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JSW Holdings Ltd.

BSE: 532642 Sector: Financials
NSE: JSWHL ISIN Code: INE824G01012
BSE 00:00 | 17 Aug 1999.05 68.05
(3.52%)
OPEN

1961.90

HIGH

2013.00

LOW

1961.90

NSE 00:00 | 17 Aug 2009.40 82.55
(4.28%)
OPEN

1925.60

HIGH

2014.95

LOW

1915.00

OPEN 1961.90
PREVIOUS CLOSE 1931.00
VOLUME 146
52-Week high 2125.00
52-Week low 1613.60
P/E 59.25
Mkt Cap.(Rs cr) 2,219
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1961.90
CLOSE 1931.00
VOLUME 146
52-Week high 2125.00
52-Week low 1613.60
P/E 59.25
Mkt Cap.(Rs cr) 2,219
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JSW Holdings Ltd. (JSWHL) - Director Report

Company director report

Dear Members

Your Directors take pleasure in presenting the Seventeenth Annual Report of yourCompany together with Standalone and Consolidated Financial Statements for the year ended31st March 2018.

1. Financial Results

Your Company has achieved a very good financial performance during the financial year2017-18 which is summarized below:

Financial Highlights

(` in Lakhs)

Standalone Consolidated
Particulars F.Y. F.Y. F.Y. F.Y.
2017-18 2016-17 2017-18 2016-17
Total Revenue 8931.90 6335.16 8934.00 6335.16
Profit Before 8422.87 5939.88 8424.97 5939.88
Depreciation & Tax Less : 3.00 1.54 3.00 1.54
Depreciation Profit Before 8419.87 5938.34 8421.97 5938.34
Tax
Less: Tax 1610.65 1200.00 1610.65 1200.00
Expense
Profit after Tax but before share of profit from Associates 6809.22 4738.34 6811.32 4738.34
Add: Share of profit from Associates - - 54.24 82.48
Profit after tax 6809.22 4738.34 6865.56 4820.82
Add: Balance brought forward from previous year 27852.09 23113.75 29170.34 24349.52
Amount available for Appropriation 34661.31 27852.09 36035.90 29170.34
Less: Nil Nil Nil Nil
Appropriations:
Transfer to
Reserve Fund
Balance carried forward 34661.31 27852.09 36035.90 29170.34

2. Dividend

Your Directors have deemed it prudent not to recommend any dividend on equity sharesfor the year ended 31st March 2018 in order to conserve the resources for the futureyears.

3. Review of Operations (A) Standalone Results:

Your Company has recorded a very good performance during the year under review. Duringthe year the Company has received income by way of Dividend of ` 3955.37 Lakhs Interestof ` 3573.15 Lakhs Pledge Fees of ` 1336.59 Lakhs and Other income of ` 66.79 Lakhsthe Total Revenue is ` 8931.90 Lakhs as against Total Revenue of ` 6335.16 Lakhs in theprevious year. The Profit before depreciation and tax is ` 8422.87 Lakhs. After providingfor depreciation of ` 3.00 Lakhs and Tax of ` 1610.65 Lakhs the Net Profit is `6809.22Lakhs as against ` 4738.34 Lakhs in the previous year an increase of around 43.70%.

(B) Consolidated Results

Your Company has recorded a very good performance during the year under review. Duringthe year the Total Revenue on consolidated basis stood at ` 8934.00 Lakhs comprising ofDividend of ` 3955.37 Lakhs Interest of ` 3573.15 Lakhs Pledge Fees of ` 1336.59Lakhs and Other Income of ` 68.89 Lakhs as against Total Revenue of ` 6335.16 Lakhs inthe previous year. The Consolidated Profit before depreciation and tax is

` 8424.97 Lakhs. After providing for depreciation of ` 3.00 Lakhs and Tax of `1610.65 Lakhs the Consolidated Net Profit after tax but before Share of Profit fromAssociates is ` 6811.32 Lakhs. The Share of Profit from Associates is ` 54.24 Lakhs andConsolidated Profit after Tax is ` 6865.56 Lakhs as against ` 4820.82 Lakhs in theprevious year an increase of around 42.41%.

4. Future Prospects

Your Company holds significant investments in Equity Shares of JSW Steel Limitedbesides certain other investments in other JSW Group of Companies therefore the businessprospects of the Company largely depends on the business prospects of JSW Steel Limitedand the steel industry.

The Indian steel industry is very modern with state-of-the-art steel mills. It hasalways strived for continuous modernisation and up-gradation of older plants and higherenergy efficiency levels.

India was the world's third-largest crude steel producer till 2017. The growth in theIndian steel sector has been driven by domestic availability of raw materials such as ironore and cost-effective labour. Consequently the steel sector has been a major contributorto India's manufacturing output. India overtook Japan to become the world's second largestcrude steel producer in the world in February 2018. Based on increased capacity additionin anticipation of upcoming demand and the new steel policy that has been approved bythe Union Cabinet in May 2017 is expected to boost India's steel production. Huge scopefor growth is offered by India's comparatively low per capita steel consumption and theexpected rise in consumption due to increased infrastructure construction and the thrivingautomobile and railways sectors. The year 2018 has given more benefits to the steelindustry in terms of demand costs of production market realisation and exports than whatwas experienced in the previous year. The higher consumption crucially dependent oninfrastructure investment from public and private sources in port-led rail and road-leddevelopment more spending by the household and the government in real estate affordablehousing smart cities would enable the demand to grow by a minimum 7-8% from the currentlevel of 5.2%. A brighter market demand would make India's crude steel production to growby a minimum 8% to reach 108 MT by 2018. The NCLT resolution during the year would alsoenable Indian steel industry to achieve a higher capacity utilisation in crude steelproduction by the second half of 2018.

This backdrop of a favourable market scenario of global steel industry is likely togive India a good platform to maximise exports and a much lesser threat of cheap importsin 2018. It is possible to enhance the export share of finished steel production from thecurrent 9.6% to a minimum 12%. Your Company is looking forward for a sustainable growth inits investee Companies in the coming years which would enhance the shareholders' value.Considering the forecasted growth in the economy as a whole and the steel industry inparticular the Company expects to enhance its entrenched value for the benefit of theshareholders' at large.

The Company will continue to focus on making long-term strategic investments in variousnew ventures promoted by JSW Group besides consolidating the existing investments throughfurther investments in the existing companies.

5. Holding Subsidiary& Associate Company

Your Company has neither any holding company nor a subsidiary company. No Company hasbecome or ceased as subsidiary associate or joint venture during the year under review.The following are the Associate Companies of your Company:

i. Sun Investments Private Limited

Sun Investments Private Limited (SIPL) is a Non- Banking Financial Company registeredwith the Reserve Bank of India. SIPL was formed with the main object of investing andfinancing. The net worth of SIPL as on 31.03.2018 is ` 246.16 crores.

ii. Jindal Coated Steel Private Limited

Jindal Coated Steel Private Limited (JCSPL) was formed with the main object of tradingand manufacturing various types of steel and allied products. The net worth of JCSPL as on31.03.2018 is ` 11.54 crores.

iii. Jindal Overseas Pte Limited

Jindal Overseas PTE Limited (JOPL) was formed in Singapore for undertaking tradingactivities. JOPL had filed an application for voluntary winding up at Singapore.Subsequently it has been wound up and ceased to be an Associate of the Company w.e.fApril 5 2018.

As per the provisions of Section 129(3) of the Companies Act 2013 a statementcontaining salient features of the financial statements of the Company's associatecompanies in Form AOC-1 is attached to the financial statements of the Company.

6. Fixed Deposits

Your Company has neither accepted nor renewed any deposits within the meaning ofSection 73(1) of the Companies Act 2013 and the rules made there under.

7. Extract of Annual Return

The extract of the Annual Return as required in Form No. MGT 9 is appended as AnnexureA.

8. Number of meetings of the Board

The Board meets to discuss and decide on Company/ business policy and strategy apartfrom other Board business. A tentative date of the Board and Committee Meetings iscirculated to the Directors in advance to facilitate them to plan their schedule and toensure meaningful participation in the meetings. However in case of a special and urgentbusiness need the Board's approval is taken by passing resolutions through circulationas permitted by law which are confirmed in the subsequent Board meeting. Usually themeetings of the Board/ Committees are held in Mumbai.

During the year under review the Board met four times on 24.04.2017 03.08.201702.11.2017 and 05.02.2018. The maximum interval between two meetings did not exceed 120days as prescribed under Companies Act 2013 and Regulation 17 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ["SEBI (LODR)Regulations 2015"] and Secretarial Standards SS-1.

9. Directors Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act 2013 yourDirectors hereby state and confirm that: a. in the preparation of the annual accounts theapplicable accounting standards have been followed along with proper explanations relatingto material departures; b. they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year on 31st March 2018 and of the profit of the Company for that period; c.they have taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities; d. they haveprepared the annual accounts on a going concern basis; and e. they have laid down internalfinancial controls to be followed by the Company and that such internal financial controlsare adequate and were operating effectively. f. they have devised proper systems to ensurecompliance with the provisions of all applicable laws and such systems were adequate andoperating effectively.

10. Declaration of Independence

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed under the CompaniesAct 2013 and Regulation 16 of the SEBI (LODR) Regulations 2015. The following are theNon-Executive Independent Directors of the Company: a) Mr. Atul Desai b) Mr. ImtiazQureshi c) Mrs. Sutapa Banerjee

11. Company's policy on Directors' KMP & other employees' appointment andremuneration

The Policies of the Company on Directors' KMP & other employees' appointmentincluding criteria for determining qualifications positive attributes independence of aDirector and other matters provided under sub-section (3) of section 178 is appended as AnnexureB to this Report. The Remuneration Policy is forming part of Corporate GovernanceReport and detailed policy has also been published on the websitehttp://www.jsw.in/investors/investor-relations-jsw-holdings for investor's information.

12. Auditors a. Statutory Auditors:

At the Company's 16th Annual General Meeting (AGM) held on July 1 2017 M/s. HPVS& Associates Chartered Accountants (Firm Registration No. 137533W) Mumbai wereappointed as the Company's Statutory Auditors from the conclusion of the 16th AGM till theconclusion of the 21st AGM. In terms of Section 139 (1) of the Companies Act 2013 theappointment of the statutory auditors to hold office from the conclusion of the 17th AGMuntil the conclusion of the 21st AGM is placed for your ratification.

There are no qualifications reservations or adverse remarks or disclaimers made byM/s. HPVS & Associates Statutory Auditors in their report.

b. Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Sunil Agarwal & Co Practicing Company Secretaries to undertake theSecretarial Audit of the Company. The Report of the Secretarial Auditor in Form No. MR- 3is appended as

Annexure C.

There are no qualifications reservations or adverse remarks or disclaimers made by theSecretarial Auditor in his report.

13. Particulars of loans or guarantees given securities provided or investments madeunder Section 186 of the Companies Act 2013

The Company has provided following investments loans and guarantees pursuant toSection 186 of the Companies Act 2013: Details for investments loans & guarantees:

Loans given:
(` in Lakhs)
Name of the party Amount at the beginning of the year Transactions during the year (Net) Balance at the end of the year
Gagan Trading Co. Ltd. 130.20 (130.20) -
JSW Investments Pvt. Ltd. 4452.50 (10.00) 4442.50
JSW Techno 12000.00 2500.00 14500.00
Projects Management Ltd.
Realcom Reality Pvt. Ltd. 11999.50 - 11999.50
Reynold Traders Pvt. Ltd. 2858.00 (335.00) 2523.00
JSW Holdings Employees Welfare Trust 540.50 (215.15) 325.35
Total 31980.70 1809.65 33790.35

Investments: Refer Note 7 of Standalone Financial Statements

Details for securities provided:

(` in Lakhs)

Name of the party Purpose for giving security Amount
JSW Techno Projects Management Ltd. ("JSW Techno") Pledge of shares for Loan availed by JSW Techno 110862.83
SJD Advisory Services Pvt. Ltd. ("SJD") Pledge of shares for Loan availed by SJD 49080.59
JSW Projects Ltd. ("Projects") Pledge of shares for Loan availed by Projects 99457.85
Jindal Stainless Ltd. ("Stainless") Pledge of shares for Loan availed by Stainless 361.90

14. Particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013

All transactions entered with Related Parties for the year under review were on arm'sLength basis and in the ordinary course of business and that the provisions of Section 188of the Companies Act 2013 and the rules made thereunder are not attracted. Thusdisclosure in Form AOC-2 in terms of Section 134 of the Act is not required.

15. Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the report.

16. Particulars regarding Conservation of Energy Technology Absorption ForeignExchange Earnings and Outgo

As your Company is not engaged in any manufacturing activity particulars under Section134(3)(m) of the Companies Act 2013 regarding conservation of energy technologyabsorption are not applicable. There were no foreign exchange transactions during theyear.

17. Risk Management Policy

The Company has in place a Risk Management Policy to identify assess monitor andmitigate various risks to key business objectives. Major risks identified by thebusinesses and functions are systematically addressed by the Risk Management Committeethrough risk response strategies and mitigating actions. All risks including investmentsare reviewed in the meetings of the Board of Directors. Risks related to internalcontrols compliances & systems are reviewed in detail by the Audit Committee.

18. Corporate Social Responsibility

JSW Holdings believes in inclusive growth to facilitate creation of a value based andempowered society through continuous and purposeful engagement with society around.

JSW Foundation administers the planning and implementation of all our CSRinterventions. All the CSR initiatives are approved by the CSR Committee in line with theCSR Policy approved by the Board on

April 28 2014 and the same are reviewed periodically. The CSR Policy formulated isuploaded on the website of the Company athttp://www.jsw.in/investors/investor-relations-jsw-holdings.

Following are the Company's initiatives proposed to be undertaken as per Schedule VIIof the Companies Act 2013: i. Improving living conditions (eradication of hungerpoverty malnutrition etc.) – Providing medical aid to cancer patients cataractpatients and to children below 10 years old. ii Promoting social development (educationskill development livelihood enhancements etc.) – Providing educational support toeconomically weak children.

The details about the initiatives taken by the Company on Corporate SocialResponsibility during the year under review to be provided as per the "annexureattached to the Companies (Corporate Social Responsibility Policy) Rules 2014" havebeen appended as Annexure D to this Report.

19. Formal Annual Evaluation

Pursuant to the provisions of the Companies Act 2013 and Regulation 17 and Part D ofSchedule II the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsAudit Nomination and Remuneration Stakeholders' Relationship Risk Management CorporateSocial Responsibility and ESOP Committees. A structured questionnaire was prepared aftertaking into consideration inputs received from the Directors covering various aspects ofthe Board's functioning such as adequacy of the composition of the Board and itsCommittees Board culture execution and performance of specific duties obligations andgovernance. A separate exercise was carried out to evaluate the performance of individualDirectors who were evaluated on parameters such as level of engagement and contributionindependence of judgement safeguarding the interest of the Company and its minorityshareholders etc. The performance evaluation of the Independent Directors was carried outby the entire Board. The Directors expressed their satisfaction with the evaluationprocess.

20. Significant and material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Company's operations in future.

There are no significant and material orders passed by the Regulators or Courts orTribunals which would impact the going concern status and the Company's future operations.

21. Adequacy of Internal Financial Controls:

The Board of Directors in consultation with Internal Auditors have laid down theInternal Financial Control Framework commensurate with the size scale and complexity ofits operations. To maintain its objectivity and independence the Internal Audit functionreports to the Chairman of the Audit Committee of the Board quarterly. The Internal AuditDepartment quarterly monitors and evaluates the efficacy and adequacy of internal controlsystem in the Company its compliance with operating systems accounting procedures andpolicies. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.

22. Directors

Mr. Nirmal Kumar Jain (DIN: 00019442) Director of your Company shall retire byrotation at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment.

The proposal regarding his re-appointment as Director is placed for your approval.

23. Reserve Bank of India's Guidelines

Your Company is a Core Investment Company ("CIC") in terms of the CoreInvestments Companies (Reserve Bank) Directions 2011. The Company continues to carry onthe business permitted to CIC in terms of the Core Investment Companies (Reserve Bank)Directions 2011.

24. Corporate Governance

Your Company has complied with the requirements of Regulation 17 to 27 of the SEBI(LODR) Regulations 2015 on Corporate Governance.

Pursuant to Schedule V of the SEBI (LODR) Regulations 2015 Report on CorporateGovernance along with the Auditors' Certificate on its compliance is annexed separately tothis Annual Report.

25. Management Discussion and Analysis Report

The Management Discussion and Analysis Report on the operations of the Company for theyear under review as required under Schedule V of the SEBI (LODR) Regulations 2015 isprovided in a separate section and forms part of this Annual Report.

26. Human Resources

Your Company continues to put due emphasis on appropriate human resource developmentfor its business. The employees of your Company and the Group fully identify with theCompany's and Group's vision and business goals.

27. E-Voting Platform

In compliance with provisions of Section 108 of the Companies Act 2013 read with theCompanies (Management and Administration) Rules 2014 your Company is registered withKarvy Computershare

Private Limited for E-Voting services to set up an electronic platform to facilitateshareholders to cast vote in electronic form to exercise their right of voting at GeneralMeetings /business to be transacted by means of voting through e-voting or poll or ballotpaper as provided under the Companies Act 2013.

28. Disclosures as per Regulation 14 of SEBI (Share Based Employee Benefits)Regulations 2014.

The JSWHL Employees' Stock Ownership Plan– 2016 approved by the shareholders videspecial resolution dated 22.03.2016 is in compliance with the Securities and ExchangeBoard of India (Share Based Employee Benefits) Regulations 2014 ("the SEBI ESOPRegulations").

Further the disclosure as required in terms of Regulation 14 of SEBI ESOP Regulationsread with SEBI circular no. CIR/CFD/POLICY CELL/2/2015 dated June 16 2015 has beendisclosed on the website of the Company at http://www.jsw.in/investors/investor-relations-jsw-holdings

29. Particulars of Employees and related disclosures

The information required to be disclosed in the Directors' Report pursuant to Section197 of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 have been appended as Annexure E andAnnexure F respectively to this Report.

The Annual Report including the aforesaid information is being sent electronically toall those members who have registered their email address and is also available on theCompany's website at http://www.jsw.in/investors/ investor-relations-jsw-holdings

30. Prevention of Sexual Harassment

Your Directors stated that the Company follows an Anti-Sexual Harassment JSW GroupPolicy in line with the Requirements of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and there were no cases filed under thesaid policy.

31. Appreciation & Acknowledgements

Your Directors wish to express their sincere appreciation for the assistance andco-operation received from Banks Reserve Bank of India NSDL CDSL Depository Participant(Stock Holding Corporation of India) and other Government Agencies and Shareholders.

Your Directors also wish to place on record their appreciation for the valuableservices rendered and the commitment displayed by the employees of the Company and lookforward to their continued support in the future as well.

For and on behalf of the Board of Directors

Sajjan Jindal Chairman

Place : Mumbai

Date : 27th April 2018