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JSW Holdings Ltd.

BSE: 532642 Sector: Financials
NSE: JSWHL ISIN Code: INE824G01012
BSE 00:00 | 22 Jun 1895.05 -10.10
(-0.53%)
OPEN

1918.00

HIGH

1918.00

LOW

1895.00

NSE 00:00 | 22 Jun 1900.65 -27.10
(-1.41%)
OPEN

1902.20

HIGH

1930.00

LOW

1900.25

OPEN 1918.00
PREVIOUS CLOSE 1905.15
VOLUME 24
52-Week high 2018.40
52-Week low 1613.60
P/E 30.89
Mkt Cap.(Rs cr) 2,104
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1918.00
CLOSE 1905.15
VOLUME 24
52-Week high 2018.40
52-Week low 1613.60
P/E 30.89
Mkt Cap.(Rs cr) 2,104
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 Sixteenth Annual Report of your Companytogether with the Standalone and Consolidated Financial Statement for the year ended 31stMarch 2017.

1. Financial Results

Your Company has achieved a very good financial performance during the financial year2016-17 which is summarized below:

Financial Highlights

(Rs in Lakhs)

Standalone Consolidated
Particulars F.Y. F.Y. F.Y.
2016-17 2015-16 2016-17
Total Income 6335.16 5034.92 6335.16
Profit Before 5939.88 4682.67 5939.88
Depreciation &
Tax Less : 1.54 1.88 1.54
Depreciation
Profit Before Tax 5938.34 4680.79 5938.34
Tax 1200.00 1020.00 1200.00
Profit After Tax but before share of profit / (loss) of Associates 4738.34 3660.79 4738.34
Add/ Less share of profit / (loss) from associates - - 82.48
Profit after tax 4734.34 3660.79 4820.82
Add : Balance brought forward from previous year 23113.75 19452.96 24349.52
Amount available for Appropriation 27852.09 23113.75 29170.34
Less : Nil Nil Nil
Appropriations:
Transfer to
Reserve Fund
Balance carried to 27852.09 23113.75 29170.34
Balance Sheet

2. Dividend

Your Directors have deemed it prudent not to recommend any dividend on equity sharesfor the year ended 31st March 2017 in order to conserve the resources for thefuture years.

3. Review of Operations (A) Standalone Results

Your Company has recorded a very good performance during the year under review. TheCompany has received during the year Income by way of Dividend of Rs 1302.68 LakhsInterest of Rs2910.51 Lakhs Pledge Fees of Rs809.97 Lakhs and Other income of Rs1312.00 Lakhs the Total

Income is Rs 6335.16 Lakhs as against Total Income of Rs 5034.92 Lakhs in theprevious year. The Profit before depreciation and tax is Rs 5939.88 Lakhs. Afterproviding for depreciation of Rs 1.54 Lakhs and Tax of Rs 1200 Lakhs the Net Profit isRs 4738.34 Lakhs as against Rs 3660.79 Lakhs in the previous year an increase of around29.43%.

(B) Consolidated Results

Your Company has recorded a very good performance during the year under review. TheCompany has received during the year Income by way of Dividend of Rs 1302.68 LakhsInterest of Rs 2910.51 Lakhs Pledge Fees of Rs 809 Lakhs and Other income of Rs1312.00 Lakhs the Total Income is Rs6335.16 Lakhs. The Profit before depreciation andtax is Rs 5939.88 Lakhs. After providing for depreciation of Rs 1.54 Lakhsand Tax of Rs 1200 Lakhs the Profit before tax but before share of profit of Associatesis Rs 4738.34 Lakhs. The share of profit from associates is Rs 82.48 Lakhs and profitafter tax is Rs4820.82 Lakhs

4. Future Prospects

The liberalization of industrial policy and other initiatives taken by the Governmenthave given a definite impetus for entry participation and growth of the private sector inthe steel industry. The Indian steel industry has entered into a new development stageriding high on the resurgent economy and rising demand for steel. The steel sector hasbeen a major contributor to India's manufacturing output. India is expected to become theworld's second largest producer of crude steel in the next 10 years moving up from thethird position India's comparatively low per capita steel consumption and the expectedrise in consumption due to increased aviation infrastructure construction thrivingautomobile railways sector and rapid growth in the industrial sector. India's economicgrowth is contingent upon the growth of the Indian steel industry. Consumption of steel istaken to be an indicator of economic development. While steel continues to have astronghold in traditional sectors such as construction housing and ground transportationspecial steels are increasingly being used in engineering industries such as powergeneration petrochemicals and fertilizers.

With the Indian economy poised for its next wave of growth under the reforms beingunleashed in the last one year there lies tremendous opportunity for the Indian steelindustry to prosper and grow exponentially. Your Company is looking forward for asustainable growth in its investee Companies in the coming years which would enhance theshareholders' value. Considering the forecasted growth in the economy as a whole and thesteel industry in particular the Company expects to enhance its entrenched value for thebenefit of the shareholders' at large.

Your Company continues to hold significant investments in Equity Shares of JSW SteelLimited besides certain other investments in other JSW Group of Companies.

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 PrivateLimited

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 in andof financing group companies. SIPL holds strategic investments in JSW Group Companies. Thenet worth of SIPL as on 31.03.2017 is Rs 244.91 crores. ii. Jindal Coated Steel PrivateLimited

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 on31.03.2017 is Rs 11.54 crores. iii. Jindal Overseas Pte Limited.

Jindal Overseas Pte Limited (JOPL) was formed in Singapore for undertaking tradingactivities. The net worth of JOPL as on 31.12.2016 is SGD 19208 (Singapore Dollar).

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 five times on 06.05.2016 13.06.201630.07.2016 21.10.2016 and 23.01.2017. The maximum interval between two meetings did notexceed 120 days as prescribed under Companies Act 2013 and Regulation 17 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ["SEBI (LODR)Regulations 2015"].

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 2017 and of the profit of the Company for thatperiod; c. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; d.they have prepared the annual accounts on a going concern basis; and e. they have laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively. f. they have devisedproper systems to ensure compliance with the provisions of all applicable laws and suchsystems were adequate and operating 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-relations-jsw-holdings for investor's information.

12. Auditors a. Statutory Auditors:

M/s. Shah Gupta & Co. Chartered Accountants (Firm Registration No. 109574W)Mumbai Statutory Auditors of the Company retire at the conclusion of the ensuing AnnualGeneral Meeting and on completion of their term as specified under

Section 139 of the Companies Act 2013 ("Act") it is proposed to appointM/s. HPVS & Associates Chartered Accountants [Firm Registration No.137533W] Mumbaias Statutory Auditors of the Company from the conclusion of this Annual General Meetingupto the conclusion of 21st Annual General Meeting subject to ratification bythe Members at every annual general meeting held thereafter.

The Company has received a declaration from M/s. HPVS & Associates CharteredAccountants Mumbai confirming that their appointment if made would be within thelimits prescribed under Section 139 of the Act and that they are not disqualified forsuch appointment within the meaning of Section 141 of the Act. The auditors have alsoconfirmed that the Institute of Chartered Accountants of India has conducted Peer Review.Your Directors recommend appointment of M/s. HPVS & Associates Chartered AccountantsMumbai as the Statutory Auditors of the Company on a remuneration as may be fixed by theBoard of Directors of the Company. 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 Secretarial Audit Report in Form No. MR- 3 isappended as Annexure C. There are no qualifications reservations or adverseremarks or disclaimers made by the Secretarial 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: a)Loans:

(Rs 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. 149.20 (19.00) 130.20
Loans & advances to related parties (Refer Note No. 17 (9) of Financial statements) 23623.00 8227.50 31850.50
Total 23772.20 8208.50 31980.70

b) Investments: Refer Note No. 8 of the Financial Statement c) Detailsfor securities given:

Name of the party Purpose for giving security (Rs in lakhs)
JSW Techno Projects Management Ltd. Pledge of shares for loan availed by 87701.20
("JSW Techno") Unity Advisory Services Pvt. Ltd. JSW Techno Pledge of shares for loan availed by 75280.00
("Unity") Unity
SJD Advisory Services Pvt. Ltd. Pledge of shares for loan availed by 43233.30
("SJD") SJD

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 the year.

17. Risk Management Policy

The Company's robust risk management framework/ policy identifies and evaluatesbusiness risks and opportunities. The policy aims to ensure resilience for sustainablegrowth & sound corporate governance by having an identified process of riskidentification and management in compliance with the provisions of the Companies Act2013. Your Company has constituted a Risk Management Committee which reviews the riskmanagement framework and high risks and opportunities which are emerging or where impactis substantially changing. Intended risks like for investments/granting loans/ providingsecurity are taken prudently so as to manageexposurewhichcanwithstandrisksaffectinginvestments/ granting loans/ providing security andremain resilient.

Unintended risks related to performance operations compliances & systems aremanaged through direction setting vision/mission funds allocation commensurate with risks& opportunities code of conduct competency building policies processessupervisory controls audit reviews etc. The Company believes that the overall riskexposure of present and future risks remains within risk capacity.

18. Corporate Social Responsibility

JSW Holdings believes in inclusive growth to facilitate creation of a value basedand empowered 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 is uploaded 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:

1. Improving living conditions (eradication of hunger poverty malnutrition etc.)– Providing medical aid to cancer patients cataract patients and to children below10 years old.

2. Promoting social development (education skill development livelihood enhancementsetc.) – Providing educational support to economically 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. The Internal Audit Departmentmonitors and evaluates the efficacy and adequacy of internal control system in theCompany its compliance with operating systems accounting procedures and policies. Basedon the report of internal audit function process owners undertake corrective action intheir respective areas and thereby strengthen the controls. Significant audit observationsand corrective actions thereon are presented to the Audit Committee of the Board.

22. Directors

Mr. Sajjan Jindal (DIN: 00017762) Director of your Company shall retire by rotation atthe 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 platformto facilitate shareholders to cast vote in electronic form to exercise their right ofvoting at General Meetings /business to be transacted by means of voting through e-votingor poll or ballot paper 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 bythe shareholders vide special resolution dated 22.03.2016 is in compliance with theSecurities and Exchange Board of India (Share Based Employee Benefits) Regulations 2014 ("theSEBI ESOP Regulations").

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 DepositoryParticipant (Stock Holding Corporation of India) and other Government Agencies andShareholders.

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
Place : Mumbai Sajjan Jindal
Date : 24th April 2017 Chairman