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PERIAMA HOLDINGS, LLC A DELAWARE ENTITY STANDALONE

FINANCIAL STATEMENTS FOR THE PERIOD ENDED

MARCH 31, 2017

Braj Aggarwal, CPA, P.C. Certified Public Accountant

115 North Broadway Hicksville, NY 11801

Phone 718-426-4661 Fax: 718-233-2525

PERIAMA HOLDINGS, LLC

A DELAWARE ENTITY

TABLE OF CONTENTS

1-2 Report of independent Auditor

Financial Statements:

Balance Sheets 4-5

Statements of Operations 6

Statements of Changes in Stockholders’ Equity 7

Statements of Cash Flows 8

Notes to Financial Statements 9-17

Braj Aggarwal, CPA, P.C. Certified Public Accountant

REPORT OF INDEPENDENT AUDITOR

To the Board of Managers Periama Holdings, LLCBaytown Texas

We have audited the financial statements of Periama Holdings, LLC (a Delaware Corporation) which comprise the balance sheets as of March 31, 2017, and related statements of operations, changes in member’s capital and cash flows for the periods then ended and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that 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 conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we 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 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 control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidences we have obtained are sufficient and appropriate to provide a basis for our audit opinion.

115 North Broadway Hicksville, NY 11801 Phone: 718-426-466 Fax: 718-233-2525

Basis for Qualified Opinion

1. As d iscussed in Note A to these f inancia l s tatements , which are for Periama Holdings, LLC a Delaware entity stand‐alone financial statements, the Company reports its investment in JSW Steel (USA), Inc., a 90 percent owned subsidiary, and Periama Holdings, Inc., a 100 percent owned subsidiaries on the cost method of accounting.

These financial statements do not consolidate the financial position or results of operationsfrom its subsidiaries in accordance with Generally Accepted Accounting Principles acceptedin the United States of America and are not intended to be a full presentation undergenerally accepted accounting principles. In our opinion, disclosure of this information isrequired by accounting principles generally accepted in the United States of America.

2. Paragraph 805‐50‐25‐2 as per US GAAP which reflects accounting for restructuring establishes that the assets and liabilities transferred between entities under common control are to be initially recognized by the receiving entity at the transfer date. The financial statements of the receiving entity shall report results of operations for the period i n which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. Financial statements and financial information presented for prior years also shall be retrospectively adjusted to furnish comparative information. The special purpose financial statements of Periama Holdings LLC a Delaware entity has been prepared without giving effect of para 805‐50‐25‐2 under US GAAP.

Opinion

In our opinion, except for point number 1 and 2 as discussed in the Basis for QualifiedOpinion paragraph, the financial statements referred to in the first paragraph present fairly,in all material respects, the financial position of Periama Holdings, LLC as of March 31, 2017,and the results of its operations and its cash flows for the periods then ended in conformitywith accounting principles generally accepted in the United States of America.

Hicksville, New York May 30, 2017

Braj Aggarwal, CPA, P.C.

FINANCIAL STATEMENTS

March 31, 2017

Assets

Current

Cash and cash equivalents 41,177$

Accounts receivables:

Intercompany receivable 559,980

Intercompany interest receivable 44,089,897

Others 23,265

Deferred tax assets 20,055,858

Total current assets 64,770,176

Intercompany loans receivable from subsidiaries 391,942,808

Deferred tax assets‐ noncurrent 46,362,543

Capitalized loan cost, net of amortization 4,126,195

Investment in JSW Steel (USA) 165,235,473

Investment in WV operations 86,807,274

252,042,747

Total assets 759,244,468

See notes to financial statements


A DELAWARE ENTITY BALANCE SHEETS

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March 31, 2017

Liabilities and Stockholders' Equity

Current liabilitiesAccounts payable ‐ trade 26,275$ Interest payable ‐ financial institutions 8,035,953Interest payable ‐ related party and affiliates 183,204Interest payable ‐ intercompany 57,217,436Loans payable ‐ intercompany 239,164,400Current portion of Long Term notes payable to banks 240,000,000

Current portion of notes payable ‐ other 3,350,716

Total current liabilities 547,977,983

Long‐term debt, net of current portions:Notes payable bank 200,000,000Total long‐term debt 200,000,000

Total liabilities 747,977,983

Stockholders' EquityMembership Interest 14,350,100

Accumulated Deficit (3,083,615)Total Stockholders' Equity 11,266,485

Total liabilities and stockholders' equity (deficit) 759,244,468



A DELAWARE ENTITY BALANCE SHEETS

5

March 31, 2017

Revenue $ ‐

Selling, general and administrative expenses 102,800

Operating loss (102,800)

Other income (expenses):

Interest income 185,561

Interest expense (357,881)

Total other income/(expenses), net (172,320)

Loss before income taxes (275,120)

Income taxes

Deferred income tax expense ‐

Total income taxes ‐

Net loss (275,120)$



A DELAWARE ENTITY STATEMENTS OF OPERATIONS

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JSW Steel

Holding (USA)

Incorporated

Periama

Holdings LLC

(WEST

VIRGINIA)

Periama

Holdings LLC

(DELAWARE)

Balances at March 31, 2016 745,778,819 9,802,936 755,581,755

Adjustments to Balance March 31, 2016:

Common Stock (10) (10)

Addi onal Paid‐ inCapital Common Stock (190,058,090) (190,058,090)

Loan to Periama Holding LLC (WV) impairment reversed (10,991,716) (10,991,716)

Investment in Periama Holdings LLC (DE) written back 100 100

Adjusted Balance at 3/31/16 544,729,103 9,802,936 554,532,039

(Profit) / loss from April 1, 2016 to March 28, 2017 (549,481,915) (2,241,629) (551,723,544)

Adjusted opening balance at March 28, 2017 (4,752,812) 7,561,307 2,808,495

(Profit) / loss from March,28 2017 to March 31, 2017 275,120

Retained Earnings at March 31, 2017 3,083,615



A DELAWARE ENTITY STATEMENT OF RETAINED EARNINGS

PERIOD ENDED MARCH 31, 2017

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PERIOD ENDEDMarch 31, 2017

Cash Flows From Operating Activities:

Net loss (275,120)

Adjustments to reconcile net loss to net cash

used in operating activites:

Provision for deferred income taxes (66,418,401)

Owner's Interest on loans written back

Owner's Loans written back

Changes in operating assets and liabilities:

Intercompany receivables (559,980)

Intercompany interest receivables (44,089,897)

Other current assets (23,265)

Accounts payable 26,275

Interest payable- financial institutions 8,035,953

Interest payable- related party 183,204

Interest payable- intercompany 57,217,436

Net cash used by operating activities (45,903,795)

Cash Flows From Financing Activities:

Proceeds from notes payable banks 440,000,000

Proceeds from other Long Term Payables - St. James 3,350,716

Proceeds from intercompany loans - JSW Steel Ltd. India 239,164,400

Interco Loans to Subsidiaries (391,942,808)

Investments in JSW Steel (USA) and WV Operations (252,042,747)

Capitalized loan cost (4,126,195)

Membership Interest funded by owners 11,541,605

Net cash provided by financing activities 45,944,971

Net decrease in cash and cash equivalents 41,177

Cash and cash equivalents at beginning of year - Cash and cash equivalents at end of year 41,177



A DELAWARE ENTITY STATEMENTS OF CASH FLOWS

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PERIAMA HOLDINGS, LLC (STADALONE) NOTES TO FINANCIAL STATEMENTS

Period ended March 31, 2017

A. Organization

Organization and Operations

During the year, Periama Holdings, LLC (the “Company”) has been incorporated in the state of Delaware. The Company is 99.9 percent owned by JSW Steel Netherlands B.V and 0.1 percent owned by JSW Steel Ltd., India. On March 16 2017, Periama Holdings, LLC (a West Virginia entity) merged with the Company. On March 28, 2017, JSW Steel Holding (USA), Inc., a Delaware corporation, 99.9 percent owned by JSW Steel Netherlands B.V and 0.1 percent owned by JSW Steel Ltd., India, has transferred all of its assets and liabilities to the Company. JSW Steel Holding (USA), Inc. was dissolved immediately thereafter.

B. Restructuring

As part of the Company’s efforts to restructure and consolidate its US operations and holding structure, the Company has implemented a reorganization which broadly entailed (i) a write back of loans (ii) Transfer of assets and liabilities on 28th of March 2017 of JSW Steel Holding (USA) Inc. to its wholly owned subsidiary company, Periama Holding LLC in US; and (iii) Dissolution of JSW Steel Holding (USA) Inc on the same day. Additionally, to improve the administration and making the US organization leaner to be more effective, control of its coal mining operations as well as its manufacturing facilities of steel plates and pipes have been consolidated with an entity, the office of which has effectively been relocated from the State of West Virginia to the State of Delaware by merging Periama Holdings LLC (wholly owned subsidiary of JSW Steel Holding (USA) Inc.) in the State of West Virginia with Periama Holdings LLC (Wholly owned subsidiary of JSW Steel Holding (USA) Inc.) in the state of Delaware on 16th of March 2017. Part of the loans and related dues from owners (members) amounting to $ 579.32 million have been written back and these amounts have been reflected as an unusual and/or infrequent item in the Statement of Operations. The assets and liabilities of JSW Steel Holding (USA) Inc. have been transferred to Periama Holdings LLC at their carrying values and JSW Steel Holding (USA) was dissolved during the year.

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C ‐ Going Concern

The Company’s financial statements have been presented on the basis that it is a going concern,

which contemplates the realization of assets and the satisfaction of liabilities in the normal

course of business. The Company engages in business activities that involve various risks, and

future success is dependent upon a number of factors including, among others, generating

sufficient revenues, the market demand and price for the Company’s products, the price of raw

materials and the availability of required working capital. The Company incurred a net loss of $

0.28 million during the period ended March 31, 2017

Through its subsidiaries, the Company has adopted a plan to increase volumes by increasing its

market share, thereby reducing unit cost through greater absorption of fixed costs over increased

volume. Further, the company plans to reduce its cost by improving quality and other cost control

initiatives.

The Company is dependent upon its ultimate parent company, JSW Steel Ltd. India to continue

providing financial support as done in the past for the Company to continue until it achieves

profitable operations. JSW Steel, Ltd. India will continue to provide need based support to the

Company as required to continue operations.

The financial statements do not include any adjustments that might be necessary should the

Company be unable to continue as a going concern.

D ‐ Summary of Significant Accounting Policies

The consolidated financial statements are prepared under accounting principles generally

accepted in the United States of America (“GAAP”), except that the subsidiaries of the Company

are recorded on the cost basis and not consolidated in these financial statements. The following

notes describe the significant accounting policies:

Use of Estimates

The preparation of consolidated financial statements, in conformity with GAAP, requires

management to make estimates and assumptions that affect the reported amounts of assets

and liabilities, disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include estimated future life in determining current depreciation rates

under the depreciation method, estimated amounts for uncollectible accounts receivables and

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the estimated present value of the Company’s note payable to seller. Actual results could

differ from those estimates.

Federal Income Taxes

The Company records income taxes pursuant to the liability method. Deferred tax assets and

liabilities are recorded based upon differences between the financial statement and tax bases of

assets and liabilities and the available tax carry‐forwards. For tax purposes buildings, property

and equipment will carry the same book value for federal taxes as carried by the entities

before the merger. The difference between the tax basis and financial statement basis is a

temporary timing difference and has been recorded as a deferred tax liability for financial

statement purposes. The Company files as consolidated tax return with its subsidiaries that are

included in the consolidated tax return. Accordingly, the Company is allocated income taxes as

if it were separate taxpayer

Tax positions are evaluated in a two‐step process. The Company first determines whether it

is more likely than not that a tax position will be sustained upon examination. If a tax position

meets the more likely than not threshold, it is then measured to determine the amount of

expense to record in the financial statements. The tax position is measured as the largest

amount of expense that is greater than 50 percent likely to be realized upon settlement. The

Company classifies any potential accrued interest recognized on an underpayment of income

taxes as interest expense and classifies any statutory penalties recognized on a tax position

taken as operating expense. Management of the Company has not taken a tax position that, if

challenged, would be expected to have a material effect on the consolidated financial

statements or the effective tax rate for the period ended March 31, 2017. The Company’s

federal income tax returns since 2008 are subject to examination by the Internal Revenue

Service.

Fair Value of Financial Instruments

The fair value of financial instruments classified as current assets or liabilities, including cash

and cash equivalents, accounts receivable, accounts payable, and accrued expenses

approximate carrying value, principally because of the short maturity of those items.

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Cash and Cash Equivalents

Cash equivalents include time deposits, certificates of deposits, sweep account and all highly

liquid debt instruments with original maturities of three months or less. Restricted amounts of

cash and cash equivalent are segregated and appropriately classified as current or noncurrent

asset.

Restricted Investments and Bond Collateral

The Company had requirements to maintain restricted cash and investments (time deposits) for

bonding requirements. Amounts held were recorded as Restricted Investments. Funds in the

restricted investment were not available to meet the Company’s operating cash needs.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit

risk consist principally of cash. The Company maintains cash balances at financial institutions,

which may at times be in excess of federally insured levels. The Company has not incurred

losses related to these balances to date.

Capitalized Loan Costs

The Company incurred costs to obtain certain loans. These costs have been deferred and are being amortized to interest expense over the related maturities of the loans. The deferred financing costs included on the balance sheet at March 31, 2017 of $4.13 million represents the remaining unamortized cost.

E. Debt from Related Party‐Minority Shareholder

The debt due to a related party was $3,350,716 as of March 31, 2017 bears interest rate equal

to the weighted average of interest charged on term loan facilities availed by JSW Steel (USA),

Inc. The note is unsecured.

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F. Debts

On February 19, 2013, JSW Steel Holding (USA) Inc. had entered into a term loan agreement with

ANZ Banking Group of Singapore for $40,000,000. The note had been renewed for the period until

Feb. 17, 2017. On Feb. 17, 2017, JSW Steel Holding (USA) Inc. paid this $40 million loan in full

along with the accrued interest thereon. Therefore, on March 31, 2017 the Company did not have

any liability on this term loan. This loan was secured by corporate guarantee furnished by JSW

Steel Limited, India.

In October 2013 JSW Steel Holding (USA), Inc. entered into a loan agreement with the State Bank

of India for $400,000,000. The note has an interest rate of LIBOR plus 2.42%. At March 31, 2017

the interest rate was 3.68%. The note is secured through an unconditional and irrevocable

standby letter of credit to the bank based on guarantee by JSW Steel, Ltd. India.

On November 3, 2014, JSW Steel Holding (USA), Inc. entered into a credit facility agreement with

ICICI Bank UK PLC, Frankfurt Branch for $40 million. The loan bears interest at LIBOR plus 3.05%

p.a. At March 31, 2017 the interest rate was 3.93%. The loan is secured by a guarantee issued by

the ultimate parent JSW Steel Limited. The loan is further secured by a second charge on the

assets of company’s 90% subsidiary. The loan is repayable in 3 equal installments commencing

from the end of 4th year of drawdown.

In October 2014, JSW Steel Holding (USA), Inc. entered into a standby letter of credit (SBLC)

facility with ICICI, NY for $40 million. This facility was secured by a corporate guarantee issued by

JSW Steel Limited.

In addition to above, in December 2014 the company entered into a SBLC facility for an additional

$40 million secured by interest bearing cash collateral of equal amount.

Both of the above SBLC facilities were availed in December 2014 to issue two irrevocable SBLCs of

$40 million each, to secure a surety bond of $80 million posted by company’s 90% subsidiary in

defending an antitrust law suit filed in the United States District Court for the Southern District of

Texas.

During the year 2016‐17, the company has been awarded an adverse judgment for the law suit

filed in the United States District Court for the Southern District of Texas. The company paid

judgment amount as per the court’s order. Thereafter, original SBLCs were returned to ICICI NY

and respective corporate guarantee of JSW Steel Limited pertaining to issuing of first $40 million

SBLC by ICICI NY and cash collateral of $40 million held by ICICI NY pertaining to second SBLC of

$40 million, were released.

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Debt was composed of the following:

March 31, 2017Short Term Debts Notes payable to a bank ‐Notes payable to related party 3,350,716 Long Term Debts

3,350,716

Notes payable to a bank 440,000,000Notes payable to related party ‐

Total long‐term debt 443,350,716

Less current portion 243,350,716 Long‐term debts, net of current portion 200,000,000

The Debts will mature as follows:

Fiscal year

Ending Mar. 31, Related Party Banks Total

2018 3,350,716 240,000,000 243,350,716

2019 ‐ 66,666,667 66,666,667

2020 ‐ 66,666,667 66,666,667

2021 ‐ 66,666,666 66,666,666

3,350,716 440,000,000 443,350,716

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G. Intercompany, Related Party and Affiliates Disclosure Information

Intercompany balances relate to loans and other transactions between the Company and its

stockholders including JSW Steel Ltd., India and JSW Steel (Netherlands) BV. The following

details intercompany balances at:

March 31, 2017 Intercompany Receivables Accounts receivable from Sales JSW Steel Ltd., India 32,688 Accounts receivable from JSW UK 527,292 559,980 Intercompany Loans Receivables Interest receivable from Periama Holdings, LLC (WV) ‐ Interest receivable from JSW Steel (USA), Inc. ‐ Intercompany Interest Receivables

Interest receivable from Periama Holdings, LLC (WV) ‐ Interest receivable from JSW Steel (USA), Inc. 44,089,897

Intercompany Payables Accounts payable – due to JSW Steel (USA), Inc. ‐ Interest payable – JSW (Netherlands) B.V. ‐ Interest payable – JSW Steel Ltd., India 57,217,436 Corp. Guarantee Com. Payable – JSW Steel Ltd., India SBLC commission payable – JSW Steel Ltd., India

‐ ‐

57,217,436 Intercompany Loans Payable JSW Steel Netherlands BV ‐ Notes payable to JSW Steel Ltd., India 239,164,400 Intercompany Loans Payable 239,164,400

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Related Party ‐ affiliates

The Company has loans from one of the shareholders’ JSW Steel (USA), Inc. The loan amounts

due to this shareholder are subordinated to bank loans.

March 31, 2017 Notes payable to St. James Investments Ltd. 3,3350,716 Interest payable to St. James Investments Ltd. ‐ Interest expense St. James Investments Ltd. ‐ H ‐ Income Taxes

The Company’s deferred tax liabilities, and deferred tax assets at March 31, 2017 are as follows: March 27, 2017 Deferred tax assets/benefits related to: Net operating loss carry forward 46,362,543 Interest not currently deductible 20,055,858

Total deferred tax assets / benefits 66,418,401

Total deferred tax liability ‐

Net deferred assets / benefits (liability) 66,418,401

For Financial Statement Presentation, the net current and long term deferred taxes are as

follows:

March 31, 2017

Deferred tax assets ‐ current 20,055,858 Deferred tax assets – non current 46,362,543

I – Contingencies

A Houston, Texas jury returned a verdict on March 25, 2014 against JSW Steel Holding (USA), Inc.

the Company, along with other co‐defendants, in an antitrust lawsuit filed in the United States

District Court for the Southern District of Texas. The jury returned a verdict of $52 million in

damages against all defendants jointly and severally, which amount has been trebled under the

federal antitrust laws and to which has been added an award of attorneys’ fees. The Company

disagreed with the judgment and damages award and filed an appeal with the U.S. Court of

Appeals for the Fifth Circuit.

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The Company posted a surety bond in the amount of $80 million in December 2014. In order to

secure reimbursement of that surety bond, two irrevocable standby letters of credit (SBLC) were

issued by ICICI, New York. Those two letters of credit total $80 million were set to expire

December 3, 2016.

Three of the original co‐defendants settled the case, leaving the Company and one other

defendant to appeal. The Court of Appeals affirmed the judgment against the Company and

reversed the judgment against the remaining defendant.

The Company strongly disagreed with the decision of the Court of Appeals and planned to appeal

in US Supreme Court. On October 31, 2016, the United States Supreme Court declined to hear an

appeal of the decision of the Fifth Circuit Court of Appeals. The Fifth Circuit Court of Appeals had

upheld the judgment of the Federal District Court in the case of MM Steel, L.P. v. JSW Steel (USA)

Inc. and several other defendants. JSW Steel (USA) respectfully disagrees and is disappointed

with the decision of the Supreme Court. There were no further appeals available and this matter

is therefore concluded.

J‐ Subsequent Events

Subsequent events have been evaluated through May 30, 2017, which is the date on which

the financial statements were available to be issued. As of the date of this report, there are no

reportable events other than the events already disclosed above where appropriate.

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