Jindal Steel Limited (formerly known as Jindal Steel & Power Limited)
Report on the Audit of the Standalone Financial Statements
OPINION
We have audited the accompanying standalone financial statements of Jindal Steel Limited (formerly known as Jindal Steel & Power Limited) ("the Company”), which comprise the Balance Sheet as at 31st March, 2026, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including material accounting policies and other explanatory information (hereinafter referred to as 'standalone financial statements').
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2026, its profit (including Other comprehensive income), changes in equity and its cash flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor's Responsibilities for the Audit of the Standalone Financial Statements” section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
EMPHASIS OF MATTERS
Attention is drawn to:
As stated in note no. 49A of the standalone financial statement, balance of outstanding loan in the account of Jindal Steel (Mauritius) Limited (formerly known as Jindal Steel & Power (Mauritius) Limited) ('JSML'), a wholly owned subsidiary of the Company is amounting to C 4,586.80 crores (including interest). As stated in the said note, Auditors of JSML have included a inherent uncertainty paragraph relating to going concern matter in their audit report for the year ended 31st March, 2026, without modifying their opinion and as stated in the said note, accumulated losses and negative net worth of JSML is of C 6,966.40 crores and C 5,379.27 crores respectively as on 31st March, 2026.
Further, as explained in the said note, as assessed by the management of the Company, after taking into consideration the report of an expert, the Company has during the financial year 2025-26, recognized write-off of loans aggregating to C 3,311.34 crores (including provisions of C 1,877.93 crores recognized in earlier years towards principal and interest). The above amount excludes de-recognition of interest income aggregating to C 339.98 crores for the current financial year (FY 2025-2026). In the opinion of the management of the Company the outstanding carry over balance in JSML is good and realisable.
Our opinion is not modified in respect of above matter. KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended 31st March, 2026. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Emphasis of matters section we have determined the matters described below to be the key audit matters to be communicated in our report:-
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S.
No.
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Description of Key Audit Matter
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How our audit addressed the key audit matters
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1
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Claims and exposures relating to taxation and litigation {as described in note no. 40(a)(i) of the standalone
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financial statements}
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As at 31st March, 2026, the Company has exposure towards
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Our procedures included the following:
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litigations relating to various matters as set out in note no. 40(a)(i) of the standalone financial statements.
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We understood from the management, assessed and tested the design and operating effectiveness of the
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Significant management judgement is required to assess such matters to determine the probability of occurrence
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Company's key controls surrounding assessment of
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of material outflow of economic resources and whether a
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litigations relating to the relevant laws and regulations.
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provision should be recognized or a disclosure should be made. The management judgement is also supported with legal advice in certain cases, as considered appropriate. Taxation and litigation exposures have been identified as a key audit matter due to:-
» Significance of these amounts and large number of
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We obtained details of claims, legal and tax disputed matters and evaluation made by the management and assessed management's position through discussions on both the probability of success in significant cases and the magnitude of potential loss;
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disputed matters with various authorities.
» Significant judgement and assumptions required by management in assessing the exposure of each case
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»
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We performed our assessment on a test basis on the underlying calculations supporting the contingent
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liabilities/other significant litigations disclosed in the
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standalone financial statements.
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to evaluate whether there is a need to set up a provision
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and measurement exposures as well as disclosure of
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We considered external legal opinions, where relevant,
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contingent liabilities.
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obtained by the management.
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Additionally, the treatment of taxation and litigation cases requires significant judgement due to the complexity of the cases, timescales for resolution and involvement of various authorities.
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We assessed the adequacy of the Company's disclosures.
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2
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Revenue Recognition
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Revenue from the sale of goods (hereinafter referred
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Our procedures included the following:
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to as "Revenue”) is recognized when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the
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Assessing the appropriateness of the Company's revenue recognition accounting policies in line with IND AS 115 ("Revenue from Contracts with Customers”) and testing thereof.
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consideration is probable. The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer, which is mainly upon delivery.
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»
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Evaluating the design and implementation of Company's
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The timing of revenue recognition is relevant to the reported performance of the Company. The management considers revenue as a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred.
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controls in respect of revenue recognition.
Performed test of details by selecting samples of revenue transactions recorded during the year and samples
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from specific period before and after year end. For such
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Owing to the multiplicity of the Company's products and volume of sales transactions, revenue is determined to be an area involving significant risk requiring significant auditor attention and is therefore considered to be a key audit matter in the current year audit
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samples selected, verified the underlying documents, which included sales invoices/contracts and dispatch/ shipping documents to ensure revenue is booked with accurate amount and in the correct period.
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Refer Note no. 3.6 - Material Accounting Policies; and
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Note no. 31 - Revenue from Operations; of the Standalone
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Performed test of details over the outstanding trade
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Financial Statements of the Company
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receivable balances which included obtaining direct independent confirmations from customers, on a sample basis, for balances outstanding.
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Performing analytical procedures over revenue recorded during the year to identify any unusual indicators/trends
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Assessed the appropriateness and adequacy of the related disclosures in standalone
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financial statements.
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In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
» Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
» Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
» Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditor's report thereon. The Annual Report is expected to be made available to us after the date of this Auditors' Report. Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
MANAGEMENT'S RESPONSIBILITY AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position/state of affairs, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
» Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of the Company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
» Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The standalone financial statements dealt with by this Report are in agreement with the books of account.
d) I n our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standards) Rules, 2015, as amended:
e) On the basis of the written representations received from the directors as on 31st March, 2026 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2026 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". Our report expresses unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls with reference to standalone financial statements.
g) With respect to the other matters to be included in the Auditor's Report in accordance with
examination, we did not come across any instance of the audit trail being tampered with, in respect of the accounting software for the period for which the audit trail feature was operating.
Additionally audit trail for prior years has been preserved by the company as per statutory requirements for record retention to the extent it was enabled and recorded in the respective years.
3. In our opinion and to the best of our information and according to the explanations given to us, the managerial remuneration for the year ended
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note No. 40(a)(i) to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or Indian accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2026.
iv.
(a) The Management has represented that, to the best of its knowledge and belief, as disclosed in Note No. 64(c) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies) including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in Note No.
64(d) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of the Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The dividend declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable. As stated in Note No. 20(h) to the standalone financial statements, the Board of Directors of the Company has proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Based on our examination, the Company has used a widely used ERP as its accounting software for maintaining its books of account during the year ended 31st March, 2026, which has a feature of recording the audit trail (edit log) facility. The audit trail (edit log) facility has been operated throughout the year for relevant transactions in the accounting software. Further, during the course of our
31st March, 2026 has been paid/provided for by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act.
For Lodha & Co LLP,
Chartered Accountants Firm Registration No. 301051E/E300284
(Gaurav Lodha)
Partner
Membership No. 507462 UDIN: 26507462EOHRBV9033
Place: New Delhi Date: 1st May, 2026
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