCL) Versus

The Deputy Comm. of Income Tax & Anr.

Karnataka High

Court, Bangalore

for Arguments

For the Assessment

Year 2001-02 & 2002-03

0.71 crores i.e. the Net Tax Liability (after

adjusting refunds

and payments)

The Tax Dept. levied interest u/s 234B and 234C of the Income tax Act. JPTCL has filed this writ petition against the levy of interest as also the validity of the retrospective operation of the amendment

41


Sr. No. Case No.



Amount Involved

(Rs.)

Facts

carried out to section 115JB of the Income Tax Act. An interim stay has been granted in favour of JTPCL upon depositing Rs. 55 lacs with the Court.

1. There are no defaults by JTPC in meeting statutory dues, Institutional & Banks’

dues, dues towards holders of debentures and arrears on cumulative preference shares.

2. Pending litigations, defaults, etc. in respect of Companies / firms / ventures with

which the promoters were associated in the past but are no longer associated in case their name(s) continue(s) to be associated with particular litigation(s): Please refer above.

3. Litigations against the Company or against any other company whose outcome

could have a materially adverse effect on the position of the Company: Please refer above.

4. The details of the past cases in which penalties were imposed by the concerned

authorities: Nil 6. Risk factor(s) - information regarding pending litigations, defaults, non-payment

of statutory dues, proceedings initiated for economic offences / Civil offences (including the past cases, if found guilty), any disciplinary action taken by the Board / Stock Exchanges against the Company / Promoters and their other business ventures (irrespective of the fact whether they fall under the purview of section 370 (1B) of the Companies Act, 1956) / Directors: No proceedings have been initiated for economic/civil offences nor has any disciplinary Action been taken by SEBI or Stock Exchanges against JTPC.

• Company’s Directors

In case of Company’s Directors, there are no outstanding litigations.

• Information relating to JVSL Contingent liabilities not provided for as on March 31, 2004: Sl. No. Particulars Rs. in

crores 1. Claims against the Company not acknowledged as debts 6.82 2. Bills discounted 155.26 3. Disputed claims including those pending in Courts for

excise & custom duties, sales tax, income tax and other levies (excluding interest)

176.24

4. Other matters 13.04

42


Provident Fund Cases There are ten (10) matters pending before various Provident Fund authorities regarding the payment of Provident Fund contributions by JVSL pertaining contract employees from the period April 1998 to April 2001 involving an amount of Rs. 26.00 lacs Land Acquisition Cases

There are three (3) matters filed in the District Court at Bellary, Karnataka and one in the Karnataka High Court for enhancement of compensation and other claims for the land acquired by JVSL for its Steel Plant involving an amount of Rs. 7.00 lacs.

Labour Cases There are six (6) labour related matters against JVSL for issues such as dismissal from employment, accident at the COREX-I site in July 2002 and compensation claims aggregating to Rs. 4.7 lacs. Civil Cases

Sr. No.

Case No. Parties Pending Before


Amount Involve

d (Rs.)

Facts

1. Civil Suit No. 538 of 1999,

G.A. No. 1880 of 2000

Mewar Growth Ltd. & Ors. Vs. JVSL

Calcutta High Court for reinstatement of the suit earlier withdrawn

SHARES 5.90 crores

approx.

The Plaintiff has filed this suit for a declaration by the court that they are the rightful owners of some shares of a banking company and that any transfers thereof were null and void. The Plaintiff thereafter withdrew the suit in 1999. The Plaintiff has in 2002 made an application for reinstatement of the suit.

2. - David James & Sons Vs. JVSL

London Court of International Arbitration for filing

Demurrage Charges

$ 57,311.45 (for dispatch earned

The Claimant was required to supply certain quantity of

43


Pleadings & interest) and $ 118,450 (for cost and interest for demurrage)

limestone to JVSL under a contract. On receipt of the consignments, the limestone was found to be of a different size than the one desired by JVSL. Due to the variance in the size of the limestone, the calcinations process in the lime calcinations plant was not to expected level. The Claimant has filed this matter for the demurrage for the delivery of the limestone at the Goa Port.

3. Original Application No.190/03

SBI & others VS Bellary Steels & Alloys Ltd & others in which JVSL is one of the Respondents.

Debt Recovery Tribunal, Bangalore

Recovery of Loan with interest

30.60 lacs with interest

This matter has been filed by Banks seeking various sums from Bellary Steel and others. JVSL is a debtor of Bellary Steel and has been served with a garnishee notice for an amount of Rs. 30.60 lacs.

44


4. Writ Petition 10713/2004

Bellary Steels & Alloys Ltd Vs IT Dept. JVSL is one of the respondents

High Court of Karnataka for hearing

Reopening of Assessment by the Department

2.17 crores

Bellary Steel has filed the Writ Petition to Stay Income Tax Department Notice reopening the assessment for the Assessment Year 1997-98 and claiming Rs. 2.17 crores The High Court has granted stay against the notice of the IT Dept.

5. Writ Petition JVSL Vs. BUDA


Levy of Betterment Charges by BUDA

12.48 crores

BUDA has levied betterment charges on the Company in the year 1996-97 which claim has been challenged in the High Court by way of this Writ Petition.

6. Reference Application

Income Tax Officer Vs. JVSL


Taxability of Interest Income under the head "Income From Other Sources"

10.99 crores

A reference application has been filed in the High Court for challenging the taxability of interest income under the head "Income from Other Sources" after the commencement of business.

45


Custom Matters



Amount

Involved

(Rs.)

Facts

Commissioner of Customs Vs. JVSL & Ors.

Commissioner of Customs

Show Cause Notice

8. 89 crores

The Comm. of Customs, Chennai has issued a show cause notice for the import of capital goods required for the Pellet Plant and Corex Module II under the EPCG Scheme.

Central Excise Matters



Amount Involved

(Rs.)

Facts

JVSL Versus Commissioner, Central Excise, Belgaum

CESTAT for Hearing

Excise Duty 50.00 lacs The penalty has been imposed by the Comm. for non inclusion of additional consideration flowing from JISCO to JVSL in the form of advances amounting to Rs. 150.00 crores for supply of HR coils in the total valuation of the steel supplied.

Commissioner of Central Excise Vs. JVSL & Ors.

CESTAT, Bangalore for Hearing

Excise Duty Rs. 9.08 crores (as

excise duty) and Rs. 5.00

lacs (as penalty)

JISCO had advanced an amount of Rs. 150.00 crores to JVSL during the year 1998-99, which was meant to be adjusted against supply of HR Coils made by JVSL to JISCO. Department has issued a Show Cause Notice that the interest accrued on the advance received from JISCO should not form part of the accessible value of the steel sold to JISCO and pay the differential Central Excise Duty amounting to Rs. 9.08 crores

46


Comm. of Excise Vs.

JVSL

Commissioner of Excise,

CESTAT

Sale of Corex Gas for various

period (October 1999 to March 2004)

4460.90 lacs The Comm. has issued a Show Cause Notice for the Sale of Corex gas to JTPCL & JPOCL. The Excise Dept. contends that JVSL had to discharge 8% of the sale price of corex gas since input credits were availed by JVSL for the exempted corex gas.

Comm. of Excise Vs.

JVSL


Disallowance of cenvat credit on

steel structures

1094.00 lacs The CESTAT has stayed the order passed by the Comm. on structures and other items

Comm. of Excise Vs.

JVSL


Input credit on high-grade pellets

47.37 lacs The quantum of pellets received at JVSL site was higher than the quantity invoiced and duty discharged by the supplier. Hence the supplementary invoice for payment of differential duty was raised by the supplier and accordingly the cenvat credit was availed by JVSL.

Comm. of Excise Vs.

JVSL


Input credit on Corex chilling

62.18 lacs The deptt. is of the view that the credit cannot be availed on the inputs when there was no production from Corex unit during the chilling period.

Comm. of Excise Vs.

JVSL


Duty on Interest free advance of Rs. 150 crore received by JVSL from JISCO

908.00 lacs JVSL's Stay Application has been granted. A deposit of Rs. 50 lacs has been made by JVSL as directed by the Tribunal

Comm. of Excise Vs.

JVSL

CESTAT, Bangalore

Demand of additional customs

duty of Rs. 16.81 lacs

on warehoused

goods

10.00 lacs The CESTAT has ordered payment of customs duty of Rs. 43,18,783/- and redemption fine of Rs. 10,00,000/-. JVSL may file a Writ Petition before the High Court of Karnataka

47


Comm. of Excise Vs.

JVSL

Supreme Court of India for Hearing

Import of Met coke –

Anti-dumping

Duty

4920.00 lacs A writ petition was filed before the High Court of Karnataka challenging the validity of the Govt. Notification as it was highly discriminatory and violative of fundamental rights. The dispute relates to antidumping duty payable by JVSL prior to 30.09.2002. At that point of time a similar issue relating to antidumping duty on metcoke was filed by Tata Chemicals before the Supreme Court of India and the matter was pending for a decision before the Supreme Court. Therefore, during the preliminary hearing held before the High Court of Karnataka, it was decided by the Bench to transfer JVSL case to the Supreme Court for tagging on with other similar cases and disposal.

Comm. of Excise at Goa and Chennai Vs. JVSL

CESTAT, Bangalore for Goa Excise matter

And Comm. Of

Excise, Chennai

Import of Shredded

scrap

1103.00 The end use certificate could not be issued by the

deptt as the scrap was used by JVSL in the Basic

Oxygen Furnace instead of the specified type of

furnaces mentioned above as per the notification no.20/99 dt.28.2.99.

Comm. of Excise Vs.

JVSL


Computation of Interest Charges

23.90 The goods were physically warehoused at Toranagallu. The bill of entry for warehousing of the goods was filed at Chennai Customs for the movement of goods to Toranagallu. Therefore the interest charges were to be computed from the date of physical bonding at Toranagallu. This was not accepted by the Department.

48


Comm. of Excise Vs.

JVSL


Customs duty on

refractories & lock hopper of Corex-1

104.40

Certain refractories and hoppers (chapter heading 68.15 & 84.79) were cleared from the warehouse on payment of customs duty @ 40% & 35% respectively as per the assessment orders issued by DC, C.Ex., Bellary. Subsequently, a refund application was filed for refund of the excess customs duty paid by JVSL on account of classification issue as per the relevant chapter heading 69.02 and 84.19 for the respective goods. The Dept. filed an Appeal with Comm. (A) which was given in its favour. JVSL has filed this further Appeal to the CESTAT.

Note: An Appeal has been filed by the Customs Department against the Order of CESTAT given in favour of JVSL. The matter involves an amount of Rs. 59.46 crores plus Interest and Penalty of Rs. 52.31 lacs demanded by the Customs towards import of certain capital goods under EPCG Scheme.

Criminal Cases Sr No

Case No.



Amount

Involved

(Rs.)

Facts

1. W.P. NO. 3352 / 2002

JVSL Vs Dy. S.P, Bellary

High Court of Karnataka, Bangalore

Corex Accident

Nil The Dy. S.P. Bellary has initiated criminal proceedings before the JMFC Court against JVSL officials in connection with the Corex Accident which had occurred at the factory site. Stay Order has been obtained by JVSL thereby prohibiting the Court from proceeding any further in the matter.

2. C.R.M.P.No. 700/03

JVSL Vs The State by Sub-Inspector of Police,

High Court of Karnataka for Trial

Discrimination under SC-ST Atrocities Act

Nil The Police have registered a case against the Jt. MD & CEO and the GM (A&LA) of JVSL

49


Sr No

Case No.



Amount

Involved

(Rs.)

Facts

Toranagallu

under SC-ST Atrocities Act, based on the Complaint filed by one employee Mr. V.K. Basappa who was an employee but was later dismissed by JVSL.

3. CRLP No. 38526/2003

Mr. G.K. Saini, JVSL Vs The Sub-Inspector of Police, Toranagallu

High Court of Karnataka

Lorry Accident

Nil A Stay Order has been obtained by JVSL against the Sub-inspector of Police, Toranagallu thereby prohibiting the Police from further investigating the matter in Lorry accident matter which happened near the RM gate wagon un-loading area in which 2 workers had lost their life.

Sales Tax Matters



Amount Involved

(Rs.)

Facts

Comm. of CST Vs JVSL

Commercial Tax Authority

Late submission of Form "C" and Form "F" with the Department

1.78 lacs

A demand was raised by the CST Dept. on account of not furnishing Form C and Form F. The Forms have now been submitted and a revised order is expected.

Stock Exchange Related Compliances BSE suspended trading in the shares of the company for 19 days (from September 16, 1999 to October 4, 1999) and levied a penalty of Rs. 1,27,000/- for delay in intimation of book closure from August 17 to August 23, 1999. Sun Investments Private Limited

Contingent liabilities not provided for as on March 31, 2004 related to disputed Income Tax demand of Rs. 111 lacs as given below.

50


S.

No. Assessment Year & Amount of Demand

Details & Current Status

1 1991-92 Rs. 54.29 lacs

The demand had arisen due to disallowance of set off of brought forward loss of earlier year. On appeal, the CIT (Appeals) upheld the Assessing Officer’s contention. The company is in appeal to Income Tax Appellate Tribunal and the matter is yet to be decided.

2 1993-94 Rs. 56.56 lacs

The demand had arisen due to disallowance of loss on renunciation of rights shares. The Company is in appeal to CIT(Appeals), which is yet to be decided.

Defaults in dues as on March 31, 2004 towards redemption of Non Convertible Debentures (Rs. 1029 lacs) and interest on Non Convertible Debentures (Rs. 1289 lacs) Jindal Praxair Oxygen Company Private Limited (JPOCL) Contingent Liabilities not provided as on March 31, 2003 were: Rs. in lacs S. No. Particulars Amount 1. Bank Guarantees 111.30 2. Excise Duty matters disputed by the

company 6902.96

3. Claims against the company not acknowledged as debt

270.00

Outstanding Litigation Cases filed by the Excise Department

Sr. No.

Case No.



Amount Involved

(Rs.)

Facts

1. 56 of 2000 (7 matters)

Comm. Of Excise Vs.

JPOCL

Order has been passed by Comm. Of Excise (A) in favour of JPOCL.. An Appeal may be filed by the Dept. to the CESTAT

Pricing of Goods to

Related Party

4.73 crores

The dispute is regarding the Department's consideration of PIL as a related party of JPCOL in the valuation of duty payable on goods.

2. 204 of 2001

Comm. Of Excise Vs.

JPOCL

Order has been passed by Comm. Of Excise (A) in favour of JPOCL. - An Appeal may

Pricing of Goods to

Related Party

55.92 lacs

The dispute is regarding the Department's consideration of PIL as a related party of JPCOL in the valuation of

51


Sr. No.

Case No.



Amount Involved

(Rs.)

Facts

be filed by the Dept. to the CESTAT

duty payable on goods.

3. 220 of 2001

Comm. Of Excise Vs.

JPOCL

Order has been passed by Comm. Of Excise (A) in favour of JPOCL. - An Appeal may be filed by the Dept. to the CESTAT

Pricing of Goods to

Related Party

5.39 crores


4. 152 of 2002

Comm. Of Excise Vs.

JPOCL


Pricing of Goods to

Related Party

3.58 crores


5. 173 of 2002

Comm. Of Excise Vs.

JPOCL


Pricing of Goods to

Related Party

3.50 crores


6. 8 Appeals

Comm. Of Excise Vs.

JPOCL

CESTAT Claim of Duty 12.88 crores

Venting of Gases has been treated by the Dept. as despatch and levied duty upon the same.

7. 8 Appeals

Comm. Of Excise Vs.

JPOCL


Venting of Liquid Products has been treated by the Dept. as despatch and levied duty upon the same.

52


Sr. No.

Case No.



Amount Involved

(Rs.)

Facts

8. 2 Appeals

Comm. Of Excise Vs.

JPOCL


Denial of MODVAT availed by JPOCL on the Capital Goods.

9. 7 cases Comm. Of Excise Vs.

JPOCL


Denial of MODVAT availed by JPOCL on the Capital Goods.


JPOCL

CESTAT Claim of Duty on Captive

Consumption

51.92 lacs

LOX Captive Consumption


JPOCL

CESTAT Duty on Infrastructure

Services

8.98 lacs

Duty on reimbursement of expenses

12. 1 case Comm. Of Excise Vs.

JPOCL

Asst. Comm.

Duty on MTOP 2.77 lacs

13. 1 case Comm. Of Excise Vs.

JPOCL

Asst. Comm.

Duty on IT Reimbursement

11.16 lacs

Cases filed by JPOCL against the Excise Department

Case No.



Amount Involved

(Rs.)

Facts

JPOCL Vs. Comm. Of

Excise

Comm. Of Central Excise

(Appeals)

Duty on Infrastructure

Services

1.21 lacs

Duty on reimbursement

of expenses

4 cases JPOCL Vs. Comm. Of

Excise

Comm. Of Excise (A)

Service Tax 55.73 lacs

Service Tax payable on Engineering Services of Praxair Inc.,

Technical Services and Field Service Agreements.

2 cases JPOCL Vs. Comm. Of

Excise

Comm. Of Excise (A) and Asst. Comm.

Claim of Duty 60.48 lacs

Denial of MODVAT availed by JPOCL on the Capital Goods to

the extent of 25% on project

imports. 2 cases JPOCL Vs.

Comm. Of Excise

Asst. Comm. Denial of MODVAT

credit

2.06 crores

Denial of MODVAT availed by JPOCL on the Capital Goods (SS Plates and

53


25% on project imports.

10 Appeals

JPOCL Vs. Comm. Of

Excise

Comm. Of Excise (A)

Claim of Duty 92.52 crores

Venting of Liquid Products has

been treated by the Dept. as despatch and

levied duty upon the same.

116 of 2002

JPOCL Vs. Comm. Of

Excise (Provisional Assessment)

Asst. Comm. Claim of Duty 1.74 crores

Venting of Liquid Products has

been treated by the Dept. as despatch and


3 Appeals

JPOCL Vs. Comm. Of

Excise

Commissioner of Excise (A)

Claim of Duty 5.20 crores

Venting of Gases has been treated by the Dept. as despatch and


RISK FACTORS AND PROPOSALS TO ADDRESS THE RISK Internal Factors (e) Redemption Reserve: For the existing debentures, the balance in the

Debenture Redemption Reserve as on 31 March 2004 is Rs.1913.65 lakhs. Creation of Debenture Redemption Reserve is envisaged for the proposed issue of Debentures as per the provisions of Companies Act, 1956.

(f) It is proposed that the Debentures shall be secured by way of First mortgage

and charge on pari passu basis on the Assets of JTPCL. (g) Market Risk: As JVSL is the major customer; power cannot be generated/sold

if JVSL’s plant is shutdown.

The Electricity Act 2003 contemplates multi buyer model in place of single buyer model and open access to Transmission & Distribution network, which may have impact of participation of Private Sector in electricity distribution business. (d) Credit Rating: JTPC has obtained credit rating for an amount of Rs. 50 crores from FITCH Ratings.

The rating is not a recommendation to buy, sell or hold securities and investors should take their own decision.

(h) Contingent Liabilities: Securities provided to banks/financial institutions against credit facilities extended to other bodies corporate is Rs.10890.30 lacs as on the date of March 31, 2004.

(f) Pending Grievances: There are no investor grievances. (g) Non-Performing Assets (NPA): JTPCL does not have any NPA. (h) Foreign Exchange Risk: JTPCL has borrowed in foreign currency from Power

Finance Corporation and State Bank of India, New York. The principal and

54


interest are payable quarterly and half-yearly respectively at the exchange rate prevailing on the date of payment.

External Factors (c) Changes in Government policies may impact the performance of the Steel

sector, which may in turn affect JTPCL, as 60% of the company’s power supplies are to JVSL and JVSL is the only fuel supplier to JTPCL.

(d) Risk of Competition: Competition in the power sector has increased and is

likely to increase further with the entry of independent power producers.

While focusing attention on cutting cost to be competitive, JTPC has been able to meet its operating norms and reduce its finance charges to meet the level of tariff requirements of KPTCL. JTPC is taking further steps to bring its costs down and remain competitive.

JTPCL may not face competition, as it intends to supply power captively to

one of its group companies and KPTCL. General Risks Investors are advised to read the risk factors carefully before taking an investment decision in this offering. For taking an investment decision, the investor must rely on his/her own examination of the issuer and the issue including the risks involved. The Debentures have not been recommended or approved by BSE nor does BSE guarantee the accuracy or adequacy of this document. Notes 3. Allotment against all valid applications for the JTPCL debentures will be made on

a full and firm allotment basis. 4. The reserves and surpluses as on March 31, 2004 are Rs.29587.56 lakhs,

however, the loans outstanding as on the said date were 54213.87 lakhs. The present issue is for an amount of Rs. 5000 lakhs.

HIGHLIGHTS • •

•

•

•

JTPCL has been formed under the Companies Act, 1956. The paid up equity share capital of JTPC as on date is Rs. 289,00,00,000 and is owned by Jindal Vijayanagar Steel Limited – 50%, other companies of JSW group - 42.39%, IDBI - 7.61%. Total assets = Rs. 112701.43 Lakhs, out of which own funds constitute Rs. 58487.56 Lakhs. Profit/Loss after tax for the F.Y. March 31, 2004 = Rs. 19555.89 Lakhs.

NPA in the books of JPL = Nil

IX. DISCLOSURE ON INVESTOR GRIEVANCES AND REDRESSAL SYSTEM To ensure that Investors grievances are attended to expeditiously JTPC has appointed a compliance officer, who may be contacted in case of any grievances at the following address:

55


Registrar & Transfer Agent Mr. Kannan Karvy Consultants Limited Registrar & Transfer Agent Corporate Office: No. 51/2, T.K.N. Complex, Vanivilas Road, Opp. National College, Basavanagudi, Bangalore – 560 004. Compliance Officer Ms. Mansi Toprani Company Secretary Jindal Thermal Power Company Limited Jindal Mansion, 5-A. G. Deshmukh Marg, Mumbai 400 026. Tel: 022-2351-3000 Fax: 022-2352-6400 The details regarding normal time taken for disposal of various types of investors grievances is given below: 1. Transfer/Transmission of equity shares : 7 days 2. Change of Address : 7 days 3. Issuance of duplicate share certificates : Shares are in demat form 4. Non receipt of share certificates : Shares are in demat form 5. Non receipt of dividend warrants : N.A. 6. Noting of bank mandate : N.A. As on date there is no outstanding grievances against JTPCL from investors/ shareholders.

56


PART – II X. GENERAL INFORMATION Consent M/s. Lodha & Co., Chartered Accountants, the Statutory Auditors of the Bank have their written consent to their report being included in the form and content in which it appears in this Information Memorandum. UTI Bank Limited has given its written consent to act as Trustees to the issue and for including their name in the Information Memorandum. Karvy Consultants Limited have given their consent to the company to act as Registrar to the present issue. Change in Auditors of JTPCL During The Last Three Years Nil

Authority for the Present issue These Debentures are being issued in accordance with the resolution passed by the Board of Directors of JTPC in its meeting held on 28th March 2005. Procedure and time schedule for allotment and issue of certificates. Debentures would be allotted by Board of Directors of the Bank and Letter of Allotment would be issued / credited within 15 days from date of allotment and Debenture Certificate in Demateralised form would be issued / credited within 3 months from the date of allotment. Name and address Auditors M/s Lodha & Company Charted Accountants No. 6, Karim Chambers 40, Ambalal Doshi Marg Hamam Street Mumbai – 400 023 Debenture Trustees UTI Bank Limited Corporate Office: Maker Tower “F” 111, 13th Floor, Cuffe Parade, Mumbai 400 005 Banker to JTPC ICICI Bank Limited ICICI Towers 1st floor (West Wing), Commissariat Road, 1 Bangalore - 560025

57


Compliance Officer: Ms. Mansi Toprani Company Secretary Jindal Thermal Power Company Limited Jindal Mansion, 5-A. G. Deshmukh Marg, Mumbai 400 026. Tel: 022-2351-3000 Fax: 022-2352-6400 Company Secretary: Ms. Mansi Toprani Company Secretary Jindal Thermal Power Company Limited Jindal Mansion, 5-A. G. Deshmukh Marg, Mumbai 400 026. Tel: 022-2351-3000 Fax: 022-2352-6400 XI. AUDITORS REPORT & FINANCIAL INFORMATION PROFIT AND LOSS ACCOUNT Summarised Statement of Profit & Loss Account for the year ended (Rs. in Crores)

PARTICULARS

JTPC

Year 9m 2005 2004 2003 2002 2001Income Sales 346.36 557.84 521.57 541.91 397.49Other Income 0.19 0.20 0.35 2.75 0.43Total Income 346.54 558.03 521.93 544.66 397.92Expenditure Cost of Fuel 173.36 242.83 250.25 238.30 169.36Operation, Maintenance & other charges 27.19 36.78 37.12 75.16 25.64Interest and Financial Charges 35.50 61.35 91.85 102.37 95.83Depreciation 43.35 58.86 60.70 60.99 52.44Misc. Expenditure w/off 3.97 27.32 5.70 5.66 5.14Total Expenditure 283.37 427.14 445.62 482.48 348.41Net Profit before Tax & Exceptional item 63.17 130.89 76.31 62.18 49.51Less: Exceptional Item 81.04 (52.43)Profit Before Tax 63.17 211.93 23.88 62.18 49.51Less: Provision for - Wealth Tax 0.006 0.003 0.003 - Current Income Tax(MAT) 5.89 16.36 2.42 5.62 3.63Profit after Tax 57.28 195.56 21.46 56.56 45.88

58


BALANCE SHEET

Summarised Statement of Assets and Liabilities as at (Rs. crores) PARTICULARS JTPC Year 9m 2005 2004 2003 2002 2001 Fixed Assets Gross Block 1066.56 1065.97 1120.69 1127.82 1104.43 Less : Depreciation 284.75 241.40 182.57 121.89 60.94 Net Block 781.81 824.57 938.12 1005.94 1043.49 Capital Work in progress 1.19 0.85 0.41 0.26 1.60 Total 783.00 825.42 938.53 1006.19 1045.09 Investments 142.86 111.90 108.90 108.90 0.00 Current Assets Inventories 19.43 19.46 18.19 17.33 9.31 Sundry Debtors 165.36 169.30 82.32 86.81 167.19 Cash and Bank Balances 20.94 15.76 1.30 1.09 18.42 Loans and Advances 29.97 23.61 16.24 11.84 19.93 Total 235.71 228.13 118.05 117.06 214.85 Total Assets 1161.57 1165.46 1165.48 1232.15 1259.94 Liabilities Secured Loans 467.42 542.14 650.40 739.99 757.80 Unsecured Loans - - - 25.00 - Current Liabilities and Provisions

53.30 38.44 144.32 115.95 213.10

Advance against share capital

0.00 0.00 0.00 0.00 0.04

Total Liabilities 520.72 580.58 794.72 880.94 970.94 Net Worth 640.85 584.88 370.76 351.21 289.00 Represented By Share Capital 289.00 289.00 289.00 289.00 289.00 Reserves 353.15 295.88 100.32 78.85 22.29 Less: Miscellaneous Exp. not w/off

1.30 0.00 18.56 16.64 22.29

Networth 640.85 584.88 370.76 351.21 289.00 Significant Accounting Policies

59


60


61


Statement of Accounting Ratios for the financial Year PARTICULARS Financial Year Year 9m 2005 2003-04 2002-03 2001-02 2000-01Earnings per Shares (EPS) Profit after Tax (Rs. in crores) 57.28 195.56 21.46 56.56 45.88No. of Shares (in crores) 28.90 28.90 28.90 28.90 28.90EPS 1.98 6.77 0.74 1.96 1.59 Return on Networth Profit after Tax (Rs. in crores) 57.28 195.56 21.46 56.56 45.88Networth ( in crores) 640.85 584.88 370.76 351.21 289.00Return on Networth (%) 8.94 33.44 5.79 16.10 15.88 Net Asset Value per share Total Assets ( Rs. in crores) 1161.57 1165.46 1165.48 1232.15 1259.94Total Liabilities (Rs. in crores) 520.72 580.58 794.72 880.94 970.94Net Asset Value (Rs. in crores) 640.85 584.88 370.76 351.21 289.00No. of Shares (in crores) 28.90 28.90 28.90 28.90 28.90Net Asset Value per share 22.17 20.24 12.83 12.15 10.00

• DEBT SERVICING TRACK RECORD The Company is meeting all its obligations relating to debt service regularly and there are no defaults.

XII. STATUTORY AND OTHER INFORMATION a) Minimum Subscription Pursuant to the notification no. SEBI/MRD/SE/AT/46/2003 dated 22nd December 2003 issued by SEBI minimum subscription clause is not applicable to the privately placed debt securities. b) Expenses of the Issue The proposed debenture issue being made on private placement basis, no major issue expenses are envisaged other than statutory payments. c) Option to subscribe: JTPC has an arrangement with NSDL for the Debentures for the depository arrangement. The investors will have the option to hold the debentures in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996/Rules as notified by NSDL from time to time. Investors desirous of receiving the debenture certificate in the dematerialised from should mention their Depository Participant’s name, DP-ID and beneficiary account number in the appropriate place in the application form. Debentures allotted to successful allottee(s) having depository account shall be credited to their depository account against surrender of letter of allotment. In case of incorrect details provided by the investors and inability of the Registrar to credit the Depository Account, the Debentures will be issued in physical form to such investors.

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XIII. RELATED PARTY DISCLOSURE Jindal Vijayanagar Steel Limited Jindal Vijayanagar Steel Limited, which is engaged in the business of manufacturing of HR coils, pellets, etc. has contractual relations with JTPCL for supply of fuel and water to JTPC and purchase of power from JTPCL. JSW Power Limited JTPC is a major shareholder of JPL. There are three common directors on the Board of both the Companies, namely: Mr. N.K. Jain, Mr. Raaj Kumar and Mr. K.T. Krishna Deshika. Southern Iron & Steel Company Limited There are two common directors, Mr. N.K. Jain and Mr. K.T. Krishna Deshika. XIV. OTHER DETAILS Interest of Directors and Promoters All the Directors of JTPC may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board and of Committees thereof, reimbursement of expenses as well as to the extent of other remuneration, if any, payable to them under the Articles. Rights of Debenture holder’s Debentureholders do not carry any rights regarding voting, dividend, lien on shares. Modifications of Rights The rights, privileges, terms and conditions attached to all Debentures may be varied, modified or abrogated with the consent, in writing, of those holders of the Debentures who hold at least three-fourths of the outstanding amount of Debentures or with the sanction accorded pursuant to a resolution passed at a meeting of the Debentureholders, carried by a majority consisting of not less than three-fourths of the persons voting there upon a show of hands or, if a poll is demanded by a majority representing not less than three-fourths in value of the votes cast on such poll, provided that nothing in such consent or resolution shall be operative against the Issuer if the same are not accepted in writing by the Issuer. Consolidation and Splitting of Debentures The request from Registered Debentureholder(s) for splitting / consolidation of Debenture certificates will be accepted by the Issuer only if the original Debentures certificate(s) is / are enclosed along with an acceptable letter of request. No requests for splits below the Market Lot will be entertained. order to recognize such holder as being entitled to the Debentures standing in the name of the demised debentures holder on production of sufficient documentary proof or indemnity. Revaluation of Assets There has been no revaluation of JPL assets during the last five years.

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XV. MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS The following contracts and also documents for inspection referred to hereunder, may be inspected at the registered office of the company at Mumbai from 11.00 am to 1.00 pm from the date of this Information Memorandum until the date of closure of this Issue. ♦ MATERIAL CONTRACTS ♦ DOCUMENTS 1. Memorandum and Articles of Association of JPL. 2. Copy of Rating. 3. Copy of Board Resolution dated 28th March 2005 authorising the issue. 4. Letter from UTI Bank giving their consent to act as Trustees to the issue. 5. Letter from Karvy Consultants giving their consent to act as Registrar for the

issue. Articles of Association TRANSFER AND TRANSMISSION OF SHARES

The Company shall keep a "Register of Transfers" and therein shall be fairly and distinctly entered particulars of every transfer or transmission of any share.

Register of Transfers

Shares in the Company may be transferred by an instrument in writing as provided by the provisions of the Act, such instrument of transfer shall be in the form prescribed and shall be duly stamped and delivered to the Company within the prescribed period.

Form of transfer

The instrument of Transfer duly stamped and executed by the Transferor and the Transferee shall be delivered to the Company in accordance with the provisions of the Act. The instrument of Transfer shall be accompanied by such evidence as the Board may require to prove the title of Transferor and his right

Transfer form to be completed and presented to the Company

to transfer the shares and every registered Instrument of Transfer shall

remain in the custody of the Company until destroyed by order of the Board. The Transferor shall be deemed to be the holder of such shares until the name of the Transferee shall have been entered in the Register of Members in respect thereof. Before the registration of a transfer the certificate of the shares must be delivered to the Company.

Transfer Books and Register of Members when close

The Board shall have power on giving not less than seven day's previous notice by advertisement in some newspaper circulating in the district in which the office of the Company is situated, to close the Transfer Books, the Register of Members or Register of Debenture-holders at such time or times and for such period or periods, not exceeding thirty days at a time and not exceeding in the aggregate forty-five days in each year.

Directors may refuse to register transfers

Subject to the provisions of Section 111 of the Act, Board may, in due and strict accordance and compliance with the provisions of Section 22A of the Securities Contract (Regulation) Act 1956, decline to register or acknowledge any transfer of shares, whether fully paid or not, (notwithstanding that the proposed transferee be already a member), but in such cases it shall, within two months from the date on which the instrument

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of transfer was lodged with the Company, send to the transferee and the transferor notice of the refusal to register such transfer. The registration of transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except a lien on shares.

Notice of application when to be given

When in the case of partly paid shares, an application for registration is made by the transferor, the Company shall give notice of the application to the transferee in accordance with the provisions of Section 110 of the Act.

Death of one or more joint holders of shares

In the case of the death of any one or more of the persons named in the Register of Members as the joint-holders of any share, the survivor or survivors shall be the only persons recognised by the Company as having any title to or interest in such share, but nothing herein contained shall be taken to release the estate of a deceased joint-holder from any liability on shares held by him jointly with any other person.

Title of deceased Member

The executors or administrators or holder of a Succession Certificate of the legal representatives of a deceased member (not being one or two or more joint holders) shall be the only persons recognised by the Company as having any title to the shares registered in the name of such member and the Company shall not be bound to recognise such executors or administrators or holders of a Succession Certificate or the legal representatives unless such

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Executors or administrators or legal representatives shall have first obtained Probate or Letter of Administration or Succession Certificate, as the case may be, from a duly constituted Court in the Union of India; provided that in any case where the Board in its absolute discretion thinks fit, the Board may dispense with production of probate or Letters of Administration or Succession Certificate, upon such terms as to indemnity or otherwise as the Board in its absolute discretion may think necessary and under Articles 62, register the name of any person who claims to be absolutely entitled to the shares standing in the name of a deceased member, as a member.

No share shall in any circumstances be transferred to any infant, insolvent or person of unsound mind.

No transfer to infant etc.

Subject to the provisions of the Act and Articles 58 and 59 any person becoming entitled to shares in consequence of the death, lunacy, bankruptcy or insolvency of any member, or by any lawful means other than by a transfer in accordance with these Articles, may with the consent of the Board (which it shall not be under any obligation to give), upon producing such evidence that he sustains the character in respect of which he proposes to act under this Articles or of such title as the Board thinks sufficient, either be registered himself as the holder of the shares or elect to have some person nominated by him and approved by the Board registered as such holder, provided nevertheless, that if such person shall elect to have his nominee registered, he shall testify the election by executing in favour of his nominee an instrument of transfer in accordance with the provisions herein contained, and until he does so, he shall not be freed from any liability in respect of the shares.

Registration of person entitled to shares otherwise than by transfer

A person entitled to a share by transmission shall, subject to the right of the Directors to retain such dividends or money as hereinafter provided, be entitled to receive and may give a discharge for, any dividend or other moneys payable in respect of the share.

Person entitled may receive dividend without being registered as Member

There shall be paid to the Company in respect of the transfer or transmission of any number of shares such fee, if any as the Directors may require.

Fee on transfer or transmission

The Company shall incur no liability or responsibility whatsoever in consequence of its giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the Register of Members) to the prejudice of person having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that the Company may have had notice of such

Company not liable for disregard of a notice prohibiting registration of a transfer

Equitable right, title or interest or notice prohibiting registration of such transfer, and may have such notice, referred thereto, in any book of the Company and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title or interest or be under any liability whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company, but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect thereto if the Board shall so think fit.

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DIVIDENDS

The profits of the Company subject to any special rights relating thereto created or authorised to be created by these Articles and subject to the provisions of these Articles, shall be divisible among the members in proportion to the amount of capital paid-up or credited as paid-up on the shares held by them respectively.

Division of profits

The Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividend shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

The Company in General Meeting may declare a dividend

No dividend shall be declared or paid otherwise than out of profits of the financial year arrived at after providing for depreciation in accordance with the provisions of Section 205 of the Act or out of the profits of the Company for previous financial year or Years arrived at after providing for depreciation in accordance with these provisions and remaining undistributed or out of both; Provided that: If the Company has not provided for depreciation for any previous financial

year or years it shall before declaring or paying a dividend for any financial year, provide for such depreciation out of profits of the financial year or out of the profits of any other previous financial year or years.

If the Company has incurred any loss in any previous financial year or years

the amount of the loss or an amount which is equal to the amount provided for depreciation for that year or those years whichever is less, shall be set off against the profits of the Company for the year for which the dividend is proposed to be declared or paid or against the profits of the Company for any previous financial year or years arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section (2) of the Section 205 of the Act or against both.

Dividends only to be paid out of profits

Interim Dividend

The Board may, from time to time, pay to the Members, such interim dividend as in their judgement the position of the Company justifies.

Capital paid up in advance at interest not to earn dividend

Where capital is paid in advance of calls, such capital may carry interest but shall not in respect thereof confer a right to dividend or participate in profits.

Dividends in proportion to amount paid-up

All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid or deemed as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but if any share is issued on terms providing that it shall rank for dividend as form a particular date, such share shall rank for dividend accordingly.

Retention of dividends until completion of transfer under Article 61

The Board may retain the dividend payable upon shares in respect of which any person is, under Article 61 entitled to become a Member, or which any person under that Article is entitled to transfer, until such person shall become a member, in respect of such shares or shall duly transfer the same.

Dividend etc to joint-holders

Any one of several persons who are registered as the joint-holders of any share may give effectual receipt for all dividends or bonus ad payments on account of dividends or bonus or other moneys payable in respect of such shares.

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No Member shall be entitled to receive payment of any interest

or dividend in respect of his share or shares, whilst any money may be due or owing from him to the Company in respect of such share or shares or otherwise however, either alone or jointly with any other person or persons; and the Board may deduct from the interest or dividend payable to any member all sums of money so due form him to the Company.

No member to receive dividend whilst indebted to the Company and Company's right to reimbursement thereof

A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer.

Transfer of Share must be registered

Unless otherwise directed, any dividend may be paid by cheque or warrant or by a payslip or receipt having the force of a cheque or warrant or bank order sent through post to the registered address of the member or person entitled or in case of joint-holders to that one of them first named in the Register in respect of the joint-holdings. Every such cheque or warrant or bank order shall be made payable to the order of the person to whom it is sent. The Company shall not be liable or responsible for any cheque or warrant or payslip or receipt lost in transmission, or for any dividend lost to the member or person entitled thereto by the forged endorsement of any cheque or warrant or the forged signature of any payslip or the fraudulent recovery of the dividend by any other means.

Dividend how remitted

No unpaid dividend shall bear interest as against the Company.

No interest on dividends

Any General Meeting declaring a dividend may on the recommendation of the Directors make a call on the members of such amount as the meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend; and the dividend may, if so arranged between the Company and the member be set off against the calls.

(a) The Company in General Meeting may resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of the Reserve Fund, or any Capital Redemption Reserve Account, or in the hands of Company and available for dividend (or representing premium received on the issue of shares and standing to the credit of the Share Premium Account) be capitalised and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend ad in the same proportions and on the footing that they become entitled thereto as capital and on that all or any part of such capitalised

Capitalisation

fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide, any unissued shares or debentures or debenture-stock of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares or debentures or debenture-stock and that such distribution or payment shall be accepted by such shareholders in full satisfaction of their interest in the said capitalised sum. Provided that a Share Premium Account and a Capital Redemption Reserve Account may, for the purposes of the Article, only be applied in the paying of any unissued shares to be issued to members of the Company as fully paid bonus shares. General Meeting may resolve that any surplus moneys, arising from the

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realisation of any capital assets of the Company or any investments representing the same or any other undistributed profits of the Company not subject to charge for income tax be distributed among the members on the footing that they receive the same as capital.

For the purpose of giving effect to any resolution under the preceding

praragraphs of this Article the Board may settle any difficulty which may arise in regard to the distribution as it thinks expedient and in particular may issue fractional certificates, and may fix the value for distribution of any specific assets, and may determine that such cash payments shall be made to any members upon the footing of the value so fixed or that fraction of less value than Rs. 10/- may be disregarded in order to adjust the rights of all parties, and may vest any such cash or specific assets in trustees upon such trusts for the person entitled to the dividend or capitalised fund as may seem expedient to the Board. Where requisite, a proper contract shall be delivered to the Registrar for registration in accordance with Section 75 of the Companies Act, 1956, and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalised fund, and such appointment shall be effective.

FORFEITURE OF SHARES

If any member fails to pay any call or instalment of a call on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the Board may at any time thereafter, during such time as the call or instalment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued, and all expenses that may have been incurred by the Company by reason of such non-payment.

If money payable on share not paid notice to be given to member

Form of Notice The notice shall name a day (not being less than fourteen days from the date of notice) and a place or places on and at which such call or instalment thereon at such rate not exceeding 18 percent per annum as the Directors shall determine from the day on which such call or instalment ought to have been paid and expense as aforesaid are to be paid. The notice shall also state that, in the event of the non-payment at or before the time and at the place appointed, the shares in respect of which the call was made or instalment is payable, will be liable to be forfeited.

In default of payment shares to be forfeited

If the requirements of any such notice as aforesaid shall not be complied with, every or any share in respect of which such notice has been given, may at any time thereafter before payment of calls or instalments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of the forfeited share and not actually paid before the forfeiture.

Notice of forfeiture to a member

When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture with the date thereof, shall forthwith be made in the Register of Members, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.

Forfeited share Any share so forfeited shall be deemed to be the property of the

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to be property of the Company and may be sold etc.

Company, and may be sold, re-allotted or otherwise disposed of, either to the original holder thereof or to any other person, upon such terms and in such manner as the Board shall think fit.

Member still liable to pay money owning at time of forfeiture and interest

Any member whose shares have been forfeited shall notwithstanding the forfeiture, be liable to pay and shall forthwith pay to the Company, on demand all calls, instalments interest and expenses owing upon or in respect of such shares at the time of the forfeiture together with interest thereon from the time of the forfeiture, until a payment, at such rate not exceeding 18 percent per annum as the Board may determine and the Board may enforce the payment thereof, if it thinks fit.

Effect of forfeiture

The forfeiture of a share shall involve extinction at the time of the forfeiture, of all interest in and all claims and demand against the Company, in respect of the share and all other rights incidental to the share, except only such of those rights as by these Articles are expressly saved.

A declaration in writing that the declarant is a Director or Secretary of the Company and that a share in the Company has been duly forfeited in accordance with these Articles on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claimed to be entitled to the shares.

Evidence of forfeiture

Upon any sale after forfeiture or for enforcing a lien purported exercise of the powers hereinbefore given, the Board may appoint some person to execute an instrument of transfer of the Register in respect of the share sold, and the purchaser shall not be bound to see the regularity of the proceedings, or to the applications of the purchase money, and after his name has been entered in the Register in respect of such shares the validity of the sale not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

Validity of sale under Articles 39 and 45

Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company has been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect, and the Directors shall be entitled to issue a duplicate certificate or certificates in respect of the said shares to the person or persons entitled threto.

Cancellation of share certificates in respect of forfeited shares

LIEN

The Company shall have a first and paramount lien upon all the shares (other than fully paid up shares) registered in the name of each member (whether solely or jointly with other) and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares, and no equitable interest it any shares shall be created except upon the footing and upon the condition that Article 22 hereof is to have full effect. Any such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed for registration of a transfer of shares shall operate as a waiver of the Company's lien, if any, in such shares.

For the purpose of enforcing such lien, the Board may sell the shares

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subject thereto in such manner as they shall think fit, and for that purpose may cause to be issued a duplicate certificate in respect of such shares and may authorise one of their members to execute a transfer thereof on behalf of and in the name of such member. No sale shall be made until such period as aforesaid shall have arrived, and until notice in writing of the intention to sell shall have been served on such member or his representatives and default shall have been made by him or them in payment, fulfillment or discharge of such debts, liabilities or engagements for fourteen days after such notice.

There are also necessary provisions in the Articles of Association of the Company, regarding Demat of securities, Nomination of shares / debentures.

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DECLARATION

I, Mr. Raaj Kumar, Joint Managing Director & CEO hereby declare that the Company has complied with all legal and statutory requirements and no statutory authorities has restrained the Company from issuing and allotting the securities. Further, that the Company undertakes to make full disclosure requirements as per Schedule II of the Companies Act, 1956 and Chapter VI of SEBI (DIP) Guidelines 2000. For JINDAL THERMAL POWER CO. LTD Sd/- Raaj Kumar Joint Managing Director & CEO Place : Mumbai Date :28th March, 2005

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INFORMATION MEMORANDUM Jindal Thermal … Karnataka Power Transmission Corporation Limited 3 ....

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Transcript of INFORMATION MEMORANDUM Jindal Thermal … Karnataka Power Transmission Corporation Limited 3 ....