48Annual Report 2015

TAYO ROLLS LIMITED A Enterprise th 48 ANNUAL REPORT 2015 -16 (As on 19.08.2016) Management Team

(As on 19.08.2016)

Mr. K. Shankar Marar - Managing Director Mr. Abhijit Mitra - Vice President (Corporate) Mr. B. K. Singh - Vice President (Marketing) Mr. P. D. Mundhra - Vice President (Operations) Mr. N. P. Singh - General Manager (M & S) Mr. Suresh Padmanabhan - Dy. Chief Financial Officer Mr. Prashant Kumar - Company Secretary & Compliance Officer

REGISTERED OFFICE Annex-2, General Office Tata Steel Limited, Bistupur Jamshedpur - 831 001, Jharkhand, India

BANKERS Bank of India IDBI Bank Ltd State Bank of India HDFC Bank Ltd Axis Bank Ltd

STATUTORY AUDITORS M/s Deloitte Haskins & Sells Chartered Accountants

COST AUDITORS M/s Shome & Banerjee Cost Accountants

SECRETARIAL AUDITORS M/s P. K. Singh & Associates Company Secretaries

REGISTRAR & TRANSFER AGENTS TSR Darashaw Limited 6-10 Haji Moosa Patrawala Industrial Estate 20, Dr. E.Moses Road Mahalaxmi, Mumbai-400 011

INVESTORS' DEDICATED E-MAIL [email protected]

1 CONTENTS

Chairman's Statement 3 Highlights 4 Notice 5 Directors' Report 19 Management Discussion and Analysis 31 Annexure to Directors' Report 33 Certification by CEO & Dy. CFO 42 Certificate on Corporate Governance 43 Corporate Governance Report 44 Auditors' Report 57 Annexure to Auditors' Report 59 Balance Sheet 62 Statement of Profit and Loss 63 Cash Flow Statement 64 Notes forming part of the Financial Statements 65 Financial Statistics 93

Annual General Meeting is on Wednesday, September 21, 2016 at the Auditorium of Centre for Excellence, Jubilee Road, Bistupur, Jamshedpur 831 001 at 11.30 a.m. As a measure of economy, copies of the Annual Report will not be distributed at the Annual General Meeting. Shareholders are requested to kindly bring their copies to the meeting.

Tayo Rolls Limited visit us at : www.tayo.co.in

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Chairman's Statement

Dear Shareholders, The global steel industry is going through unprecedented challenges. Though India is a bright spot, the global challenges have had its effect on the Indian steel industry as well. Low cost imports from China, Russia and Japan, has put extreme pressure on steel companies in India. Consequent cost cutting measures adopted by the steel companies has imposed additional strain on the Roll manufacturers. While the demand for rolls was not encouraging, the prices continue to come under severe pressure. Subdued demand and delayed realizations has resulted in a fragile cash position leading to adverse performance of the roll industry as a whole. The Indian roll industry continues to reel under severe financial strain. Tayo has been facing many challenges during recent years and has been incurring losses since 2008-09 due to multiple reasons such as subdued demand growth, declining prices, delay in the ramp up of the Forged Roll Project due to worldwide economic downturn, and consequent liquidity crunch. Since then, the Promoter(s) have been extending their financial and technical support to the Company. The Company invested these resources towards improvement of equipment reliability and infrastructure, absorption of new technology, repayment of debts, working capital requirements, and loss funding. Despite the relentless efforts by the Management, and continued support from all stakeholders, especially the Promoter(s), the changes in external environment and continued sub optimal performance has resulted in continuous losses. Further, the subdued growth in infrastructure sector, over-capacity situation in the Roll and Forging industries, delayed technology absorption for next generation rolls, severe cash constraints among customers etc, have led towards higher working capital requirement and high fixed cost. The adverse impact of high unabsorbed depreciation, interest costs, inability to meet future financial obligations and continued cash loss compelled the Company to write down value of its assets by Rs. 77.88 crores, which has eroded its net worth as on 31.12.2015. As a result, your Company has been referred to the Board for Industrial and Financial Reconstruction (BIFR) under First Proviso to Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985. The Company's operating results continue to be materially affected by various factors, particularly high pricing pressures due to overcapacity in roll industry, general economic slowdown and unavailability of future financing. Considering these factors, the going concern assumption is not appropriate for preparing the financial statements. Therefore, the financial statements for FY’16 have been prepared on realizable value basis. Accordingly, the assets have been stated at the lower of their historic cost and estimated net realizable value, and the liabilities have been stated at the values at which they are expected to be discharged. Your Company has also introduced employees Voluntary Separation Scheme and suspended operations in a phased manner. I express my deep concern. Mr. K. Shankar Marar, subject to the approval of the shareholders, has been re-appointed as Managing Director of the Company for a further period of three years with effect from August 11, 2016. I am grateful to our Promoter(s) for extending their unstinted financial and technical support. I also take this opportunity to express my sincere gratitude and heartfelt thanks of entire “Tayo Family” to our shareholders, customers, bankers, suppliers, employees, Tayo Wokers Union, Board Members and other stakeholders, for their continued support to the Company and the Management.

Anand Sen Chairman (DIN: 00237914)

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HIGHLIGHTS

2015-16 2014-15 2013-14

OPERATIONAL

Production - Rolls Tonnes 6767 7719 7750

- Pig Iron Tonnes 25281 17247 20382

- Ingot Tonnes 4413 3921 4608

- Engineering Forging Tonnes 707 474 837

Sales - Rolls Tonnes 6750 7805 7610

- Pig Iron Tonnes 24474 12283 17115

- Ingot Tonnes 96 1077 634

- Engineering Forging Tonnes 707 472 827

Capacity Utilisation - Rolls Percent 50 57 57

- Pig Iron Percent 63 43 51

- Ingot Percent 22 20 23

FINANCIAL

Turnover (Gross) Rs. lakhs 14181 15756 16755

Depreciation Rs. lakhs 1541 1305 2256

Profit Before Tax Rs. lakhs (15688) (6762) (7504)

Profit After Tax Rs. lakhs (15688) (6762) (7504)

Net Worth Per Share Rupees 86.68 50.62 55.55

Transfer to General Reserve Rs. lakhs - - -

Shareholder's Funds Rs. lakhs (8894) 5194 5700

Capital Expenditure Rs. lakhs 269 2757 783

Employee’s Cost Rs. lakhs 3953 3865 3443

Dividend Percent - - -

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NOTICE

THE FORTY- EIGHTH ANNUAL GENERAL MEETING OF TAYO ROLLS LIMITED will be held at the Auditorium of Centre for Excellence, Jubilee Road, Bistupur, Jamshedpur – 831 001 on Wednesday, September 21, 2016 at 11:30 a.m. to transact the following businesses: ORDINARY BUSINESS: 1. To receive, consider and adopt the Audited Balance Sheet as on March 31, 2016 and the Audited Statement of Profit and Loss for the year ended on that date together with reports of the Board of Directors and the Auditors thereon. 2. To appoint a Director in place of Mr. Anand Sen (DIN- 00237914), who retires by rotation and, being eligible, offers himself for re- appointment. 3. To appoint Statutory Auditors and to fix their remuneration. SPECIAL BUSINESS: 4. To re- appoint Mr. K. Shankar Marar (DIN-06656658) as Managing Director: To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution: “RESOLVED THAT pursuant to Sections 196, 197, 202, 203 and any other applicable provisions of the Companies Act, 2013 (“Act”) and the rules made there under, as amended from time to time, read with Schedule V to the Act, the Company hereby approves the re-appointment and terms of remuneration of Mr. K. Shankar Marar (DIN: 06656658), as Managing Director of the Company for a further period of three years with effect from August 11, 2016 to August 10, 2019 and not liable to retire by rotation, upon the terms and conditions as mentioned in the draft agreement submitted to this meeting, the details of which are set out in the explanatory statement annexed to the Notice convening this meeting, including the remuneration to be paid in the event of loss or inadequacy of profits in any financial year, with liberty to the Board to alter and vary the terms and conditions of the said appointment in such manner so as to not exceed the limits specified in Schedule V to the Act, as may be agreed to between the Board and Mr. K. Shankar Marar within the applicable provisions of the Companies Act, 2013. RESOLVED FURTHER THAT the Board be and is hereby authorised to take all such actions/ steps as may be necessary and expedient to give effect to this resolution.” 5. Ratification of Material Related Party Transactions for FY 2015-16: To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 188 of the Companies Act, 2013 (“Act”) read with rules made there under and provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchange, in addition to the consent of the shareholders already given, approval be and is hereby given to ratify the contracts/ arrangements for availing Inter Corporate Deposits (ICDs) from the Related Parties (as detailed in the explanatory statement to the Notice) which were carried out in the ordinary course of business and which were also at arm’s length basis for a sum not exceeding Rs. 4363 lakhs during the financial year 2015-16.” 6. Approval of Material Related Party Transactions for FY 2016-17: To consider and, if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to the provisions of Section 188 of the Companies Act, 2013 read with rules made there under and provisions of SEBI (Listing Obligations and other Disclosure Requirements) Regulations, 2015 with the Stock Exchange, approval be and is hereby given to the transactions with the Related Parties (as detailed in the explanatory statement to the Notice) as per the existing contracts/ arrangements which are in the ordinary course of business and also at arm’s length basis for a sum not exceeding Rs. 18,000 lakhs for the financial year 2016-17.” 7. Ratification of Cost Auditors’ remuneration To consider and, if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution: “RESOLVED THAT pursuant to Section 148 and other applicable provisions, if any, of the Companies Act, 2013 (“Act”) and the rules made thereunder, as amended from time to time, the Company hereby ratifies the remuneration of Rs. 35,000/- (Rupees thirty five thousand only) plus out-of-pocket expenses payable to M/s. Dutta Ray & Co. Cost & Management Accountants (Firm Registration No: 000224), who are appointed as Cost Auditors of the Company to conduct Cost Audits relating to such business of the Company as may be ordered by the Central Government under the Act and the Rules made thereunder for the year ending March 31, 2017.”

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NOTES: I) A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND ON A POLL, TO VOTE INSTEAD OF HIMSELF. A PROXY NEED NOT BE A MEMBER OF THE COMPANY. THE PROXY FORM DULY COMPLETED SHOULD BE DEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY NOT LESS THAN FORTY-EIGHT HOURS BEFORE THE COMMENCEMENT OF THE MEETING. II) The Register of Members and Share Transfer books of the Company will remain closed from Thursday, September 8, 2016 till Monday, September 12, 2016 (both days inclusive) III) As per Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015, the cut off date for determining the eligibility for remote e-voting or vote at the Annual General Meeting is Thursday, September 15, 2016. IV) During FY’12, FY’14 and FY’15, your Company had issued Non-cumulative Redeemable Preference Shares to its promoters (Tata Steel Limited & Yodogawa Steel Works Limited). Your Company has not been able to pay dividend on these shares for the financial years FY’13, FY’14, FY’15 and FY’16. Therefore, according to the provision of Section 47 read with other relevant provisions of the Companies Act, 2013 and rules made thereunder, the preference shareholders shall have a right to vote on all the resolutions placed before the meeting, in the same proportion as the paid up capital in respect of equity shares bears to the paid up capital in respect of preference shares. Therefore, one preference share vote is equivalent to 10 equity shares vote. Accordingly, the Preference Shareholders are entitled to vote on all the resolutions as mentioned above. V) As per the provisions of the Companies Act, 2013, facility for making nomination is available to the shareholders in respect of the shares held by them. Nomination forms can be obtained from the Registered Office or the Registrar & Transfer Agents by the Members holding shares in physical form. Members holding shares in electronic form may obtain Nomination forms from their respective depository participants. VI) Shareholders holding shares in the physical form are requested to notify/ send the following to TSR Darashaw Limited, the Registrar & Transfer Agents to facilitate better services: (i) Any change in their address/ mandate/ bank details and; (ii) Particulars of the bank account in which they wish their dividend to be credited, in case they have not furnished it earlier. VII) Members who still have their holdings in physical form are requested to convert them into dematerialized form (under ISIN No. INE895C01011). VIII) Pursuant to Section 205A of the Companies Act, 1956, all unclaimed / unpaid dividends up to the financial year ended March 31, 1996 have been transferred to the General Revenue Account of the Central Government. Shareholders, who have not yet encashed their dividend warrant(s) for the said period, are requested to forward their claims in prescribed Form to The Companies Unpaid Dividend (Transfer to General Revenue Account of the Central Government) Rules, 1978 to Office of the Registrar of Companies, Bihar & Jharkhand, Mourya Lok, 'A' Block (4th Floor), Dak Bungalow Road, Patna -800 001. Consequent upon amendment to Section 205A of the Companies Act, 1956 and introduction of Section 205C by the Companies (Amendment) Act, 1999, the amount of dividend for the subsequent years remaining unpaid or unclaimed for a period of seven years from the date of transfer to Unpaid Dividend Account of the Company shall be transferred to the Investors Education and Protection Fund (IEPF) set up by the Government of India and no payments shall be made in respect of any such claims by the IEPF. Accordingly, the Company has transferred to the IEPF all unclaimed/unpaid dividends in respect of the financial years 1995-96 to 2007-08. Currently the Company doesn’t have any outstanding amount, which warrants transfer to the IEPF account. IX) SEBI vide its circular ref no. MRD/DoP/ Cir-05/2009 dated 20.05.2009 has clarified that for securities market transactions and off- market/ private transactions involving transfer of shares in physical form of listed companies, it shall be mandatory for the transferee(s) to furnish a copy of the PAN Card to the Company/ RTA for registration of such transfer of shares irrespective of the amount of such transaction. All intended transferee(s) are, therefore, requested to furnish a self- certified copy of their PAN Card along with the relevant transfer deed for registration of transfer of shares. Please note that the shares lodged for transfer without self- certified copy of PAN Card of the transferee(s) shall be returned under objection.

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X) Survivor(s) of the deceased shareholders are advised to forward their request with full details and supporting documents to the Registrar & Transfer Agents of the Company, for early transmission of Shares.

XI) Members desirous of any additional information as regards the Accounts are requested to write to the Company at an early date so as to enable the Management to keep the information ready at the meeting.

XII) In accordance with Section 20 of the Companies Act, 2013 read with Rule 35 the Companies (Incorporation) Rules, 2014, the Annual Reports are sent by electronic mode to those members whose email-ids are registered with the Depository for communication purposes. The members holding shares in physical form and who have not registered their email –ids are requested to register the same with TSR Darashaw Limited, the Registrars and Transfer Agents of the Company.

XIII) Members are requested to bring the admission slips along with their copies of the Annual Report to the meeting.

XIV) Process for members opting for e-voting:

The instructions and the procedure for the e-voting are as follows:

I. In compliance with provisions of Section 108 of the Companies Act, 2013, Rule 20 of the Companies (Management and Administration) Rules, 2014 as amended by the Companies (Management and Administration) Amendment Rules, 2015 and read with Regulation 44 of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015, the Company is pleased to provide members facility to exercise their right to vote on resolutions proposed to be considered at the Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services. The facility of casting the votes by the members using an electronic voting system from a place other than venue of the AGM) (“remote e-voting”) will be provided by National Securities Depository Limited (NSDL).

II. The facility for voting through ballot paper shall be made available at the AGM and the members attending the meeting who have not cast their vote by remote e-voting shall be able to exercise their rights at the meeting through ballot paper.

III. The members who have cast their vote by remote e-voting prior to the AGM may also attend the AGM, but shall not be entitled to cast their vote again.

IV. The remote e-voting period commences on Sunday, September 18, 2016 (9:00 am) and ends on Tuesday, September 20, 2016 (5:00 pm). During this period members of the Company, holding shares either in physical form or in dematerialized form, as on the cut-off date of Thursday, September 15, 2016, may cast their vote by remote e-voting. The remote e-voting module shall be disabled by NSDL for voting thereafter. Once the vote on a resolution is cast by the member, the member shall not be allowed to change it subsequently.

V. The process and manner for remote e-voting are as under:

A. In case a Member receives an email from NSDL [for members whose email IDs are registered with the Company/Depository Participants(s)] :

(i) Open email and open PDF file viz; “remote e-voting.pdf” with your Client ID or Folio No. as password. The said PDF file contains your user ID and password/PIN for remote e-voting. Please note that the password is an initial password.

(ii) Launch internet browser by typing the following URL: https://www.evoting.nsdl.com/

(iii) Click on Shareholder - Login

(iv) Put user ID and password as initial password/PIN noted in step (i) above. Click Login.

(v) Password change menu appears. Change the password/PIN with new password of your choice with minimum 8 digits/characters or combination thereof. Note new password. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.

(vi) Home page of remote e-voting opens. Click on remote e-voting: Active Voting Cycles.

(vii) Select “EVEN” of “ Tayo Rolls Limited”.

(viii) Now you are ready for remote e-voting as Cast Vote page opens.

(ix) Cast your vote by selecting appropriate option and click on “Submit” and also “Confirm” when prompted.

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(x) Upon confirmation, the message “Vote cast successfully” will be displayed. (xi) Once you have voted on the resolution, you will not be allowed to modify your vote. (xii) Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/JPG Format) of the relevant Board Resolution/ Authority letter etc. together with attested specimen signature of the duly authorized signatory(ies) who are authorized to vote, to the Scrutinizer through e-mail to [email protected] with a copy marked to [email protected] B. In case a Member receives physical copy of the Notice of AGM [for members whose email IDs are not registered with the Company/Depository Participants(s) or requesting physical copy] : (i) Initial password is provided as below/at the bottom of the Attendance Slip for the AGM : EVEN (Remote e-voting Event Number) USER ID PASSWORD/PIN (ii) Please follow all steps from Sl. No. (ii) to Sl. No. (xii) above, to cast vote. VI. In case of any queries, you may refer the Frequently Asked Questions (FAQs) for Members and remote e-voting user manual for Members available at the downloads section of www.evoting.nsdl.com or call on toll free no.: 1800-222-990. VII. If you are already registered with NSDL for remote e-voting then you can use your existing user ID and password/PIN for casting your vote. VIII. You can also update your mobile number and e-mail id in the user profile details of the folio which may be used for sending future communication(s). IX. The voting rights of members shall be in proportion to their shares of the paid up equity share capital of the Company as on the cut-off date of September 15, 2016. X. Any person, who acquires shares of the Company and become member of the Company after dispatch of the notice and holding shares as of the cut-off date i.e. September 15, 2016, may obtain the login ID and password by sending a request at [email protected] or [email protected] However, if you are already registered with NSDL for remote e-voting then you can use your existing user ID and password for casting your vote. If you forgot your password, you can reset your password by using “Forgot User Details/ Password” option available on www.evoting.nsdl.com or contact NSDL at the following toll free no.: 1800-222-990. XI. A member may participate in the AGM even after exercising his right to vote through remote e-voting but shall not be allowed to vote again at the AGM. XII. A person, whose name is recorded in the register of members or in the register of beneficial owners maintained by the depositories as on the cut-off date only, shall be entitled to avail the facility of remote e-voting as well as voting at the AGM through ballot paper. XIII. Mr. Pratap Kumar Chakrabraty, Practicing Company Secretary, Partner, M/s P. K. Singh & Associates, Company Secretaries, has been appointed as the Scrutinizer to scrutinize the voting and remote e-voting process in a fair and transparent manner. XIV. The Chairman shall at the end of discussion on the resolutions on which voting is to be held at the AGM allow voting with the assistance of Scrutinizer, by use of “ballot Paper” for all those members who are present at the AGM but have not cast their votes by availing the remote e-voting facility. XV. The Scrutinizer shall after the conclusion of voting at the Annual General Meeting, will first count the votes cast at the meeting and thereafter unblock the votes cast through remote e-voting in the presence of at least two witnesses not in the employment of the Company and shall make, not later than three days of the conclusion of the AGM, a consolidated scrutinizer’s report of the total votes cast in favour or against, if any, to the Chairman or a person authorized by him in writing, who shall countersign the same and declare the result of the voting forthwith. XVI. The Results declared alongwith the report of the Scrutinizer shall be placed on the website of the Company at www.tayo.co.in and on the website of NSDL immediately after the declaration of result by the Chairman or a person authorized by him in writing. The results shall also be immediately forwarded to the BSE Limited, Mumbai.

Jamshedpur By Order of the Board of Directors August 19, 2016 Registered Office: Prashant Kumar Annex – 2, General Office Tata Steel Limited, Bistupur, Company Secretary & Compliance Officer Jamshedpur- 831 001

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ANNEXURE TO NOTICE Explanatory Statements pursuant to Section 102 of the Companies Act, 2013

As required under Section 102 of the Companies Act, 2013 (“Act”) the following Explanatory Statements set out all material facts relating to the special business mentioned in Item Nos. 4 to 7. Item No. 4: Mr. K. Shankar Marar (DIN- 06656658) was appointed as Managing Director of the Company for a period of three years with effect from August 11, 2013. His existing term in office has expired on August 10, 2016. On the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on July 18, 2016, subject to the approval of the shareholders by special resolution and the Central Government, if required, have re-appointed Mr. Marar as Managing Director for a further period of three years with effect from August 11, 2016 till August 10, 2019. Mr. Marar is a Metallurgical Engineer from National Institute of Technology, Rourkela and did his Business Management from Symbiosis Institute of Business Management, Pune. Mr. Marar is a certified practitioner in Total Quality Management (from JUSE) and ISO / OHSAS. He has played a significant role in embedding TQM practices in strategy formulation, deployment and planning (Hoshin Kanri). Mr. Marar has undergone leadership programmes including Tata Group Executives Leadership Seminar (in collaboration with Ross School of Business, Michigan), Tata Group Strategic Leadership Seminar (in collaboration with Harvard Business School) and Tata Global Leadership Development Programme. He has also contributed to several benchmark performances in steel making and was conferred the “Young Metallurgist of the Year” Award by the Ministry of Steel, Government of India. Prior to joining Tata Steel in 2005, Mr. Marar was with SAIL & JSW Steel Ltd, which gave him exposure to Projects, Operations, Technology and Quality. Mr. Marar is a member of Indian Institute of Metals, Confederation of Indian Industry (CII). The terms and condition for re-appointment of Mr. K. Shankar Marar is as follows: 1.0 Term and Termination: 1.1 Subject as hereinafter provided, this Agreement shall remain in force up to August 10, 2019 from the date of appointment unless terminated earlier. 1.2 This Agreement may be terminated earlier, without any cause, by either Party by giving to the other Party six months’ notice of such termination or the Company paying six months’ remuneration in lieu of such notice. 2.0 Duties & Powers: 2.1 The Managing Director shall devote his whole time and attention to the business of the Company and perform such duties as may be entrusted to him by the Board from time to time and separately communicated to him and exercise such powers as may be assigned to him, subject to the superintendence, control and directions of the Board in connection with and in the best interests of the business of the Company and the business of one or more of its associated companies and / or subsidiaries, including performing duties as assigned to the Managing Director from time to time by serving on the boards of such associated companies and / or subsidiaries or any other executive body or any committee of such a company. 2.2 The Managing Director shall not exceed the powers so delegated by the Board. 2.3 The Managing Director undertakes to employ the best of his skill and ability and to make his utmost endeavors to promote the interests and welfare of the Company and to conform to and comply with the policies and regulations of the Company and all such orders and directions as may be given to him from time to time by the Board. 2.4 Mr. K. Shankar Marar shall undertake his duties from such location as may be directed by the Board. 3.0 Remuneration 3.1 So long as the Managing Director performs his duties and conforms to the terms and conditions contained in this Agreement, he shall, subject to such approvals as may be required, be entitled to the following remuneration subject to deduction at source of all applicable taxes in accordance with the laws for the time being in force. (i) Basic Salary: Rs. 1,40,000/- (Rupees one lakh forty thousand only) per month upto a maximum of Rs. 3,50,000/- (Rupees three lakh fifty thousand only) per month. The annual increment, which will be effective from 1st April each year, will be decided by the Board / Committee on merit and will take into account the Company’s performance, as well. His current basic salary would be Rs. 1,84,200/- (Rupees one lakh eighty four thousand two hundred only) per month.

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(ii) Benefits, Perquisites & Allowances: In addition to the basic salary referred above, the Managing Director would be entitled to: (a) Rent free unfurnished residential accommodation, the Company bearing the cost of repairs, maintenance, society charges and utilities (e.g. gas, electricity and water charges) for the said accommodation. “Or” House rent, house maintenance and utility allowance aggregating 85% of basic salary (In case residential accommodation is not provided by the Company to the Managing Director). (b) Hospitalisation, transport, telecommunication and other facilities: i. Hospitalisation and major medical expenses for self, spouse and dependant children; ii. Car with driver provided / maintained by the Company for official and personal use; iii. Telecommunication facilities including broadband, internet and fax. (c) Other perquisites and allowances given below subject to a maximum of 55% of the annual salary:

Other Allowances 33.34% of basic Leave travel concession/ Allowance 8.33% of basic

Medical Allowance 8.33% of basic

Monthly Supplementary Allowances/ 5.00% of basic Personal Accident Insurance / Club Membership fees Total 55.00% of basic

(d) Contribution to Provident Fund, Superannuation Fund or Annuity Fund and Gratuity Fund, as per the Rules of the Company. (e) Managing Director would be entitled to leave in accordance with the Rules of the Company. Privilege Leave earned but not availed by the Managing Director would be encashable in accordance with the Rules of the Company. (iii) Commission / Performance Bonus: In addition to the salary, perquisites and allowances payable, the Managing Director shall be entitled to the annual performance linked bonus or Commission subject to the overall ceilings as stipulated in Sections 197 and 198 of the Companies Act, 2013. The specific amount payable to the Managing Director would be based on performance as evaluated by the Board or Committee thereof. These amount, if any, would be payable annually after the Annual Accounts have been approved by the Board and adopted by the shareholders. (iv) Minimum Remuneration: In the event of absence of absence or inadequacy of profits of the Company in any financial year during the period of the Managing Director’s appointment, the Company shall pay to the Managing Director remuneration by way of salary, benefits, perquisites and allowances, performance linked bonus/ commission, as specified above, subject to the provisions of Companies Act, 2013 and Schedule V to the Act. (v) Managing Director shall not, so long as he functions as the Managing Director of the Company, be entitled to receive any fees for attending any meetings of the Board or Committee thereof. (vi) The entire remuneration package of the Managing Director shall however be subject to the overall ceiling laid down under Section 196 and 197 of the Companies Act, 2013 read with Schedule V to the Companies Act, 2013 including any modification or amendment thereto. 4.0 Variation The terms and conditions of the appointment of the Managing Director and / or this Agreement may be altered and varied from time to time by the Board as it may, in its discretion deem fit, irrespective of the limits stipulated under Schedule V to the Act or any amendments made hereafter in this regard in such manner as may be agreed to between the Board and the Managing Director, subject to such approvals as may be required.

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Forty-Eighth annual report 2015-16

5.0 Intellectual Property 5.1 The Parties acknowledge that the Managing Director may make, discover or create Intellectual Property (IP) in the course of his employment and agree that in this respect the Managing Director has a special obligation to protect such IP and use it to further the interests of the Company, or any of its associated companies or subsidiaries. 5.2 Subject to the provisions of the laws relating to intellectual property for the time being in force in India, if at any time during his employment, the Managing Director makes or discovers or participates in the making or discovery of any IP relating to or capable of being used in the business for the time being carried on by the Company or any of its subsidiaries or associated companies, full details of the Intellectual Property shall immediately be communicated by him to the Company and such IP shall be the absolute property of the Company. At the request and expense of the Company, the Managing Director shall give and supply all such information, data, drawings and assistance as may be required to enable the Company to exploit the IP to its best advantage and the Managing Director shall execute all documents and do all things which may be necessary or desirable for obtaining patent or other protection for the Intellectual Property in such parts of the world as may be specified by the Company and for vesting the same in the Company or as it may direct. 5.3 The Managing Director hereby irrevocably appoints the Company as his attorney in his name and on his behalf to sign or execute any such instrument or do any such thing and generally to use his name for the purpose of giving to the Company or its nominee the full advantage of the provisions of this clause and if in favour of any third Party, a certificate in writing signed by any director or the secretary of the Company that any instrument or act falls within the authority conferred by this clause shall be conclusive evidence that such is the case. 5.4 If the IP is not the property of the Company, the Company shall, subject to the provisions of the applicable laws for the time being in force, have the right to acquire for itself or its nominee, the Managing Director’s rights in the IP within 3 months after disclosure pursuant to clause 5.2 above on fair and reasonable terms. 5.5 The rights and obligations under this clause shall continue in force after termination of the Agreement in respect of IP relating to the period of the Managing Director’s employment under the Agreement and shall be binding upon his heirs and legal representatives. 6.0 Confidentiality 6.1 The Managing Director is aware that in the course of his employment he will have access to and be entrusted with information in respect of the business and finances of the Company including intellectual property, processes and product specifications, etc. and relating to its dealings, transactions and affairs and likewise in relation to its subsidiaries, associated companies, customers or clients all of which information is or may be of a confidential nature. 6.2 The Managing Director shall not except in the proper course of performance of his duties during or at any time after the period of his employment or as may be required by law divulge to any person whatever or otherwise make use of and shall use his best endeavours to prevent the publication or disclosure of any Confidential Information of the Company or any of its subsidiaries or associated companies or any of its or their suppliers, agents, distributors or customers. 6.3 All notes, memoranda, documents and Confidential Information concerning the business of the Company and its subsidiaries or associated companies or any of its or their suppliers, agents, distributors or customers which shall be acquired, received or made by the Managing Director during the course of his employment shall be the property of the Company and shall be surrendered by the Managing Director to the Company upon the termination of his employment or at the request of the Board at any time during the course of his employment. 7.0 Non-competition The Managing Director covenants with the Company that he will not, during the continuance of his employment with the Company, without the prior written consent of the Board, carry on or be engaged, directly or indirectly, either on his own behalf or on behalf of any person, or as manager, agent, consultant or employee of any person, firm or company, in any activity or business, in India or overseas, which shall directly or indirectly be in competition with the business of the Company or its holding company or its subsidiaries or associated companies. The application of this clause needs to be read in conjunction with the relevant clauses in the Tata Code of Conduct as referred below. 8.0. Tata Code of Conduct The provisions of the Tata Code of Conduct shall be deemed to have been incorporated into this Agreement by reference. The Managing Director shall during his term, abide by the provisions of the Tata Code of Conduct in spirit and in letter and commit to assure its implementation. 9.0 Selling Agency The Managing Director, so long as he functions as such, undertakes not to become interested or otherwise concerned, directly or through his spouse and / or children, in any selling agency of the Company.

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Forty-Eighth annual report 2015-16

10.0 Personnel Policies All Personnel Policies of the Company and the related Rules which are applicable to other employees of the Company shall also be applicable to the Managing Director, unless specifically provided otherwise. 11.0 Summary termination of employment The employment of the Managing Director may be terminated by the Company without notice or payment in lieu of notice: a. if the Managing Director is found guilty of any gross negligence, default or misconduct in connection with or affecting the business of the Company or any subsidiary or associated company to which he is required by the Agreement to render services; or b. in the event of any serious or repeated or continuing breach (after prior warning) or non-observance by the Managing Director of any of the stipulations contained in the Agreement; or c. in the event the Board expresses its loss of confidence in the Managing Director. 12.0 Termination due to physical / mental incapacity In the event the Managing Director is not in a position to discharge his official duties due to any physical or mental incapacity, the Board shall be entitled to terminate his contract on such terms and condition, as the Board may consider appropriate in the circumstances. 13.0 Resignation from directorships Upon the termination by whatever means of his employment under the Agreement: a. the Managing Director shall immediately cease to hold offices held by him in any holding company, subsidiaries or associate companies without claim for compensation for loss of office by virtue of Section 167 (1)(h) of the Act and shall resign as trustee of any trusts connected with the Company. b. the Managing Director shall not without the consent of the Board at any time thereafter represent himself as connected with the Company or any of its subsidiaries and associated companies. 14.0 Agreement co-terminus with employment / directorship If and when this Agreement expires or is terminated for any reason whatsoever, Mr. K. Shankar Marar will cease to be the Managing Director and also cease to be a Director of the Company. If at any time, the Managing Director ceases to be a Director of the Company for any reason whatsoever, he shall cease to be the Managing Director and this Agreement shall forthwith terminate. If at any time, the Managing Director ceases to be in the employment of the Company for any reason whatsoever, he shall cease to be a Director and Managing Director of the Company. 15.0 Other Directorships The Managing Director covenants with the Company that he will not during the continuance of his employment with the Company accept any other directorships in any company or body corporate without the prior written consent of the Board. 16.0. Non-Solicitation The Managing Director covenants with the Company that he will not for a period of one year immediately following the termination of his employment under this Agreement, without the prior written consent of the Board endeavor or entice away from the Company any officer above Chief level who has at any time during the one year immediately preceding such termination been employed or engaged by the Company or any subsidiaries or associated companies at any time during the one year immediately preceding termination. 17.0 Notices Notices may be given by either Party by letter addressed to the other Party at, in the case of the Company, its registered office for the time being and in the case of the Managing Director his last known address and any notice given by letter shall be deemed to have been given at the time at which the letter would be delivered in the ordinary course of post or if delivered by hand upon delivery and in proving service by post it shall be sufficient to prove that the notice was properly addressed and posted by hand or by electronic mail. In accordance with the provisions of Sections 196, 197, 202, 203 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 and Rules made thereunder and as amended from time to time, the terms of appointment of Mr. K. Shankar Marar, as Managing Director are placed before the Members in the Annual General Meeting for their approval. In the event the Company has no profits or inadequate profits in any financial year, approval of the shareholders is sought by way of special resolution for payment of remuneration to Mr. K. Shankar Marar, as Managing Director, as laid down in Section II of Part II of Schedule V to the Companies Act, 2013. This will be valid for the aforesaid period of his appointment.

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The draft agreement to be entered into with Mr. K. Shankar Marar is available for inspection by the Members of the Company at its registered office between 11.00 a.m. to 1.00 p.m. on any working day. The proposed resolution is in the interest of the Company and your Directors commend resolution at Item No. 4 for your approval. None of the Directors or Key Managerial Personnel of the Company or their relatives except Mr. K. Shankar Marar and his relatives, are concerned or interested in the aforesaid resolution. Item No. 5: As per Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the Companies (Meetings of Board and its Powers) Rules, 2014, all material related party transactions require approval of the shareholders. Transaction(s) with a related party shall be considered as material if the transaction(s) to be entered into individually or taken together with previous transaction(s) during the financial year exceeds 10 % of the annual consolidated turnover of the Company as per last audited financial statements of the Company. Accordingly, the turnover for FY’15 was approx. Rs. 14918 lakhs and 10% of which is equal to Rs 1491 lakhs. At 47th Annual General Meeting held on August 20, 2015, the shareholders of the Company had approved the material related party transactions with the Related Parties for the financial year 2015-16. During the financial year 2015-16, apart from other transactions, Tayo received Inter Corporate Deposit of Rs. 4363 lakhs from Tata Steel Limited. The approval of shareholders is sought by way of ordinary resolution to ratify the availment of Inter Corporate Deposits (ICDs) of Rs.4363 lakhs during financial year 2015-16, as follows:

Sl no. Description Details a. Name of the related party Tata Steel Limited b. Name of the Director or Key Managerial Person who None is related, if any c. Nature of relationship Tata Steel Ltd is a holding Company having 54.45% shares in the paid-up capital of the Company. d. Nature, material terms, monetary value and particulars ØInter Corporate Deposit repayable on demand of the contract or arrangement Inter Corporate Ø Value – Rs. 4363 Lakhs. Deposit : Ø an interest rate in the range of 12.50% to 13.00% e. Any other information relevant or important for the The Credit rating of the Company was not good therefore, the members to take decision on the resolution Company found it difficult to arrange fund from other sources at a rate of 12.50%.

According to the provisions of Section 188 of the Companies Act, 2013 read with Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all entities falling under the definition of “Related Party” under Section 2(76) of the Companies Act, 2013, irrespective of the fact whether the entity is a related party to the transaction or not, shall abstain from voting on resolution mentioned at Item No. 5 of the Notice. The proposed resolution is in the interest of the Company and your Directors commend resolution at Item No. 5 for your approval. None of the Directors and the Key Managerial Personnel of the Company including their relatives are concerned or interested in aforesaid resolution. Item No. 6: As per Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the Companies (Meetings of Board and its Powers) Rules, 2014, all material related party transactions require approval of the shareholders. Transaction(s) with a related party shall be considered as material if the transaction(s) to be entered into individually or taken together with previous transaction(s) during the financial year exceeds 10 % of the annual consolidated turnover of the Company as per last audited financial statements of the Company. Accordingly, the turnover for FY’16 was approx. Rs. 13596 lakhs and 10% of which is equal to Rupees 1359 lakhs. The expected transactions during FY’17 with the following related parties are likely to be more than 10% of the consolidated turnover of the Company for FY’16. Hence, it is proposed to secure approval of the shareholders by way of ordinary resolution.

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Forty-Eighth annual report 2015-16

Sl. No. Description Details a. Name of related the party Tata Steel Limited b. Name of the Director or Key Managerial Person None who is related, if any c. Nature of relationship Tata Steel Ltd is a holding Company having 54.45% shares in the paid-up capital of the Company. d. Nature, material terms, monetary value and Purchase of Material: particulars of the contract or arrangement Ø Purchase of Scrap, Steel Material and Hot Metal for Internal Consumption etc. Ø Value – Rs. 815 Lakhs. Ø Scrap required was purchased as per technical specification based on production requirements. Ø The price is determined through auction mechanism. Services Availed: Ø Availing services towards Security/Township/Medical and Power, etc. Ø Value – Rs. 383 Lakhs Ø Charges are uniform for all group companies. Ø Tata Steel is the only reliable service provider in the area for the above services. Sale of Products: Ø Supply and Sale of Rolls, Pig Iron etc. manufactured by the Company. Ø Value – Rs. 1393 Lakhs Ø The products are sold at different terms and conditions depending on grades, size and metallurgical properties. Ø Prices are determined based on estimation of variable costs plus contribution. Services Rendered: Ø Services for machining Ø Value – Rs. 46 lakhs. Ø Price is determined based on estimation of variable cost plus contribution. Ø Prices are negotiated with customers and orders are finalized based on market forces. Ø Cost estimation was vetted & certified by technical experts. Conversion Charges: Ø Conversion of Iron Ore, Coke and Lime Stone, supplied by Tata Steel to Tayo under conversion agreement. Ø Value – Rs. 871 Lakhs Ø Raw Material is supplied by Tata Steel to Tayo for conversion into Pig Iron under a Conversion Agreement. Ø The conversion, consignment and marketing agency charges are designed to ensure Tayo to recover its cost plus mark up. Issue of Inter Corporate Deposits Ø Inter Corporate Deposit repayable on demand Ø Value – Rs. 7000 Lakhs. Ø an interest rate in the range of 12.50% to 13.00% Ø The Credit rating of the Company is not good therefore, the Company fund it difficult to arrange fund from other sources at a rate of 12.50%. Issue of Redeemable Preference Shares: Ø Issue of Redeemable Preference Shares Ø Value - Rs. - 6400 Lakhs Ø Coupon rate – 7.17% Ø Junior to all Unsubordinated creditors, pari passu with any further issuance of Preference shares, senior only to ordinary Share capital and any other securities at par with ordinary Share capital of the Issuer.

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Forty-Eighth annual report 2015-16

Ø Issuer shall redeem the preference shares together with all arrears of dividend, if any, in three equal instalments at the end of 8th year from the date of issue. e. Any other information relevant or important for the Ø The quality of the scrap is most suitable for our product and members to take decision on the resolution delivery is also committed. Ø Tayo is not in position to raise/obtain funds from any external sources, but it requires funds for discharging its financial commitments, to the extent possible, towards its various stakeholders. TSL, as the parent entity, has been requested to provide necessary funds as part of its shareholder service, solely in its capacity as the parent company.

Sl No. Description Details

a. Name of related party JUSCO Ltd b. Name of the Director or Key Managerial Person None who is related, if any c. Nature of relationship JUSCO Ltd is a 100% subsidiary of Tata Steel Limited. d. Nature, material terms, monetary value and Ø Availing Power from JUSCO. particulars of the contract or arrangement Ø Value – Rs. 816 Lakhs. Ø Company has entered into a power agreement for supply of electricity. Ø JUSCO charges a rate as finalised by JSERC. e. Any other information relevant or important for the JUSCO’s quality of power supply is better and cheaper members to take decision on the resolution than the JSEB, the other licensee in the area.

According to the provisions of Section 188 of the Companies Act, 2013 read with Regulation 23(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, all entities falling under the definition of “Related Party” under Section 2(76) of the Companies Act, 2013, irrespective of the fact whether the entity is a related party to the transaction or not, shall abstain from voting on resolution mentioned at Item No. 6 of the Notice. The proposed resolution is in the interest of the Company and your Directors commend resolution at Item No. 6 for your approval. None of the Directors and the Key Managerial Personnel of the Company including their relatives are concerned or interested in aforesaid resolution. Item No. 7: The Company is directed, under Section 148 of the Act to have the audit of its cost records conducted by a cost accountant in practice. The Board of your Company has, on the recommendation of the Audit Committee, approved the appointment of M/s Dutta Ray & Co. Cost & Management Accountants (Firm Registration No: 000224) as the Cost Auditors of the Company to conduct Cost Audits relating to such businesses of the Company as may be ordered by the Central Government under the Act and the Rules made thereunder for the year ending March 31, 2016, at a remuneration of Rs.35,000/- (Rupees thirty five thousand only) plus out-of-pocket expenses. M/s. Dutta Ray & Co. Cost & Management Accountants, have furnished a certificate regarding their eligibility for appointment as Cost Auditors of the Company. M/s. Dutta Ray & Co. Cost & Management Accountants, have vast experience in the field of cost audit. On the recommendation of the Audit Committee, the Board has approved a remuneration of Rs. 35,000/- (Rupees thirty five thousand only) plus out-of-pocket expenses to M/s. Dutta Ray & Co., Cost & Management Accountants as the Cost Auditors and ratification of the shareholders is sought for the same by an ordinary resolution at Item No. 7. The proposed resolution is in the interest of the Company and your Directors commend resolution at Item No. 7 for your approval. None of the Directors and the Key Managerial Personnel of the Company including their relatives are concerned or interested in aforesaid resolution.

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Forty-Eighth annual report 2015-16

Information relevant to the appointment of Mr. K. Shankar Marar as the Managing Director, as required under Section II of Part II of Schedule V to the Companies Act, 2013 1. General Information: i) Nature of Industry: The Company is engaged in manufacture of Steel Rolls, Steel base Rolls and Cast Iron Rolls, Forged Rolls, Ingots, Pig Iron etc. The Company has set up facilities to manufacture Forging Quality Ingots, Round Ingots, Engineering Forgings and Forged Rolls. ii) Date of commencement of commercial production: The Company was incorporated on February 2, 1968, and started commercial production from March 01, 1970 for Cast & Steel Rolls. The commercial production of MBF commenced on February 01, 2005. The Company also started the commercial production of Forging Quality Ingots, Engineering Forgings and Forged Rolls. iii) In case of new companies, expected date of commencement of activities as per Project approved by financial institutions appearing in the prospectus: Not applicable. iv) Financial performance based on given indicators - as per published audited financial results for the year ended March 31 , 2016:: Particulars (Rupees in Lakhs) Turnover & Other Income 12787.92 Profit before tax (15687.73) Profit after tax (15687.73) Net Worth (8894.84)

vi) Foreign investments or collaborators, if any: M/s Yodogawa Steel Works Limited and Sojitz Corporation of Japan, hold 15,36,704 (14.98%) and 3,07,341 (3.00%) equity shares of Rs.10/- each, respectively. Apart from this, M/s. Yodogawa Steel Works Limited had also invested Rs. 20.00 crores in 8.50% non-cumulative Redeemable Preference Shares of Rs. 100/- each. II. Information about the appointee: i) Background Details: Mr. K. Shankar Marar was appointed as Chief Executive Officer of the Company with effect from August 1, 2013 and subsequently w.e.f. August 11, 2013, Mr. Marar was appointed as Managing Director by the Board of Directors for a period of 3 years. The existing tenure of three years has expired on August 10, 2016. Mr. Marar is a Metallurgical Engineer from National Institute of Technology, Rourkela and did his Business Management from Symbiosis Institute of Business Management, Pune. Mr. Marar is a certified practitioner in Total Quality Management (from JUSE) and ISO / OHSAS. He has played a significant role in embedding TQM practices in strategy formulation, deployment and planning (Hoshin Kanri). Mr. Marar is having rich experience of 25 years at various positions in different Companies. ii) Past Remuneration drawn: During the financial year 2015-16 Rs. lakhs Mr. K. Shankar Marar 40.69* * including retiral benefits. iii) Recognition & Awards/Achievements: He has contributed to several benchmark performances in steel making and was conferred the “Young Metallurgist of the Year” Award by the Ministry of Steel Government of India. iv) Job Profile and suitability: Mr. K. Shankar Marar was appointed as Managing Director w.e.f. August 11, 2013 for a period of 3 years. The existing tenure of Mr. Marar has expired on August 10, 2016. Mr. Marar is a Metallurgical Engineer from National Institute of Technology, Rourkela and did his Business Management from Symbiosis Institute of Business Management, Pune. Mr. Marar is a certified practitioner in Total Quality Management (from JUSE) and ISO / OHSAS. He has played a significant role in embedding TQM practices in strategy formulation, deployment and planning (Hoshin Kanri). Mr. Marar is having rich experience of 25 years at various positions in different Companies. Prior to joining Tata Steel in 2005, Mr. Marar was with SAIL & JSW Steel Ltd, which gave him exposure to Projects, Operations, Technology, Quality, Planning and Strategy. The Board considered Mr. K. Shankar Marar suitable for the position of Managing Director of the Company due to vast experience and managerial skill possessed by him.

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Forty-Eighth annual report 2015-16

v) Remuneration proposed:

Salary : Rs. 1,40,000 /- (Rupees one lakh forty thousand only) per month upto a maximum of Rs. 3,50,000 /- (Rupees three lakh fifty thousand only) per month. The annual increment, which will be effective from 1st April each year, will be decided by the Board / Committee and will be merit-based and take into account the Company's performance, as well. His current basic salary would be Rs. 1,84,200 /- (Rupees one lakh eighty four thousand two hundred only) per month. Benefits, Perquisites & Allowances Perquisites and Allowances will be subject to an overall ceiling of 140% of the annual salary as may be fixed by the Board of Directors from time to time. Commission / Performance Bonus At the discretion of the Board within the stipulated limit under the Act. Minimum Remuneration in case of Salary, incentive remuneration and perquisites and allowances as specified above. inadequacy of profits during any financial year.

a. Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person (in case of expatriates, the relevant details would be with respect to the country of his origin): Taking into consideration the size of the Company, the profile of Mr. K. Shankar Marar, responsibility to be shouldered by him and the industry bench mark, the remuneration proposed is commensurate with the remuneration packages paid to similar senior level executives in other companies. b. Pecuniary relationship directly or indirectly with the Company or relationship with the managerial personnel, if any: Beside the remuneration proposed, the Managing Director do not have any other pecuniary relationship with the Company and its managerial personnel’s. III. Other Information: (i) Reasons of loss or inadequate profits: The Company has been making moderate profits since inception. The Company has been incurring losses since FY’09 due to multiple reasons, such as subdued growth in the infrastructure segment (especially the steel sector), over-capacity situation in the Foundry and Forging industry, onset of the Global Economic Crisis resulting in delayed commissioning and ramp-up of the Forged Roll Project, and challenges related to technology absorption for next generation rolls. Severe cash constraints among customers resulted in strain on the Company’s working capital requirement, leading to low capacity utilization and interrupted production, having significant impact on the operating efficiency. Despite the challenging conditions, the Company has made all out efforts to improve the business performance by working on operating efficiency, cost and quality. The low returns coupled with impact of high unabsorbed depreciation and interest costs, resulted in erosion of the net worth of the Company. The Company has been referred to the BIFR.The financial statements of the Company have also been prepared on a realizable value basis. The assets have been stated at the lower of their historic cost and estimated net realizable value, and the liabilities have been stated at the values at which they are expected to be discharged. (ii) Steps taken or proposed to be taken for improvement: The net worth of the Company is fully eroded and the Company has been referred to the BIFR. (iii) Expected increase in productivity and profits in measurable terms: Not Applicable

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Forty-Seventh annual report 2015-16

Details of Directors seeking appointment / re-appointment in the forthcoming Annual General Meeting (Pursuant to Regulation 36(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Name of Director Mr. Anand Sen DIN 00237914 Date of birth 17.09.1959 Date of appointment 18.01.2008 Expertise in specific functional areas In the area of Marketing and Sales, Strategy and Business Leadership. Qualifications Metallurgical Engineer, from IIT, Kharagpur, MBA from IIM, Kolkata and executive MBA from CEDEP at INSEAD. Directorship held in other Public Companies (excluding The Tinplate Co. of India Limited Foreign Companies) as on March 31, 2016 Tata Bluescope Limited Jamshedpur Continuous Annealing Processing Co. Pvt. Ltd. Nat Steel Asia & NatSteel Holdings Pte. Ltd. Tata Steel Odisha Limited Tata Steel Processing & Distribution Limited Chairmanship / Membership of committees of other Public The Tinplate Co. of India Limited – Shareholders Companies (includes only Audit Committee and Stakeholders Grievances’ Committee – Member Relationship Committee) as on March 31, 2016 Tata Bluescope Limited – Audit Committee - Member Tata Steel Processing & Distribution Limited – Audit Committee - Member Shareholding in the Company as on March 31, 2016 NIL Relationship between Directors inter-se None Category Promoter, Non- Independent, Non-Executive Chairman.

Name of Director Mr. K. Shankar Marar DIN 06656658 Date of birth 19.11.1969 Date of appointment 11.08.2013 Expertise in specific functional areas TQM practices in strategy formulation, deployment and planning (Hosin Kanri). Qualifications Metallurgical Engineer from NIT, Rourkela & Business Management from Symbiosis School of Management. Directorship held in other Public Companies (excluding NIL Foreign Companies) as on March 31, 2016 Chairmanship / Membership of committees of other Public NIL Companies (includes only Audit Committee and Stakeholders Relationship Committee) as on March 31, 2016 Shareholding in the Company as on March 31, 2016 NIL Relationship between Directors inter-se None Category Executive Director

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Forty-Eighth annual report 2015-16

Directors' Report To the Members, The Directors present the Forty- Eighth Annual Report on the business and operations of your Company along with the financial statements for the year ended March 31, 2016. 1. FINANCIAL RESULTS:

Particulars Current Year Previous Year Rupees Lakhs Rupees Lakhs a) Profit/(Loss) before Depreciation, tax and exceptional Items (5233) (4663) b) Deduct: Depreciation 1541 1305 c) Profit/ (Loss) before tax and exceptional items (6774) (5968) d) Add: (Deduct) exceptional items (8914) (794) e) Profit / (Loss) before tax (15688) (6762) f) Tax: --- — g) Profit/ (Loss) after tax (15688) (6762) h) Transfer to Reserve --- — i) Loss carried to Balance Sheet (15688) (6762)

2. DIVIDEND: The Directors have decided not to recommend any dividend for the year ended March 31, 2016 due to loss. 3. PREFERENTIAL ALLOTMENT OF REDEEMABLE PREFERENCE SHARES: During the year 16,00,000 (sixteen lakhs only) 8.50% Non-cumulative Redeemable Preference Shares of Rs. 100/- (Rupees one hundred each only) each has been allotted to Tata Steel Limited on preferential basis. After allotment of these Non-cumulative Redeemable Preference Shares, the paid up share capital of the Company is Rs. 2,61,26,13,567/- (Rupees two hundred sixty one crore twenty six lakh thirteen thousand five hundred sixty seven only). 4. REFERENCE TO BIFR: Post 2008 financial crisis Tayo’s performance has significantly deteriorated. Your Company has been incurring losses due to multiple reasons such as delay in the setting up of Forged Roll Project, delay in Technology absorption for next generation rolls, liquidity crunch etc. The customers while seeking deferment of deliveries, were prescribing stringent quality specification resulting in higher costs. As a result, Cast Roll business performed sub-optimally and incurred cash losses. The subdued growth in infrastructure sector, over-capacity situation in the Roll and Forging industry reflected in lower capacity utilization , and severe cash constraints among customers led to higher working capital requirement and higher finance cost. To support Tayo, the Promoters have extended their financial and technical support from time to time. The Company has invested these funds towards improvement of equipment reliability and infrastructure, absorption of new technology, repayment of debts, working capital requirements, and loss funding. In view of the continued under utilization and consequent losses, your Company has written down the value of its assets by Rs. 77.88 crores resulting into negative net worth during Q3 of FY’16. Considering negative net worth, continued cash loss, inability to meet future financial obligations, and other related factors as above, the Board of Directors at their meeting held on February 12, 2016, decided that the Company be referred to the Board for Industrial and Financial Restructure (BIFR) under First Proviso to Section 15(1) of Sick Industrial Companies (Special Provisions) Act, 1985. Accordingly, your Company had made a reference to the BIFR on February 29, 2016, which was registered on March 23, 2016 with the BIFR. On May 26, 2016, the Board of Directors of your Company has decided to introduce employees Voluntary Separation Scheme and suspension of operations in a phased manner 5. OPERATION AND SALES: (i) During the year under review, the Company’s turnover was Rs. 13596 lakhs as against Rs.14918 lakhs in the previous year. The sales of rolls 6751 tons, which includes the sale of Forged Rolls of 1160 tons against 908 tons in the previous year. The sale of Engg Forgings was 711 tons as against 472 tons in the previous year. (ii) During the year under review, the production of pig iron was 25281 tons, as against 17247 tons in the previous year. (iii) During the year under review, the Company has incurred a net loss of Rs.15688 lakhs as against the net loss of Rs. 6762 lakhs in the previous year. 19 TAYO ROLLS

Forty-Eighth annual report 2015-16

6. FINANCIAL AND WORKING CAPITAL MANAGEMENT: Your Company caters mainly to the Steel Industry, which is facing liquidity challenges due to several reasons including dumping of Steel Products. The Steel Industry continues to put pressure on the Roll manufacturers with longer Credit Term, deferred payment and lean inventory. Aggressive pricing strategy of Roll Industry has also put your Company under pressure. As a result thereof, the liquidity position of your Company continued to be fragile during the year. 7. FIXED DEPOSITS: Your Company has not accepted / renewed any fixed deposit during the year. 8. TECHNOLOGY AND GROWTH: 8(I) TECHNOLOGY: 8(i)(a) Cast Roll: During the year, your Company engaged deeply with Yodogawa Steel Works Ltd., Japan to improve the quality performance of Cast Rolls. Your Company has focused primarily on the stabilization of good nodularity in Enhance Carbide (TS) Roll for CSP (Compact Strip Profile) mills to reduce roll failure in mills. The performance improvement of CCM Roll and SG Core strength of Bi-metallic Rolls have also been practiced. Improved Enhance carbide (TS) & SNG (Type-1) Rolls supplied are resulting into better performance. Adamite sleeve and Plunger have also been developed to cater to the need of modern heavy section mills. Methoding and process improvement have resulted in quality improvement of Static Cast Rolls. 8(i)(b) New Business: During the year, focus was on improvement of microstructure of Forged Rolls through heat treatment cycles. Implementation of unique specialized cryogenic treatment of Forged Roll has given significant improvement in hardness on the surface as well as at depth. Deep analysis and experiments have resulted in better microstructure in the Forged Rolls. Due to improved cleanliness level in forged products, new business opportunities and new customers were developed. 8(ii) GROWTH: 8(ii)(a) Cast Roll: During the year, your Company could not show promising volume due to several reasons. However, revamping of Foundry and Melting furnace have improved the reliability of equipment & infrastructure. Revamping of Mould drying oven has reduced rejection. Development of Graphitic steel rolls, Adamite arbors and plunger of extrusion press also provided an opportunity to enter into new business in Cast Roll segment. 8(ii)(b) New Business Tayo has developed special grade Forged Roll for the first time to fulfill its customer’s requirement. In the area of Engineering Forging, your Company has developed special and tailor made products, including development of special wheels. 9. TOTAL QUALITY MANAGEMENT: (i) Your Company had participated in the “Tata Innovista 2015”, which is a platform within the Group to showcase innovative edges and initiatives. (ii) The Indian Register Quality Systems conducted Surveillance Audit for ISO 9001:2008 Quality Management System, ISO 14001:2004 Environmental Management System and OHSAS 18001:2007 Occupational Health and Safety Management System, and your Company was successful in this audit. (iii) The “TAYO Improvement Projects” (TIP) initiative had been mentored, and the progress was reviewed by the senior leaders every month. The initiative had given us substantial savings which would have been greater if the production volumes would have been achieved. (iv) The Quality Circle initiative has been rejuvenated and re-launched under the name “Abhyuday” to improve the morale of employees and quality of processes. This initiative also aimed to boost the engagement of employees. Your Company had also arranged sessions with experts on technical and quality aspects of Roll manufacturing. 10. SAFETY AND HEALTH: As per the Tata Group philosophy, Safety is given primary focus in the Company. Senior leadership is fully committed towards improving the safety culture and awareness and is involved in formulating and guiding the safe work practices. Being in close proximity of one of our Promoters, Tata Steel, we enjoy the guidance and expertise support in the various avenues of safety.

Your Company initiated projects in Safety for awareness among the employees and institutionalize safety practices all across. Apart from the visuals and awareness training programmes, the behavioral aspects of safety were communicated through interactions and discussions at various levels. Safety initiatives were also extended to our service providers, contract workforce, local community,

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visiting customers, inspectors and other officials through mandatory use of PPEs. Following actions have been taken to improve behavioral safety. (i) Safety programmes like Safety Competitions, House-keeping, Safety training, Fire Fighting training, Mock Drill and First-Aid Training, National Safety day etc. were conducted regularly. Basic and standard lead and lag measures pertaining to safety performance form the basis of “Safety Performance Reporting and Review”. Review of the lag measures like near misses, first aid cases, incident investigations and analysis of root causes helped in strengthening the improvement plans and executions (ii) Employees undergo mandatory periodical medical examination as stipulated under various statutory requirements. Free medical facilities are provided at Tata Main Hospital and Company’s Dispensaries apart from other areas where specific attention is given to ensure fitness of employees at the work place. (iii) Tree plantation was done in and around the factory premises. Compliance to EHS legislations has been achieved through implementation of the Environmental, Occupational Health and Safety Policy of the Company which ensures continual improvement on safety front. 11. COMMUNITY INITIATIVES: Your Company is committed towards the welfare of the society. Several initiatives were undertaken during the year like community and skill development, Blood donation camps, Health awareness Programme, Acu-pressure treatment camp, distribution of free sapling etc, were conducted in the villages situated around the Plant. Organised Yoga sivir camp at Tata Complex Colony, Gamharia in which employees and their family members participated. 12. AFFIRMATIVE ACTION: The Company is guided by the Code of Conduct on Affirmative Action. The Company ensures implementation of the Code by arousing awareness on the subject amongst employees, vendors, suppliers and stakeholders through training programmes conducted from time to time. Emphasis is laid on 4Es ie Employment, Entrepreneurship, Employability and Education. 13. AUDIT REPORT: The Statutory Auditors Report on Audited Annual Accounts for the financial year 2015-16 doesn’t contain any qualification, reservation or adverse remarks which warrant comments from the Board of Directors. The Secretarial Auditors Report for the financial year 2015-16 doesn’t contain any qualification, reservation or adverse remark which warrant comments from the Board of Directors. The Secretarial Audit Report as required under section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report. 14. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS: The particulars of Loans, Guarantees and Investments, if any, have been disclosed in the Financial Statements. 15. CONTINGENT LIABILITIES AND MAJOR LITIGATIONS: (i) Consequent to the order of the Hon’ble Supreme Court vide its order dated April 15, 2009, upholding the decision of the Hon’ble Patna High Court with a direction to BSEB to rework the rates of fuel surcharge. BSEB has adjusted Rs. 23.23 crore against the Coal Claims of Rs. 100 crore and modified the rate of fuel surcharge for the financial year 1998-99 to 158.79 P/ Kwh against the earlier notified rate of 164.83 P/ Kwh for the financial year 1998-99, thus giving a benefit of 6.04 P/ Kwh to the consumers. However, this benefit will be passed on to the consumers on receipt of Coal Claim of Rs. 100 crore by BSEB from the Coal Companies. The Hon’ble Supreme Court has, however, given liberty to the consumers to approach High Court to challenge the correctness of this adjustment and the terms of such adjustment and also stated that the other pending issues on fuel surcharge can be taken up by the consumers before the High Court. The Hon’ble Jharkhand High Court had passed its order against the Company. Thereafter, the Company has filed a Letters Patent Appeal (LPA) before the Division Bench of the Jharkhand High Court. The Division Bench in its Interim order, directed Company to pay the principle amount by August 31, 2015 (this was paid by Tayo even before the order) and 50% of DPS to be payable in 3 equal monthly installments beginning from August 31, 2015 and to furnish a Bank Guarantee for balance 50% of DPS. The Company also had to renew the Bank Guarantee of Rs. 3.72 crores which was given at the time of disconnection of electricity in the year 2013. Against the interim order, the Company has filed a Special Leave Petition (SLP) in the Hon’ble Supreme Court. The Supreme Court granted stay on the payment of DPS till final decision in LPA by the Jharkhand High Court.

(ii) In the year 2000, your Company had filed a writ petition in Hon’ble Jharkhand High Court challenging the applicability of 1999 Tariff schedule (HTSS category) to 1993 Electricity Tariff on Tayo. Hon’ble Jharkhand High Court on May 02, 2013, had dismissed Company’s Petition and confirmed the applicability of 1999 Tariff schedule on Tayo. Consequent to the adverse judgment of Hon’ble Jharkhand High Court, with regard to applicability of electricity tariff to the Company from January 2000 till

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March 2013, the Jharkhand State Electricity Board (JSEB) has issued a rectified energy bill dated June 10, 2013 for Rs. 272.03 crore, which includes delayed payment surcharge of Rs. 208.00 crore and fuel surcharge of Rs. 5.96 crore.

The Judgment dated May 2, 2013 was challenged on various legal grounds by way of LPA before the Hon’ble Jharkhand High Court which was admitted on merit. Meanwhile the Jharkhand State Electricity Board has initiated Certificate proceeding against the Company, Board of Directors and its Officers for recovery of Rs. 263.61 crore, which was challenged before the Certificate Officer. On December 12, 2015, the Certificate Officer in his order absolved the Directors and Officers from their liability to the extent of Certificate amount and ordered the JSEB to raise fresh Bill within 15 days and the Company to pay the same. Pursuant to the order of Certificate Officer, the JSEB had raised a bill of Rs. 218 crore which was also challenged by the Company in the Hon’ble High Court. The High Court in its interim order mentioned that no coercive action shall be taken against the Company during pendency and final disposal of the LPA at High Court. These LPAs are still pending at Hon’ble Jharkhand High Court.

iii) Writ Petitions challenging the order of Jharkhand Government denying exemption from the operation of Employee State Insurance Act, 1948 are pending with Hon’ble Jharkhand High Court.

16. DIRECTORS & KEY MANAGERIAL PERSONNEL (KMP):

Mrs. Ramya Hariharan (DIN-06928511) was appointed as Director under Section 160 of the Companies Act, 2013 at the 47th Annual General Meeting held on August 29, 2015. Mrs. Hariharan is an Independent Director on the Board and was appointed for a period of five (5) consecutive years from October 20, 2014 or till the date of retirement of Non-Executive Directors as per Tata Group Policy, whichever is earlier.

Mr. Yoshikazu Miyasaka (DIN- 07125432) was appointed as Director under section 160 of the Companies Act, 2013. Mr. Miyasaka is Promoter, Non-Independent, Non-Executive Director.

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Article 146 of the Articles of Association of the Company, Mr. Anand Sen (DIN- 00237914), Director retires by rotation and being eligible, offers himself for re-appointment.

The existing tenure of three years of Mr. K. Shankar Marar is expiring on August 10, 2016. The Board of Directors on the recommendation of the Nomination and Remuneration Committee and subject to the approval of members by way of special resolution at the forthcoming Annual General Meeting and Central Government, if any, have re-appointed Mr. K. Shankar Marar as Managing Director for a further period of three years with effect from August 11, 2016. Accordingly, pursuant to Section 196, 197 and other applicable provisions of the Companies Act, 2013 read with Schedule V of the Companies Act, 2013, Mr. K. Shankar Marar is appointed as Managing Director on such terms and condition as may be agreed between the Board and Mr. Marar and specified in the notice convening the Annual General Meeting.

17. DIRECTORS' SHAREHOLDING:

The shareholding of Managing Director and Non-Executive Directors in the Company is NIL.

18. NUMBER OF MEETINGS OF BOARD:

During the year, eight Board meetings were held wherein directors were present either physically or through Video Conferencing.

19. DECLARATION BY INDEPENDENT DIRECTORS:

All the Independent Directors have given declaration under Sec 149(6) of the Companies Act, 2013 read with Regulation 16 (b) of the SEBI (LODR) Regulations, 2015, regarding their independence.

20. INTERNAL FINANCIAL CONTROLS:

The Company has put in place internal financial controls with reference to financial statements. To further strengthen the existing system, an audit of the system and process was carried on by the auditors. The gaps, if any, in the system and process have been tighten to ensure adequacy of internal financial controls in the Company. However, during the year, no reportable material weakness in the design or operation was observed. The Audit Committee periodically reviews the internal financial control systems.

21. DIRECTORS RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2015-16.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: 22 TAYO ROLLS

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21.1 in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

21.2 they have selected such accounting policies in consultation with the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit / loss of your Company for that period;

21.3 they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

21.4 the Management has concluded that the going concern basis is not appropriate because of the financial condition of the Company and, therefore the Financial Statements have been prepared on non-going concern basis;

21.5 they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

21.6 they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

22. BOARD MEMBERSHIP CRITERIA:

The Nominations and Remuneration Committee works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business, government, education, and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, ability to participate constructively in deliberations and willingness to exercise authority in a collective manner.

In evaluating the suitability of individual Board members, the Nomination and Remuneration Committee considers many factors, including general understanding of marketing, finance, operations management, public policy, international relations, legal, governance and other disciplines relevant to the success of the Company in today’s business environment; understanding of the Company's business; experience in dealing with strategic issues and long-term perspectives; maintaining an independent familiarity with the external environment in which the Company operates and especially in the Director’s particular field of expertise; educational and professional background; personal accomplishment; and geographic, gender, age, and ethnic diversity.

The Board evaluates each individual in the context of the Board as a whole, with the objective of having a group that can best perpetuate the success of the Company's business and represent stakeholder’s interests through the exercise of sound judgment, using its diversity of experience.

In determining whether to recommend a director for re-election, the Committee, also considers the director’s past attendance at meetings, participation in meetings and contributions to the activities of the Board, and the results of the most recent Board self- evaluation.

Board members are expected to rigorously prepare for, attend and participate in all Board and applicable Committee meetings. Each member is expected to ensure that their other current and planned future commitments do not materially interfere with the responsibilities at the Company.

23. BOARD DIVERSITY POLICY:

The Company recognizes the importance of diversity in its success. It is essential that the Company has as diverse a Board as possible.

A diverse Board will bring in different set of expertise and perspectives. The combination of Board having different skill set, industry experience, varied cultural and geographical background and belonging to different race and gender will bring a variety of experience and viewpoints which will add to the strength of the Company.

While all appointments to the Board are made on merit, the diversity of Board in aggregate will be of immense strength to the Board in guiding the Company successfully through various geographies.

The Nomination and Remuneration Committee reviews and recommends appointments of new Directors to the Board. In reviewing and determining the Board composition, the Nomination and Remuneration Committee considers the merit, skill, experience, race, gender and other diversity of the Board. To meet the objectives of driving diversity and an optimum skill mix, the Nomination and Remuneration Committee may seek the support of Parent company.

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24. CRITERIA FOR DETERMINING INDEPENDENCE OF DIRECTORS:

Independence Guidelines:

A Director is considered independent if the Board makes an affirmative determination after review of all the relevant information. T h e Board has established the categorical standards to assist it in making such determinations. A Director to be considered independent:

Ø Shall not be Managing Director or a Whole time Director or a Nominee Director.

Ø Shall be, in the opinion of the Board, a person of integrity and shall possess relevant expertise and experience.

Ø Shall not be a Promoter of the Company or its holding, subsidiary or associate Company.

Ø Shall not be related to Promoters or Directors in the Company, its holding, subsidiary, or associate Company.

Ø Apart from receiving Director’s remuneration, shall not have any pecuniary relationships with the Company, its holding, its subsidiaries, its associate companies, its Promoters, or Directors, during the current financial year or immediately preceding two financial years.

Ø Relatives should not have or had pecuniary relationships or transactions with the Company, its holding (s), subsidiary or associate Company, or their promoters, or Directors, amounting to 2% or more of its gross turnover or total income or Rupees 50 lakhs (Rupees fifty lakh) or such amount as the Company may prescribe, whichever is lower, during the two immediately preceding financial years or during the current financial year.

Ø Neither himself / herself nor any of his / her relatives shall hold or has held the position of a KMP or is or has been employee of the Company or its holding, subsidiary or associate Company in any of the three financial years immediately preceding the financial year in which he / she is proposed to be appointed.

Ø Neither himself / herself nor any of his / her relatives shall or has been an employee or proprietor or a partner, in any of the 3 financial years immediately preceding the financial year, of :

a) a firm of Auditors or Company Secretaries in practice or Cost Auditors of the Company or its holding, subsidiary or associate Company;

b) any legal or a consulting firm that has or had any transaction with the Company, its holding, subsidiary or associate Company amounting to 10% or more of the gross turnover of such firm;

c) holds together with his relatives 2% or more of the total voting power of the Company (“Substantial Shareholder”);

d) a Chief Executive or Director, by whatever name called, of any non-profit organization that receives 25%, or more of its receipts from the Company, any of its Promoters, Directors or its holding, subsidiary or associate Company or that holds 2%, or more of the total voting power of the Company;

Ø Has not held office for more than two consecutive terms on the Board of the Company.

Ø Should not be a material supplier, service provider or customer or a lessor or a lessee of the Company.

Ø Shall not be less than 21 years of age.

Ø Possesses such other qualifications as may be prescribed by the Companies Act, 2013.

25. REMUNERATION POLICY:

The philosophy of remuneration of Directors, KMP and all other employees at Tayo Rolls Limited (‘Company’) is based on the commitment demonstrated by the Directors, KMPs and other employees towards the Company. The key principles governing the Remuneration Policy are as follows:

(i) Remuneration for Independent Directors and Non-Independent Non- Executive Directors:

Ø Overall remuneration should be reflective of the size of the company, complexity of the sector/ industry/ company’s operations and the company’s capacity to pay the remuneration and should be consistent with recognized best practices.

Ø Independent Directors (“ID”) and Non-Independent Non-Executive Directors (“NED”) may be paid sitting fees (for attending the meetings of the Board and Committees of which they may be members). Quantum of sitting fees and NED Commission may be subject to review on a periodic basis, as required.

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Ø Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the Nomination and Remuneration Committee and approved by the Board.

Ø Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the company.

Ø The aggregate commission payable to all the NEDs and IDs will be recommended by the Nomination and Remuneration Committee to the Board, based on company’s performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters, as may be decided by the Board.

Ø The Nomination and Remuneration Committee will recommend to the Board, the quantum of commission for each Director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and committee meetings, individual contributions at the meetings and contributions made by Directors other than in meetings.

Ø In addition to the sitting fees and commission, the company may pay to any director such fair and reasonable expenditure, as may have been incurred by the director while performing his / her role as a Director of the company. This could include reasonable expenditure incurred by the director for attending Board / and its committee meetings, general meetings, court convened meetings, meetings with shareholders / creditors / management, site visits, induction and training (organized by the company for Directors) and in obtaining professional advice from independent advisors in the furtherance of his / her duties as a Director.

(ii) Remuneration for Managing Director (“MD”)/ Executive Directors (“EDs”)/ KMP/ rest of the employees:

The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be:

Ø Market competitiveness driven by the role played by the individual.

Ø Reflective of size of the company, complexity of the sector / industry / company’s operations and the company’s capacity to pay.

Ø Consistent with recognized best practices and aligned to any regulatory requirements.

Ø The remuneration mix for the MD / EDs is as per the contract approved by the shareholders. In case of any change, the same would again require the approval of the shareholders.

Ø Basic / fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience.

In addition to the basic / fixed salary, the company may provide employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings and tax optimization, where ever possible. The company may also provide all employees with a social security net (subject to limits) by covering medical expenses and hospitalization through re-imbursements or insurance cover and accidental death and dismemberment through personal accident insurance.

The company provides retirement benefits as applicable.

In addition to the basic / fixed salary, benefits, perquisites and allowances, the company may provide MD / EDs such remuneration by way of bonus / performance linked incentive and/or commission calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Companies Act, 2013 read with Schedule V of the Act. The specific amount payable to the MD / EDs would be based on performance as evaluated by the Board or the Nomination and Remuneration Committee and approved by the Board.

The company may provide the rest of the employees a performance linked bonus and/or performance linked incentive. The performance linked bonus/performance linked incentive would be driven by the outcome of the performance appraisal process and the performance of the Company.

(iii) Remuneration payable to Director for services rendered in other capacity:

The remuneration payable to the Directors shall be inclusive of any remuneration payable for services rendered by such Director in any other capacity unless:

Ø The services rendered are of a professional nature; and

Ø The Nomination and Remuneration Committee is of the opinion that the director possesses requisite qualification for the practice of the profession.

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26. PERFORMANCE EVALUATION OF BOARD:

Pursuant to the provisions of the Companies Act, 2013 and Chapter IV of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, Individual Directors as well as the evaluation of various Committees.

The performance evaluation of the Independent Directors was carried out by the entire Board. The Independent Directors at their exclusive meeting separately reviewed the performance of Non- Independent Directors and the Board as a whole, performance of the Chairman of the Company and quality, quantity & timeliness of flow of information between the Company Management and the Board. The Directors expressed their satisfaction over the evaluation process.

27. LOAN TO DIRECTORS:

During the year, the Company has not advanced any loan nor given any guarantee nor provided any security in connection with any loan made to any of its Director/s or to any other person in whom the Director is interested as mentioned in Section 185 of the Companies Act, 2013 read with Rule 10 of the Companies (Meetings of Board and its Powers) Rules, 2014.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per section 135 (1) of the Companies Act, 2013, every Company having a net worth of Rupees five hundred crores or more, or turnover of Rupees one thousand crores or more, or net profit of Rupees five crores or more, during any financial year is required to constitute a Corporate Social Responsibility Committee of the Board consisting of three or more Directors, out of which at least one Director shall be Independent Director.

Your Company has been suffering from loss since FY 2008-09 and doesn’t fulfill any of the criteria as specified under section 135 (1) of the Companies Act, 2013, therefore, Corporate Social Responsibility Committee of the Board is not required and as a result, Company has not constituted a Corporate Social Responsibility Committee. However, in spite of acute shortage of cash and poor financial position, your Company has tried to meet its social obligations, wherever possible with its limited resources.

29. RELATED PARTY TRANSACTIONS:

During the year under review, your Company has not entered into any contract/ arrangement which falls under the purview of Section 188 of the Companies Act, 2013. However few related parties transactions are such which are covered under Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has also entered into material related party transactions for which approval of the shareholders have already been taken at 47th Annual General Meeting and approval for shortfall, if any, will be taken at the forthcoming Annual General Meeting. Approval of shareholders is also being sought for likely related party transactions for FY’17, at the forthcoming Annual General Meeting. All the transactions with the related parties are at arm’s length and in the ordinary course of business and have prior approval of the Audit Committee. The policy on materiality of Related Party Transaction is available on the website of the Company at www.tayo.co.in. As required under section 134 (3) (h) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, “Form AOC-2” is annexed with this report.

30. CORPORATE GOVERNANCE:

Management Discussion and Analysis, Corporate Governance, Managing Director’s and Auditor’s Certificates are made part of this Annual Report.

31. EXTRACT OF ANNUAL REPORT:

As required under section 134 (3) (a) of the Companies Act, 2013 read with Section 92(3) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, “Form MGT-9” is annexed with this report.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the period under review:

• No. of complaints received : NIL

• No. of complaints disposed off : Not Applicable

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33. PARTICULARS OF EMPLOYEES:

33. a As per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board Report shall include a statement showing the name of every employee of the company, who:

(i) if employed throughout the financial year, was in receipt of remuneration for that year which, in the aggregate, was not less than rupees one crore two lakhs only ;

(ii) if employed for a part of the financial year, was in receipt of remuneration for any part of that year, at a rate which, in the aggregate, was not less than rupees eight lakhs fifty thousand only per month;

(iii) if employed throughout the financial year or part thereof, was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

During the financial year 2015-16, none of the employees are in receipt of remuneration as specified above. Therefore statement under Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not required.

33. b The Information required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as under:

As on March 31, 2016, total number of employees on roll was 698. During the year under review, the ratio of remuneration of Whole Time Director (“WTD”) to the median remuneration of employees is 12:1. The annual increment for officers is based upon the performance evaluation system and for other employees, it is governed as per the Wage Agreement. However, due to loss no increment was given to any of the Key Managerial Personnels (KMP) and other officers.

The Key Managerial Personnel are holding strategic positions and are responsible for steering the performance of the Company and adhering to various statutory compliances as well as implementation of the strategies chalked out through the operational and management team. The median remuneration of employees’ was increased by approximately 3.74% . The reason for low percentile increase in median remuneration of employees is retirement / superannuation of workman in higher wage structure and joining of new employees in new wage structure. The median increase in average remuneration was to take care of minimum inflation.

In terms of shareholders’ approval obtained at the Annual General Meeting held on July 18, 2012, the Non-Executive Directors are also paid commission at the rate not exceeding 1% of the net profits computed in accordance with section 309 of the erstwhile Companies Act, 1956 (equivalent to section 197 of the Companies Act, 2013) distributed on the basis of Board and various Committees meetings attended and chaired by the Non-Executive Directors. However, due to inadequacy of profits during the financial year 2015-16, commission will not be paid to the Non-Executive Directors.

Market Capitalization as on 31.03.2016 based upon the closing price of listed equity shares was ~Rs.3909 lakhs as against ~Rs. 5710 lakhs as on 31.03.2015. Earnings Per Share (EPS) as on 31.03.2016 was Rs. (152.89) as against Rs. (65.90) on 31.03.2015.The previous Rights issue of the Company was in the financial year 2008-09 @ Rs. 116/- per share. Percentage decrease in the quoted price of shares is approximately 67 %.

No employee is paid in excess of the Managing Director.

We confirm that the remuneration paid to the Director / Key Managerial Personnel and other employees are in accordance with the Remuneration policy approved by the Board of Directors on the recommendation of Nomination and Remuneration Committee. None of the employees of the Company are in receipt of remuneration in excess of Rs. 1.02 crore per annum.

34. ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

In terms of the Section 134(3) (m) of the Companies Act, 2013 read Rule 8(3) with Companies (Accounts) Rules, 2014, the particulars in respect of (a) Conservation of Energy (b) Technology Absorption and (c) Foreign Exchange Earnings and Outgo are furnished on pages 29-30.

35. AUDITORS:

i) The existing Statutory Auditors, M/s Deloitte Haskins & Sells (DHS), Kolkata, Chartered Accountants (ICAI Registration No.302009E), retire at the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. Your Company has received a certificate from the Auditors to the effect that their appointment, if made, would be within the limits of Section 141(3) (g) of the Companies Act, 2013. Members are requested to appoint Auditors for the financial year 2016-17 at

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Forty-Eighth annual report 2015-16

the Annual General Meeting and to authorize the Board of Directors to fix their remuneration based upon the recommendation of Audit Committee as mutually agreed upon between the Audit Committee/ Board and the Auditors.

ii) M/s Dutta Ray & Co., Cost & Management Accountants (Registration No: 000224) offered themselves for appointment to examine and report on the Cost Audit records of the Company for the financial year 2016-17, in accordance with the Central Government circular on Audit of Cost Accounting Records of the Company. The Audit Committee at their meeting recommended the appointment of M/s Dutta Ray & Co., Cost & Management Accountants (Registration no: 000224), which was approved by the Board subject to the ratification of remuneration payable to the Cost Auditors for the financial year 2016-17 by the shareholders at the forthcoming Annual General Meeting

On behalf of the Board of Directors

Anand Sen Chairman Jamshedpur (DIN-00237914) July 18, 2016

Addendum to the Directors Report

On August 08, 2016 the Board of Directors of your Company approved conducting the Postal Ballot to seek approval of the shareholders by way of special resolution for allotment of 64,00,000 (sixty four lakhs only) Non-cumulative Redeemable Preference Shares of Rs. 100/- (Rupees one hundred only) each to the extent of Rs. 64,00,00,000/- (Rupees sixty four crores only) on preferential basis to Tata Steel Ltd. , the promoter of the Company, in one or more trenches. The results of the Postal Ballot will be declared on September 10, 2016

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ANNEXURE TO DIRECTORS’ REPORT – INFORMATION UNDER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (ACCOUNTS) RULES, 2014 AND FORMING PART OF DIRECTORS REPORT.

(A) Conservation of energy (2015-16):

i) The steps taken and its impact on conservation of energy:

a. Installation of additional ladle pre-heater (firing through BF gas) to save furnace oil.

b. High power VFD (200 KW) commissioned in FES to save electrical power.

c. Regulation of Arc & LRF tuned to save electrical energy.

ii) The steps taken by the Company to reduce electrical energy:

a. Use of high power electrical transformer for Induction Furnace.

iii) The capital investment on energy conservation equipment ;

Approx. Rs. 60.00 lakhs has been spent on energy conservation equipment.

Technology absorption(2015-16):

i) Efforts made towards technology absorption:

a. Optimization of Heat Treatment cycles and process control to ensure product quality.

b. Usage of special arrangement and introduction of “Two Stage” core pouring for CCM rolls.

c. Macro etching process checking to detect nature of defect and improve quality.

d. Determination of Shell, Inter layer thickness of Hi-Cr (Iron) & HSS Roll through Ultrasonic test to enhance performance.

e. Depth wise Micro structural investigation in casting parameters to assess roll performance in mill.

f. Achievement of High hardness on ICDP Roll without shell metal inoculation.

g. New process has been introduced on CCM Roll for faster solidification and thereby performance improvement.

ii) The benefits derived like product improvement, cost reduction, product development or imports substitution:

a. Improved quality of forged product resulting in enhanced customer satisfaction.

b. Improve SG core strength will reduce mill outages.

c. SG Core Plate mill roll to fulfill the mill requirement.

d. Two stage core pouring and use of neck flask in CCM rolls has improved quality of cast rolls.

e. High hardness on ICDP Roll will improve roll performance in mill.

f. Production of ‘Graphitic Cast Steel’ will enhance performance in mill due to high hardness and presence of ‘Graphite’ in roll.

g. Micro structural investigation under In-situ Microscope correlation with forging temperature to control hardness on forged rolls established.

iii) Information regarding imported technology (imported during the last three years):

During the last three financial years, your Company has not imported any R&D Technology.

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(B) Expenditure on R&D:

Current Year Previous Year 2015-16 2014-15 (Rs. Lakhs) (Rs. Lakhs) a) Capital --- — b) Recurring 26.26 89.89 c) Total 26.26 89.89 d) Total R&D expenditure as a percentage of 0.22% 0.63% total turnover

Current Year Previous Year (Rs. Lakhs) (Rs. Lakhs) 2015-16 2014-15 i) Foreign Exchange Earnings 78.47 1329.31 ii) Foreign Exchange Outgo 231.79 1154.14

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MANAGEMENT DISCUSSION & ANALYSIS

BUSINESS REVIEW AND OUTLOOK:

India is the only country amongst steel major producer in the world which has witnessed positive growth in production in 2015. According to the World Steel Association (WSA), production in India, the world's third largest steel producer, rose by 2.6 % .Though production was higher, consumption of domestically produced steel was lower as the consumer preferred using imported steel over domestically produced.

The last decline in global steel output was witnessed in 2009, when production fell by 8 % to 1,238.8 MT from 1,343.4 MT in 2008. Since then it has continuously risen till 2014. The slowdown and over capacity are affecting companies especially those who have presence in countries where growth has stagnated. Despite high levels of dumping by steel majors from China, Japan and Korea, integrated steel producers were able to keep themselves afloat. Imports from the above mentioned countries increased by nearly 30 %.

OPPORTUNITIES AND THREATS:

China at over 800 million tons accounts for nearly 50 % of around 1.6 billion tons global capacity. The slowdown in China has resulted in excess capacity of 360 million tons per year in the country. Lower demand in China has resulted in global steel industry operating at a lower capacity utilization and steel prices have fallen drastically.

Indian companies have been given some protection by increasing the trade barriers. The Commerce Ministry fixed a minimum import price (MIP) for certain steel products to protect domestic manufacturers from cheap imports. Most of the steel plants in India are struggling to maintain cash flow. Companies are facing severe liquidity crunch in the market. This has resulted into lowering of cost of buy, reduction in inventory of Rolls and tightening of quality requirements. The demand of Rolls is not expected to grow in near future and will remain at FY’16 levels. Liquidity problem is prompting Roll customers to adopt extended credit terms and deferred payments.

With a view to keep the order book healthy, the Roll manufacturers are working on effective supply-chain management, cost reduction programmes in every area of operations, along with product differentiation and enhanced services.

This needs to be rephrased considering the fact that we are discontinuing Tayo has a great opportunity ahead due to the increasing Cast Roll and Forged Roll requirements of Tata Steel Group. The ICDP Rolls supplied by Tayo to the key customers have been accepted well and the same will result into increased buy shares for the coming years. Tayo has also established itself as the only domestic supplier of Universal Mill Rolls comprising assembly of Cast Sleeve and Forged Arbor.

The acceptance of Tayo’s Forged Rolls in Indian Cold Rolling Mills has been improving. The Company bagged orders from TCIL, SAIL, JSW etc. despite the stiff challenges from imports, Tayo has established presence in the field of Forge Rolls across all domestic CRMs. Foray into Aluminum rolling mill has given encouraging results.

In view of the challenges being faced by the Steel industry, use of high productive new generation Rolls such as HSS, Semi HSS and Special Enhanced Carbide or SNG rolls has become necessity. With the strengthening of product development initiatives at Tayo, our Company is well poised to be the first mover amongst all domestic players which is at present being catered to by imports only.

In the Engineering Forgings business the work done in FY15 has helped us to enter into segment like Gear and Structural Rolling mills. The Company has added quite a good number of customers with high requirement like TGS,TRF, Thyssen Krup ,Welspun etc.

PIG IRON MARKETING & OPERATIONS:

The Pig Iron business, under the Conversion Agreement with Tata Steel, continues to be stable. Tata Steel is supplying iron ore, limestone and nut coke to Tayo for conversion to foundry grade Pig Iron. The plant now is running more efficiently after relining of the furnace. The major quantity of Pig Iron produced is sold in West Bengal while the remaining quantities are sold in Jharkhand and northern India.

SEGMENTWISE PERFORMANCE:

The segment wise performance has been given in the Directors’ Report in Page 19. The segment wise result is given in Page No. 87-88 of this report.

RISK AND CONCERNS:

The Company on regular basis reviews its Risk Management Policy and takes proactive steps to safeguard and minimize any adversity related to the Market, Technology, People, Environment/ Regulatory, Financial, Information Technology and Opportunity Risks. Wherever necessary, the Company takes adequate insurance coverage of its assets for safeguarding from unforeseen risks.

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INTERNAL CONTROL AND ADEQUACY:

The Company has adequate internal control system and well laid-down policies and procedures for all its operations and financial functions. The procedures are aligned to provide assurance for maintaining proper accounting controls, monitoring efficient and proper usage of all its assets and reliability of financial and operational reports. The internal control system is ably supported by the Internal Audit Department which carries out extensive audit of various functions throughout the Company. The Internal Audit Department functions independently and submits its findings to the Managing Director for corrective actions, if any. The Company’s Board has an Audit Committee which comprises five members with majority being Independent Directors. The Audit Committee reviews significant findings of the internal audit.

The Audit Committee reviews the financial reporting process, internal financial control and control system the audit process and the Company’s process for monitoring compliances with law and regulations and the Company’s code of conduct. The Audit Committee also reviews with the Statutory Auditors the financial reports and ascertains their observation on issues of concern. The Committee monitors the implementation of internal audit recommendations as well as vigil Mechanism, as applicable.

HUMAN RESOURCES DEVELOPMENT:

Human Recourse is valued as one of the most important asset by the Company. The various initiatives taken up by employees and active participation by them in various forums has strengthened the Human Resource system and established flexibility to keep abreast with the business need of the Company.

Employees are encouraged to suggest innovative ideas, suggestions and other improvement initiatives promotes team work, empowerment, continuous improvement and innovation in all area across the Company.

In-house training modules have been developed on various subjects such as Quality Systems, TBEM, TCoC, Management Development, Safety, Fire Fighting, Induction Training etc. which were regularly conducted for employees and trainees throughout the year.

The Knowledge Sharing Sessions conducted from time to time provide ample opportunities for sharing skill and knowledge on various aspects across all levels of employees.

Awareness Programmes on “Performance Management System” were also conducted in which all Officers participated. Gap analysis and identification of key disciplines that need to be strengthened in the Officer Cadre was done. Action plans to fill the gaps have been drawn out.

The Joint meeting between Management and Union as well as monthly meetings between Departmental Heads and Union Office Bearers / Executive Committee Members has developed a climate conducive for interaction & clarity of concepts amongst cross-functional teams and close relationship between the Management and Employees. With the support and co-operation of Tayo Workers Union, the Industrial Relations climate was cordial and harmonious throughout the year.

The workforce of the Company stands at 698 as on 31.03.2016.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Company's operating results continue to be materially affected by various factors, particularly high pricing pressures due to overcapacity in roll industry, general economic slowdown and unavailability of future financing. Considering these factors the going concern assumption is not appropriate. Therefore the financial statements for FY’16 have been prepared on realisable value basis. Accordingly, the assets have been stated at the lower of their historic cost and estimated net realisable value and the liabilities have been stated at the values at which they are expected to be discharged. The Q1 of FY-17 accounts have also been prepared on non-going concern basis.

A loss of Rs. 8,914 lakhs, classified as exceptional item, has been recognized as the difference between the realisable values and the historical carrying amounts of these assets and liabilities.

The total revenue (gross) was Rs. 14,003 lakhs against Rs.15,624 lakhs in the previous year. The revenue from roll segment (gross) was Rs. 9,901 lakhs as compared to Rs. 11,988 lakhs in the previous year. The revenue from pig iron segment was Rs. 1680 lakhs as compared to Rs. 805 lakhs in the previous year. The revenue from Ingot was Rs. 31 lakhs in the current year as against Rs. 590 lakhs in the previous year. The revenue from Engg Forgings segment was Rs. 1,183 lakhs as against Rs. 788 lakhs in the previous year. The net loss was Rs. 15688 lakhs against a net loss of Rs. 6762 lakhs in the previous year.

The Board of Directors had referred the Company to the Board for Industrial and Financial Reconstruction (BIFR), which was registered with BIFR on 23 March, 2016. The Company has also introduced employees Voluntary Separation Scheme and a phase wise suspension of operations . 32 TAYO ROLLS

Forty-Eighth annual report 2015-16

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations may be ‘forward-looking statements’ within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

Annexure to Directors' Report

FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN as on financial year ended on 31.03.2016 Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of The Companies (Management & Administration ) Rules, 2014. I Registration and other details: i CIN L27105JH1968PLC000818 ii Registration Date 02.02.1968 iii Name of the Company Tayo Rolls Limited iv Category/Sub-category of the Company Public Company Limited by shares v Address of the Registered office & contact details Annex 2, General Office, Tata Steel Limited, Bistupur, Jamshedpur, 831001 Phone no. 6627140/141/142 vi Whether listed company Yes vii Name , Address & contact details of the Registrar & TSR Darashaw Limited, 6-10 Haji Moosa Transfer Agent, if any. Patrawala Industrial Estate, 20 Dr. E Moses Road Mahalaxmi, Mumbai - 400011 022-66568484 III Principal Business Activities of the Company: All the business activities contributing 10% or more of the total turnover of the company shall be stated Sl. Name & Description of NIC Code of the % to total turnover of the company No. main products/services Product /service 1 Cast Rolls 3371 2 Forge Rolls 3440 III Particulars of Holding , Subsidiary & Associate Companies: Sl. Name & Address of CIN/GLN Holding/ % of shares Applicable No. the Company Subsidiary/ held Section Associate 1 Tata Steel Limited L27100MH1907PLC000260 Holding 54.45 2 (87)

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IV. Shareholding Pattern (Equity Share Capital break up as % to Total Equity) (i) Category wise shareholding: Category of No. of Shares held at the beginning No. of Shares held at the end % change Shareholders of the year of the year during the year Demat Physical Total % of Demat Physical Total % of Total Total Shares Shares A. Promoters (a) Individuals / 0 0 0.00 0 0 0 0.00 0.00 Hindu Undivided Family (b) Central Government / 0 0 0 0.00 0 0 0 0.00 0.00 State Governments(s) (c) Bodies Corporate 5,668,322 0 5,668,322 55.24 5,668,322 0 5,668,322 55.24 0.00 (d) Financial Institutions / Banks 0 0 0 0.00 0 0 0 0.00 0.00 (e) Any Other (Specify) 0 0 0 0.00 0 0 0.00 0.00 Sub-Total (A) (1) 5,668,322 0 5,668,322 55.24 5,668,322 0 5,668,322 55.24 0.00 (2) Foreign (a) Individuals (Non-Resident 0 0 0 0.00 0 0 0 0.00 0.00 Individuals / Foreign Individuals) (b) Bodies Corporate 1,844,045 0 1,844,045 17.97 1,844,045 0 1,844,045 17.97 0.00 (c) Institutions 0 0 0 0.00 0 0 0 0.00 0.00 (d) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00 (e) Any Other (specify) 0 0 0 0.00 0 0 0 0.00 0.00 Sub-Total (A) (2) 1,844,045 0 1,844,045 17.97 1,844,045 0 1,844,045 17.97 0.00 Total Shareholding of Promoter 7,512,367 0 7,512,367 73.21 7,512,367 0 7,512,367 73.21 0.00 and Promoter Group (A) (B) Public Shareholding (1) Institutions (a) Mutual Funds / UTI 0 150 150 0.00 0 150 150 0.00 0.00 (b) Financial Institutions / Banks 600 350 950 0.01 600 350 950 0.01 0.00 (c) Cental Government / 0 0 0 0.00 0 0 0 0.00 0.00 State Governments(s) (d) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00 0.00 (e) Insurance Companies 0 450 450 0.00 0 450 450 0.00 0.00 (f) Foreign Institutional Investors 0 0 0 0.00 0 0 0 0.00 0.00 (g) Foreign Venture Capital Investors 0 0 0 0.00 0 0 0 0.00 0.00 (h) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00 (i) Any Other (specify) 0 0 0 0.00 0 0 0 0.00 0.00 (i) - (i) Foreign Portfolio Investors (Corp) 0 0.00 0 0.00 0.00 Sub-Total (B) (1) 600 950 1,550 0.02 600 950 1,550 0.02 0.00 (2) Non-Institutions (a) Bodies Corporate 215,129 5,201 220,330 2.15 170,757 5,201 175,958 1.71 -0.43 (b) Individuals - (I) Individual shareholders holding 1,541,812 407,121 1,948,933 18.99 1,547,387 400,041 1,947,428 18.98 -0.01 Rs. 1 lakh nominal share capital upto (ii) Individual shareholders holding nominal share capital in excess 577,555 0 577,555 5.63 623,432 0 623,432 6.08 0.45 of Rs. 1 lakh (c) Qualified Foreign Investor 0 0 0 0.00 0 0 0 0.00 0.00 (d) Any Other (i)Trust 0 200 200 0.00 0 200 200 0.00 0.00 Sub-total (B) (2) 2,334,496 412,522 2,747,018 26.77 2,341,576 405,442 2,747,018 26.77 0.00 Total Public Shareholding 2,335,096 413,472 2,748,568 26.79 2,342,176 406,392 2,748,568 26.79 0.00 (B) = (B)(1)+(B)(2) TOTAL (A)+(B) 9,847,463 413,472 10,260,935 100.00 9,854,543 406,392 10,260,935 100.00 0.00 (C) Shares held by Custodians and against which Depository Receipts have been issued (1) Promoter and Promoter Group 0 0 0 0.00 0 0 0 0.00 0.00 (2) Public 0 0 0 0.00 0 0 0 0.00 0.00 GRAND TOTAL (A)+(B)+© 9,847,463 413,472 10,260,935 100.00 9,854,543 406,392 10,260,935 100.00 0.00

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(ii) Shareholding of Promoters:

Sl. Shareholders Name Shareholding at the Shareholding at the % change in No. beginning of the year end of the year shareholding during the year No. of % of total % of shares No. of % of total % of shares shares shares of pledged shares shares of pledged the company encumbered the company encumbered to total shares to total shares 1 Tata Steel Limited 5,587,372 54.45 NIL 5,587,372 54.45 NIL NIL 2 Yodogawa Steel Woks Limited 1,536,704 14.98 NIL 1,536,704 14.98 NIL NIL 3 Sojitz Corporation 307,341 3.00 NIL 307,341 3.00 NIL NIL 4 Rujuvalika Investments Limited 47,050 0.46 NIL 47,050 0.46 NIL NIL 5 Ewart Investments Limited 30,200 0.29 NIL 30,200 0.29 NIL NIL 6 Tata Industries Limited 3,700 0.04 NIL 3,700 0.04 NIL NIL Total 7,512,367 73.21 NIL 7,512,367 73.21 NIL NIL

(iii) Change in Promoters' Shareholding (please specify, if there is no change)

Sl. Shareholding at the beginning of the Year Cumulative Shareholding during the year No. No. of shares % of total shares of No. of shares % of total shares of the company the company

At the beginning of the year 75,12,367 73.21 75,12,367 73.21

Date wise increase/decrease in Promoters Share holding during the year specifying the THERE IS NO CHANGE IN PROMOTER HOLDING DURING THE FINANCIAL YEAR 2015-16 reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc)

At the end of the year 75,12,367 73.21 75,12,367 73.21

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters & Holders of GDRs & ADRs)

Sl. Name of the Shareholder Date Reason Shareholding at the Cumulative Shareholding No. beginning of the year during the year

No. of % of total No. of % of total Shares shares Shares shares of the of the company company 1 Gautam Chokhany [HUF] 01/04/2015 At the beginning of the year 87,700 0.85 87,700 0.85 No Change 0 0.00 87,700 0.85 31/03/2016 At the End of the year 87,700 0.85 87,700 0.85 2 Hasmukh Parekh 01/04/2015 At the beginning of the year 72,200 0.70 72,200 0.70 No Change 0 0.00 72,200 0.70 31/03/2016 At the End of the year 72,200 0.70 72,200 0.70 3 Tara Chand Jain 01/04/2015 At the beginning of the year 66,939 0.65 66,939 0.65 No Change 0 0.00 66,939 0.65 31/03/2016 At the End of the year 66,939 0.65 66,939 0.65 4 Smita N Navare 01/04/2015 At the beginning of the year 53,670 0.52 53,670 0.52 No Change 0 0.00 53,670 0.52 31/03/2016 At the End of the year 53,670 0.52 53,670 0.52 5 Kashi Prasad Purohit 01/04/2015 At the beginning of the year 48,000 0.47 48,000 0.47 28/08/2015 Increase 35 48,035 0.47 04/09/2015 Decrease -35 48,000 0.47 26/02/2016 Increase 500 48,500 0.47

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Sl. Name of the Shareholder Date Reason Shareholding at the Cumulative Shareholding No. beginning of the year during the year

04/03/2016 Increase 500 49,000 0.48 11/03/2016 Decrease -35 48,965 0.48 18/03/2016 Increase 35 49,000 0.48 31/03/2016 At the End of the year 49,000 0.48 49,000 0.48 6 Nitika Chokhany 01/04/2015 At the beginning of the year 46,585 0.45 46,585 0.45 No Change 0 0.00 46,585 0.45 31/03/2016 At the End of the year 46,585 0.45 46,585 0.45 7 Narinder Bajaj 01/04/2015 At the beginning of the year 44,501 0.43 44,501 0.43 18/09/2015 Decrease -4,034 -0.04 40,467 0.39 31/03/2016 At the End of the year 40,467 0.39 40,467 0.39 8 Manishkumar 01/04/2015 At the beginning of the year 0 0.00 0 0.00 Sumatilal Mehta 25/03/2016 Increase 36,946 0.36 36,946 0.36 31/03/2016 At the End of the year 36,946 0.36 36,946 0.36 9 Everett Consultants Pvt. Ltd. 01/04/2015 At the beginning of the year 31,851 0.31 31,851 0.31 24/04/2015 Decrease -5,344 -0.05 26,507 0.26 08/05/2015 Decrease -1,881 -0.02 24,626 0.24 31/07/2015 Decrease -1,083 -0.01 23,543 0.23 18/09/2015 Increase 17,000 0.17 40,543 0.40 30/09/2015 Decrease -2,236 -0.02 38,307 0.37 30/10/2015 Decrease -2,561 -0.02 35,746 0.35 06/11/2015 Decrease -1,000 -0.01 34,746 0.34 27/11/2015 Increase 2,000 0.02 36,746 0.36 11/12/2015 Decrease -5,000 -0.05 31,746 0.31 25/12/2015 Increase 1,406 0.01 33,152 0.32 31/12/2015 Decrease -12,752 -0.12 20,400 0.20 08/01/2016 Decrease -5,012 -0.05 15,388 0.15 22/01/2016 Decrease -168 0.00 15,220 0.15 05/02/2016 Increase 4,147 0.04 19,367 0.19 19/02/2016 Increase 1,890 0.02 21,257 0.21 18/03/2016 Increase 3,900 0.04 25,157 0.25 31/03/2016 At the End of the year 25,157 0.25 25,157 0.25 10 Sunshine Commodities 01/04/2015 At the beginning of the year 0 0.00 0 0.00 Private Limited 11/11/2015 Increase 24,459 0.24 24,459 0.24 31/03/2016 At the End of the year 24,459 0.24 24,459 0.24 11 Gautam Chokhany 01/04/2015 At the beginning of the year 22,204 0.22 22,204 0.22 26/02/2016 Increase 5 0.00 22,209 0.22 11/03/2016 Decrease -5 0.00 22,204 0.22 11/03/2016 Increase 5 0.00 22,209 0.22 31/03/2016 At the End of the year 22,209 0.22 22,209 0.22 12 Indo Invest Vision Limited 01/04/2015 At the beginning of the year 44,884 0.44 44,884 0.44 29/05/2015 Decrease -4,700 -0.05 40,184 0.39 28/08/2015 Decrease -15,725 24,459 0.24 11/09/2015 Decrease -24,459 0 0.00 31/03/2016 At the End of the year 0 0.00 0 0.00 13 Manishkumar 01/04/2015 At the beginning of the year 26,040 0.25 26,040 0.25 Sumatilal Mehta(Huf) 25/09/2015 Decrease -26,040 -0.25 0 0.00 31/03/2016 At the End of the year 0 0.00 0 0.00

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(v) Shareholding of Directors & Key Managerial Personnel

Sl. No. Shareholding at the end Cumulative Shareholding of the year during the year

For Each of the Directors % of total shares % of total & Key Managerial Personnel No. of shares of the company No. of shares shares of the company

At the beginning of the year NIL NIL NIL NIL

Date wise increase/decrease in Promoters Share holding during the NIL NIL NIL NIL year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc)

At the end of the year NIL NIL NIL NIL

V Indebtedness: Indebtedness of the Company including interest outstanding / accrued but not due for payment:

Secured Loans Unsecured Deposits Total excluding deposits Loans (In Rupees) Indebtedness (In Rupees) (In Rupees) (In Rupees) Indebtness at the beginning of the financial year I) Principal Amount 964,970,113 183,991,730 1,148,961,843 ii) Interest due but not paid iii) Interest accrued but not due 3,338,185 33,562 3,371,747 Total (i+ii+iii) 968,308,298 184,025,292 0 1,152,333,590 Change in Indebtedness during the financial year Additions 268,532,408 268,532,408 Reduction 137,398,969 137,398,969 Net Change 137,398,969 268,532,408 0 405,931,377 Indebtedness at the end of the financial year i) Principal Amount 827,365,934 436,300,000 1,263,665,934 ii) Interest due but not paid iii) Interest accrued but not due 3,543,395 16,257,700 19,801,095 Total (i+ii+iii) 830,909,329 452,557,700 0 1,283,467,029

VI Remuneration of Directors and Key Managerial Personnel:

A. Remuneration to Managing Director, Whole Time Director and/or Manager

Sl. No. Particulars of Remuneration Name of the MD/WTD/Manager Total Amount

1 Gross Salary Mr. K. Shankar Marar In Rupees Managing Director (a) Salary as per provisions contained in section 17(1) of the Income Tax. 1961. 29,64,492 29,64,492 (b) Value of perquisites u/s 17(2) of the Income tax Act, 1961 5,07,218 5,07,218 (c ) Profits in lieu of salary under section 17 (3) of the Income Tax Act, 1961 NIL NIL 2 Stock option NIL NIL 3 Sweat Equity NIL NIL 4 Commission NIL NIL as % of profit NIL NIL others (specify) NIL NIL 5 Others (Retiral Benefits) 5,96,808 5,96,808 Total (A) 40,68,518 40,68,518 Ceiling as per the Act 84,00,000 84,00,000

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B. Remuneration to other directors: Sl. No. Particulars of Remuneration Name of the Directors Total Amount 1 Independent Directors Dr. S.K. Mr. Sudev. C. Mr. Dipak.K. Prof. Mrs. Ramya Bhattacharya Das Banerjee Ranjan Das Hariharan (a) Fee for attending board/ 2,35,000 1,35,000 75,000 1,35,000 75,000 committee meetings (b) Commission NIL NIL NIL NIL NIL (c ) Others, please specify NIL NIL NIL NIL NIL Total (1) 2,35,000 1,35,000 75,000 1,35,000 75,000 6,55,000 Other Non Executive Directors Mr. Anand Sen Mr. V.S.N. Mr. Yoshikazu Murty Miyasaka (a) Fee for attending board committee meetings NIL NIL NIL NIL NIL (b) Commission NIL NIL NIL NIL NIL (c ) Others, please specify. NIL NIL NIL NIL NIL Total (2) NIL NIL NIL NIL NIL NIL Total (B)=(1+2) NIL NIL NIL NIL NIL 6,55,000 Total Managerial Remuneration - A+B 47,23,518 Overall Ceiling as per the Act. Considering the financial position of the Company, Non-Executive Directors (NED's) have decided not to take sitting fees for attending Board/Committee meetings

C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD :

Sl. No. Particulars of Remuneration Key Managerial Personnel

1 Gross Salary Deputy Chief Financial Officer Company Secretary Total Mr. Suresh Padmanabhan Mr. Prashant Kumar

(a) Salary as per provisions 16,74,380 7,24,592 23,98,972 contained in section 17(1) of the Income Tax Act, 1961.

(b) Value of perquisites u/s 17(2) 54,531 20,400 74,931 of the Income Tax Act, 1961

c) Profits in lieu of salary under NIL NIL NIL section 17(3) of the Income Tax Act, 1961

2 Stock Option NIL NIL NIL

3 Sweat Equity NIL NIL NIL 4 Commission NIL NIL NIL as % of profit NIL NIL NIL others, specify NIL NIL NIL

5 Others, please specify NIL NIL NIL

Total 17,28,911 7,44,992 24,73,903

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Forty-Eighth annual report 2015-16

VII Penalties / Punishment / Compounding of Offences:

Type Section of the Brief Details of Penalty / Authority Appeal Companies Act Description Penalty / Punishment / (RD /NCLT/Court) made Compounding if any fees imposed (give details ) A. COMPANY Penalty N.A. N.A. N.A. N.A. N.A. Punishment N.A. N.A. N.A. N.A. N.A. Compounding N.A. N.A. N.A. N.A. N.A. B. DIRECTORS Penalty N.A. N.A. N.A. N.A. N.A. Punishment N.A. N.A. N.A. N.A. N.A. Compounding N.A. N.A. N.A. N.A. N.A. C. OTHER OFFICERS IN DEFAULT Penalty N.A. N.A. N.A. N.A. N.A. Punishment N.A. N.A. N.A. N.A. N.A. Compounding N.A. N.A. N.A. N.A. N.A.

Form No. AOC-2 Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014} Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub- section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm’s length basis:

Name(s) of Nature of Duration of Salient terms Justification Date(s) of Amount paid Date on which the related contracts/arra the contracts / of the for entering approval by as advances, the special party and ngements/tran arrangements contracts or into such the Board if any resolution was nature of sactions / transactions a r r a n g e m ents contracts or passed in relationship or transactions arrangements general including the or value, if any transactions meeting as required under first proviso to Section 188 NIL 2 . Details of material contracts or arrangement or transactions at arm’s length basis:

Name(s) of the Nature of Duration of the Salient terms of the Date(s) of approval Amount paid as related party and contracts/arrange contracts contracts or by the Board, if advances, if any nature of ments/transactions /arrangements / arrangements or any relationship transactions transactions including the value, if any

All related party transactions (“RPT”) entered into during FY 2015-16 were on arm’s length basis and in the ordinary course of business. All RPT were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained on a yearly basis for the transactions which were foreseen and were repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted were audited and a statement giving details of38 all RPTs was placed before the Audit Committee for its monitoring on quarterly basis. The details of transactions as per AS-18 are disclosed in the Notes to Accounts for FY15-16.

On behalf of the Board of Directors Jamshedpur July 18, 2016 Anand Sen Chairman (DIN– 00237914)

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Forty-Eighth annual report 2015-16

SECRETARIAL AUDIT REPORT FORM NO. MR - 3 FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016 [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014] To, The Members, Tayo Rolls Limited Annex-2, General Office, Tata Steel Limited, Bistupur, Jamshedpur - 831 001 We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Tayo Rolls Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended March 31, 2016, complied with the statutory provisions and that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter. We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2016 according to the provisions of:

Sl No. Name of Act, Rules, Regulation 1 The Companies Act, 2013 (the Act) and the rules made thereunder 2 The Securities Contracts (Regulation) Act, 1956 ('SCRA') and the rules made thereunder 3 The Depositories Act, 1996 and the Regulations and bye-laws framed thereunder 4 Foreign Exchange Management Act,1999 and the rules and regulations made thereunder 5 The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (,SEBI Act'):- 5 (a) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations, 2015 5 (b) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2013 5 (c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 5 (d) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations,1993, regarding the Companies Act and dealing with client 6 Employees Provident Fund and Miscellaneous Provisions Act, 1952 7 Employees State Insurance Act, 1948 8 Public Liability Insurance Act, 1991 9 Environment Protection Act, 1986 10 Water (Prevention and Control of Pollution) Act, 1974 and Water Cess Act, 1977 11 Air (Prevention and Control of Pollution) Act, 1981 12 Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008 13 Factories Act, 1948 14 Contract Labour (Regulation and Abolition) Act, 1970 15 The Industrial Employment Standing Orders Act, 1946 16 Employees Compensation Act, 1923 17 Employment Exchange (Compulsory Notification of Vacancies) Act, 1961 18 Apprenticeship Act, 1961

40 TAYO ROLLS

Forty-Eighth annual report 2015-16

19 Batteries management & Handling Rules, 2001 20 Indian Stamp Act, 1999 21 Industrial Dispute Act, 1947 22 Maternity Benefits Act, 1961 23 Minimum Wages Act, 1948 24 Payment of Bonus Act, 1965 25 Payment of Gratuity Act, 1972 26 Equal Remuneration Act, 1976 27 Payment of Wages Act, 1936

We have also examined compliance with the applicable clauses ofthe following: (i) Secretarial Standards issued by The Institute of Company Secretaries of India. (ii) The Listing Agreements entered into by the Company with Stock Exchanges (now known as the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015; w.e.f 2nd day of December, 2015). During the period under review the Company has complied with the provisions of the Act, Rules, Regulations,Guidelines, Standards, etc mentioned above. We further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. We further report that the Company has issued and allotted fully paid-up 8.50% Non- Cumulative Redeemable Preference Shares on preferential basis during the audit period in part compliance of the Companies Act 2013. We further report that: Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. All decisions at Board Meetings and committee Meetings are carried out in unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be. We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines. We further report that during the audit period, there were no instances of: (i) Public Rights debentures sweat equity. (ii) Redemption buy-back of securities. (iii) Major decisions taken by the Members in pursuance to Section180 of the Companies Act, 2013. Except Sub-Sectionl (a) and1 (c). (iv) Foreign technical collaborations. We further report that the Company had passed a resolution in Board Meeting held on 20th January, 2016 to get itself registered with Board for Industrial and Financial Reconstruction (BIFR) and the same was accepted and registered by BIFR on 23 rd March, 2016 .

For, P.K. Singh & Associates (Firm's Registration No. P2002JH045700)

Kolkata May 26, 2016 This Report is to be read with our letter of even date which is annexed as Annexure A and forms an integral part of this report

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'Annexure - A’ To, The Members, Tayo Rolls Limited Annex-2, General Office, Tata Steel Limited, Bistupur, Jamshedpur - 831 001 Our report of even date is to be read along with this letter. 1. Maintenance of Secretarial records is the responsibility of the management of the Company. Our Responsibility is to express an opinion on these secretarial records based on our audit. 2. We have followed the audit practices and the processes as were appropriate to obtain reasonable assurance about the correctness of the contests of the secretarial records.The verification was done on test basis to ensure the correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion. 3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company. 4. Wherever required, we have obtained the Management Representation about the compliance of Laws, rules and regulation and happening of events etc. 5. The Compliance of the provisions of Corporate and other applicable laws, rule, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis. 6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy of effectiveness with which the management has conducted the affairs of the Company.

For, P.K Singh & Associates (Firm's Registration No. P2002JH045700)

Kolkata Santosh Kumar 26 May, 2016 (Partner) ACS No.: 40221 C P No.: 15130 Certification by Managing Director /CEO & Dy. CFO Pursuant to Regulation 17(8) read with Schedule II Part B of the SEBI (LODR) Regulations 2015, we, K. Shankar Marar, Managing Director and Suresh Padmanabhan, Deputy Chief Financial Officer hereby certify that: 1. We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge and belief: (i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; (ii) these statements together present a true and fair view of the company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations. 2. There are, to the best of our knowledge and belief, no transactions entered into by the company during the year which are fraudulent, illegal or violative of the company’s code of conduct. 3. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. 4. We have indicated to the auditors and the Audit committee: (i) significant changes in internal control over financial reporting during the year; (ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and (iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system over financial reporting.

Kolkata Suresh Padmanabhan K. Shankar Marar May 26, 2016 Deputy Chief Financial Officer Managing Director DIN – 06656658 42 TAYO ROLLS

Forty-Eighth annual report 2015-16

Certification on Corporate Governance

TO THE MEMBERS OF TAYO ROLLS LIMITED

1. We have examined the compliance of conditions of Corporate Governance by TAYO ROLLS LIMITED (“the Company”), for the year ended on 31 March, 2016, as stipulated in:

• Clause 49 (excluding clause 49(VII)(E)) of the Listing Agreements of the Company with stock exchanges for the period from 1 April, 2015 to 30 November, 2015.

• Clause 49(VII)(E) of the Listing Agreements of the Company with the stock exchanges for the period from 1 April, 2015 to 1 September, 2015.

• Regulation 23(4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) for the period from 2 September, 2015 to 31 March, 2016 and

• Regulations 17 to 27 (excluding regulation 23(4)) and clauses (b) to (i) of regulation 46(2) and para C, D and E of Schedule V of the Listing Regulations for the period from 1 December, 2015 to 31 March, 2016.

2. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring compliance with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

3. We have examined the relevant records of the Company in accordance with the Generally Accepted Auditing Standards in India, to the extent relevant, and as per the Guidance Note on Certification of Corporate Governance issued by the Institute of the Chartered Accountants of India.

4. In our opinion and to the best of our information and according to our examination of the relevant records and the explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement and regulation 17 to 27 and clauses (b) to (i) of regulation 46(2) and para C , D and E of Schedule V of the Listing Regulations for the respective periods of applicability as specified under paragraph 1 above, during the year ended 31 March, 2016.

5. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company.

For Deloitte Haskins & Sells Chartered Accountants (Firm‘s Registration No. 302009E)

Alka Chadha Partner (Membership No. 93474)

Gurgaon, August 19, 2016

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Forty-Eighth annual report 2015-16

Corporate Governance Report for the year 2015 - 16 As required under Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

The Company has a Corporate Governance framework that is followed over the years to uphold the Tata traditions and values. As a Tata Company, the philosophy on corporate governance is founded upon a rich legacy of fair, ethical and transparent governance practice. In order to achieve the objectives of good corporate governance, Tayo follows the principles of transparency, disclosure, independent supervision, healthy competition, provision of equal opportunity employment, safety & welfare, production of quality products and services, compliance with applicable Laws, Rules and Regulations. In order to protect the interests of its stakeholders, Company emphasizes the need for full transparency and accountability in all its transactions. The Board considers itself as a Trustee of its Shareholders and acknowledges its responsibilities towards them for creation and safeguarding their wealth. The core values of Company are honesty, integrity, credibility, commitment, agility, team spirit and excellence. BOARD OF DIRECTORS The Board of Directors of the Company (“Board”) is entrusted with the ultimate responsibility of management, general affairs, direction and performance of the Company and has been vested with the requisite powers and authorities. The Board members are having varied skills, experience and knowledge for the management of the Company. In accordance with the Articles of Association, the Board may have maximum 12 Directors. As on March 31, 2016 the total strength of the Board was Nine, comprising of one Executive and eight Non- Executive Directors. The Company has a Non-Executive Non-Independent Chairman and the number of Independent Directors as on March 31, 2016 is more than 50% of the total strength of the Board. The number of Non-Executive Directors is also more than 50% of the total strength of the Board. The Board also comprises of a Woman Director. The composition of the Board is in compliance with the provisions of Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, hereinafter called as SEBI (LODR) Regulations, 2015. An optimum combination of Independent and Non-Independent Directors in the Board ensures that the independence prevails at all times while transacting business at Board meetings. The Board reviews its policy from time to time to assess its relevance and suggest appropriate measures, if required. None of the Directors on the Board is a member of more than 10 Committees and Chairman of more than 5 Committees as specified in Regulation 26 of the SEBI (LODR), Regulations, 2015, across all the Public companies in which he was a Director. All the Directors have made necessary disclosures regarding Committee positions. The Non - Executive Directors are paid sitting fees as per the relevant provisions of Companies Act, 2013. Apart from sitting fees, the Non –Executive Directors are eligible for commission not exceeding 1% of the net profit of the Company computed in accordance with Section 197 of the Companies Act, 2013. The payment of commission to Non-Executive Directors has been approved by the shareholders at the 44th Annual General Meeting held on July 18, 2012, for a period of 5 years with effect from April 1, 2012. However, due to loss, commission has not been paid to the Non-Executive Directors for the financial year 2014-15 and no Commission is proposed for the financial year 2015- 16. BOARD MEETINGS The Board of Directors met eight times during the financial year 2015-16 and gap between two meetings did not exceed more than one hundred and twenty days. The dates on which the Board meetings were held are as follows: (i) April 21, 2015 (ii) June 20, 2015 (iii) July 16, 2015 (iv) August 08, 2015 (v) August 20, 2015 (vi) October 17, 2015 (vii) January 20, 2016 & adjourned Board Meeting on February 12, 2016 and (viii) March 14, 2016. The necessary quorum was present at all the meetings. As per Regulation 25(3) of the SEBI (LODR), Regulations, 2015, the Independent Directors meeting was held on March 16, 2016, wherein Independent Directors were present without the participation of Non-Independent Directors and members of Management. Apart from other businesses, the Independent Directors at their meeting dealt with the Agenda as specified in the Companies Act, 2013 and SEBI (LODR), Regulations, 2015. The company has framed a familiarization policy for its Independent Directors to make them aware about the company and business scenario in which it operates including the roles, rights, responsibilities etc. of the Independent Directors. The details of such policy are available on the website of the company at www.tayo.co.in The names and categories of Directors on the Board, their attendance at the Board meetings during the year and at the last Annual General Meeting and their Directorships held and Committee Membership in other public companies and Shareholdings are given below:

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Forty-Eighth annual report 2015-16

Other Public Companies No. of Last AGM Directorship held as on Committees position held as Board held on 31.03.2016 on 31.03.2016 Meetings August 20, 2015 Name Category attended attended Member Chairman Member Chairman Mr. Anand Sen, Chairman Promoter , Non 7 No 4 Nil 1 Nil DIN-00237914 Independent, Non-Executive Dr. S. K. Bhattacharyya Independent, 8 Yes Nil Nil Nil Nil DIN-00026534 Non-Executive Mr. Dipak K. Banerjee Independent, 6 Yes 8 Nil 4 4 DIN-00028123 Non-Executive Prof. Ranjan Das Independent 7 Yes 1 Nil Nil Nil DIN-01738493 Non-Executive Mr. Sudev C. Das Independent, 8 Yes 2 Nil 2 Nil DIN-01072628 Non-Executive Mr. V. S. N. Murty Promoter, Non 7 Yes 4 Nil 2 1 DIN-00092348 Independent, Non-Executive Mrs. Ramya Hariharan Independent, 5 No 6 Nil 4 Nil DIN- 06928511 Non - Executive Mr. Yoshikazu Miyasaka Promoter, Non 2 Yes Nil Nil Nil Nil DIN – 07125432 Independent, Non-Executive Mr. K. Shankar Marar Non- Independent, 8 Yes Nil Nil Nil Nil DIN- 06656658 Executive

During the year Board Meetings were also held through Video Conferencing and other Audio Visual means in conformity with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014. Apart from the formal Board meetings, in case of urgency the Board also passed resolution through Circular resolution in accordance with the provisions of Section 175 of the Companies Act, 2013, read with Article 164 of the Articles of Association of the Company. The Board periodically reviews Compliance to all applicable Laws. The Audit committee reports to the Board on the same. The Managing Director submits a compliance certificate on quarterly basis at the meetings of the Board. The ‘Tata Code of Conduct’, as adopted by the Company, is applicable to the Executive Director, Senior Management Personnel and other employees of the Company. The Company has received confirmation from the Managing Director as well as Senior Management Personnel regarding compliance to the Code during the year under review. The Company has laid down the ‘Code of Conduct for Non- Executive Directors’ of the Company. The Company has also received confirmations from the Non-Executive Directors regarding compliance of the code during the year under review. These codes are posted on www.tayo.co.in , the website of the Company. The Managing Director’s declaration to the affirmation of the Code of Conduct is on report. BOARD COMMITTEES The Board has constituted Committee of Directors to monitor the activities and to deal with matters within the terms of reference of the Committees thereof: (a) Audit Committee A qualified and Independent Audit Committee was constituted in the year 1997. The Company has complied with the requirements of Regulation 18 of the SEBI (LODR) Regulations, 2015 with regard to the composition of the Committee. The members of the Audit Committee are Non-Executive Directors, with majority of them being independent. The Chairman of the Committee is an Independent Director. The members bring with them vast experience in the field of operations, technical and finance. The Deputy Chief Financial Officer, Internal Auditor and Statutory Auditor attend the Audit Committee meetings. Other senior executives attend the meeting as and when invited by the Committee. The Company Secretary acts as the Secretary of the Audit Committee. The role and review of information by the Audit Committee is as prescribed under Regulation 18 (3) read with Part C of Schedule II of the SEBI (LODR) Regulations, 2015 read with section 177 of the Companies Act, 2013. The broad terms of reference of the Audit Committee includes: • Oversight of the company’s financial reporting process and the disclosure of it’s financial information; • Recommendation for appointment, remuneration and terms of appointment of auditors of the company; • Evaluation of internal financial control and risk management systems; • Discussion with internal auditors of any significant findings and follow up thereon;

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Forty-Eighth annual report 2015-16

• Discussions with the statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern; • Reviewing with the management the annual / quarterly financial statements and auditors report thereon before submission to the board for approval; • To review the functioning of the Whistle Blower Mechanism and Insider Trading etc. • Carrying out such other functions as mentioned in the terms of reference of the Audit Committee. The Audit Committee reviews the financial statements with the statutory auditors and the management with reference to the accounting policies and practices, before recommending the same to the Board for approval. The Audit Committee also reviews and approves the statement of related party transactions and any subsequent modification of transactions of the company with related parties, Internal Control weakness report issued by Internal Auditor and Statutory Auditors and also the Management Discussion & Analysis. The Audit Committee met five times during the year on (i) April 21, 2015 (ii) July 16, 2015 (iii) October 17, 2015 (iv) January 20, 2016 and adjourned meeting on February 12, 2016 and (v) March 16, 2016. The necessary quorum was present at all the meetings. Composition of Audit Committee and details of the meeting attended during the financial year 2015-16 are as follows:

Name Category No. of meetings attended

Dr. S. K. Bhattacharyya, Chairman Independent, Non-Executive 5

Mr. Dipak K. Banerjee Independent, Non-Executive 3

Prof Ranjan Das Independent, Non-Executive 4

Mr. Sudev C. Das Independent, Non-Executive 4

Mr. V. S. N. Murty Promoter, Non-Independent, Non 5 Executive

Dr. S. K. Bhattacharyya, Chairman of the Audit Committee was present at the last Annual General Meeting held on August 20, 2015. Whistle Blower Policy The Company has adopted the Whistle Blower Policy which provides a formal mechanism for all employees and directors of the Company to approach to the Ethics Counselor / Chairman of the Audit Committee of the Company and to make protective disclosure about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct. The Whistle Blower Policy is an extension of the Tata Code of Conduct, which requires every employee and director to promptly report to the Ethics Counselor / Chairman Audit Committee, any actual or suspected or possible violation of the Code or an event he becomes aware of, that could affect the business or reputation of the Company. Under the policy, each employee and director of the Company has an assured access to the Ethics Counselor/ Chairman of the Audit Committee. The Whistle Blower Policy also provides for adequate safeguards against victimization of employees and directors who avail the vigil mechanism and also provides direct access to the Chairman of Audit Committee as and when required. The Audit Committee also reviews the functioning of Whistle Blower Mechanism. The Company does not have any Subsidiary Company. The Company has laid down Risk Management Policy, which is reviewed by the Management and by the Board. The details of the policy are available on the website of the company at www.tayo.co.in (b) Nomination and Remuneration Committee To comply with the provisions of section 178(1) of the Companies Act, 2013 read with Regulation 19 of the SEBI (LODR) Regulations, 2015, the Board has constituted a Nomination and Remuneration Committee. The Nomination and Remuneration Committee comprises Non-Executive Directors, majority of them being Independent Directors. The Chairman of the Nomination and Remuneration Committee is an Independent Director. The terms of reference of the Nomination and Remuneration Committee are formulation of the criteria for determining qualifications, positive attributes, independence of directors and recommend to the Board a policy relating to the remuneration of the directors, Key Managerial Personnel and other employees, formulation of criteria for evaluation of Independent Directors and the Board, Board Diversity Policy and to identify the persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal. The Nomination and Remuneration Committee met two times during the year on (i) April 21, 2015 (ii) July 16, 2015 Composition of Nomination and Remuneration Committee and details of the meeting attended during financial year 2015 – 16 are as follows: 46 TAYO ROLLS

Forty-Eighth annual report 2015-16

Name Category No. of meetings attended

Dr. S. K. Bhattacharyya, Chairman Independent, Non-Executive 2

Mr. Anand Sen Promoter, Non Independent, 2 Non- Executive

Mr. Dipak K. Banerjee Independent, Non-Executive 1

Prof Ranjan Das Independent, Non-Executive 2

The Chairman of Nomination and Remuneration Committee was present at the last Annual General Meeting. Remuneration Policy of Directors, KMPs and other Employees The philosophy for remuneration of directors, key managerial personnel and all other employees of the company is based on the commitment of fostering a culture of “Leadership with Trust”. The remuneration policy has been prepared pursuant to the provisions of Section 178(3) of the Companies Act, 2013 read with Regulation 19 (4) read with Part D of Schedule II of the SEBI (LODR) Regulations, 2015. While formulating the policy, Nomination and Remuneration Committee has considered the factors laid down under section 178(4) of the Act. which are as under: (1) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; (2) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (3) Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals. (i) Remuneration for Independent Directors and Non-Independent Non-Executive Directors Key principles governing the remuneration policy are as follows: Overall remuneration should be reflective of the size of the Company, complexity of the sector/ industry/ Company’s operations and the Company’s capacity to pay the remuneration and should be consistent with recognized best practices. Independent directors (“ID”) and Non-Independent Non-Executive Directors (“NED”) may be paid sitting fees (for attending the meetings of the Board and Committees of which they may be members). Quantum of sitting fees and NED Commission may be subject to review on a periodic basis, as required. Within the parameters prescribed by law, the payment of sitting fees and commission will be recommended by the NRC and approved by the Board. Overall remuneration (sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate directors aligned to the requirements of the Company. The aggregate commission payable to all the NEDs and IDs will be recommended by the NRC to the Board, based on company’s performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters, as may be decided by the Board. The NRC will recommend to the Board, the quantum of commission for each director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and Committee meetings, individual contributions at the meetings and contributions made by directors other than in meetings. In addition to the sitting fees and commission, the Company may pay to any director such fair and reasonable expenditure, as may have been incurred by the director while performing his/ her role as a director of the company. This could include reasonable expenditure incurred by the director for attending Board/and its committee meetings, general meetings, court convened meetings, meetings with shareholders/ creditors/ management, site visits, induction and training (organized by the company for directors) and in obtaining professional advice from independent advisors in the furtherance of his/ her duties as a director. (ii) Remuneration for Managing Director (“MD”)/ Executive Directors (“EDs”)/ KMP/ rest of the employees The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be: Market competitive (market for every role is defined as companies from which the company attracts talent or companies to which the company loses talent) and driven by the role played by the individual, Reflective of size of the company, complexity of the sector/ industry/ company’s operations and the company’s capacity to pay, Consistent with recognized best practices and aligned to any regulatory requirements, 47 TAYO ROLLS

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The remuneration mix for the MD/ EDs is as per the contract approved by the shareholders. In case of any change, the same would require the approval of the shareholders. Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition to the basic/ fixed salary, the company may provide employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings and tax optimization, where possible. The company may also provide all employees with a social security net (subject to limits) by covering medical expenses and hospitalization through re-imbursements or insurance cover and accidental death and dismemberment through personal accident insurance. The company provides retirement benefits as applicable. In addition to the basic/ fixed salary, benefits, perquisites and allowances as provided above, the Company may provide MD/ EDs such remuneration by way of bonus/performance linked incentive and/or commission calculated with reference to the net profits of the Company in a particular financial year, as may be determined by the Board, subject to the overall ceilings stipulated in Section 197 of the Companies Act, 2013. The specific amount payable to the MD/ EDs would be based on performance as evaluated by the Board or the NRC and approved by the Board. The Company may provide the rest of the employees a performance linked bonus and/or performance linked incentive. The performance linked bonus/performance linked incentive would be driven by the outcome of the performance appraisal process and the performance of the company. Remuneration payable to Director for services rendered in other capacity The remuneration payable to the Directors shall be inclusive of any remuneration payable for services rendered by such director in any other capacity unless: The services rendered are of a professional nature; and The Nomination and Remuneration Committee is of the opinion that the director possesses requisite qualification for the practice of the profession. The Non-Executive Directors are paid remuneration by way of sitting fees and commission. The Company paid sitting fees of Rs. 15,000/- (Rupees fifteen thousand only) per meeting to its Non-Executive Directors, for attending Board meeting, Audit Committee and Nomination and Remuneration Committee meetings and Rs. 10,000/- (Rupees ten thousand only) per meeting for any other Committee meeting. Total sitting fees paid to the Non-Executive Directors for attending meetings of the Board and Committees thereof during financial year 2015-16 was Rs. 6,55,000/- (Rupees six lakh fifty five thousand only). The Company has not granted any stock options to its Non-Executive Directors. Details of remuneration paid to Non-Executive Directors towards sitting fees for attending the Board and Committee meetings during financial year 2015-16 are as follows:

Name of Director Amount in (Rs.) Mr. Anand Sen — Dr. S. K. Bhattacharyya 235,000 Mr. Dipak K. Banerjee 75,000 Mr. Osamu Nishimura — Prof. Ranjan Das 135,000 Mr. Sudev C. Das 135,000 Mr. V.S. N. Murty --- Mrs. Ramya Hariharan 75,000 Mr. Yoshikazu Miyasaka — Total 6,55,000

Details of remuneration paid to the Managing Director during financial year 2015-16 is as follows:

Name Salary Allowances & Retiral Benefits Performance Bonus/ Stock Options Perquisites Variable Pay Mr. K. Shankar Marar, 22.10 12.62 5.97 NIL NIL Managing Director

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Service Contract, Severance Fees and Notice Period: Period of Contract of Mr. K. Shankar Marar Three years (From 11.08.2013 to 10.08.2016) On the recommendation of Nomination and Remuneration Committee, the Board has, subject to the approval of shareholders by way of special resolution at the forthcoming Annual General Meeting, re-appointed Mr. Marar for a further period of 3 years with effect from August 11, 2016 The contract may be terminated by either party, giving the other party six months’ notice or the Company paying six months’ salary in lieu there of. Severance fees There is no separate provision for payment of severance fees. Performance Evaluation Criteria for Board/Committee(s)/Director(s) Pursuant to the provisions of the Companies Act, 2013 and Chapter IV read with the provisions of Schedule II of SEBI (LODR) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process. c) Stakeholders Relationship Committee The Board has a Stakeholders Relationship Committee in confirmation with the requirements of section 178(5) of the Companies Act, 2013 read with Regulation 20 of SEBI (LODR) Regulations, 2015. The terms of reference of the Stakeholders Relationship Committee are to resolve the grievances of the security holders of the company including complaints related to transfer of shares, non-receipt of annual report etc. Company Secretary acts as Compliance Officer for this purpose. Stakeholders Relationship Committee met once during the year 2015-16. The Composition of Stakeholders Relationship Committee is as follows: Name Category No of meetings attended Mr. Anand Sen, Chairman Promoter, Non- Independent, Non-Executive 0 Mr. Sudev C. Das Independent, Non-Executive 1 Mr. K. Shankar Marar Promoter, Non- Independent, Managing Director, 1

During the year under review the Company has received few correspondences from its shareholders relating to non-receipt of dividend, non-receipt of shares sent for transfer, enquiry for dematerialization, split/transmission, change in address etc. No correspondence was pending as on 31.03.2016. d) Share Transfer Committee: Constituted in the year 1969. Share Transfer Committee was constituted for approving transfer, sub-division of shares and issue of fresh share certificates with the following members, with the authority to act individually. The Committee met as and when required.

Name Category Mr. Anand Sen, Chairman Promoter, Non- Independent,Non-Executive Mr. K. Shankar Marar Promoter, Non- Independent, Managing Director Mr. Prashant Kumar Company Secretary & Compliance Officer

e) Ethics & Compliance Committee: Constituted in the year 2002. Ethics and Compliance Committee was constituted in terms of the Amended regulations of SEBI (Prohibition of Insider Trading) Regulations, 1992 including the amendment done in 2015. The Board had adopted the “Tata Code of Conduct for Prevention of Insider Trading” and “Code of Corporate Disclosure Practices” for its Directors, Officers and Employees. The terms of reference of the Committee are to oversee the implementation of regulation of the code, take on record the status report prepared by the Compliance Officer detailing the dealings in Securities by the specified persons and decide on penal action in respect of violation of the regulation/code by the specified person. The Company Secretary has been appointed as the Compliance Officer for implementation of Tata Code of Conduct for Prevention of Insider Trading and overseeing the compliance with the Regulations and Code across the Company.

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The Managing Director and the Company Secretary & Compliance Officer have been appointed as the Public spokesperson pursuant to the Code as required under the regulation, who would be responsible to ensure timely and adequate disclosure of price sensitive information to the investors. f) Governance Council: Constituted in the year 2003. Governance Council of the Board is responsible for the formation and evaluation of the Board of Directors of the Company. The Council is constituted with the following Directors:

Name Category Mr. Anand Sen, Chairman Promoter, Non- Independent,Non-Executive Dr. S. K. Bhattacharyya Independent, Non- Executive Mr. Sudev C. Das Independent, Non- Executive

g) Committee of the Board: Constituted in the year 2003. The terms of reference of the Committee of the Board (COB) are to approve capital expenditure schemes and to recommend to the Board, capital budget and other major capital schemes, to consider new business, diversification and future strategy. The Committee is constituted with the following Directors:

Name Category Dr. S. K. Bhattacharyya Chairman Independent, Non-Executive Director Mr. Dipak K. Banerjee Independent, Non-Executive Director Mr. V. S. N. Murty Promoter, Non-Independent, Non- Executive Director Mr. K. Shankar Marar Managing Director, Promoter, Non- Independent

The Committee met as and when required.

h) Corporate Social Responsibility (CSR) Committee:

As per section 135 (1) of the Companies Act, 2013, every Company having a net worth of Rupees five hundred crore or more, or turnover of Rupees one thousand crore or more or a net profit of Rupees five crore or more during any financial year shall constitute a CSR Committee of the Board consisting of three or more Directors, out of which at least one Director shall be Independent Director.

The Company has been suffering loss since 2008-09 and doesn’t fulfill any of the basic criteria as mentioned under section 135 (1) of the Companies Act, 2013 therefore CSR Committee of the Board is not required. Hence Company has not constituted a CSR Committee of the Board.

Other than the above Committees, the Board also constitutes Committee for specific purpose as and when required.

Name, Designation & address of Compliance Officer: Mr. Prashant Kumar, Company Secretary & Compliance Officer, Tayo Rolls Limited, Office of the Company Secretary, Large Scale Industrial Estate, P.O. Gamharia – 832108 Dist: Seraikella- Kharsawan, Jharkhand Tel.No.0657-6627140/6627141 Fax No.0657-6627200 E-mail :[email protected] [email protected]

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GENERAL BODY MEETING DETAILS Location and time where last three Annual General Meetings were held:

Year Date Time Venue 2015* 20.08.2015 11:30 a.m. Auditorium of Centre for Excellence, Jubilee Road, Bistupur, Jamshedpur 831001 2014* 29.08.2014 3:00 p.m. Auditorium of Centre for Excellence, Jubilee Road, Bistupur, Jamshedpur 831001 2013 14.06.2013 3.00 p.m. TMDC Auditorium, XLRI Campus, C.H. Area (East), Jamshedpur- 831001

*E-voting facility was provided to the shareholders in accordance with the provisions of Companies Act, 2013 and erstwhile Listing Agreement with Stock Exchange. Special Resolution passed during previous three years at Annual General Meetings: The Special Resolutions passed during previous three Annual General Meetings are as under:

AGM Date Special Resolutions Passed

20.08.2015 - Ratification of Material Related Party transactions for FY 2014-15

- Approval of Material Related Party transactions for FY 2015-16

29.08.2014 - Fixing borrowing limits of the Board of Directors under section 180 (1) (c) of the Companies Act, 2013

- authorizing the Board of Directors to create charge, mortgages and hypothecations on the assets of the company under section 180 (1) (a) of the Companies Act, 2013

14.06.2013 - Alteration of the Articles of Association of the Company giving effect to increase in Share capital of the Company to Rs. 2000,000,000. (under section 31 of the Companies Act 1956) Issue and allotment of Redeemable Preference Shares to promoter(s) on preferential basis.

During FY’ 14 and FY’15, e-voting facility was provided to the shareholders at the Annual General Meeting. During FY’15, Postal Ballot facility was given to the shareholders at the Annual General Meeting. Mr. Pramod Kumar Singh, Company Secretary was appointed as the Scrutinizer for the e-voting and Postal Ballot at the AGM. No Extraordinary General Meeting was held during the financial year 2015-16. According to regulation 36(3) of the SEBI (LODR) regulations, 2015 particulars of Directors seeking appointment / re-appointment are given in the Annexure to the Notice. Disclosures i) None of the Directors are related to each other. ii) Disclosures on related party transactions are as per the approved policy on dealing with related party transactions and all material related party transactions have been reported to the Stock Exchange on quarterly basis along with the compliance report on corporate governance. iii) The details of related party transactions are given in the notes on the Balance Sheet and Profit and Loss Accounts at Page Nos.88-91. iv) The Company has formulated a policy on materiality of related party transactions and also on dealing with related party transactions. All the related party transactions have prior approvalof the Audit Committee of the Company. In case of repetitive nature of transactions, omnibus approval of the Audit Committee may be obtained. In case of material related party transactions, shareholders approval will be obtained as and when applicable. The detailed policy on dealings with Related Party transactions is available on the website of the company at www.tayo.co.in v) There are no instances of non-compliance by the Company or strictures imposed by the Stock Exchanges, SEBI or any other regulatory authority on any matter related to capital markets, during the last three years.

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vi) The Board has adopted the Risk Management policy and framework, and the same is being periodically reviewed. vii) In preparation of financial statements, all the applicable accounting standards have been followed. viii) Management Discussion and Analysis Report forms a part of the Director’s Report. ix) The relevant disclosures on the remuneration of directors have been included under “Remuneration Policy” in this Report. x) None of the Directors of the Company is holding any shares in the Company. xi) Senior management team has not entered into any material financial & commercial transaction, where they have any potential interest that may have a potential conflict with the interest of the Company at large. xii) The Company allotted 16,00,000 (sixteen lakhs only) 8.50% Non-Cumulative Redeemable Preference Shares of Rs. 100/- (Rupees one hundred only) each to Tata Steel Limited on preferential basis. The Audit Committee is monitoring the utilization and deployment of the funds raised by these issues as well as earlier issues of Redeemable Preference Shares. xiii) The Statement on Investor Complaints (Regulation 13), Corporate Governance Report (Regulation 27), Shareholding Pattern (Regulation 31), and Financial Results (Regulation 33) have also been uploaded on www.listing.bseindia.com as well as on the Company Website. xiv) The Company is complying with the requirements of Regulation 34 read with Schedule V Clause C of SEBI (LODR) Regulations, 2015, relating to Corporate Governance Report. xv) The Details of adoption/non-adoption of the Discretionary requirements as specified in Regulation 27 (1) read with Schedule II Part E of SEBI (LODR) Regulations, 2015 are as under: Details of Compliance/ Adoption of the Non-Mandatory requirements under the SEBI (LODR) Regulations, 2015.

Sl.No. Particulars Status 1. The Board Non-executive Chairman may be entitled to maintain a Chairperson’s office at the company’s Not Adopted expenses and also allowed reimbursement of expenses incurred for performance of his duties 2. Shareholder Rights A half yearly declaration of financial performance including summary of the significant events in Not Adopted the last 6 (six) months should be sent to each household of shareholders. 3. Modified opinion(s) in audit report Not Adopted The company may move towards a regime of financial statements with unmodified audit opinion. 4. Separate posts of Chairperson and Chief Executive Officer Adopted The Company may appoint separate persons to the post of Chairperson and Managing Director or Chief Executive Officer 5. Reporting of Internal Auditor Adopted The Internal Auditor may report directly to the Audit Committee

RECONCILIATION OF SHARE CAPITAL AUDIT A qualified Practicing Company Secretary carried out the Share Capital Reconciliation audit to reconcile the total issued and paid up capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) with the total issued and listed capital. The audit confirms that the total issued/ paid up capital is in agreement with the total number of Shares in the physical form and the total number of dematerialized shares held with NSDL and CDSL. CEO/CFO CERTIFICATION The Managing Director and Deputy Chief Financial Officer, who heads the Finance function, have submitted the required Certificate to the Board at its meeting held on May 26, 2016, wherein the Audited Accounts of the Company for the financial year 2015-16 were considered. MEANS OF COMMUNICATION The quarterly and annual results along with the segmental report are generally published in Business Standard (in English) and Prabhat Khabar, Hindustan & Danik Bhaskar (in Hindi) and also been posted on Company’s Web site www.tayo.co.in shortly after its submission to the Stock Exchange.

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GENERAL SHAREHOLDER INFORMATION

I) AGM: Date, time and venue : Wednesday, September 21, 2016 at 11:30 am at the Auditorium of the Centre for Excellence, Jubilee Road, Bistupur – Jamshedpur - 831001

ii) Particulars of Directors seeking appointment/ re-appointment are annexed to the Notice of the Annual General Meeting to be held on Wednesday, September 21, 2016.

iii) Financial Calendar : April to March

Annual General Meeting : Wednesday, September 21, 2016

Reviewed Financial Results :

Quarter 1, 2016-17 3rd week of July, 2016

Quarter 2, 2016-17 3rd week of October 2016

Quarter 3, 2016-17 3rd week of January 2017

Audited Financial Results

Quarter 4, 2016-17 4th week of April 2017

iv) Date of book closure : Thursday, September 08, 2016 to Monday, September 12, 2016 (both days inclusive)

v) Cut off date for e-voting : Thursday, September 15, 2016

vi) Remote e-voting period : Sunday, September 18, 2016 (9.00 am) to Tuesday, September 20, 2016 (5.00 pm)

vii) Dividend Payment date : The directors have not recommended any dividend for the financial year 2015-16.

viii) Listing on Stock Exchange : The Company’s shares are listed on the Bombay Stock Exchange Ltd. (BSE) The Company has paid the annual listing fees to the Stock Exchange where its shares are listed for the financial year 2015-16.

ix) Stock Code : 504961 (BSE)

x) Market Information:

Market Price Data: High, Low (based on the closing prices) and volume during each month in last financial year, as under:

Bombay Stock Exchange High (Rs.) Low (Rs.) Volume (No. of Shares) Apr'15 69.95 55.80 51,800 May'15 62.45 53.05 25,719 June'15 59.80 48.55 24,350 July'15 69.50 51.50 68,342 Aug'15 64.60 41.00 94,072 Sept'15 52.00 40.30 92,355 Oct'15 53.70 43.85 60,920 Nov'15 51.70 45.00 40,863 Dec'15 54.90 48.00 78,848 Jan'16 57.70 35.55 102,811 Feb'16 47.00 35.00 34,282 Mar'16 40.05 35.35 74,732

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xi) Performance of Company’s Share Price The performance of the Company’s share prices in comparison to the BSE Sensex during the financial year 2015-16, was as under:

xii) Registrar & Transfer Agents:

TSR Darashaw Limited 6-10, Haji Moosa Patrawala Ind Estate, (Near Famous Studio) 20, Dr. E. Moses Road, Mahalaxmi, Mumbai – 400 011 Tel. no. : (022) 6656-8484 Fax no. : (022) 6656-8494/96 E-mail: [email protected]: www.tsrdarashaw.com

Branch Offices of TSR Darashaw Ltd TSR Darashaw Limited TSR Darashaw Limited Bunglow No-1, “E” Road, Northern Town, Tata Centre, 1st Floor, 43, Jawahar Lal Nehru Road, Bistupur,Jamshedpur- 831 001 Kolkata- 700 071 Phone : 0657-2426616 Phone : 033-22883087 Fax : 0657- 2426937 Fax : 033-22883062 E-mail : [email protected] Email : [email protected] TSR Darashaw Limited TSR Darashaw Limited 503, Barton Centre, (5th Floor), 84, M.G.Road, 2/42, Sant Vihar, Ansari Road Daryaganj, Bangalore- 560 001 New Delhi- 110 002 Phone : 080-25320321 Phone : 011-23271805 Fax : 080-25580019 Fax : 011- 23271802 E-mail : [email protected] E-mail : [email protected] Agent of TSR Darashaw Limited: Shah Consultancy Services Limited Sumatinath Complex, 2nd Dhal Pritam Nagar, Ellis Bridge, Ahmedabad -380 006 Telefax : 079- 26576038 E-mail : [email protected] Investor Relation Assistance:

Mr. Prashant Kumar Mr. Deepak Tambe Company Secretary & Compliance Officer Senior Associate Tayo Rolls Limited TSR Darashaw Ltd Office of the Company Secretary, 6-10 Haji Moosa Patrawala Ind Estate, Large Scale Industrial Estate, 20, Dr. E. Moses Road, P.O. Gamharia – 832108 Dist: Seraikella- Kharsawan Mumbai- 400 011 Tel.No. : 0657-6627140/6627141 Phone : 022- 66568484 Fax No. : 0657-6627143 Fax : 022- 66568494/96 E-mails : [email protected] E-mail : [email protected] [email protected] Website : www.tsrdarashaw.com

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xiii) Share transfer system: a) Physical Form: The Board has authorized a few Directors and the Company Secretary severally to approve the transfer of share. Share transfer in physical form can be lodged either at the Registered Office of the Company or with TSR Darashaw Limited, the Registrar & Transfer Agents, at the above-mentioned address or any of their branch offices, addresses of which are available on their website. Transfers are normally processed within 15 days from the date of receipt, provided the documents are complete in all respect. Certain executives (including the Managing Director) are severally empowered to approve transfers. b) Demat Form: The Company has made arrangements to dematerialize its shares through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and Company’s ISIN No. is INE895C01011.The shares of the Company are actively traded in the Stock Exchange where they are listed. As on March 31, 2016, 96.04% shares of the Company were in Dematerialized form. xiv) a) Distribution of shareholdings as on 31.03.2016:

No. of Equity Shares held Shareholders Share Amount No. of Holders No. of Shares % to total Rs. % to total 1 - 500 7,420 10,19,484 91.77 1,01,94,840 9.94 501 - 1000 355 2,76,496 4.39 27,64,960 2.69 1001 - 2000 161 2,44,829 1.99 24,48,290 2.39 2001 - 3000 51 1,29,754 0.63 12,97,540 1.26 3001 - 4000 26 92,522 0.32 925,220 0.90 4001 - 5000 10 44,307 0.12 443,070 0.43 5001 - 10000 36 2,59,565 0.45 25,95,650 2.53 10001 and above 26 81,93,978 0.32 8,19,39,780 79.86 TOTAL 8,085 102,60,935 100.00 10,26,09,350 100.00

b) Shareholding pattern as on 31.03.2016:

Sl. No. Category No. of Shares % I. Promoters/Associate companies, etc. 75,12,367 73.21 II. Financial Institutions 1,550 0.02 III. Other Bodies Corporate/Trusts 1,76,158 1.72 IV. Directors & Relatives --- — V. General Public 25,70,860 25.05 TOTAL 10,260,935 100.00

c) Top five equity shareholders as on 31.03 2016:

Sl. No. Category No. of Shares % I. Tata Steel Limited 55,87,372 54.45 II. Yodogawa Steel Works Limited 15,36,704 14.98 III. Sojitz Corporation 3,07,341 3.00 IV. Gautam Chokhany 87,700 0.85 V. Hasmukh Parekh 72,200 0.70 TOTAL 7,591,317 73.98

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xv) The Company has no outstanding GDR/ADR/Warrants or any convertible instruments.

xvi) Plant location : TAYO Works, Gamharia, Distt: Seraikella- Kharsawan, Jharkhand.

xvii) Registered Office Address : Annex -2, General Office Premises, Tata Steel Limited, P.O. & P.S. Bistupur, Jamshedpur – 831 001 Tel. : (0657) 6627101/ 140/ 141 E-mail : [email protected] Web-site : www.tayo.co.in

A Certificate from the Auditors of the Company, M/s. Deloitte Haskins & Sells, Chartered Accountants, regarding due Compliance of conditions stipulated in Regulation 34(3) read with Schedule V Clause E the SEBI (LODR) Regulations, 2015 is annexed hereto.

Jamshedpur On Behalf of Board of Directors August 19, 2016 Anand Sen Chairman (DIN-00237914)

DECLARATION I, K. Shankar Marar, Managing Director of Tayo Rolls Limited, on the basis of confirmation received from the Board Members and Senior Management personnel, hereby declare that all the Board Members and Senior Management personnel, have affirmed compliance with the Code of Conduct for Non-Executive Directors and the Tata Code of Conduct respectively for the financial year 2015-16.

Jamshedpur (K. Shankar Marar) August 19, 2016 Managing Director (DIN-06656658)

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INDEPENDENT AUDITOR’S REPORT To THE MEMBERS OF TAYO ROLLS LIMITED

Report on the Financial Statements We have audited the accompanying financial statements of TAYO ROLLS LIMITED (“the Company”), which comprise the Balance Sheet as at 31 March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143 (11) of the Act. We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2016, and its loss and its cash flows for the year ended on that date. Emphasis of Matters We draw attention to Note 1(b)A(1)(ii) in the financial statements wherein it is indicated that, the Company has accumulated losses and its net worth has been fully eroded. The Company has incurred a net loss during the current and previous years and the Company’s current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters set forth in Note 1(b)A(1)(ii), indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. Accordingly, the financial statements of the Company have not been prepared on a going concern basis for the reasons stated in the said Note. The assets have been stated at the lower of their historic cost and estimated net realisable values and the liabilities have been stated at the values at which they are expected to be discharged. Our opinion is not modified in respect of this matter.

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Report on Other Legal and Regulatory Requirements 1. 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) In 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. d) In our opinion, the aforesaid financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable. e) The going concern matter described in ‘Emphasis of Matters’ paragraph above, in our opinion, may have an adverse effect on the functioning of the Company. f) On the basis of the written representations received from the directors as on 31 March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act. g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting. h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 financial statements – Refer note 15.1A. ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses - Refer note 22. iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company - Refer note 23. 2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”/”CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For Deloitte Haskins & Sells Chartered Accountants (Firm's Registration No. 302009E)

Alka Chadha Partner (Membership No. 93474) Gurgaon 26 May, 2016

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Forty-Eighth annual report 2015-16

(ANNEXURE ‘A’ TO THE INDEPENDENT AUDITOR’S REPORT (Referred to in paragraph 1(g) under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date) Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of TAYO ROLLS LIMITED (“the Company”) as of 31 March, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Deloitte Haskins & Sells Chartered Accountants (Firm's Registration No. 302009E)

Alka Chadha Gurgaon Partner 26 May, 2016 (Membership No. 93474) 59 TAYO ROLLS

Forty-Eighth annual report 2015-16

ANNEXURE ‘B’ TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date) (i) In respect of its fixed assets: a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. b) Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification. c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of leasehold land and freehold buildings, are held in the name of the Company as at the balance sheet date, except the following:

Particulars of the land Amount (Rs. lacs) Remarks Leasehold land located at Gamaharia, Jharkhand 1.75 The Company is yet to execute a lease deed in respect of the said land. The Company had made an application to the Bihar Government for exemption of land from the Urban Land (Ceiling and Regulation) Act, 1976, which decision is awaited

The Company does not have immovable properties of freehold land and leasehold buildings (ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification. (iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnership or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. (iv) The Company has not granted any loans, made investments or provided guarantees and hence reporting under clause(iv) of the CARO 2016 is not applicable. (v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013. (vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete. (vii) According to the information and explanations given to us, in respect of statutory dues: a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it to the appropriate authorities. We are informed that the provisions of ‘Employees’ State Insurance Act, 1948 are not applicable to the Company. b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Sales Tax, Service tax, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March, 2016 for a period of more than six months from the date they became payable. We are informed that the provisions of ‘Employees’ State Insurance Act, 1948 are not applicable to the Company. c) Details of dues of Income-tax, Sales Tax, Excise Duty and Value Added Tax which have not been deposited as on 31 March 2016 on account of disputes are given below:

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Name of Nature of Forum where Period to which Amount Amount Statute Dues Dispute the amount Involved Unpaid is pending Relates (Rs. In Lacs) (Rs. In Lacs) Income Tax Act Income Tax Commissioner, (Appeals) 2006-07, 2007-08 232.75 225.42 –Jamshedpur, Jharkhand and 2010-11 Income Tax Act Income Tax Income Tax Appellate 2002-03 21.55 21.55 Tribunal Income Tax Act Income Tax High Court – Ranchi, 2001-02 46.21 46.21 Jharkhand Central Excise Excise Duty Assistant Commissioner, 2007-08 to 2008-09 6.87 6.87 and Service (Appeals) – Jamshedpur, Tax Act Jharkhand Central Excise Excise Duty Commissioner (Appeals) 2003-04 to 2011-12 290.95 290.95 and Service – Jamshedpur, Jharkhand Tax ActI Jharkhand Sales JVAT Tribunal 2010-11 34.05 34.05 Tax Act, 2005 Jharkhand Sales JVAT Joint Commissioner, 2010-11 95.55 95.55 Tax Act, 2005 Appeals) Jamshedpur, to 2012-13 Jharkhand

There are no dues of Service tax and Customs duty as on 31 March, 2016 on account of disputes. (viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company has not taken loans from financial institutions and government or issued any debentures. (ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 is not applicable. (x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year. (xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013. (xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable. (xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards. (xiv) According to the information and explanations given to us, the Company has made preferential allotment of shares during the year under review. In respect of the above issue, we further report that: a) the requirements of Section 42 of the Companies Act, 2013, as applicable, have been complied with; and b) the amounts raised have been applied by the Company during the year for the purposes for which the funds were raised. (xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable. (xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Deloitte Haskins & Sells Chartered Accountants (Firm's Registration No. 302009E)

Alka Chadha Gurgaon Partner 26 May, 2016 (Membership No. 93474) 61 TAYO ROLLS

Forty-Eighth annual report 2015-16

Balance Sheet as at 31 March 2016 Rupees in lakhs

As at 31.03.2016 As at 31.03.2015 Notes I EQUITY AND LIABILITIES (1) Shareholder's funds (a) Share capital 2 26,126.13 24,526.13 (b) Reserves and surplus 3 (35,020.17) (19,332.44) (8,894.04) 5,193.69 (2) Non-current liabilities (a) Long-term borrowings 4 398.10 1,990.60 (b) Long-term provisions 5 751.27 1,648.67 1,149.37 3,639.27 (3) Current liabilities (a) Short-term borrowings 4 10,646.04 7,906.51 (b) Trade payables 6 (A) Total outstanding dues of micro enterprises 50.85 79.99 and small enterprises Total outstanding dues of creditor other than 4,134.03 4,226.13 micro enterprises and small enterprises (c) Other current liabilities 6 (B) 5,958.48 5,767.21 (d) Short-term provisions 5 1,763.26 960.46 22,552.66 18,940.30 TOTAL EQUITY AND LIABILITIES 14,807.99 27,773.26 II ASSETS (4) Non-current assets (a) Fixed assets (I) Tangible assets 7 6,257.33 13,694.87 (ii) Intangible assets 7 1.94 182.16 (iii) Capital work-in-progress 42.53 1,449.59 6,301.80 15,326.62 (b) Non-current investments 8 0.14 0.14 (c) Long-term loans and advances 9 830.38 1,208.95 7,132.32 16,535.71 (5) Current assets (a) Inventories 10 (A) 3,751.63 5,719.67 (b) Trade receivables 10 (B) 2,955.93 4,231.80 (c) Cash and cash equivalents 11 (A) 509.22 587.10 (d) Short-term loans and advances 9 392.88 642.61 (e) Other current assets 11 (B) 66.01 56.37 7,675.67 11,237.55 TOTAL ASSETS 14,807.99 27,773.26 The notes referred to above form an integral part of Balance Sheet

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells Chartered Accountants Alka Chadha K SHANKAR MARAR ANAND SEN Partner Managing Director Chairman DIN: 06656658 DIN: 00237914

PRASHANT KUMAR SURESH PADMANABHAN Company Secretary Dy. Chief Financial Officer

Gurgaon Kolkata May 26, 2016 May 26, 2016

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Statement of Profit & Loss for the year ended 31 March 2016 Rupees in lakhs Year ended Year ended 31.03.2016 31.03.2015 Notes I Revenue from operations 12 (A) 12,610.35 14,170.08 II Other income 12 (B) 177.57 131.12 III Total revenue (I + II) 12,787.92 14,301.20 IV EXPENSES (a) Cost of raw materials consumed 4,593.52 5,033.52 (b) Purchases of finished, semi-finished and other products - 43.47 (c) Changes in inventories of finished goods and work-in-progress 628.55 (65.36) (d) Employee benefits expense 13 (A) 3,953.42 3,865.01 (e) Finance costs 13 (B) 1,343.54 1,572.52 (f) Depreciation and amortisation expense 1,541.20 1,304.70 (g) Other expenses 14 7,570.60 8,586.36 19,630.83 20,340.22 (h) Less: Expenditure (other than interest) transferred to 68.69 70.95 capital and other account Total expenses (IV) 19,562.14 20,269.27 V Loss before exceptional and extraordinary items and tax (III - IV) (6,774.22) (5,968.07) VI Exceptional item see note 1(b)(A) 1 (ii) and 15.12 8,913.51 794.00 VI Loss before tax (V - VI) (15,687.73) (6,762.07) VII Tax expense Total tax expense - - VIII Loss after tax (VI - VII) (15,687.73) (6,762.07) IX Earnings per equity share (1) Basic 18 Rs. (152.89) Rs. (65.90) (2) Diluted 18 Rs. (152.89) Rs. (65.90)

The notes referred to above form an integral part of Statement of Profit and Loss

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells Chartered Accountants

Alka Chadha K SHANKAR MARAR ANAND SEN Partner Managing Director Chairman DIN: 06656658 DIN: 00237914

PRASHANT KUMAR SURESH PADMANABHAN Company Secretary Dy. Chief Financial Officer

Gurgaon Kolkata May 26, 2016 May 26, 2016

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Forty-Eighth annual report 2015-16

Cash Flow Statement for the year ended 31 March, 2016

Rupees in lakhs

Year ended Year ended 31.03.2016 31.03.2015

A. CASH FLOW FROM OPERATING ACTIVITIES Net loss before tax Adjustment for (15,687.73) (6,762.07) i) Depreciation and amortisation expense 1,541.20 1,304.70 ii) Provision for exceptional item [Refer Note 8,913.51 794.00 1(b)(A) 1 (ii) and 15.12] iii) Unrealised loss/(gain) on exchange fluctuation (12.23) (20.27) iv) Loss on sale/write off of tangible assets 25.50 70.47 v) Liabilities no longer required written back (155.69) (70.78) vi) Provision for warranty 597.45 644.85 vii) Interest income (20.22) (45.45) viii) Finance costs 1,343.54 1,572.52 ix) Provision for doubtful trade receivables 51.82 12,284.88 - 4,250.04 Operating profit/(loss) before working capital changes (3,402.85) (2,512.03) Adjustments for i) Trade and other receivables 1,506.28 (96.25) ii) Inventories 1,135.85 (760.38) iii) Trade payable and other liabilities (584.22) 2,057.91 914.73 58.10 Cash used in operation (1,344.94) (2,453.93) Direct taxes paid (tax deducted at source) (34.77) (28.12) Net cash used in operating activities (1,379.71) (2,482.05) B. CASH FLOW FROM INVESTING ACTIVITIES i) Purchase of fixed assets including Capital (268.74) (2,756.74) work in progress ii) Sale of fixed assets - 0.30 iii) Interest received 10.58 13.76 Net cash used in investing activities (258.16) (2,742.68) C. CASH FLOW FROM FINANCING ACTIVITIES i) Proceeds from preference shares 1,600.00 6,300.00 ii) Proceeds/(Repayment) from borrowings (Short term) net 2,739.53 133.91 iii) Repayment of borrowings (Long term) (1,592.50) (1,710.84) iv) Interest paid (1,180.07) (1,643.09) Net cash from financing activities 1,566.96 3,079.98 NET DECREASE IN CASH AND CASH EQUIVALENTS (70.91) (2,144.75) OPENING CASH AND CASH EQUIVALENTS [Refer Note 11 (A)(a)] 579.66 2,724.41 CLOSING CASH AND CASH EQUIVALENTS [Refer Note 11 (A)(a)] 508.75 579.66

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells Chartered Accountants Alka Chadha K SHANKAR MARAR ANAND SEN Partner Managing Director Chairman DIN: 06656658 DIN: 00237914

PRASHANT KUMAR SURESH PADMANABHAN Company Secretary Dy. Chief Financial Officer

Gurgaon Kolkata May 26, 2016 May 26, 2016 64 TAYO ROLLS

Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements As at 31st March, 2016

Note 1 (a): General Corporate Information TAYO ROLLS LIMITED ('The Company), formerly Tata- Yodogawa Limited was incorporated in 1968. The company was promoted by Tata Steel Limited in collaboration with Yodogawa Steel Works, Japan and Nissho Iwai Corporation of Japan for production of Cast Iron and Cast Steel Rolls for metallurgical industries. As a part of its backward integration, the Company has set up a mini blast furnace of 40,000 tpa for the manufacture of Pig Iron. Other products include Forged Rolls, Engineering Forging and Ingots. The Company has a licence and know-how agreement with Sheffield Forgemasters International, UK, for the transfer of technology to manufacture forging quality ingots, forged bars, engineering forgings and forged rolls. Note 1 (b): Accounting Policies A SIGNIFICANT ACCOUNTING POLICIES 1) Basis for Accounting (i) The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis. The matter stated in paragraph 1 (ii) indicates the inappropriateness of the use of generally accepted accounting principles that is applicable to a going concern entity in preparation of the financial statements of the Company for the year ended 31 March, 2016. (ii) The Company has incurred a loss of Rs. 15,687.73 lakhs during the year ended 31 March, 2016 (incurred a loss of Rs. 6,762.07 lakhs during the year ended 31 March, 2015) and the accumulated losses as on date amounting to Rs. 40,462.10 lakhs has eroded the net worth of the Company. The Company’s current liabilities exceeds its current assets by Rs. 14,876.99 Lakhs. The Company's operating results continue to be materially affected by various factors, particularly high pricing pressures due to overcapacity in roll industry, general economic slowdown and unavailability of future financing. Considering, these factors the going concern assumption is not appropriate for preparing the financial statements and these financial statements have been prepared on a realisable value basis. Accordingly, the assets have been stated at the lower of their historic cost and estimated net realisable value and the liabilities have been stated at the values at which they are expected to be discharged. A loss of Rs. 8,913.51 lakhs, classified as exceptional item, has been recognised as the difference between the realisable values and the historical carrying amounts of these assets and liabilities. The Board of Directors had referred the Company to the Board for Industrial and Financial Reconstruction (BIFR) as required u/s 15 (1) of The Sick Industrial Companies (Special Provisions) Act, 1985 and the Co. was registered with BIFR 23 March, 2016. Further, the Board of Directors of the Company in its meeting held on 26 May, 2016 has approved a Voluntary Separation Scheme for employees and a phase wise suspension of operations. 2) Cash Flow Statement Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. 3) Use of Estimates The preparation of the financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

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4) Inventories Finished and semi-finished products produced by the Company are carried at lower of cost and net realisable value. Raw materials purchased by the Company are carried at lower of cost and net realisable value. Raw material in transit is carried at cost by the Company. Stores and spare parts are carried at cost. Necessary provision is made and charged to revenue in case of identified obsolete and non-moving items. Cost comprises purchase price, freight and handling, non refundable taxes and duties and other directly attributable cost. Value of inventories are generally ascertained on the "weighted average" basis. 5) Depreciation Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of Plant and Machinery where the useful life of the assets has been assessed as under based on technical evaluation by a Charterred Engineer taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc. Useful life of Plant and Machinery is considered to be 15-20 years. Intangible assets are amortised over their estimated useful life of five years on straight line method. The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any. 6) Revenue Recognition i) Sale of goods Revenue from the sale of goods is recognised in the Statement of Profit and Loss when the significant risks and rewards of ownership have been transferred to the buyer. Revenue includes consideration received or receivable, excise duty but is net of discounts and other sales related taxes. ii) Export Incentive under Duty Draw Back System Export incentive under the Duty Draw Back System is recognised at the time of shipment. iii) Dividend and Interest income Dividend income is recognised when the Company’s right to receive dividend is established. Interest income is recognised on accrual basis based on interest rates implicit in the transactions. 7) Fixed Assets All fixed assets are valued at cost less depreciation / amortisation / impairment. The cost of an asset includes the purchase cost of materials, including import duties and non refundable taxes, and any directly attributable costs of bringing an asset to the location and condition of its intended use. Interest on borrowings used to finance the construction of fixed assets are capitalised as part of the cost of the asset until such time that the asset is ready for its intended use. Pre operation expenses including trial run expenses (net of revenue) are capitalised. In case of Blast Furnace relining and Arc Furnace (bottom) relining the expenditure is capitalised and depreciated over the period to the planned relining date. 8) Foreign Exchange Transactions Foreign currency transactions and forward exchange contracts are recorded on initial recognition in the reporting currency i.e. Indian rupees, using the exchange rates prevailing on the date of the transaction. Monetary assets and liabilities in currencies other than the reporting currency and foreign exchange contracts remaining unsettled are re measured at the rates of exchange prevailing at the balance sheet date. Exchange difference arising on the settlement of monetary items, and on the re-measurement of monetary items, are included in Statement of Profit and Loss for the year. In case of forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the Statement of Profit and Loss over the period of the contract. 9) Investment

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Long term investments are carried at cost less provision for other than temporary diminution, if any in the value of such investments. Current investments are carried at lower of cost and fair value. 10) Cash and cash equivalents Cash and Bank Balances comprises of cash on hand and balances in current accounts and deposit accounts with banks having original maturity of less than three months. 11) Employees Benefits i) Short Term benefits Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered. ii) Post Employment benefit Defined Contribution Plans Defined contribution plans are those plans where the Company pays fixed contributions to a separate entity. Contributions are paid in return for services rendered by the employees during the year. The contributions are expensed as they are incurred in line with the treatment of wages and salaries. Defined Benefit Plans Defined benefit plans are arrangements that provide guaranteed benefits to employees, either by way of contractual obligations or through a collective agreement. This guarantee of benefits represents a future commitment of the Company and, as such, a liability is recognised. The present value of these defined benefit obligations are ascertained by independent actuarial valuation as per the requirement of Accounting Standards 15 - Employee Benefits. The liability recognised in the balance sheet is the present value of the defined benefit obligations on the balance sheet date less the fair value of the plan assets (for funded plans), together with adjustments for unrecognised past service costs. All actuarial gains and losses are recognised in the Statment of Profit and Loss in full in the year in which they occur. 12) Borrowing Costs Borrowing costs that are attributable to the acquisition, construction of qualifying assets are capitalised as part of the cost of such assets till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are recognised as an expense in the Statement of Profit and Loss in the period in which they are incurred. 13) Earnings Per Share The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20- Earnings Per Share. Basic earnings per equity share have been computed by dividing net profit after tax attributable to equity share holders by the weighted average numbers of equity shares outstanding during the year. Diluted earnings during the year adjusted for the effects of all dilutive potential equity shares per share is computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year. 14) Taxes on Income Current Taxes Provision for Current tax is determined on the basis of taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable laws. Deferred Taxes Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are

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recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability. 15) Research and Development Research and Development costs (other than cost of fixed assets acquired) are charged as an expense in the year in which they are incurred. 16) Impairment "The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists. If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss. The recoverable amount is the greater of the net selling price (less cost of disposal) and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. " 17) Provisions and contingencies A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements. 18) Segment Reporting: The Company identifies primary segments based on the dominant source, nature of risks and returns, internal organisation , management structure and the internal performance reporting systems. The accounting policies adopted for the segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocable asset / liabilities"

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Notes forming part of the Financial Statements as at 31March, 2016 Note 2(A) : Share Capital Rupees in lakhs As at 31.03.2016 As at 31.03.2015 (1) Authorised: * 15,000,000 Ordinary shares of Rs. 10 each 1,500.00 1,500.00

(2) 8.50%, 335,00,000 Non cumulative redeemable 33,500.00 33,500.00 preference shares of Rs. 100 each. 35,000.00 35,000.00

(3) Issued and subscribed and fully-paid up: (a) 10,260,935 Ordinary shares of Rs. 10 each 1,026.09 1,026.09

10,260,935 Equity shares of Rs.10 each fully paid up (As at 31.03.2015: 10,260,935 Shares) of the above 5,587,372 (as at 31.03.2015: 5,587,372 ) shares of Rs. 10 each are held by Tata Steel Limited, the holding Company (b) 8.50%, 2,51,00,000 Non-cumulative redeemable 25,100.00 23,500.00 preference shares of Rs. 100 each**

23,100,000 8.50% Non-cumulative redeemable preference shares of Rs. 100 each are held by Tata Steel Limited, the holding Company (as at 31.03.2015: 21,500,000) and 2,000,000 8.50% Non-cumulative redeemable preference shares of Rs. 100 each are held by Yodogawa Steel Works Limited, Japan (as at 31.03.2015: 2,000,000)

Shareholder holding more than 5% of Ordinary shares As at 31.03.2016 As at 31.03.2015 % of Share Number of % of Share Number of Shares held Shares held i Tata Steel Limited 54.45% 5,587,372 54.45% 5,587,372 ii Yodogawa Steel Works Limited 14.98% 1,536,704 14.98% 1,536,704

Shareholder holding more than 5% of Preference shares % of Share Number of % of Share Number of Shares held Shares held i Tata Steel Limited 92.03% 23,100,000 91.49% 21,500,000 ii Yodogawa Steel Works Limited 7.97% 2,000,000 8.51% 2,000,000

* During the previous year, pursuant to Section 13(1) read with Section 55, 61, 64 and other applicable provision of the Companies Act, 2013, the Company had increased its authorised share capital from Rs. 2,000,000,000 divided into 15,000,000 Equity Shares of Rs. 10 each and 8.50% Non-Cumulative 18,500,000 Preference Shares of Rs. 100 each to Rs. 3,500,000,000 divided into 15,000,000 Equity Shares of Rs. 10 each and 8.50% Non-Cumulative 33,500,000 Preference Shares of Rs. 100 each. The Shareholders approval of such increase was obtained at the Extra-ordinary Genaral Meeting held on 12 May, 2014. ** In accordance with the approval of shareholders at the Extra-ordinary general meeting held on 12 May 2014, 1,600,000, 8.50% Non-cumulative redeemable preference shares were allotted on preferential basis to Tata Steel Limited, the promoters of the Company.

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Notes forming part of the Financial Statements as at 31 March, 2016 Note 2(B): Share Capital 1 Reconciliation of number of shares i) Equity share capital with face value of Rs 10 each As at 31.03. 2015 Addition Deletion As at 31.03.2016 No. of Rupees No. of Rupees No. of Rupees shares in lakhs shares in lakhs shares in lakhs

a) Authorised share capital 15,000,000 1,500.00 - - - 15,000,000 1,500.00 b) Issued share capital 10,260,935 1,026.13 - - - 10,260,935 1,026.13 c) Subscribed and fully paid-up 10,260,935 1,026.13 - - - 10,260,935 1,026.13 d) Subscribed and not fully paid-up ------

iii) Preference share capital with face value of Rs. 100 each As at 31.03.2015 Addition Deletion As at 31.03.2016 No. of Rupees No. of Rupees No. of Rupees shares in lakhs shares in lakhs shares in lakhs a) Authorised share capital 33,500,000 33,500.00 - - - 33,500,000 33,500.00 b) Issued share capital 23,500,000 23,500.00 1,600,000 1,600.00 - 25,100,000 25,100.00 c) Subscribed and fully paid-up 23,500,000 23,500.00 1,600,000 1,600.00 - 25,100,000 25,100.00 d) Subscribed and not fully paid-up ------2 Share capital : Rights, preferences and restrictions attached to shares Equity shares: The Company has one class of equity shares having a par value of Rs 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to their shareholding. Preference shares : Non-cumulative redeemable preference shares of Rs. 100 each are entitled to a fixed rate of dividend at the rate of 8.50% per annum. The issuer shall redeem the preference shares together with all arrears of dividend, if any, in three equal installments at the beginning of eighth year, ninth year and tenth year from the deemed date of allotment. Preference shares issued are redeemable on the following dates: Amounts Rs. Lakhs Year of Redemption 2,833.33 2019-20 2,833.33 2020-21 5,733.34 2021-22 5,000.00 2022-23 5,533.33 2023-24 2,633.33 2024-25 533.34 2025-26 25,100.00

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Notes forming part of the Financial Statements Rupees in lakhs as at 31 March, 2016 Note 3 : Reserves & Surplus As at As at 31.03.2016 31.03.2015

(1) Securities premium reserve Balance as per last account 5,441.93 5,441.93 5,441.93 5,441.93 (2) Surplus / (Deficit) Balance as per the last account (24,774.37) (17,968.35) Debit Balance in Statement of (15,687.73) (6,762.07) Profit and Loss Adjustment arising on account of adoption of Schedule II of the Companies Act, 2013 (See note 15.15) - (43.95) (40,462.10) (24,774.37) Total Reserves and Surplus (35,020.17) (19,332.44)

Note 4: Borrowings Rupees in lakhs As at 31.03.2016 As at 31.03.2015 Long Term Short Term Total Long Term ShortTerm Total

(A) Secured borrowings (a) Term loans IDBI Bank Limited 398.10 - 398.10 1,990.60 - 1,990.60 (Refer note 1) (b) Repayable on demand Cash credit Bank of India - 3,598.96 3,598.96 - 3,581.10 3,581.10 IDBI Bank Limited - 2,684.08 2,684.08 - 2,485.49 2,485.49 (Refer note 2) Total Secured borrowings 398.10 6,283.04 6,681.14 1,990.60 6,066.59 8,057.19

(B) Unsecured borrowings Repayable on demand Tata Steel Limited (12.50%) - 3,050.00 3,050.00 - - - Tata Steel Limited (13.00%) - 1,313.00 1,313.00 - - - Tata Capital Financial Services Limited - - - - 1,000.00 1,000.00 (12.50%) Tata Coffee Limited (12.50%) - - - - 500.00 500.00 - 4,363.00 4,363.00 - 1,500.00 1,500.00 Buyer's credit IDBI Bank Limited - - - - 339.92 339.92 Total Unsecured borrowings - 4,363.00 4,363.00 - 1,839.92 1,839.92 Total Borrowings 398.10 10,646.04 11,044.14 1,990.60 7,906.51 9,897.11

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( C) Terms of repayment Number of Installment Repayment outstanding amount terms installments (Rs in Lakhs)

IDBI Bank Limited 5.00 398.13 Quarterly

Notes:

Nature of Security

1 Term loans from IDBI Bank Limited are secured by first charge on the fixed assets of the Company.

2 Cash credit accounts with Bank of India and IDBI Bank Limited are secured by hypothecation of all tangible movable assets of the Company including finished and semi-finished stocks, raw materials, stores and book debts ranking pari passu. In addition they are secured by way of second charge on the immovable properties of the Company ranking pari passu.

Rupees in lakhs Note 5: Provisions As at 31.03.2016 As at 31.03.2015 Long Term Short Term Total Long Term Short Term Total

Provision for employee benefits (a) Post-employment defined benefits (i) Retiring gratuity (see note 16) - 341.91 341.91 326.04 - 326.04 (ii) Pension obligations (see note 16) 222.42 27.55 249.97 225.86 28.41 254.27 (iii) Post retirement medical benefits 489.47 26.02 515.49 591.97 23.73 615.70 to employees (see note 16) (iv) Post retirement medical benefits 20.71 6.48 27.19 25.64 2.71 28.35 to Ex-Directors (see note 16)

(b) Other Post-employment benefits (i) Leave benefit scheme - 571.08 571.08 454.27 48.86 503.13 732.60 973.04 1,705.64 1,623.78 103.71 1,727.49 Provision for employee separation 18.67 12.12 30.79 24.89 19.38 44.27 compensation Provision for current tax - 123.08 123.08 - 123.08 123.08 [Net of advance tax of Rs. 576.73 lakhs (31.03.2015 : Rs. 576.73 lakhs)] Provision for warranty (see note 21) - 655.02 655.02 - 714.29 714.29 18.67 790.22 808.89 24.89 856.75 881.64 Total provisions 751.27 1,763.26 2,514.53 1,648.67 960.46 2,609.13

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Notes forming part of the Financial Statements as at 31 March, 2016 Rupees in lakhs Note 6: As at 31.03.2016 As at 31.03.2015

Note 6(A) : Trade payables (a) Total outstanding dues of micro enterprises and 50.85 79.99 small enerprises (see note 15.3) (b) Total outstanding dues of creditor other than micro enterprises and small enterprises (see note 15.3) (i) Creditors for supplies and services 3,173.40 3,401.40 (ii) Creditors for accrued wages and salaries 960.63 824.73 4,184.88 4,306.12

Note 6(B) : Other current liabilities (a) Current maturities of long-term debt (see note 4) 1,592.52 1,592.52 (b) Advances received from customers 2,812.44 2,793.03 (c) Interest accrued but not due on borrowings 198.01 34.55 (d) Creditors for capital goods 468.33 512.25 (e) Liability towards Investors Education and Protection Fund i) Unpaid dividend 0.17 0.17 ii) Unclaimed dividend 0.30 4.27 iii) Unpaid matured fixed deposits 0.13 0.20 (f) Other liabilities 886.58 830.22 Total other current liabilities 5,958.48 5,767.21

73 Forty-Eighth annualreport2015-16 T A YO ROLLS Notes forming part of the Financial Statements as at 31 March, 2016

Note 7: Fixed assets - See Note -1 (b) (ii) Rupees in lakhs

As at 31.03.2015 Leasehold Buildings Owned Furniture Office Vehicles Total Computer Technical Total Total Land Plant and and Equip- Tangible Software Knowhow Intangible Assets Note (a) Machinery fixtures ments Assets Fee Assets Cost at beginning of the year 5.25 464.66 27,711.99 65.53 38.63 61.51 28,347.57 83.87 1,471.82 1,555.69 29,903.26 Additions - - 2,486.27 41.31 21.08 - 2,548.66 - - - 2,548.66 Disposals/Adjustments - - (31.28) - (6.19) (1.04) (38.51) 12.90 - 12.90 (25.61) Cost at end of the year 5.25 464.66 30,166.98 106.84 53.52 60.47 30,857.72 - 96.77 1,471.82 1,568.59 32,426.31 Impairment at beginning of the year - - 1,797.89 - - - 1,797.89 - - - 1,797.89 Additions - - 794.00 - - - 794.00 - - - 794.00 Disposals/Adjustments ------Impairment at end of the year - - 2,591.89 - - - 2,591.89 - - - 2,591.89 Depreciation at beginning of the year 0.32 179.89 13,178.83 42.50 19.30 33.07 13,453.91 81.89 1,096.77 1,178.66 14,632.57 Other adjustment (Note b) - 8.35 29.29 2.46 1.56 2.29 43.95 - - - 43.95 Charge for the year 0.06 10.77 1,066.71 7.79 4.79 6.81 1,096.93 12.73 195.04 207.77 1,304.70 Disposals - - (17.93) - (5.38) (0.52) (23.83) - - - (23.83) Depreciation at end of the year 0.38 199.01 14,256.90 52.75 20.27 41.65 14,570.96 - 94.62 1,291.81 1,386.43 15,957.39 Net book value at beginning of 4.93. 284.77 12,735,27 23.03 19.33 28.44 13,095,77 1.98 375.05 377.03 13,472.80 the year Net book value at end of the year 4.87 265.65 13,318.19 54.09 33.25 18.82 13,694.87 2.15 180.01 182.16 13,877.03 Notes: (a) Leasehold land includes Rs. 1.75 lakhs (31.03.2015: Rs. 1.75 lakhs) for which documents are yet to be executed. The Company has applied to the Bihar Government for exemption of this land from the Urban Land (Ceiling and Regulation) Act, 1976. The decision of the Government is still awaited. b) Pursuant to transitional provisions prescribed in Schedule II of the Companies Act, 2013, the Company had fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014 and had adjusted an amount of Rs. 43.95 lakhs against the opening surplus balance in the Statement of Profit and Loss under Reserve and surplus. TAYO ROLLS

Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31 March, 2016 Note 8: Investments Rupees in lakhs As at 31.03.2016 As at 31.03.2015 No. of Non current Current Total Non-current Current Total shares/ units fully paid up

Trade Investment

Shares and debentures in associates Quoted Tata Construction & Projects 32326 ------Limited (Equity Shares of Rs 10 each) [net of provision of Rs. 3.88 lakhs (31.3.2015 : Rs. 3.88 lakhs)] Tata Construction & Projects 3000 ------Limited (10% Secured Non-Convertible Debentures of Rs 100 each) [net of provision of Rs. 3.00 lakhs (31.3.2015 : Rs. 3.00 lakhs)] Unquoted Adityapur Toll Bridge 5000 ------Company Limited (Equity Shares of Rs 10 each) [net of provision of Rs. 0.50 lakhs (31.3.2015 : Rs. 0.50 lakhs)] Nicco Jubilee Park Limited 30000 ------( Equity shares of Rs. 10 each) [net of provision of Rs. 3.00 lakhs (31.3.2015 : Rs. 3.00 lakhs)] Shares and debentures in others Quoted HDFC Bank Limited (Equity 2500 0.05 - 0.05 0.05 - 0.05 Shares of Rs. 2 each) Unquoted Government securities-Lodged 0.09 - 0.09 0.09 - 0.09 as security deposit with parties Total investments in shares 0.14 - 0.14 0.14 - 0.14 and debentures Investments by type: Investments in equity instruments 0.05 - 0.05 0.05 - 0.05 Investments in Government or trust securities 0.09 - 0.09 0.09 - 0.09 Investments in debentures and bonds ------Total investments 0.14 - 0.14 0.14 - 0.14 Additional details: Carrying value of quoted investments 0.05 - 0.05 0.05 - 0.05 Market value of quoted investments 27.07 27.07 25.57 25.57 Carrying value of unquoted investments 0.09 - 0.09 0.09 - 0.09

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Notes forming part of the Financial Statements as at 31 March, 2016

Note 9: Loans and advances Rupees in lakhs As at 31.03.2016 As at 31.03.2015 Long Term Short Term Total Long Term Short Term Total

Loans and advances (a) Capital advances 84.18 - 84.18 482.57 - 482.57 (b) Security deposits 111.18 - 111.18 126.13 - 126.13 (c) Advance with public bodies 185.97 194.26 380.23 185.97 226.95 412.92 (d) Other loans and advances (i) Pre-paid advances - 37.30 37.30 - 17.76 17.76 (ii) Other advances - 161.32 161.32 - 397.90 397.90 (e) Current tax assets (net) (i) Advance payment against taxes 449.05 - 449.05 414.28 - 414.28 [Net of provision of Rs.737.04 lakhs (31.03.2015 :Rs. 737.04 lakhs)] Gross loans and advances 830.38 392.88 1,223.26 1,208.95 642.61 1,851.56 Classification of loans and advances Secured, considered good ------Unsecured, considered good 830.38 392.88 1,223.26 1,208.95 642.61 1,851.56 Doubtful ------Gross loans and advances 830.38 392.88 1,223.26 1,208.95 642.61 1,851.56

Note 10(A): Inventories Rupees in lakhs

As at 31.03.2016 As at 31.03.2015

(a) Raw materials (at lower of cost or net realisable value) 805.13 1,112.31

(b) Semi-finished goods (at lower of cost or net realisable value) 1,258.80 1,745.79

(d) Stores and spares *(at cost less write off for obsolescence) 950.89 1,983.20

Total inventories 3,751.63 5,719.67

* Stores and spare parts includes the realisable value of purchased moulds issued to production, Rs. 236.63 lakhs (as at 31.03.2015 amortised value Rs. 1,158.62 lakhs)

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Notes forming part of the Financial Statements as at 31 March, 2016

Note 10(B): Trade Receivables Rupees in lakhs As at 31.03.2016 As at 31.03.2015 (i) Trade receivables outsatnding for a period exceeding six 340.33 871.43 months from the date they were due for payment (ii) Others 2,792.86 3,485.81 Gross trade receivables 3,133.19 4,357.24 Less: Provision for doubtful trade receivables 177.26 125.44 Net trade receivables 2,955.93 4,231.80 Classification of trade receivables Unsecured, considered good 2,955.93 4,231.80 Doubtful 177.26 125.44 Gross trade receivables 3,133.19 4,357.24

Note 11(A): Cash and Bank Balances Rupees in lakhs As at 31.03.2016 As at 31.03.2015 (a) Cash and cash equivalents (i) Cash in hand 0.13 0.07 (ii) Cheques, drafts on hand - 22.22 (iii) Balances with banks (a) In current accounts 508.62 557.37 Total cash and cash equivalents 508.75 579.66 (b) Earmarked balance with scheduled banks (i) In deposit account for public deposits - 3.02 (ii) In unpaid dividend accounts 0.47 4.42 0.47 7.44 Total cash and bank balances 509.22 587.10

Note 11(B): Other Current Assets Rupees in lakhs As at 31.03.2016 As at 31.03.2015

Other current assets (1) Interest accrued on deposits, loans and advances 66.01 56.37 Total other current assets 66.01 56.37

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Notes forming part of the Financial Statements as at 31 March, 2016

Note 12(A): Revenue from operations Rupees in lakhs Year ended Year ended 31.03.2016 31.03.2015

(1) Sale of products 11,695.24 13,740.61 (2) Sale of services 1,900.94 1,177.43 Gross revenue from Operations 13,596.18 14,918.04 (3) Less: Excise duty recovered on sales 1,392.83 1,454.84 12,203.35 13,463.20 4) Other operating income (i) Export benefits (Dutydrawback) 1.46 21.02 (ii) Sale of miscellaneous goods 397.87 503.52 (iii) Sundry income 7.67 182.34 407.00 706.88 Total revenue from operations 12,610.35 14,170.08

Note 12(B): Other income Rupees in lakhs

Year ended Year ended 31.03.2016 31.03.2015

(1) Liabilities no longer required written back 155.69 70.78

(2) Interest received on sundry advances, deposits, customers balances etc. 20.22 45.45

(3) Net (loss) / gain on foreign currency transactions 1.66 14.89 (other than finance cost)

Total other income 177.57 131.12

Note 13(A): Employee benefit expense: Rupees in lakhs Year ended Year ended 31.03.2016 31.03.2015 (1) Salaries and wages, including bonus (i) Salaries and wages including bonus 3,069.31 3,102.67 (ii) Employee separation compensation 1.49 2.35 3,070.80 3,105.02 (2) Contribution to provident and other funds 679.18 594.16 (3) Staff welfare expenses 203.44 165.83 882.62 759.99 Total employee benefits expense 3,953.42 3,865.01

Note 13(B): Finance costs Rupees in lakhs Year ended Year ended 31.03.2016 31.03.2015 (a) Interest expense (i) Fixed loans 329.66 554.94 (ii) Interest on others 1,013.88 1,017.58 Total finance costs 1,343.54 1,572.52

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Notes forming part of the Financial Statements as at 31 March, 2016

Note 14: Other expenses Rupees in lakhs Year ended Year ended 31.03.2016 31.03.2015 (1) Consumption of store and spare parts 1,963.62 2,107.74 (2) Repairs and maintenance to buildings - 7.17 (3) Repairs and maintenance to machinery 317.31 571.92 (4) Fuel oil consumed 603.66 1,485.06 (5) Power 1,616.96 1,540.57 (6) Freight and handling charges 343.25 329.17 (7) Rent 10.65 13.94 (8) Royalty 145.03 167.70 (9) Rates and taxes 51.52 30.49 (10) Registration charges for increase in authorised share capital - 98.69 (11) Insurance charges 11.26 4.79 (12) Excise duties 66.49 51.12 (13) Other expenses (a) Provision for warranty 597.45 644.85 (b) Auditors remuneration and out-of-pocket expenses (i) For audit 9.00 7.90 (ii) For taxation matters 1.50 1.50 (iii) For other services 0.50 1.10 (iv) for reimbursement of expenses 0.42 0.10 (c) Loss on sale/write off of tangible assets 25.50 70.47 (d) Legal and other professional costs 290.76 55.65 (e) Advertisement, promotion and selling expenses 1.30 3.99 (f) Travelling expenses 66.69 113.52 (g) Consultation fees 106.84 96.96 (h) Rolls machining charges 147.74 163.01 (i) Provision for doubtful trade receivables 51.82 - (j) Other general expenses 1,141.33 1,018.95 2,440.85 2,178.00 Total other expenses 7,570.60 8,586.36

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Notes forming part of the Financial Statements* as at 31 March, 2016

Note-15 Rupees in lakhs 15.1A Contingent liabilities and commitments 15.1A (a) Claims against the Company not acknowledged as debt* As at 31.03.2016 As at 31.03.2015 i) Demands raised by income tax authorities 300.51 305.30 ii) Demands raised by sales tax authorities 129.60 34.05 iii) Demands raised by excise authorities 297.81 297.81 iv) Other money for which the Company is contingently liable - Under litigation (see note 'I' below) 21,804.00 27,203.25 - Export promotion capital goods scheme (see note 'II' below) 1,520.72 1,271.72 *No provision is considered necessary since the Company expects favorable decisions.

15.1A(b) Guarantees Under Export Promotion Capital Goods Scheme for concessional - 177.00 duty on import of machinery furnished to the Customs authorities Notes: I. Consequent to the judgment dated 2 May, 2013 of Honourable Jharkhand High Court with regard to the applicability of power tariff structure on the Company’s Induction Furnace Unit from January 2000, the Jharkhand State Electricity Board (JSEB) had raised rectified energy bill dated 10 June, 2013 for Rs. 27,203.00 lakhs (later claim revised to Rs. 26,361.00 lakhs). The rectified energy bill was challenged separately before the Honourable Jharkhand High Court. The Company has also contested the judgment dated 2 May, 2013 on the applicability of power tariff structure by way of filing an appeal (Letters Patent Appeal) before the Honourable Jharkhand High Court which has been admitted on merit on 3 July, 2013 . The demand raised by JSEB has been considered as contingent liability in the financial statements. JSEB had also initiated Certificate proceedings for recovery of Rs. 26,361.00 lakhs against the Company and Board of Directors, which was challenged before the Certificate Officer. The Certificate Officer in his Order dated 12 December, 2015 has absolved the directors from any liability to the extent the certificate amount is considered. He also directed JSEB to raise revised bills and the Company to pay the same within 15 days of the Order. JSEB has raised the revised bill dated 24 December, 2015 for Rs. 21,804.00 lakhs. The Company has also challenged the Order dated 12 December 2015 of the Certificate officer before the Division Bench of the Jharkhand High Court. On 18 December, 2015, the Division Bench of Jharkhand High Court has passed its Order that "No Coercive Action" shall be initiated against the Company during pendency and final hearing of the Appeals. II. During the year the Company has filed a rectification application with the Director General of Foreign Trade for discharge of export obligation. 15.2 Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 318.27 lakhs (31.3.2015: Rs. 829.70 lakhs) against which advances paid Rs. 84.18 Lakhs (31.3.2015 : Rs. 482.57 lakhs). 15.3 Disclosure required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED') Amounts payable to MSMED suppliers as at 31 March, 2016 are as under : Rupees in lakhs As at 31.03.2016 As at 31.03.2015 a) Principal amount remaining unpaid to supplier as at the 43.39 73.48 end of the accounting year b) Interest due thereon remaining unpaid to supplier as at the 7.46 6.51 end of the accounting year c) The amount of interest paid in terms of Section 16, along with - - the amount of payment made to the supplier beyond the appointment day during the year 2015-16 d) The amount of interest due and payable for the period of delay in 7.46 6.51 making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act e) The amount of interest accrued during the year and remaining unpaid 1.44 0.50 at the end of the accounting year f) The amount of further interest remaining due and payable even in the 7.46 6.51 succeeding years, until such date when the interest dues above are actually paid to the small entereprise, for the purpose of disallowance of a deductible expenditure under section 23 of the MSMED

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Notes forming part of the Financial Statements as at 31March, 2016 Note-15 (Contnd.)

15.4 The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below: (All amount in Lakhs) Amount in Foreign Currency Euro GBP USD JPY Rupees Amount receivable from Export of goods - 0.02 2.97 - 198.81 (-) (2.59) (4.93) (-) (548.14) Amount payable for: Import of goods - - 0.06 - 3.84 (3.08) - (2.08) - (339.92) Royalty - - 2.88 528.04 482.29 - - (1.65) (448.94) (337.26) Figures in brackets are for the previous year.

15.5 TURNOVER, CLOSING AND OPENING STOCKS OF GOODS PRODUCED Class of Products Turnover @ Closing Stocks Opening Stocks Tonnes Rupees Tonnes Rupees Tonnes Rupees in Lakhs in Lakhs in Lakhs a) Rolls (I) Steel, Steel Base * * and Cast Iron Rolls 5,591.00 7,182.63 50.00 53.98 105.00 153.40 (6,897.00) (9,777.29) (105.00) (153.40) (156.00) (204.52) (ii) Forged Rolls 1,160.00 2,718.09 22.00 45.86 11.00 23.80 (908.00) (2,211.15) (11.00) (23.80) (53.00) (109.09) b) Pig Iron (i) Others - Pig Iron Skull etc. - 580.74 - 570.62 - 524.54 (-) (373.67) (-) (524.54) (-) (273.47)

c) Ingots 96.00 31.17 133.00 64.14 247.00 159.73 (1,077.00) (590.26) (247.00) (159.73) (133.00) (92.72)

d) Engineering Forgings 711.00 1,182.61 2.00 2.21 10.00 16.90 (472.00) (788.23) (10.00) (16.90) (8.00) (11.05)

e) Conversion Income - 1,900.94 - - - - (-) (1,177.44) (-) (-) (-) (-)

TOTAL 13,596.18 736.81 ** 878.37 (14,918.04) (878.37) (690.85)

Notes: (i) @ includes excise duty recovered from customers (ii) * after adjustment for stocks value written down and transferred to semi-finished stock (iii) ** Value of closing stocks includes excise duty. (iv) Figures in brackets are in respect of the previous year.

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31 March, 2016 Note-15 (Contnd.) 15.6 CONSUMPTION OF RAW MATERIALS*

2015-16 2014-15 Quantity Rs. Lakhs Quantity Rs. Lakhs Tonnes Tonnes a) Scrap (net of own generated scrap) 4,343 937.83 5,095 1,483.07 b) Ferro Moly 28 200.66 39 460.99 c) Other Ferro Alloys 611 759.03 699 1,023.08 d) Nickel 68 563.63 91 1,028.23 e) Fluxes 632 113.76 807 173.85 f) Others 2,018.61 864.30 4,593.52 5,033.52 * Net of shortage / excess identified during physical count.

Rupees in lakhs 2015-16 2014-15 15.7 C.I.F. VALUE OF IMPORTS:

Components, stores and spares parts 66.78 335.55 Raw materials - 199.58 Capital goods - 411.61

15.8 EXPENDITURE IN FOREIGN CURRENCY: a) Consultancy charges 15.80 31.92 b) Foreign travel 4.18 4.69 c) Royalty 145.03 167.70 d) Others - 3.09

15.9 CONSUMPTION OF IMPORTED AND INDIGENOUS MATERIALS Value of consumption of imported and indigenously obtained raw materials, components, stores and spare parts and the percentage of each to the total consumption:

2015-16 2014-15 % Rupees in Lakhs % Rupees in Lakhs a) Raw Materials: Imported 12.58 577.72 22.28 1,121.62 Indigenous 87.42 4,015.80 77.72 3,911.90 b) Components, stores and spare parts: Imported 8.67 170.34 9.89 208.37 Indigenous 91.33 1,793.28 90.11 1,899.37 Note: Stores and spare parts consumption includes amortization of moulds Rs. 91.45 lakhs (2014-15: Rs. 101.08 lakhs)

2015-16 2014-15 Quantity Rupees in Lakhs Quantity Rupees in Lakhs Tonnes Tonnes

15.10 PURCHASES OF SEMI-FINISHED PRODUCTS Semi finished Cast Rolls - - 88.65 43.47

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31 March, 2016 Note-15 (Contnd.) Rupees in lakhs 2015-16 2014-15 15.11 EARNINGS IN FOREIGN EXCHANGE: FOB value of Exports 78.47 1,329.31 (including value of exports through export house / agents)

15.12 Exceptional item of previous year

During the previous year, the Company had carried out an impairment review of its fixed assets based on changes in circumstances indicating that their carrying amount may not be recoverable. Based on the review, the Company had made a provision in the financial statements for Rs. 794.00 lakhs towards write down of assets pertaining to integrated facilities for manufacture of Forging Quality Ingots, Engineering Forgings and Forged Rolls.

15.13 The Wage Agreement dated 8 April, 2009 and dated 23 March, 2010 between the Company and the Tayo Workers Union expired on 31 December, 2011 and 30 September, 2014 and fresh agreements are under negotiation. Pending finalisation of these negotiations, provisions have been recorded on an estimated basis. Any adjustments necessary, consequent on final determination of the liability pertaining to the years ended 31 March, 2015 and 31 March, 2016 will be made in the year in which negotiations are concluded. (Also see note 1 (A) (b) A (1) (ii)).

15.14 End use of funds raised from the issue of 8.50%, Rupees in Lakhs Non-Cumulative Redeemable Preference Shares 2015-16 2014-15 Balance as at 1 April, 2015 95.95 2,267.88 Fund raised during the year 1,600.00 6,300.00 Utilisation of Fund a) Capital expenditure 43.92 1,749.85 b) Working capital 1,652.03 6,722.08 c) Unutilised monies as at 31 March, 2016 - 95.95

15.15 During the previous year, the Company had revised its estimates of useful life of its fixed assets as prescribed in Part C of Schedule II of the Companies Act, 2013. Carrying amount less residual value of the assets whose remaining useful life had become Nil at the beginning of the previous year, had been adjusted with the opening balance of retained earnings. Consequent to the adoption of Schedule II as above, the loss for the year ended 31 March, 2015 was lower by Rs. 695.33 lakhs (net of amount transfered to retained earnings). The opening retained earnings as at 1 April, 2014 was lower by Rs. 43.95 lakhs.

Notes 16: Disclosure relating to Accounting Standard AS 15 1 The Company has recognised, in the Statement of Profit and Loss for the current year, Rupees in Lakhs the following expenses under the defined contribution plans. Benefit (Contribution to) 2015-16 2014-15 Provident Fund 218.02 205.17 Superannuation Fund 96.77 111.06 TAYO Employees Pension Scheme 22.48 21.63 Total 337.27 337.86

2 The company operates post retirement defined benefit plans as follows: a. Funded i) Post Retirement Gratuity b. Unfunded: i) Post Retirement Medical benefits ii) Pension to Directors

83 TAYO ROLLS

Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31 March, 2016

2 (a)(I) Details of the Post Retirement Gratuity plan are as follows: Rupees in Lakhs

Description 2015-16 2014-15 (see note below) Reconciliation of opening and closing balances of obligation a. Obligation as at the beginning of the year - 1,138.48 b. Current service cost - 57.86 c. Interest cost - 86.13 d. Obligation of new companies - - e. Acquisitions - - f. Actuarial (gain)/loss - 152.10 g. Exchange rate variation - - h. Benefits paid - (362.85) i. Obligation as at the end of the year - 1,071.72

Change in Plan Assets (Reconciliation of opening & closing balances) a. Fair value of plan assets as at beginning of the year - 821.23 b. Acquisition adjustment - - c. Expected return on plan assets - 62.99 d. Actuarial gain/(loss) - (23.20) e. Contributions - 247.52 f. Benefits paid - (362.86) g. Fair value of plan assets as at the end of the year - 745.68

Reconciliation of fair value of assets and obligations a. Fair value of plan assets as at the end of the year - 745.68 b. Present value of obligation as at the end of the year - 1,071.72 c. Amount recognised in the balance sheet - (326.04) Current - - Non-current - 326.04

Expense recognised during the year a. Current service cost - 57.86 b. Interest cost - 86.13 c. Expected return on plan assets - (62.99) d. Actuarial (gain)/loss - 175.30 e. Exchange rate variation - - f. Expense recognised during the year - 256.30 The expense is disclosed in the line item – company's contribution to gratuity fund

Investment Details % Invested % Invested a. GOI securities - 2.72 b. Public sector unit bonds - 39.12 c. State / Central government guaranteed securities - 6.69 d. Special deposit schemes - 47.17 e. Others (including bank balances) - 4.30 - 100.00 Assumptions a. Discount rate (per annum) - 7.90% p.a. b. Estimated rate of return on plan assets (per annum) - 8.25% p.a. c. Rate of escalation in salary (per annum) - 5.00% p.a. Note: As the Company has prepared the financial statements for the year ended 31 March, 2016 on not a going concern basis, provision for gratuity liabilitiy is provided on actual basis and hence disclosures as per paragraph 120 of Accounting Standard 15 'Employee Benefits' is not provided for the current year.

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31March, 2016

Notes 16: Disclosure relating to Accounting Standard AS 15 (Contd.) Rupees in lakhs

2(b) Details of unfunded post retirement defined benefit obligations are as follows:

2015-16 2014-15 Description Post Pension Post Pension Retirement to Retirement to Medical Directors Medical Directors benefits benefits 1. Reconciliation of opening and closing balances of obligation a. Obligation as at the beginning of the year 644.05 254.27 552.13 226.91 b. Current/employer service cost 17.98 - 19.48 - c. Interest cost 49.81 18.83 48.59 19.28 d. Obligation of new companies - - - - e. Actuarial (gain)/loss (142.49) 6.37 49.20 38.00 f. Past service cost - - - - g. Exchange rate variation - - - - h. Benefits paid (26.67) (29.50) (25.35) (29.92) i. Obligation as at the end of the year 542.68 249.97 644.05 254.27 Current 32.50 27.55 26.44 28.41 Non-current 510.18 222.42 617.61 225.86

Expense recognised in the period a. Current /employer service cost 17.98 - 19.48 - b. Interest cost 49.81 18.83 48.59 19.28 c. Past service cost - - - - d. Exchange rate variation - - - - e. Actuarial (gain)/loss (142.49) 6.37 49.20 38.00 f. Expense recognised during the period (74.70) 25.20 117.27 57.28

3. Assumptions

a. Discount rate (per annum) as at the 7.90% p.a. 7.90% p.a. 9.00% p.a. 9.00% p.a. beginning of the year b. Discount rate (per annum) as at the 7.50% p.a. 7.50% p.a. 7.90% p.a. 7.90% p.a. end of the year c. Medical costs inflation rate 6.50% 6.50% d. Average medical cost (Rs / person) Rs. 8,349.00 Rs. 7,839.00 at the beginning of the year e. Average medical cost (Rs / person) Rs. 8,891.00 Rs. 8,349.00 at the end of the year f. Effect of a 1% change in health care cost, on Increase Decrease Increase Decrease (7.50% p.a.) (5.50% p.a.) (7.50% p.a.) (5.50% p.a.) - aggregate current service and 8.20 6.88 11.04 8.80 interest cost - closing balance of obligation 64.47 54.06 103.17 82.21

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31March, 2016

Notes 16: Disclosure relating to Accounting Standard AS 16 (Contd.) Rupees in lakhs

2(c) The estimate of future salary increases take into account inflation, seniority, promotion and other relevant factors. 2(d) Other disclosures: Benefit 2015-16 2014-15 2013-14 2013-12 2011-12

Retiring Gratuity Defined benefit obligation - (1,071.72) (1,138.48) (1,076.60) (965.94) Plan assets - 745.69 821.23 769.55 680.44 Surplus/(deficit) - (326.03) (317.25) (307.05) (285.50) Experience adjustment on plan liabilities - gain/(loss) - (57.46) (55.01) (40.91) (78.10) Experience adjustment on plan assets - gain/(loss) - (23.20) (13.36) 30.39 (0.77)

Medical Defined benefit obligation Plan assets (542.68) (643.91) (548.43) (505.79) (494.02) Surplus/(deficit) (542.68) (643.91) (548.43) (505.79) (494.02) Experience adjustment on plan liabilities - gain/(loss) 0.37 0.58 (70.48) (15.99) 13.02 Experience adjustment on plan assets - gain/(loss) - - - - - Pension to Retired Directors Defined benefit obligation (249.97) (254.27) (188.18) (190.73) (152.86) Plan assets - - - Surplus/(deficit) (249.97) (254.27) (188.18) (190.73) (152.86) Experience adjustment on plan liabilities - gain/(loss) (2.69) (18.34) (50.90) (42.43) (19.61) Experience adjustment on plan assets - gain/(loss) - - - - - Leave benefit scheme Defined benefit obligation - (503.13) (432.67) (453.44) (455.28) Plan assets - - - - Surplus/(deficit) - (503.13) (432.67) (453.44) (455.28) Experience adjustment on plan liabilities - gain/(loss) - 4.04 37.42 85.32 8.81 Experience adjustment on plan assets - gain/(loss) - - - -

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31March, 2016 Note 17: Segment disclosures R upees in lakhs Note 17(1): Primary Segment-Business SEGMENT REVENUE Roll Pig Iron Ingot Engg Un- Total Forgings allocable External revenue 9,222.23 2,341.74 2,142.24 1,060.36 177.57 14,944.14 11,649.67 1,561.88 1,978.29 746.24 131.12 16,067.20 Inter segment revenue (37.87) (2,118.35) (2,156.22) (313.00) (1,453.00) (1,766.00) Total revenue 9,222.23 2,303.87 23.89 1,060.36 177.57 12,787.92 11,649.67 1,248.88 525.29 746.24 131.12 14,301.20 RESULTS Segment result before finance costs, (4,766.61) 138.99 (282.41) (644.50) 123.85 (5,430.68) exceptional items and tax (3,631.49) 175.42 (294.28) (600.22) (44.98) (4,395.57) Finance costs (net) (1,343.54) (1,572.52) Profit/ (loss) before exceptional items and tax (6,774.22) (5,968.07) Exceptional item (see note 1(b)(A) 1 (ii) and 15.12) (8,913.51) (794.00) Profit/ (loss) before tax (15,687.73) (6762.07) Tax expense - (-) Profit/ (loss) after tax (15,687.73) (6762.07) OTHER INFORMATION Segment assets 6,810.65 2,628.68 1,114.47 971.79 3,282.40 14,807.99 18,116.28 2,479.61 3,668.18 3,378.01 131.18 27,773.26 Segment liabilities 6,585.13 1,641.49 427.36 690.26 14,357.79 23,702.03 6,064.60 1,609.31 448.90 719.29 13,737.46 22,579.56 Capital expenditure 438.78 - 122.98 61.43 - 623.19 337.86 1,290.91 44.78 71.60 1,006.77 2,751.92 Other significant non-cash expenses 674.77 - - - 8,913.51 9,588.28 715.32 - - - 794.00 1,509.32 Depreciation 637.18 217.83 341.77 256.21 88.21 1,541.20 818.46 105.43 127.41 251.05 2.35 1,304.70

Figures in italics are for previous year.

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31 March, 2016

Note 17: Segment disclosures( Contd.) Rupees in lakhs

Note 17(2): Secondary segment-geography 2015-16 2014-15 Note 17(2)(a): Revnue by geographical market India 12,709.45 12,971.88 Outside India 78.47 1,329.32 12,787.92 14,301.20 Note 17 (2)(b): Capital expenditure incurred India 623.19 2,751.92 Outside India - - 623.19 2,751.92 Note 17 (2)(c): Carrying amount of segment assets India 14,807.99 27,773.26 Outside India - - 14,807.99 27,773.26 Notes: (i) The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of products, the differing risks and returns, the organizational structure and internal reporting system. The ompany's operations predominantly relate to manufacture of Rolls, Pig Iron, Ingots and Engineering Forgings. (ii) Segment revenue, segment results, segment assets and segment liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly relatable to the business segments, are shown as unallocated cost. Assets & Liabilities that cannot be allocated between segments are shown as unallocated assets & liabilities respectively. (iii) Transaction between segments are primarily for materials which are transferred at market determined price and common costs are apportioned on a reasonable basis.

Note 18: Related party disclosures Rupees in lakhs

A. List of Related parties i. Holding company Tata Steel Limited ii. Fellow Subsidiaries a. Tata Steel Europe Limited b. The Indian Steel & Wire Products Limited c. The Tinplate Company of India Limited d. Jamshedpur Continuous Annealing and Processing Company Private Limited e. Jamshedpur Utilities & Services Company Limited f. Tata Metaliks Limited g. Tata Metaliks DI Pipes Limited h. Tata Sponge Iron Limited i. TKM Global Logistics Limited iii. Key management personnel Mr. K. S. Marar (Managing Director)

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31 March, 2016 Note 18: Related party disclosures (Contd.) Rupees in lakhs

Nature of transactions Holding Fellow Key Total Company Subsidiaries Managerial Personnel Sale of goods Tata Steel Limited 2,938.50 - - 2,938.50 (3,131.88) - - (3,131.88) Tata Steel Europe Limited - - - - - (967.86) - (967.86) The Indian Steel & Wire Products Limited - - - - - (13.31) - (13.31) The Tinplate Company of India Limited - 494.58 - 494.58 - (286.67) - (286.67) 2,938.50 495.27 - 3,433.77 (3,131.88) (1,267.84) - (4,399.72) Rendering of services Tata Steel Limited 2,240.41 - - 2,240.41 (1,183.88) - - (1,183.88) Jamshedpur Continuous Annealing and Processing - 0.68 - 0.68 Company Private Limited - (-) - (-) Interest income Jamshedpur Utilities & Services Company Limited - 5.64 - 5.64 - (6.28) - (6.28) Purchase of goods Tata Steel Limited 1,668.91 - - 1,668.91 (1,799.17) - - (1,799.17) Tata Metaliks DI Pipes Limited - - - - - (52.44) - (52.44) Tata Sponge Iron Limited - 61.95 - 61.95 - (87.40) - (87.40) 1,668.91 61.95 - 1,730.86 (1,799.17) (139.84) - (1,939.01) Receiving of services Tata Steel Limited 548.66 - - 548.66 (475.82) - - (475.82) TKM Global Logistics Limited - 8.68 - 8.68 - (201.93) - (201.93) Jamshedpur Utilities & Services Company Limited - 1,620.11 - 1,620.11 - (1,540.00) - (1,540.00) 548.66 1,628.79 - 2,177.45 (475.82) (1,741.93) - (2,217.75) Managerial remuneration 40.69 40.69 (39.99) (39.99) Interest expenses

Tata Steel Limited 162.58 - - 162.58 (-) - - (-)

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Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31 March, 2016 Note 18: Related party disclosures (contd.) Rupees in lakhs

Nature of transactions Holding Fellow Key Total Company Subsidiaries Managerial Personnel Management contracts including deputation of employees Tata Steel Limited 27.03 - - 27.03 (18.32) - - (18.32) The Indian Steel & Wire Products Limited - 7.26 - 7.26 - (7.26) - (7.26) 27.03 7.26 - 34.29 (18.32) (7.26) - (25.58) Issue of prefernce shares Tata Steel Limited 1,600.00 - - 1,600.00 (6,300.00) - - (6,300.00) Short term loan Tata Steel Limited 4,363.00 - - 4,363.00 (-) - - (-) Advance Tata Steel Limited - - - - (1,006.89) - - (1,006.89) Outstanding receivables Tata Steel Limited 1,195.83 - - 1,195.83 (510.25) - - (510.25) Indian Steel & Wire Products Limited - - - - - (5.87) - (5.87) Tata Steel Europe - 1.80 - 1.80 - (246.08) - (246.08) Tinplate Company of India Limited - 15.11 - 15.11 - (24.61) - (24.61) Tata-Metaliks Di Pipes - 1.94 - 1.94 - (1.94) - (1.94) 1,195.83 16.91 - 1,212.74 (510.25) (276.56) - (788.75) Deposits given Jamshedpur Utilities Services Company - 75.64 - 75.64 - (76.28) - (76.28) Outstanding payables Tata Steel Limited 2,618.94 - - 2,618.94 (2,875.26) - - (2,875.26)

90 Notes forming part of the Financial Statements as at 31March, 2016 Rupees in lakhs

Nature of transactions Holding Fellow Key Total Company Subsidiaries Managerial Personnel The Indian Steel & Wire Products Limited - 29.12 - 29.12 - (3.02) - (3.02) TKM Global Logistics Limited - - - - - (20.32) - (20.32) Tata Sponge Iron Limited - - - - - (8.40) - (8.40) Jamshedpur Utilities Services Company - 129.21 - 129.21 - (89.85) - (89.85) 2,618.94 158.33 - 2,777.27 (2,875.26) (121.59) - (2,996.85) Issue of prefernce shares Tata Steel Limited 23,100.00 - - 23,100.00 (21,500.00) - - (21,500.00) Short term loan Tata Steel Limited (ICD) 4,525.58 - - 4,525.58 (-) - - (-) Note: Figure in brackets are for the previous year

Note 19: Earnings / (Loss) per share (EPS) : Rupees in lakhs

2015-16 2014-15 Loss after tax (15,687.73) (6,762.07) Weighted average number of ordinary 1,02,60,935 1,02,60,935 shares for basic/diluted EPS Nominal value of shares Rs. 10.00 Rs. 10.00 Basic and diluted EPS (152.89) (65.90)

Note 20: Deferred tax assets / (liabilities (net) Rupees in lakhs

The Company has carried out it's tax computation in accordance with Accounting Standard 22 'Accounting for Taxes on Income'. In view of absence of virtual certainty of unabsorbed tax losses, deferred tax losses, deferred tax assets have been recognised only to the extent of deferred tax liabilities. The major components of deferred tax assets / liabilities as recognised in the financial statements are as follows:

Rupees in Lakhs 31.03.2016 31.03.2015 Deferred Tax Liability (Net) consists of a) Book/Tax depreciation difference - (733.83) b) Employee benefits - 159.13 c) Carry forward of business loss (restricted to the extent of deferred tax liability) - 564.84 d) Others - 9.86 Deferred Tax Assets / Liability - -

91 TAYO ROLLS

Forty-Eighth annual report 2015-16

Notes forming part of the Financial Statements as at 31March, 2016 Note 21: Provision for warranty Rupees in lakhs In accordance with the accounting policy and Accounting Standard 29 - 'Provisions, Contingent Liabilities and Contingent Assets' provision has been made for estimated warranty liability in respect of rolls sold to customers. Details are as follows : 2015-16 2014-15 Provision at the beginning of the year 714.29 619.12

Provision made during the year 597.45 644.85 Amount utilised during the year (656.72) (549.68) Provision at the end of the year 655.02 714.29 Note: The Company has given warranty on sale of rolls. Provision for warranty is made based on technical estimates and past experience of such costs. This estimate is based on the Company's estimate of liability towards warranty expenses. Actual claims may differ from estimates and the difference is recognised in the year of occurence.

Note 22: The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

Note 23: There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.

Note 24: Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

For and on behalf of the Board

K SHANKAR MARAR ANAND SEN Managing Director Chairman DIN: 06656658 DIN: 00237914

PRASHANT KUMAR SURESH PADMANABHAN Company Secretary Dy Chief Financial Officer

Kolkata May, 26, 2016

92 TAYO ROLLS

Forty-Eighth annual report 2015-16

FINANCIAL STATISTICS REVENUE ACCOUNTS CAPITAL ACCOUNTS Share Share (Rupees) Sl. Year Sale of Depre- No. products Dividend Share Gross Net Shares of Rs. 100/- & Other Tax Tax ings Block Block each Income (Rupees in Lakhs) (Rupees in Lakhs) (Rupees) 1 1969-70 58.33 16.08 (-)14.16 — — 249.32 — 370.62 647.62 606.50 — — 2 1970-71 314.66 47.50 17.71 — — 249.66 — 413.00 667.74 599.95 99.87 7.08 3 1971-72 336.55 52.19 39.09 — 6% 249.78 44.70 422.11 681.09 563.34 117.79 15.64 4 1972-73 330.93 52.40 9.42 — 6% 249.88 39.12 373.12 687.67 516.96 115.60 3.77 5 1973-74 338.52 53.13 2.83 — — 249.92 26.95 341.57 700.75 475.83 110.75 1.13 6 1974-75 502.03 53.53 36.19 — 10% 249.93 38.15 291.15 724.19 448.84 125.23 14.48 tax Free 7 1975-76 481.43 55.28 23.61 — 5% 249.94 49.25 264.41 733.53 403.30 119.68 9.44 tax Free 8 1976-77 555.96 54.44 53.04 — 5% 249.95 89.79 210.66 743.38 358.47 135.90 21.22 tax Free 9 1977-78 601.89 54.62 62.99 — 6% 249.98 137.80 148.51 781.42 311.59 155.15 25.20 tax Free 10 1978-79 733.35 57.94 115.61 51.00 12% 249.98 172.41 139.37 786.05 289.39 169.00 25.85 11 1979-80 830.35 54.40 103.36 63.00 12% 249.98 182.78 116.52 802.81 251.81 173.15 16.15 12 1980-81 865.36 32.07 97.43 55.00 12% 249.98 195.22 85.05 814.08 231.62 178.13 16.98 13 1981-82 1117.36 42.07 126.19 28.00 15% 249.98 255.92 89.73 976.28 353.12 202.41 39.29 14 1982-83 1586.76 47.05 84.52 25.00 15% 249.98 277.95 92.64 1088.45 419.43 211.23 23.82 15 1983-84 1579.14 68.36 65.69 38.00 10% 249.98 280.65 73.86 1142.24 404.89 212.31 11.09 16 1984-85 1894.43 60.19 89.40 48.80 15% 249.98 283.76 57.47 1184.04 390.61 213.55 16.25 17 1985-86 2308.38 41.51 306.25 147.00 20% 249.98 425.02 183.42 1266.03 463.42 270.07 63.72 18 1986-87 2661.89 48.88 95.57 22.00 20% 249.98 448.61 228.37 1390.37 539.84 279.51 29.44 19 1987-88 2978.52 64.66 104.28 31.00 15% 249.98 484.40 775.56 1428.89 523.31 293.83 29.32 20 1988-89 3396.64 83.89 16.60 2.65 15% 249.98 477.54 901.35 1921.42 949.06 291.08 5.58 Shares of Rs.10/- each 21 1989-90 4100.40 106.17 81.66 13.25 18% 249.98 500.97 1003.86 2025.62 947.32 30.05 2.74 22 1990-91 4351.72 113.65 235.70 36.00 25% 249.98 638.18 968.96 2167.76 994.07 35.54 7.99 23 1991-92 4891.95 137.93 247.72 106.00 25% 249.98 717.42 2220.74 3339.54 2035.72 38.71 5.67 24 1992-93 5113.27 231.41 407.93 150.00 25% 547.32 1154.45 2086.59 4429.44 2899.37 31.10 4.71 25 1993-94 6776.30 370.70 344.55 93.00 25% 547.32 1269.18 2230.08 5040.38 3142.06 33.19 4.59 26 1994-95 6224.20 423.10 403.28 130.00 25% 547.32 1371.97 2010.63 5256.62 2937.35 35.07 4.99 27 1995-96 6781.96 428.59 405.51 120.00 27.5% 547.32 1438.40 1970.25 5403.74 2656.00 36.28 5.22 28 1996-97 7331.59 418.30 537.22 231.00 27.5% 547.32 1579.26 1767.07 5702.49 2543.24 38.86 5.60 29 1997-98 7350.62 438.06 708.80 280.00 30% 547.32 1827.47 1671.63 6041.52 2525.61 43.39 7.84 30 1998-99 7603.76 466.81 692.91 158.00 32.5% 547.32 2164.94 2328.91 7801.1 1 3951.50 49.56 9.77 31 1999-2000 8907.66 553.28 736.56 269.00 32.5% 547.32 2435.07 1534.30 7724.29 3501.55 54.49 8.54 32 2000-01 9433.94 543.51 567.82 205.00 32.5% 547.32 2601.88 1609.33 7740.88 3060.30 57.54 6.63 33 2001-02 9577.14 518.26 211.40 78.05 22% 547.32 2185.88 965.58 7855.73 2712.34 49.94 2.44 34 2002-03 10010.83 466.60 627.38 220.00 27% 547.32 2426.73 706.58 7994.84 2398.28 54.34 7.45 35 2003-04 10430.65 424.14 595.78 173.16 27% 547.32 2682.65 783.45 8062.74 2068.64 59.02 7.72 36 2004-05 14045.73 418.73 842.40 233.75 40% 547.32 2832.94 3036.31 10084.14 3768.12 61.76 11.12 37 2005-06 18447.56 516.61 756.46 141.90 40% 547.32 3197.88 3267.07 10160.93 3381.99 68.43 11.23 38 2006-07 22154.81 492.88 1532.50 469.95 42.5% 547.32 3617.68 2839.85 10362.06 3115.94 76.10 19.41 39 2007-08 24678.77 421.56 983.44 348.37 40% 547.32 4182.15 3608.76 13077.48 5479.78 86.43 11.60 40 2008-09 18929.72 354.13 (1839.52) (165.9) - 1026.13 7959.98 8655.41 22075.61 14192.18 87.57 (23.68) 41 2009-10 14236.63 395.56 (1153.30) - - 1026.13 6806.68 11988.94 27256.11 19029.55 76.30 (11.24) 42 2010-11 14727.86 562.17 (3044.00) - - 1026.13 5540.05 16670.19 30243.82 21458.17 96.40 (29.67) 43 2011-12 15232.80 1810.94 (5312.39) - - 9526.13 (1597.56) 13874.24 27939.71 17343.51 64.00 (51.77) 44 2012-13 19644.96 1915.64 (3373.84) - - 9526.13 (4971.40) 15027.18 29048.46 16548.01 44.80 (32.88) 45 2013-14 16754.52 2255.70 (7504.44) - - 18226.13 (12526.42) 13066.55 29903.26 13472.80 49.50 (73.14) 46 2014-15 15756.04 1304.70 (6762.07) - - 24526.13 (19332.44) 11489.63 32426.31 13877.03 69.00 (65.90) 47 2015-16 14180.75 1541.20 (15687.73) - - 26126.13 (35020.17) 12636.66 26329.36 6259.27 38.30 (152.89)

93 TAYO ROLLS

Forty-Eighth annual report 2015-16

NOTES

94 TAYO ROLLS

Forty-Eighth annual report 2015-16

NOTES

95 TAYO ROLLS

Forty-Eighth annual report 2015-16

NOTES

96 Tayo Rolls Limited FORM NO. MGT – 11 Proxy Form Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of The Companies (Management and Administration) Rules, 2014

Corporate Identity Number: L27105JH1968PLC000818

Name of the company: Tayo Rolls Limited

Registered office: Annex 2, General Office, Tata Steel Ltd, Bistupur, Jamshedpur – 831001

Name of the member (s): Registered address: E-mail Id: Folio No/ Client Id: DP ID:

I/We, being the member (s) of ………...... …. shares of the above named company, hereby appoint 1. Name : ……...... ………… Address : ……...... ………… E-mail Id : ……...... ………… Signature : ………...... ……., or failing him

2. . Name : ……...... ………… Address : ……...... ………… E-mail Id : ……...... ………… Signature : ………...... ……., or failing him

3. Name : ……...... ………… Address : ……...... ………… E-mail Id : ……...... ………… Signature : ………...... ……., or failing him as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Forty- Eighth Annual General Meeting of the company, to be held on Wednesday, September 21, 2016 at 11:30 a.m. at Auditorium of Centre for Excellence, Jubilee Road, Bistupur, Jamshedpur- 831 001 and at any adjournment thereof in respect of such resolutions as are indicated below:

97 Ordinary Business:

1. To receive, consider and adopt the Audited Balance Sheet as on March 31, 2016 and the Audited Profit and Loss Account for the year ended on that date together with reports of the Board of Directors and the Auditors thereon.

2. To appoint a Director in place of Mr. Anand Sen (DIN- 00237914), who retires by rotation and, being eligible, offers himself for re-appointment.

3. To appoint Statutory Auditors and to fix their remuneration.

Special Business:

4. To re-appoint Mr. K. Shankar Marar (DIN- 06656658) as the Managing Director of the Company.

5. To ratify Material Related Party transactions for FY 2015-16.

6. To approve Material Related Party transactions for FY 2016-17

7. To ratify Cost Auditors’ remuneration

Affix Revenue Stamp

Signed this…...... ….. day of…...... ……… 20….....… Signature of shareholder

Signature of Proxy holder(s)

Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.

98 Route Map of Centre for Excellence

Auditorium of Centre for Excellence TAYO ROLLS LIMITED 44498 Design and Printed at SCPL