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JSW Steel Ltd.

BSE: 500228 Sector: Metals & Mining
NSE: JSWSTEEL ISIN Code: INE019A01038
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OPEN 295.30
PREVIOUS CLOSE 298.05
VOLUME 236654
52-Week high 427.30
52-Week low 237.90
P/E 8.72
Mkt Cap.(Rs cr) 70,933
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 295.30
CLOSE 298.05
VOLUME 236654
52-Week high 427.30
52-Week low 237.90
P/E 8.72
Mkt Cap.(Rs cr) 70,933
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JSW Steel Ltd. (JSWSTEEL) - Director Report

Company director report

DIRECTORS

To the Members of JSW STEEL LIMITED

Your Directors take pleasure in presenting the First Integrated Report alongwithfinancial statements on the business and operational performance of the Company for theFinancial year ended March 31 2018.

1. FINANCIAL RESULTS

(Rs in crores)

Standalone Consolidated

FY 2017-18

FY 2016-17

FY 2017-18

FY 2016-17
I Revenue from operations 66234 56913 71503 60536
II Other income 213 255 167 152
III Total income (I + II) 66447 57168 71670 60688
IV Expenses:
Cost of materials consumed 35995 28400 38779 29749
Purchases of stock-in-trade 1063 945 2 -
Changes in inventories of finished goods work-in- progress and stock-in-trade 412 (1390) 244 (1486)
Employee benefits expense 1260 1168 1843 1700
Finance costs 3591 3643 3701 3768
Depreciation and amortisation expense 3054 3025 3387 3430
Excise duty expense 1259 4623 1278 4932
Other expenses 12504 11623 14563 13467
Total expenses 59138 52037 63797 55560
V Profit / (loss) before exceptional items and tax (III-IV) 7309 5131 7873 5128
VI Exceptional items 234 - 264 -
VII Profit / (loss) before tax (V-VI) 7075 5131 7609 5128
VIII Tax expenses / (benefit):
Current tax 1578 (53) 1826 152
Deferred tax 872 1607 (288) 1522
2450 1554 1538 1674
IX Profit / (loss) for the year (VII-VIII) 4625 3577 6071 3454
X Share of (loss) / profit from an associate - (9)
XI Share of profit from joint ventures (net) 42 22
XII Total Profit / (loss) for the year (IX+X+XI) 4625 3577 6113 3467
XIII Other comprehensive income
A i) Items that will not be reclassified to profit or loss
a) Re-measurements of the defined benefit plans (3) (16) (5) (20)
b) Equity instruments through Other Comprehensive Income 82 (63) 92 (68)
ii) Income tax relating to items that will not be reclassified to profit or loss 1 6 2 7
Total (A) 80 (73) 89 (81)
B i) Items that will be reclassified to profit or loss
a) The effective portion of gains and loss on hedging instruments (341) 300 (401) 347
b) Changes in Foreign Currency Monetary Item Translation Difference account (FCMITDA) (33) 297 (33) 297
c) Foreign currency translation reserve (FCTR) - - 9 30
ii) Income tax relating to items that will be reclassified to profit or loss 130 (207) 150 (223)
Total (B) (244) 390 (275) 451
Total Other comprehensive income / (loss) (A+B) (164) 317 (186) 370

(Rs in crores)

Standalone Consolidated

FY 2017-18

FY 2016-17

FY 2017-18

FY 2016-17
XIV Total comprehensive income / (loss) (XII+ XIII) 4461 3894 5927 3837
Total Profit /(loss) for the year attributable to:
- Owners of the company 6214 3523
- Non-controlling interests (101) (56)
6113 3467
Other comprehensive income/(loss) for the year attributable to:
- Owners of the company (184) 365
- Non-controlling interests (2) 5
(186) 370
Total comprehensive income/(loss) for the year
attributable to:
- Owners of the company 6030 3888
- Non-controlling interests (103) (51)
5927 3837

The Company has adopted Indian Accounting Standard (referred to as ‘Ind AS') witheffect from April 1 2016 and accordingly these financial results along with thecomparatives have been prepared in accordance with the recognition and measurementprinciples stated therein prescribed under Section 133 of the Companies Act 2013("Act") read with the relevant Rules framed thereunder and the other accountingprinciples generally accepted in India.

2. RESULTS OF OPERATIONS

During the Financial Year 2017-18 the global business cycle turnaround and structuralfactors provided fundamental support to steel demand. The cyclical upturn for steelbroadened and firmed throughout the year leading to better than expected performance fromboth developed and developing economies.

The structural factors such as supply reforms in China by way of continuing closure ofinefficient production facilities and pollution induced production curtailments coupledwith strong domestic demand in China lead to lower exports from China. This disciplinealong with robust steel demand helped improve global steel demand-supply balance. Duringthe year the steel prices rebounded due to resilient demand and improved steeldemand-supply balance.

The steel spread calculated by subtracting iron ore and coking coal prices from thebenchmark HRC price has been improving throughout the year. This improved steel spreadcoupled with higher volumes enabled the steel industry to deliver improved results in thecurrent year.

Indian steel consumption grew by 7.9% and there was competitive pressure in thedomestic market due to a surge in domestic steel production and an elevated level ofimports specifically in coated products. Steel consumption grew largely in the second halfof the year on the back of the Government's push for infrastructure spending andstrengthening consumer demand. In this competitive environment the Company continued toincrease its market share in the domestic market.

This robust domestic demand focused cost reduction drive and value added specialproduct portfolio helped the Company deliver strong profitable performance andconsequently the Company's profitability improved during F.Y. 2017-18.

(A) Standalone Results

Your Company delivered its highest ever production volumes sales volume EBITDA andprofit after tax during the F.Y. 2017-18.

The Company reported crude steel production growth of 3% YoY at 16.27 million tonnesfor the full year F.Y. 2017-18. Saleable steel sales volume for the year grew by 6% YoY to15.62 million tonnes driven by domestic sales.

Revenue from operations for F.Y. 2017-18 stood at Rs 66234 crores up 16% YoY.

This revenue was driven by sales volume growth of 6% YoY and higher realisations. TheCompany also progressed well on multiple performance improvement initiatives – fromdiversified sourcing optimisation of logistics costs digitalisation projects drivingimprovement of yields and productivity. As a result the operating EBITDA for the yeargrew by 19% YoY to Rs 13741 crores. The Company posted a net profit of Rs 4625 croresfor F.Y. 2017-18 as compared to the net profit of Rs 3577 crores for F.Y. 2016-17.

During the year a subsidiary of the Company has surrendered one of its iron ore minesin Chile considering its economic viability. Accordingly the Company reassessed therecoverability of the loans given to and investments made in these subsidiaries andrecognised an impairment provision of Rs 234 crores which has been disclosed as anexceptional item in the standalone financial statements.

The Company's net worth increased to Rs 27907 crores as on March 31 2018 as comparedto Rs 24098 crores as on March 31 2017. The Company's gearing (Net Debt toEquity) at the end of the year stood at 1.27x (as against 1.53x as on March 31 2017) andNet Debt to EBITDA stood at 2.59x (as against 3.20x as on March 31 2017).

(B) Consolidated Results

Revenue from operations on a consolidated basis for F.Y. 2017-18 stood at Rs 71503crores. The operating EBITDA stood at Rs 14794 crores registering an increase of 22%YoY. Sales of value-added products grew by 13% YoY to 9 million tonnes for F.Y.2017-18. The Company reported a net profit of Rs 6113 crores for F.Y. 2017-18 as comparedto the net profit of Rs 3467 crores for F.Y. 2016-17.

The performance and financial position of the subsidiary companies and jointarrangements are included in the consolidated financial statement of the Company.

The operational performance at the US operations of both the Plate and Pipe mill atBaytown as well as the US coal operations have seen an improvement during the course ofthe year. In view of the improved operating performance and a strong economic outlook forthe USA the Company during the year ended March 31 2018 has recognised a Deferred TaxAsset amount of Rs 729 crores on the unutilised tax losses to the extent of temporarydifferences. Further during the year pursuant to the enactment of Tax Cuts and Jobs Actby the USA on December 22 2017 the corporate income tax rate in USA has been reduced to21% resulting in a reversal of deferred tax liabilities amounting to Rs 572 crores.Accordingly the Company has recognised a Deferred Tax credit of Rs 1301 crores in theconsolidated financial statements.

During the year the Group has surrendered one of its iron ore mines in Chileconsidering its economic viability and accordingly has reassessed the recoverability ofcarrying amounts of Property Plant and Equipment Goodwill and advances pertaining to thesaid iron ore mine and recognised an impairment of Rs 264 crores which has been disclosedas an exceptional item in the consolidated financial statements.

The Company's net worth increased to Rs 27534 crores as on March 31 2018 as comparedto Rs 22401 crores as on March 31 2017. The Company's gearing (Net Debt toEquity) at the end of the year stood at 1.38x (as against 1.85x as on March 31 2017) andNet Debt to EBITDA stood at 2.57x (as against 3.41x as on March 31 2017).

In terms of Section 134(3) (l) of the Companies Act 2013 except as disclosedelsewhere in this Report no material changes or commitments affecting the financialposition of the Company have occurred between the end of the financial year and the dateof this Report.

3. DIVIDEND

The Board of Directors of the Company has approved a Dividend Distribution Policy onJanuary 31 2017 in accordance with the Securities and Exchange Board of India (ListingObligations & Disclosure Requirements) Regulations 2015. The Policy is available onthe Company's website: www.jsw.in/investors/investor-relations-steel.

In terms of the Policy Equity Shareholders of the Company may expect Dividend if theCompany is having surplus funds and after taking into consideration relevant internal andexternal factors enumerated in the policy for declaration of dividend. The policy alsoenumerates that efforts will be made to maintain a dividend payout (including dividenddistribution tax and dividend on preference shares if any) in the range of 15% to 20% ofthe consolidated net profits of the Company after tax in any financial year subject tocompliance of covenants stipulated by Lenders/Bond holders.

In line with the said policy the Board has subject to the approval of the Members atthe ensuing Annual General Meeting recommended:

- Dividend at the stipulated rate of 10% per share on the 10% Cumulative RedeemablePreference Shares of Rs 10 each of the Company i.e. (i) Rs 1 (rupee one only) per shareof Rs 10 each (prior to its part redemption on 15.12.2017) (ii) Rs 0.75 (paise seventyfive only) per share of Rs 7.50 each (face value post redemption on 15.12.2017) and (iii)Rs 0.50 (paise fifty only) per share on the 10% Cumulative Redeemable Preference Shares ofRs 5 each (face value post redemption on 15.03.2018) for the year ended March 31 2018.The aggregate amount of Dividend per share works out to Rs 0.91506849.

- Cumulative dividend starting from October

1 2002 at the stipulated rate of 0.01% per share on the 0.01% Cumulative RedeemablePreference Shares of Rs 10 each. The aggregate amount of Dividend per share works out toRs 0.015496.

- Dividend of Rs 3.20/- (Rupees Three & Paise Twenty only) (320%) per fully paid-upEquity Share of Rs 1 each of the Company for the year ended March 31 2018.

Together with Corporate Tax on dividend the total outflow on account of equitydividend will be Rs 932.5 crores vis--vis Rs 654.6 crores paid for F.Y.2016-17.

4. PROSPECTS

A report on the Management Discussion and Analysis covering prospects is provided as aseparate Section in the Annual Report.

5. INTEGRATED REPORT

The Securities and Exchange Board of India (SEBI) in its circular dated February 62017 has advised the top 500 listed companies (by market capitalisation) to voluntarilyadopt Integrated Reporting (IR) from the financial year 2017-18.

Your Company believes in sustainable value creation while balancing utilisation ofnatural resources and social development in its business decisions. In continuation withthis commitment we are delighted to present the first Integrated Report (IR) for theperiod ended March 31 2018. The IR framework of the Company has been developed on theGuiding Principles and Content Elements as defined by the International IntegratedReporting Council (IIRC).

IR is a concept that better articulates the broader range of measures that contributeto an organisation's long-term value creation. Central to this concept is the propositionthat value is increasingly shaped by factors additional to financial performance such asreliance on the environment social reputation human capital innovation and others. Thisvalue creation concept is the backbone of IR and is the direction for future of corporatereporting. In addition to the financial capital IR examines five additional capitals thatshould guide an organisation's decision-making and long-term value creation. IR startsfrom the position that any value created as a result of a sustainable strategy willtranslate into performance thereby impacting market value.

This IR articulates the Company's unique approach to long term value creation which isa paradigm shift from the traditional compliance based reporting to governance based valuecreation model.

6. PROJECTS AND EXPANSION PLANS

F.Y. 2017-18 marked a turning point for the domestic steel demand growth for thecountry as elasticity of steel demand growth to GDP growth went back to >1x after morethan 5 years. With rising spends in infrastructure projects the medium term demand growthoutlook is quite constructive. At the same time with a 91% utilisation in F.Y. 2017-18there is an opportunity to expand capacity to participate in the strong India growthstory.

With a strategic objective of augmenting the incremental capacity creation at a lowspecific investment cost so that they remain returns accretive the Board of Directors ofthe Company has approved certain key new projects in addition to the existing capexpipeline to achieve the following:

- expand overall steelmaking capacity from 18 MTPA to 24.7 MTPA by March 2020.

- enrich the product mix with 3.2 MTPA additional downstream capacity.

- backward integration projects to achieve cost reduction.

The major new projects so approved are:

(a) Upstream Projects – Augmenting crude steel capacity at Vijayanagar & Dolvii) The Company in the last year had announced a plan to revamp and up-grade capacityof Blast Furnace-3 at Vijayanagar post which the higher cost BF-2 would have been rampeddown keeping overall capacity at Vijayanagar at 12 MTPA. Considering the prospects ofstrong steel demand outlook the Company now plans to modify and enhance the capacities ofSteel Making Shop and capacities of flat and long products mills with allied facilities toutilise the additional hot metal at an estimated cost of Rs 2300 crores.

ii) The expansion project at Dolvi to 10 MTPA is currently under implementation. Inorder to effectively utilise the steel making and casting capacity the Company hasdecided to increase DRI capacity at its subsidiary JSW Steel Salav Limited to 1.6 MTPA(from existing 0.9 MTPA) along with augmentation and modification of Steel Melting Shop atDolvi for hot charging of DRI. This project is expected to be commissioned by March 2020at an estimated cost of Rs 1375 crores. With this the crude steel capacity at Dolviwould increase to 10.7 MTPA.

Post completion of both these projects the Company's overall crude steel makingcapacity will increase from 18 MTPA to 24.7 MTPA by March 2020.

(b) Enriching Product Mix

The Company remains strategically focused on enriching its product mix byincreasing the volume and share of value added and special products in its portfolio.Considering the growth potential in these value added segments the Company has decided toset up the following downstream facilities:

i) Setting up 0.3 MTPA colour coated line at CRM1 complex at Vijayanagar

ii) Modernisation and Capacity Enhancement at Vasind & Tarapur by 1.5 MTPA bysetting up PLTCM instead of earlier planned 0.96 MTPA BCTM

iii) Installation of an additional Tin Plate line with capacity of 0.25 MTPA at Tarapur

iv) Capacity enhancement of Pre-Painted Galvalume Line (PPGL) at Kalmeshwar by 0.22MTPA

These projects in phases are likely to be commissioned between September 2019 andMarch 2020. The overall project cost for the above new projects is expected to be Rs 1470crores.

(c) Cost reduction projects and manufacturing integration i) Setting up of 8 MTPApellet plant and 1.5 MTPA coke oven plant at Vijayanagar:

The Company has decided to set up an 8 MTPA pellet plant at Vijayanagar tostrategically reduce the dependency on more expensive lump iron ore. The Company has alsodecided to set up a 1.5 MTPA coke oven plant at Vijayanagar to bridge the currentand expected gaps in coke availability. Both these projects are expected to providesignificant cost savings and are likely to be commissioned by August 2019 and March 2020respectively at an estimated cost of Rs 5200 crores.

ii) Phase-2 Coke Oven plant of 1.5 MTPA under Dolvi Coke Projects Limited (DCPL):

The Company through DCPL would set up a second phase of 1.5 MTPA coke oven plant alongwith CDQ facilities to cater to the additional coke requirement for the crude steelcapacity expansion to 10.7 MTPA at Dolvi. This project is expected to be commissioned byJune 2020 at an estimated cost of Rs 2050 crores.

iii) Setting up 175 MW and 60 MW power plants at Dolvi:

The Company will set up power plants of 175 MW and 60 MW to effectively utiliseflue gases and steam generated from CDQ which will lead to savings in power costs. Thesepower plants are expected to be commissioned in March 2020 at an estimated cost of Rs 975crores.

The overall estimated capex plan of Rs 26815 crores as approved by the Board ofthe Company at the start of F.Y. 2018 is expected to be enhanced by ~Rs17600 crores to implement the above new projects. Overall the Company is nowimplementing a cumulative capex pipeline of Rs 44415 crores over a four-year periodbetween F.Y. 2018 to F.Y. 2021. With spend of about Rs 4700 crores in F.Y.2018 the Company plans to spend the balance Rs 39715 crores over the next 3 years. Theseprojects are planned to be funded by a mix of debt and internal accruals in such a manneras to keep the overall leverage ratios within the targeted threshold levels of 3.75x NetDebt / EBITDA and 1.75x Net Debt / Equity.

VIJAYANAGAR

I. Projects commissioned during F.Y. 2017-18

The following projects were commissioned at the steel melting shop to enhancecapacities and improve operational efficiencies:

A pouring station of capacity 10000 TPD at SMS-1 to enhance melting shop productivityand casting capacity.

Movable KR station at SMS-1 for pre-treatment (desulphurisation) of hot metal asrequired for producing special steel grades and silicon steel.

HR Slitter line of 0.75 MTPA capacity at HSM-2 to cater to customer's requirement of HRblack HRPO HRSPO and BH grade steel in narrow width.

Installation of the sixth strand at SMS-3 to reduce the long casting time due tosubmerged casting speed and to match the Electric Arc Furnace (EAF) productivityenhancement in future.

New De-dusting systems at various areas of shops to control the level of emissions.

II. Projects under implementation

BF-3 at Vijayanagar works is to be revamped and upgraded from 3 MTPA to 4.5 MTPA alongwith the associated auxiliary units.

Capacity expansion of the CRM-1 complex at Vijayanagar from 0.85 MTPA to 1.8MTPA.

A pipe conveyor system is being set up with a capacity of 20 MTPA. This solution willbe environment friendly and reduce transportation costs of iron ore to the plant.

A new water reservoir to ensure adequate supply of water for uninterrupted operationsof the plant.

Coke drying unit for Blast Furnace-1 to utilise the waste heat of Sinter Plant-1 toreduce moisture in coke.

Maximised Emission Reduction of Sintering (MEROS) and Selective Waste Gas Recovery(SWGR) at sinter plants and installation of Bag filter with the provision for DeSOX afterprocess ESP to meet emission norms.

Replacement of defective Primary Gas Coolers (PGCs) in Coke Oven-4 to improveoperational efficiencies.

New Cut to Length (CTL) line is planned to be commissioned to cater to the demand ofhigh-strength steel.

Efficiency productivity improvement and cost-reduction initiatives a) Edge and BARheater at HSM-2 to enhance the quality of Auto grade steels. b) Tailing BeneficiationProject envisaged to facilitate recovery of useful iron ore from medium-grade tailingrejects. c) Waste heat recovery boiler for reheating furnace for HSM-1 and 2 to recoverthe heat from flue gases. d) Debottlenecking of Beneficiation Plant-2 to handle feed rateof 50000 TPD of low-grade iron ore.

DOLVI

I. Projects commissioned during F.Y. 2017-18

Installation of 500 TPD Vapour Pressure Swing Adsorption (VPSA) for increasing oxygenenrichment and ramp up hot metal production at blast furnace.

Addition of the sixth strand billet caster to the existing machines to enhance theproductivity with 130 X 130 Sections.

Waste heat recovery system installed at Sinter Plant-2 by utilising the waste heat fromthe sinter cooler.

II. Projects under implementation

The steelmaking capacity at Dolvi Works will be increased from existing 5 MTPA to 10MTPA. The major facilities included in the project are 4.5 MTPA blast furnace 5 MTPAsteel melt shop and 5 MTPA hot strip mill.

SALEM

I. Projects commissioned during F.Y. 2017-18

Caster III Project with 3 Strands to handle casting Sections of 220 x 220 mm 250x 250 mm and 280 x 370 mm Sliding Stand at BRM to handle higher Sections Coil Annealingwith capacity of 48000 TPA for value added end products

Second Billet grinding machine to improve quality of billets for Cold head quality andfree cutting steels.

II. Projects under implementation

Pre & Post Pickling Treatment with capacity of 84000 TPA for BRM products BarAnnealing of capacity 18000 TPA for further value addition CPP 3 of 30 MW is to cater tothe power requirements is under erection Stove upgradation in BF 1 to improve Hot Blasttemperature Third Billet grinding machine

7. SUBSIDIARY JOINT VENTURE (JV) AND ASSOCIATE COMPANIES

The Company had 46 direct and indirect subsidiaries and 9 JVs as on March 31 2018.There has been no material change in the nature of the business of the subsidiaries.

During the year under review the following 4 companies were formed as the subsidiariesof the Company:

1. JSW Utkal Steel Limited

2. Creixent Special Steels Limited

3. Hasaud Steel Limited

4. Milloret Steel Limited

As per the provisions of Section 129(3) of the Act a statement containing the salientfeatures of the financial statements of the Company's subsidiaries (which includeassociate companies and JVs) in Form AOC-1 is attached to the financial statements of theCompany.

As per the provisions of Section 136 of the Act the standalone financial statements ofthe Company and consolidated financial statements along with relevant documents andseparate audited accounts in respect of subsidiaries are available on the website of theCompany. The Company would provide the annual accounts of the subsidiaries and the relateddetailed information to the shareholders of the Company on specific request made to it inthis regard by the shareholders.

The details of major subsidiaries JVs and associate companies are given below:

A. INDIAN SUBSIDIARIES

1. JSW STEEL COATED PRODUCTS LIMITED (JSW STEEL COATED)

JSW Steel Coated Products Limited is the Company's wholly-owned subsidiary. It hasthree manufacturing facilities in the State of Maharashtra at Vasind Tarapur andKalmeshwar. It is engaged in the manufacture of value-added flat steel products comprisingof Galvanised and Galvalume Coils/Sheets and Colour-Coated Coils/Sheets. This Companycaters to both domestic and international markets. JSW Steel Coated reported a production(Galvanising/Galvalume products) of 1.70 million tonnes a decrease by 1% YoY. The salesvolume grew by 20% YoY to 2.06 million tonnes during F.Y. 2017-18 including traded goods.

The revenue from operations for the year under review was Rs 12553 crores. Theoperating EBITDA during F.Y. 2017-18 was F.Y. Rs 638 crores as compared to theEBITDA of Rs 630 crores in F.Y. 2016-17. The operating EBIDTA margin during F.Y.2017-18 was 5% as compared to 7% in F.Y. 2016-17. The net profit after tax stood atRs 275 crores compared to net profit after tax of Rs 277 crores in F.Y. 2016-17.

KEY NEW PROJECTS Tin Plate Mill:

JSW Steel Coated Products Limited is setting up a Tin Plate Mill and related facilitiesat its Tarapur Work to cater to the increasing demand for the tin plate. The estimatedproject cost is Rs 650 crores and is expected to be commissioned in F.Y. 2018-19.

Considering the potential growth in demand it is decided to set up another Tin PlateMill with capacity of 0.25 MTPA at an estimated cost of Rs 419 crores.

Modernisation and Capacity Enhancement at Vasind & Tarapur by 1.5 MTPA by settingup PLTCM:

Additions/modifications will be carried out at Vasind and Tarapur for net capacityenhancement of cold rolling by 1 MTPA and other down stream facilities. The project costis estimated at Rs 1729 crores and is expected to be commissioned in F.Y.2019-20.

2. AMBA RIVER COKE LIMITED (ARCL)

Amba River Coke Limited (ARCL) is a wholly-owned subsidiary of the Company. ARCL hasset up a 1 MTPA coke oven plant and a 4 MTPA pellet plant. ARCL has produced 1.04 milliontonnes of coke and 4.19 million tonnes of pellet during the F.Y. 2017-18 registering anincrease of 3% and 6% respectively as compared to F.Y. 2016-17. The cokeand pellets produced are primarily supplied to the Dolvi unit of the Company. Theoperating EBITDA during the F.Y. 2017-18 was Rs 431 crores as compared to the EBITDA of Rs369 crores in F.Y. 2016-17.The profit after tax increased to Rs 169 crores in F.Y. 2017-18as compared to Rs 159 crores in F.Y. 2016-17.

3. JSW STEEL (SALAV) LIMITED (JSW SALAV)

JSW Salav is a wholly owned subsidiary of JSW Steel Ltd. JSW Salav has a DRI plant witha capacity of 0.9 MTPA along with a captive jetty and railway siding.

During the year 2017-18 the unit has produced 0.67 MnT an increase of 19% as comparedto F.Y. 2016-17. The profit after tax for F.Y. 2017-18 was Rs 35 crores.

JSW SALAV has decided to increase DRI capacity at Salav to 1.6 MTPA from existing 0.9MTPA.

4. JSW STEEL PROCESSING CENTRES LIMITED (JSWSPCL)

JSW Steel Processing Centres Limited (JSWSPCL) is the Company's wholly-ownedsubsidiary. JSWSPCL was set up as a steel service centre comprising HR/ CR slitter andcut-to-length facility with an annual slitting capacity of 6.5 lakh tonnes. The Companyprocessed 5.68 lakh tonnes of steel during F.Y. 2017-18 compared to previousyear's 5.41 lakh tonnes. JSWSPCL registered a profit after tax for F.Y. 2017-18 of Rs 21crores.

JSWSPCL's Board has recommended a dividend of Rs 20 per share (at 200%) for every shareof Rs 10 each to the equity shareholders for F.Y. 2017-18.

5. PEDDAR REALTY PRIVATE LIMITED (PRPL)

Peddar Realty Private Limited (PRPL) is the Company's wholly-owned subsidiary.

Loss after tax for F.Y. 2017-18 was

Rs 12 crores compared to profit after tax of Rs 3 crores in F.Y. 2016-17.

6. JSW BENGAL STEEL LIMITED (JSW BENGAL) ITS SUBSIDIARIES JSW NATURAL RESOURCESINDIA LIMITED JSW ENERGY (BENGAL) LIMITED (JSWEBL) AND JSW NATURAL RESOURCES (BENGAL)LIMITED (JSWNRBL)

As a part of the Company's overall growth strategy JSW Bengal Steel's Salboni projectwas planned to set up a 10 MTPA capacity steel plant in phases. All enabling work to takeup the implementation of the project is in place.

However due to uncertainties in the availability of key raw materials such as iron oreand coal post cancellation of allotted coal blocks the implementation of the project iscurrently put on hold.

Auditors in their Audit report has put up an emphasis of matter on going concern of theproject due to material uncertainties relating to allocation of Coal and iron ore mines tothe Company and its consequential impact on the implementation of the project.

In the meantime efforts are being made to secure long-term linkages of raw materials.

7. JSW JHARKHAND STEEL LIMITED

JSW Jharkhand Steel Limited was incorporated for setting up a 10 million tonnes (inphases) steel plant in Jharkhand. It is pursuing for various approvals and clearances forsetting up the project.

8. JSW INDUSTRIAL GASES PRIVATE LIMITED (JIGPL) (FORMERLY KNOWN AS JSW PRAXAIROXYGEN PRIVATE LIMITED)

JSW Industrial Gases Private Limited is a wholly owned subsidiary of the Company.TheCompany sources oxygen nitrogen and argon gases from JIGPL for its Vijayanagar plant. Theprofit after tax was Rs 33 crores in F.Y. 2017-18 as compared to profit after tax of Rs 21crores in F.Y. 2016-17.

JIGPL's Board has recommended a dividend of

Rs 13.50 per share (at 135%) for every share of

Rs 10 each to the equity shareholders for the F.Y. 2017-18.

9. DOLVI MINERAL & METALS PRIVATE LIMITED (DMMPL) AND ITS SUBSIDIARY DOLVICOKE PROJECTS LIMITED (DCPL)

The Company holds 39.996% stake in Dolvi Minerals & Metals Private Limited (DMMPL)and Dolvi Coke Projects Limited (DCPL) is a wholly-owned subsidiary of DMMPL.

The Company is setting up a 1.5 million tonnes per annum Coke Oven Plant (Phase-1) atDolvi through DCPL. The total cost for this project will be about Rs 2000 crores and isexpected to be commissioned during F.Y. 2018-19.

DCPL has also commenced setting up of Phase II project comprising of a 1.5 MTPA cokeoven plant and 2x190 TPH Coke Dry Quenching (CDQ) unit at an estimated cost of Rs 2133crores during F.Y. 2017-18.

Although the Company owns only 39.996% ownership interest under Ind AS the Companyhas concluded that it has the practical ability to direct the relevant activities of DMMPLand DCPL unilaterally and treated both these Companies as its subsidiaries and accordinglyconsolidated DMMPL and DCPL in its consolidated financial statements

10. JSW REALTY & INFRASTRUCTURE PRIVATE LIMITED (JSWRIPL)

JSWRIPL primarily provides housing facilities to the employees of JSW Steel Limited andits business associates at Vijayanagar plant of JSW Steel. JSW Steel holds 10% preferenceshares of Rs 99.15 crores in JSWRIPL as on March 31 2018.

Though the Company does not hold any ownership interest in JSWRIPL the Company hasconcluded that it has the practical ability to direct the relevant activities of JSWRIPLunder Ind AS and treated the same as subsidiary and accordingly consolidated JSWRIPL aspart of its consolidated financial statements.

11. JSW Utkal Steel Limited

JSW Steel Limited has formed a wholly-owned subsidiary by the name ‘JSW UtkalSteel Limited' for setting up of an Integrated Steel Plant (ISP) of 12 MTPA capacity and a900 MW captive power plant in the state of Odisha in phases.

B. OVERSEAS SUBSIDIARIES

1. JSW STEEL (NETHERLANDS) B.V. (JSW NETHERLANDS)

JSW Steel (Netherlands) B.V. is a holding company for subsidiaries based in the US theU.K. Chile and Italy. It also has 49% equity holding of Georgia-based Geo Steel LLCincorporated under the laws of Georgia.

(a) PERIAMA HOLDINGS LLC AND ITS SUBSIDIARIES VIZ. JSW STEEL (USA) INC – PLATE ANDPIPE MILL OPERATION AND ITS SUBSIDIARIES – WEST VIRGINIA USA-BASED COAL MININGOPERATION

Plate and pipe mill operation

During F.Y. 2017-18 the US plate and pipe mill's performance improved as compared toF.Y. 2016-17 with better capacity utilisation. This unit produced 0.25 million net tonnesof plates and 0.05 million net tonnes of pipes with capacity utilisation of 26% and 9%respectively.

Profit after tax for F.Y. 2017-18 was

Rs 652 crores compared to loss after tax of

Rs 364 crores in F.Y. 2016-17.

Coal mining operation

Periama Holdings LLC has 100% equity interest in coal mining concessions in WestVirginia US along with permits for coal mining. Periama also owns a 500 TPH coal-handlingand preparation plant.

During the year the coal-handling and preparation plant was operational and it hasprocessed 0.09 million net tonnes of coal after procuring the same from the neighbouringmines.

Loss after tax of coal mining operations for F.Y. 2017-18 was Rs 81 crores compared toloss after tax of Rs 49 crores in F.Y. 2016-17.

The operational performance at the US operations of both the Plate and Pipe mill atBaytown as well as the US coal operations have seen a consistent improvement during thecourse of the year. This has been supported by a strong economic outlook for the US.Consequently the Company during the year ended March 31 2018 has recognised a DeferredTax Asset amount of Rs 729 crores on the unused tax losses to the extent of temporarydifferences. Further during the year pursuant to the enactment of Tax Cuts and Jobs Actby the USA on December 22 2017 the corporate income tax rate in USA has been reduced to21% resulting in a reversal of deferred tax liabilities amounting to Rs 572 crores.Accordingly the Company has recognised a Deferred Tax credit of Rs 1301 crores in theconsolidated financial statements.

(b) JSW PANAMA HOLDINGS CORPORATION (JPHC) AND CHILEAN SUBSIDIARIES NAMELY INVERSIONESEUROSH LIMITADA (IEL) SANTA FE MINING (SFM) AND SANTA FE PUERTO S.A (SFP)

Santa Fe Mining (SFM) in Chile is developing iron ore deposits in the Atacama region ofChile. The Company holds 70% equity interest in SFM.

SFM has developed the Bella Vista iron ore deposit located 20 km from Copiapo Chile.In 2010 SFM installed a 1 MTPA dry beneficiation plant.

These mines have been currently shut down for care and maintenance since May 2015 andthe commencement of operations might be further delayed based on prevailing marketconditions.

Loss after tax for F.Y. 2017-18 was

Rs 143 crores compared to Rs 77 crores in F.Y. 2016-17.

During the year the Group has surrendered one of its iron ore mines in Chileconsidering its economic viability and accordingly has reassessed the recoverability ofcarrying amounts of Property Plant and Equipment Goodwill and advances pertaining to thesaid iron ore mine and recognised an impairment of Rs 264 crores which has been disclosedas an exceptional item in the consolidated financial statements.

(c) JSW STEEL UK LIMITED AND ITS ASSOCIATE ACCIATALIA S.P.A.

During the previous year the Company has acquired 35% stake in Accitalia S.P.A.Accitalia S.P.A. which is currently in the process of voluntary liquidation.

The loss after tax was Rs 34 crores for F.Y. 2017-18.

2. JSW NATURAL RESOURCES LIMITED (JSWNRL) AND ITS SUBSIDIARIES JSW NATURALRESOURCES MOZAMBIQUE LIMITADA (JSWNRML) AND JSW ADMS CARVAO LIMITADA

JSW Natural Resources Limited formed a wholly-owned subsidiary – JSW NaturalResources Mozambique Limitada in Mozambique. This initiative was taken to acquire coalassets and engage in prospecting and exploring coal iron ore and manganese. JSW NaturalResources Mozambique Limitada completed the exploration activities in Mutara district ofthe Tete province and is in the process of obtaining the necessary approvals for lease ofcertain mining assets.

JSW ADMS Carvo Limitada a subsidiary of JSW Natural Resources Mozambique Limitadahas a coal mining licence in Zumbo district of the Tete province. The Company hascompleted exploration activities and it has received an award for mining concession duringthe year. Now the Company is in the process of making various applications for obtainingthe necessary approvals for mining operations.

3. NIPPON ISPAT SINGAPORE (PTE) LIMITED EREBUS LIMITED ARIMA HOLDINGS LIMITEDAND LAKELAND SECURITIES LIMITED

There were no significant operations during the financial year.

4. JSW STEEL ITALY S.R.L.

JSW Steel Italy S.R.L. is a wholly-owned subsidiary through JSW Steel Netherlands B.V.The Company was formed mainly for trading in steel and steel-related products primarily tocater the European market.

The loss after tax was for F.Y. 2017-18 was

Rs 9 crores as compared to Rs 0.28 crores for F.Y. 2016-17.

C. JOINT VENTURE COMPANIES

1. GEO STEEL LLC

Georgia-based JV Geo Steel LLC in which the Company holds 49% equity through JSWSteel (Netherlands) B.V. has set up a steel rolling mill in Georgia with 175000 tonnesproduction capacity. Geo Steel produced 1.58 lakh tonnes of rebars and 1.54 lakh tonnes ofbillets during F.Y. 2017-18. Profit after tax for F.Y. 2017-18 was

Rs 76 crores compared to Rs 41 crores in F.Y. 2016-17.

2. ROHNE COAL COMPANY PRIVATE LIMITED

Rohne Coal Company Pvt. Ltd. is a JV for developing Rohne coal block. While Rohne coalblock was under development the Hon'ble Supreme Court of India cancelled the allocationof coal blocks by the Government of India to the state and private sectors during F.Y.2014-15. Consequently the allocation of Rohne coal block to Rohne Coal Company PrivateLimited stood cancelled.

3. MJSJ COAL LIMITED (MJSJ)

The Company along with other partners agreed to participate in the 11% equity of MJSJCoal Limited Odisha. This was in accordance with the JV agreement to develop Utkal-A andGopal Prasad (West) thermal coal block in Odisha.

The Hon'ble Supreme Court of India cancelled the allocation of coal blocks by theGovernment of India to the state and private sectors during F.Y. 2014-15. Consequentlythe allocation of coal block to MJSJ stood cancelled.

The Ministry of Coal Government of India has not yet commenced the auction of thesecoal blocks.

4. GOURANGDIH COAL LIMITED

Gourangdih Coal Ltd. (GCL) is a 50:50 JV between JSW Steel Limited and Himachal EMTAPower Corporation Ltd. (HEPL). It was incorporated to develop and mine coal from WestBengal's Gourangdih ABC thermal coal block. The Hon'ble Supreme Court of India cancelledthe allocation of coal blocks by the Government of India to the state and private sectorsduring F.Y. 2014-15. Consequently the allocation of the coal block to GCL stoodcancelled. The Gourangdih coal block has been re-allocated to West Bengal MineralDevelopment and Trading Corporation by the Ministry of Coal vide its notice dated March16 2016.

5. VIJAYANAGAR MINERALS PRIVATE LIMITED (VMPL)

According to the Hon'ble Supreme Court's order to stop all mining operations in theBellary district in Karnataka activities from Thimmappanagudi Iron Ore Mines (TIOM)operated by VMPL were halted since July 2011.

As per the Apex Court direction the mines are being operated by Mysore MineralsLimited directly.

6. JSW SEVERFIELD STRUCTURES LIMITED AND ITS SUBSIDIARY JSW STRUCTURAL METALDECKING LIMITED

JSW Severfield Structures Limited (JSSL) is operating a facility to design fabricateand erect structural steel work and ancillaries for construction projects.

These projects have a total capacity of 55000 TPA at Bellary Karnataka. JSSL produced46385 tonnes during F.Y. 2017-18. Its order book stood at Rs 598 crores (53953 tonnes)as on March 31 2018. The profit after tax for F.Y. 2017-18 was

Rs 11 crores as compared to Rs 1 crores in F.Y. 2016-17.

JSW Structural Metal Decking Limited (JSWSMD) a subsidiary company of JSSL is engagedin the business of designing and roll forming of structural metal decking and accessoriessuch as edge trims and shear studs. The plant's total capacity is 10000 TPA. The profitafter tax for F.Y. 2017-18 was Rs 0.1 crores compared to Rs 2 crores in F.Y. 2016-17.

7. JSW MI STEEL SERVICE CENTRE PRIVATE LIMITED (MISI JV)

JSW Steel and Marubeni-Itochu Steel signed a JV agreement on September 23 2011 to setup steel service centres in India.

The JV Company had started the commercial operation of its steel service centre inwestern India (near Pune) with 0.18 MTPA initial installed capacity in March 2015. MISIJV has also started the project work for its steel service centre in Palval Haryana with0.18 MTPA initial capacity. This facility is expected to be commissioned by end of May2018. The service centre is equipped to process flat steel products such as hot-rolledcold-rolled and coated products. Such products offer just-in-time solutions to automotivewhite goods construction and other value-added segments.

MISI JV earned a profit after tax of Rs 12 crores during F.Y. 2017-18.

8. JSW VALLABH TINPLATE PRIVATE LIMITED (JSWVTPL)

JSW Steel holds 50% stake in JSWVTPL which is into tin plate business and has acapacity of 1.0 lakh tonnes. JSWVTPL produced 0.85 lakh tonnes during F.Y. 2017-18. Netloss after tax for F.Y. 2017-18 was Rs 2 crores.

D. COAL BLOCK

The Company had entered into three separate JV agreements for the development of RohneCoal Block Gopal Prasad (West) and Utkal (A) Coal Block and Gourangdih Coal Block. Whilethe coal blocks were under development the Hon'ble Supreme Court of India cancelled theallocation of coal blocks by the Government of India to the states and private sectors.Consequently the allocation of coal blocks to these three JVs stood cancelled.Subsequently the Government of India promulgated the Coal Mines (Special Provision) Act2015. As per the provisions of the Act the investment made in the block by the priorallottee to the extent permitted under the said provisions will be reimbursed by thesuccessful bidder of the coal block. The Company has made an assessment of recoverableamounts of investments and other assets impacted by the said order. It has alsorecognised a provision of Rs 32 crores as on March 31 2018 (Rs 30 crores as on March 312017) considering the principle of conservatism.

8. ACQUISITION

Monnet Ispat & Energy Limited (MIEL)

The Company and Aion Investments Private II Limited (together as a consortium) hadsubmitted a bid for Monnet Ispat & Energy Limited (MIEL) under the corporateinsolvency process of the Insolvency and Bankruptcy code 2016. MIEL was referred to theNational Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. MIEL has asteel plant in Chhattisgarh with a steel making and rolling capacity of 1.5 MTPA when thefacilities are fully commissioned. The Company proposes to hold a minority stake in theirventure.

The consortium has been declared as a successful resolution applicant by the Committeeof creditors of MIEL on April 10 2018 and has received a Letter of Intent (LOI). Theconsortium has accepted the terms of the LOI.

The consortium has also received approval from the Competition Commission of India forthe proposed acquisition of MIEL. The closure of the transaction is subject to obtainingnecessary regulatory approval including the National Company Law Tribunal which is inprogress.

Acero Holdings Limited and its wholly-owned subsidiary Acero Junction Inc (ACERO)

On March 28 2018 the Company entered into a stock purchase agreement with JSMInternational Limited Acero Junction Holdings Inc. and Acero Junction Inc. foracquisition of 100% shares of Delaware-based steel manufacturer Acero Junction HoldingsInc. for a cash consideration of up to USD 80.85 million.

The proposed acquisition is subject to the fulfilment of certain conditions precedentand other terms as per the stock purchase agreement with a long stop date of May 31 2018.The Company expects that this acquisition will allow it to gain increased access to theNorth American steel market. The total enterprise value of the transaction is about USD180.35 million with equity value of USD 80.85 million and liabilities of USD 99.50million subject to closing adjustments.

Acero Junction Inc has a steel-manufacturing facility which includes an Electric ArcFurnace of 1.5 million tonne per annum a ladle metallurgy furnace a slab continuouscasting machine and a 3 million tonne per annum hot strip mill.

The Company has also planned an investment program to complete backward integrationproject to restart the EAF and Caster which will need an additional investment of up toUSD 50 million. On completion of this capital expenditure estimated in about 6 monthsfrom completion of the transaction there shall be a 1.5 MTPA fully integrated steelmaking facility with HSM rolling capacity up to 3 MTPA.

9. TECHNICAL COLLABORATION WITH JFE STEEL CORPORATION JAPAN (JFE)

The financial year under review was the 8th year of strategic collaboration between theCompany and JFE Steel Corporation. During the year the Company has been able to enhanceits business share in the Automotive and Electrical Steel segments.

The Strategic Technical collaboration with JFE Steel has added significant value to theCompany both in terms of products and services thereby enriching the product mix of theCompany. The Company has developed a wide range of steel for critical auto end useapplications such as outer body panels bumper beams and other crash resistant componentswith strength levels up to 980 mPA. The continuous support received from JFE in the formof technical assistance has resulted in expeditious resolution of issues observed duringthe commercial production/approval of stipulated licensed grades.

Our strategic collaboration agreement with JFE has added significant value to theCompany in business processes products and customers over the years.

The partnership has helped the Company achieve a "PREFERRED STEEL SUPPLIERSTATUS" with certain major customers in the auto and electrical steel segments inIndia. The systems and methods that have been deployed under the guidance from JFE hasenabled the Company to re-define customer relationship and has paved the way for a betterunderstanding to meet customer expectations.

The Company by virtue of its partnership has been able to create a formidable positionin the market place to take on the challenges of the future.

In addition to the technical assistance JFE continues to provide key inputs to improvequality parameters at downstream facilities and for manufacture of Electrical steel.

10. RISK MANAGEMENT

JSW Steel follows the globally recognised ‘COSO' framework. The Company's robustrisk management framework identifies and evaluates business risks and opportunities.

The Company recognises that the emerging and identified risks need to be managed andmitigated to:

Protect its shareholders and other stakeholder's interests Achieve its businessobjective Enable sustainable growth

The risk frame work is aimed at effectively mitigating the Company's various businessand operational risks through strategic actions. Risk management is embedded in ourcritical business activities functions and processes. The risks are reviewed for thechange in the nature and extent of the major risks identified since the last assessment.It also provides control measures for risks and future action plans.

Pursuant to the requirement of Regulation 21 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Clause 49 of the erstwhile ListingAgreement the Company has constituted a subcommittee of Directors to oversee theEnterprise Risk Management framework to ensure that execution of decided strategies withfocus on action and monitoring risks arising out of unintended consequences of decisionsor actions related to performance operations compliance incidents processes andsystems and transactions are monitored and managed appropriately.

The Company believes that the overall risk exposure of present and future risks remainswithin risk capacity.

Key risks and response strategies

Competitive dynamics and industrial cyclicality – managed through widening anddeepening customer reach and broadening product range.

Raw material availability and cost– broad–basing vendors fromdifferent geographies exploring various contract options such as long term / spot /indexing and relationship management with vendors.

Logistics and infrastructure – a centralised logistics cell to ensure end-to-endintegration optimisation of infrastructure spend and digitisation initiatives such aslast mile connectivity tracking.

Technology and operational disruptions – effective management of automationsystems spares management maintenance scheduling R & D infrastructure and insurancecover for plant interruptions and loss of profit.

Environment health and safety – compliance with norms through the right selectionof equipment processes inputs and tracking emissions; preserving bio-diversity ineco-sensitive area; tracking changing technology and future norms for advance planning andsafety training and providing medical facilities and Mediclaim policy cover for employeesand their families.

Manpower availability with desired skill-sets – manpower planning in line withgrowth strategy on-the-job / online trainings to develop competencies and soft skills andleadership programmes to develop future fit leaders.

Reputation – value-driven leadership; adhering to the highest standards ofgovernance and code of conduct extending even to business partners.

Finance - proactive tracking of funding and covenants regular review of hedgingstrategy close monitoring of plant operations cost optimisation inventory collectionsand vendor credit.

Confidentiality integrity and security of data and systems - security policies andprocedures antivirus / endpoint security deployment operationalisation of disasterrecovery site and implementation of disaster recovery plan and regular training on ITsecurity.

11. INTERNAL CONTROLS AUDIT AND INTERNAL FINANCIAL CONTROLS

Overview

A robust system of internal control commensurate with the size and nature of itsbusiness forms an integral part of the Company's corporate governance policies.

Internal control

The Company has a proper and adequate system of internal control commensurate with thesize and nature of its business. Internal control systems are integral to JSW Steel'scorporate governance. Some significant features of the internal control systems are:

Adequate documentation of policies guidelines authorities and approval procedurescovering all the important functions of the Company.

Deployment of an ERP system that covers most of its operations and is supported by adefined on-line authorisation protocol.

Ensuring complete compliance with laws regulations standards and internal proceduresand systems.

De-risking the Company's assets/ resources and protecting them from any loss.

Ensuring the integrity of the accounting system and a proper and authorised recordingand reporting of all transactions.

Preparation and monitoring of annual budgets for all operating and service functions.

Ensuring a reliability of all financial and operational information.

Audit Committee a sub-committee of the Board of Directors comprising of IndependentDirectors. The Audit Committee regularly reviews audit plans significant audit findingsadequacy of internal controls compliance with Accounting Standards etc.

A comprehensive Information Security Policy and continuous updation of IT systems.

The internal control systems and procedures are designed to assist in theidentification and management of risks the procedure-led verification of all compliancesas well as an enhanced control consciousness.

Internal audit

JSW Steel has an internal audit function that inculcates global best standards andpractices of international majors into the Indian operations. The Company has a stronginternal audit department reporting to the Audit Committee comprising IndependentDirectors who are experts in their fields. The Company successfully integrated the COSOframework in its audit process to enhance the quality of its financial reportingcompatible with business ethics effective controls and governance.

The Company extensively practices delegation of authority across its team whichcreates effective checks and balances within the system to arrest all possible gaps. Theinternal audit team has access to all information in the organisation – this islargely facilitated by ERP implementation across the organisation.

Audit plan and execution

The Internal Audit function prepares a risk-based audit plan. The frequency of theaudit is decided by risk ratings of areas/functions. The audit plan is carried out by theinternal team and reviewed periodically to include areas that have assumed significantimportance in line with the emerging industry trend and the aggressive growth of theCompany. In addition the audit committee also places reliance on internal customerfeedback and other external events for inclusion into the audit plan.

Internal financial controls

As per Section 134(5)(e) of the Companies Act 2013 the Directors have an overallresponsibility for ensuring that the Company has implemented a robust system and frameworkof internal financial controls. This provides the Directors with reasonable assuranceregarding the adequacy and operating effectiveness of controls with regards to reportingoperational and compliance risks. The Company has devised appropriate systems andframework including proper delegation of authority policies and procedures; effective ITsystems aligned to business requirements; risk-based internal audits; risk managementframework and a whistle blower mechanism.

The Company had already developed and implemented a framework for ensuring internalcontrols over financial reporting. This framework includes entity-level policiesprocesses and Standard Operating Procedures (SOP).

The entity-level policies include antifraud policies (such as code of conduct conflictof interest confidentiality and whistle blower policy) and other polices (such asorganisation structure insider trading policy HR policy IT security policy treasurypolicy and business continuity and disaster recovery plan). The Company has also preparedSOP for each of its processes such as procure to pay order to cash hire to retiretreasury fixed assets inventory manufacturing operations etc.

During the year controls were tested and no reportable material weakness in design andeffectiveness was observed.

12. CREDIT RATING

During the year Moody's Investors Service has upgraded the Corporate Family Rating andSenior Unsecured Bond Rating due in 2019 and 2022 respectively to Ba2 from Ba3 whilemaintaining the outlook at stable.

Also Fitch Ratings retained the Company's long-term Issuer Default Rating (IDR) andSenior Unsecured Bond rating due in 2019 and 2022 respectively to BB upgrading theoutlook to stable from negative.

The domestic credit rating for long-term debt/ facilities/ Non-Convertible Debentures(NCDs) by Credit Analysis and Research Ltd (CARE) and ICRA were retained at AA- while theshort-term debt/ facilities continues to be rated at the highest level of A1+. CARE hasassigned a stable outlook on the long-term rating while ICRA has upgraded the outlook tostable from negative. India Ratings has assigned a long-term issuer rating and rating forthe outstanding NCDs of the Company is AA- while upgrading the outlook to stable fromnegative.

13. FIXED DEPOSITS

The Company has not accepted any fixed deposits from the public. Therefore it is notrequired to furnish information in respect of outstanding deposits under Non-bankingNon-financial Companies (Reserve Bank) Directions 1966 and Companies (Accounts) Rules2014.

14. SHARE CAPITAL

The Company's Authorised Share capital during the financial year ended March 31 2018remained at Rs 90150000000 (Rupees Nine Thousand Fifteen crores only) consisting of Rs60150000000 (Rupees Six Thousand Fifteen crores only) equity shares of Rs 1/-(Rupee One only) each and 3000000000 (Three Hundred crores) preference shares of Rs10/- (Rupees Ten only) each.

The Company's paid-up equity share capital remained at Rs 2417220440 comprising of2417220440 equity shares of Rs 1 each.

During the financial year the Company partially redeemed its 279034907 10%cumulative redeemable preference shares of Rs 10 each fully paid up in two equalinstalments of Rs 2.5 per share on December 15 2017 and March 15 2018.

Thereby the aggregate preference share capital as at the financial year ended March31 2018 is Rs 6249320575 comprising of 279034907 10% cumulative redeemablepreference shares of Rs 5 each paid up and 485414604 0.01% cumulative redeemablepreference shares of Rs 10 each fully paid up.

15. FOREIGN CURRENCY BONDS (FCBS)

During F.Y. 2014-15 the Company had allotted 2500 4.75% Fixed Rate Senior UnsecuredNotes of USD 200000 each of the Company due 2019 aggregating to USD 500 million toeligible investors. In April 2017 the Company further allotted 2500 5.25% Fixed RateSenior Unsecured Notes of USD 200000 each of the Company due 2022 aggregating to USD 500million to eligible investors. These Bonds issued by the Company in the InternationalMarket are listed on the Singapore Exchange Securities Trading Limited (the"SGX-ST").

16. CORPORATE GOVERNANCE

The Company constantly endeavours to follow the corporate governance guidelines andbest practices sincerely and disclose the same transparently. The Board is conscious ofits inherent responsibility to disclose timely and accurate information on the Company'soperations performance material corporate events as well as on the leadership andgovernance matters relating to the Company.

Your Company has complied with the requirements of Securities and Exchange Board ofIndia (Listing Obligation and Disclosure Requirements) Regulations 2015 regardingcorporate governance. A report on the Corporate Governance practices and the Auditors'Certificate on compliance of mandatory requirements thereof are given as an annexure tothis report.

17. MANAGEMENT DISCUSSION & ANALYSIS

A detailed report on the Management Discussion & Analysis is provided as a separateSection in the Annual Report.

18. BUSINESS RESPONSIBILITY/ SUSTAINABILITY REPORTING

JSW Steel Ltd. is committed to pursuing its business objectives ethicallytransparently and with accountability to all its stakeholders. The Company believes indemonstrating responsible behaviour while adding value to the society and the communityas well as ensuring environmental well-being with a long-term perspective.

The Business Responsibility Report (BRR) of the Company was being presented to thestakeholders as per the requirements of Regulation 34 of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 describing theenvironmental social and governance initiatives taken by the Company. Further SEBI videits circular dated February 6 2017 has advised the top 500 listed companies (by marketcapitalisation) to voluntarily adopt Integrated Reporting (IR) from F.Y. 2017-18.

As stated earlier in the report the current financial year marks an importantmilestone in its corporate reporting journey as the Company is transitioning towardsIntegrated Reporting focussing on the six ‘capitals' in its imparatives of valuecreation. The Company's maiden Integrated Report discloses performance as per the IRframework for the period April 01 2017 to March 31 2018.

The Company was recognised in 2018 as the ‘Industry Mover' in the Dow JonesSustainability Indices under their Corporate Sustainability Assessment for achieving thelargest improvement in sustainability performance compared to the previous year. TheCompany also features in the Vigeo Eiris Emerging 70 group.

In F.Y. 2017-18 among several other initiatives the Company has put in significantefforts to ensure a positive impact on its surrounding flora and fauna that are part ofthe local ecosystems. The Company was among the pioneers to sign up and commit to theIndian Business and Biodiversity Initiative (IBBI) a pioneering effort by theConfederation of Indian Industry (CII) in partnership with India's Ministry ofEnvironment Forest & Climate Change. This has helped to learn from peers about theirefforts to manage biological diversity at their sites and to demonstrate to stakeholdersthe Company's commitment and efforts towards a sustainable future.

The Company has also provided the requisite mapping of principles of the NationalVoluntary Guidelines to fulfill the requirements of the Business Responsibility Report asper the directive of SEBI as well as between the Integrated Report and the GlobalReporting Initiative (‘GRI'). The Report along with all the related policies can beviewed on the Company's website (http://www. jsw.in/investors/investor-relations-steel).

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of the Articles of Association of the Company Mr. Seshagiri Rao M.V.S. (DIN00029136) retires by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for re-appointment.

Dr.(Mrs.) Punita Kumar Sinha (DIN 05229262) who was appointed as a Director of theCompany in the category of Independent Director holds office up to the conclusion of theensuing Annual General Meeting of the Company ("first term" in terms of Sections149(10) of the Companies Act 2013). Your Company has received a notice under Section 160of the Companies Act 2013 from a shareholder of your Company proposing the re-appointmentof Dr.(Mrs.) Punita Kumar Sinha for the Office of Director of your Company in the categoryof Independent Director for a second term of upto July 23 2023 or upto the conclusion ofthe 29th Annual General Meeting (AGM) of the Company in the calendar year 2023 whicheveris earlier. A brief profile of Dr. (Mrs.) Punita Kumar Sinha is given in the noticeconvening the 24th AGM for the reference of the shareholders. The Board taking intoaccount the recommendation of the Nomination and Remuneration Committee and on the basisof the report of performance evaluation of Independent Directors has recommended thereappointment of Dr.(Mrs.) Punita Kumar Sinha as a Director of the Company in the categoryof Independent Director for the aforesaid term.

The proposals regarding the re-appointment of the aforesaid Directors are placed foryour approval.

Mr. Vijay Kelkar and Mr. Kannan Vijayraghavan who were appointed as IndependentDirectors in the Company's 20th Annual General Meeting held on July 31 2014 wouldcomplete their term upon the conclusion of the ensuing 24th Annual General Meeting of theCompany and having been on the Board for a tenure of 10 years and not being eligible forre-appointment in terms of the Company's policy for appointment/reappointment ofIndependent Directors have not offered themselves for re-appointment.

Other changes in the Board of Directors of your Company during the year under revieware as follows:

Karnataka State Industrial Infrastructure and Development Corporation Limited (KSIIDC)had nominated Mrs. P. Hemlatha IAS (DIN 06537451) as its nominee on your Company's Boardin place of Mr. Naveen Raj Singh IAS (DIN 06854287) with effect from April 20 2017.However it withdrew the nomination of Mrs. P. Hemlatha IAS and nominated Mr. N JayaramIAS (DIN 03302626) as its nominee on your Company's Board with effect from October 312017.

Your Directors place on record their deep appreciation of the valuable servicesrendered by Mr. Vijay Kelkar Mr. Kannan Vijayaraghavan Mr. Naveen Raj Singh IASand Mrs. P. Hemlatha IAS during thier tenure as Directors of the Company.

There were no changes in the Key Managerial Personnel of the Company during the yearunder review.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

Matching the needs of the Company and enhancing the competencies of the Board are thebasis for the Nomination and Remuneration Committee to select a candidate for appointmentto the Board.

The current policy is to have a balanced mix of executive and non-executive IndependentDirectors to maintain the independence of the Board and separate its functions ofgovernance and management. As at 31.03.2018 the Board of Directors comprises 12Directors of which eight are non-executive including one woman director. The number ofIndependent Directors is six which is one half of the total number of Directors.

The policy of the Company on directors' appointment including criteria for determiningqualifications positive attributes independence of a director and other matters asrequired under sub-Section (3) of Section 178 of the Companies Act 2013 isgoverned by the Nomination Policy read with the Company's policy on appointment/re-appointment of Independent Directors. The remuneration paid to the directors is inaccordance with the remuneration policy of the Company.

20. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declaration from each of the independent directorsunder Section 149(7) of the Companies Act 2013 that he/she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.

21. BOARD EVALUATION

The Board carried out an annual performance evaluation of its own performance theperformance of the Independent Directors individually as well as the evaluation of theworking of the Committees of the Board. The performance evaluation of all the Directorswas carried out by the Nomination and Remuneration Committee. The performance evaluationof the Chairman and the Non-Independent Directors was carried out by the IndependentDirectors. Details of the same are given in the Report on Corporate Governance annexedhereto.

22. AUDITORS AND AUDITOR'S REPORT

STATUTORY AUDITORS

At the Company's 23rd AGM held on June 29 2017 M/s S R B C & CO LLP(324982E/E300003) Chartered Accountants has been appointed as the Statutory Auditor ofthe Company for a term of 5 years (subject to ratification by members at every AGM ifrequired under the prevailing law at that time) to hold office from the conclusion of the23rd Annual General Meeting until the conclusion of the 28th Annual General Meeting of theCompany.

Vide Section 40 of the Companies (Amendment) Act 2017 notified by the Ministry ofCorporate Affairs on May 7 2018 the requirement for ratification of the appointment ofStatutory Auditors by the members at every Annual General Meeting has been done away with.Accordingly no resolution has been proposed for ratification of the Statutory Auditorswho were appointed in the 23rd Annual General Meeting held on June 29 2017.

The Notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.

No fraud has been reported by the Auditors under Section 143(12) of the Companies Act2013 requiring disclosure in the Board's Report.

COST AUDITORS

Pursuant to Section 148(2) of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 your Company is required to get its costaccounting records audited by a Cost Auditor.

Accordingly the Board at its meeting held on May 16 2018 has on the recommendationof the Audit Committee re-appointed M/s. Shome & Banerjee Cost Accountants toconduct the audit of the cost accounting records of the Company for F.Y.2018-19 on a remuneration of Rs15 lacs plus taxes as applicable and reimbursement ofactual travel and out-of-pocket expenses. The remuneration is subject to the ratificationof the Members in terms of Section 148 read with Rule 14 of the Companies (Audit andAuditors) Rules 2014 and is accordingly placed for your ratification. The due date forfiling the Cost Audit Report of the Company for the Financial Year ended March 31 2017was September 30 2017 and the Cost Audit Report was filed in XBRL mode on August 302017.

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 hadappointed M/s. S. Srinivasan & Co. a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Auditcarried out is annexed herewith as Annexure‘C'.TheReportdoesnotcontainanyobservationor qualification requiring explanation or comments from the Board under Section 134(3) ofthe Companies Act 2013. During the period under review the Company has complied with theapplicable Secretarial Standards notified by the Institute of Company Secretaries ofIndia.

The Board at its meeting held on May 16 2018 has re-appointed M/s. Srinivasan &Co. Practicing Company Secretaries as Secretarial Auditor for conducting SecretarialAudit of the Company for F.Y. 2018-19.

23. RELATED PARTY TRANSACTIONS

All Related Party Transactions (RPT) that were entered into during the financial yearwere on an arm's length basis and in the ordinary course of business.

The Company has obtained approval of the shareholders by way of a postal ballot onDecember 17 2016 for RPT with JSW International Tradecorp Pte Limited (JITPL) for anaggregate value of USD 7480 million over a period of 36 months starting from April 12016 for procuring iron ore coking coal coke and other raw materials being consideredmaterial in terms of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. Total value of raw material purchased fromJITPL during F.Y. 2017-18 was Rs 16369 crores.

The policy on dealing with RPT as approved by the Board is uploaded on the Company'swebsite (http://www.jsw.in/ investors/steel/related-party-policy). The Policy intends toensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and Related Parties. This Policy specifically deals withthe review and approval of RPT keeping in mind the potential or actual conflicts ofinterest that may arise because of entering into these transactions. All RPT are placedbefore the Audit Committee for review and approval. Prior omnibus approval is obtained forRPT that are of repetitive nature and / or entered in the ordinary course of business andare at arm's length. All RPT are subjected to independent review by a reputed accountingfirm to establish compliance with the requirements of RPT under the Companies Act 2013and Regulation 23 of the Securities and Exchange Board of India (Listing Obligation andDisclosure Requirements) Regulations 2015.

The disclosure of material RPT is required to be made under Section 134(3) (h) readwith Section 188(2) of the Companies Act 2013 in Form AOC 2. Accordingly RPTs thatindividually or taken together with previous transactions during a financial year thatexceed 10% of the annual consolidated turnover as per the last audited financialstatements which were entered into during the year by your Company are given in AnnexureE to this Report.

Your Directors draw your attention to Note No. 8 to the Abridged Standalone financialstatements and Note No. 44 to the Standalone financial statements which set out relatedparty disclosures.

24. EMPLOYEE STOCK OPTION PLAN (ESOP):

The Board of Directors of the Company at its meeting held on January 29 2016formulated the JSWSL Employees Stock Ownership Plan – 2016 (ESOP Plan) to beimplemented through the JSW Steel Employees Welfare Trust (Trust) with an objective ofenabling the Company to attract and retain talented human resources by offering them theopportunity to acquire a continuing equity interest in the Company which will reflecttheir efforts in building the growth and the profitability of the Company. The ESOP Planinvolves acquisition of shares from the secondary market.

A total of 28687000 (Two Crores Eighty Six Lakhs Eighty Seven Thousand) optionswould be available for grant to the eligible employees of the Company and its director(s)excluding independent directors and a total of 3163000 (Thirty One Lakh Sixty ThreeThousand) options would be available for grant to the eligible employees of the IndianSubsidiaries of the Company and their director(s) excluding independent directors underthe ESOP Plan.

7436850 options have been granted under this plan by the JSWSL ESOP Committee in itsmeeting held on May 17 2016 under the first grant to the eligible employees of theCompany and its Indian Subsidiaries including the Whole-time Directors of the Company.The grant of ESOPs to the Whole-time Directors of the Company has been approved by theNomination and Remuneration Committee and the Board. Mr. Seshagiri Rao M.V.S Dr. VinodNowal and Mr. Jayant Acharya Whole-time Directors of the Company have been granted192680 179830 and 179830 options respectively towards the first grant under theESOP Plan.

5118977 options have been granted under this plan by the JSWSL ESOP Committee in itsmeeting held on May 16 2017 under the second grant to the eligible employees of theCompany and its Indian Subsidiaries including the Whole-time Directors of the Company.The Grant of ESOPs to the Whole-time Directors of the Company has been approved by theNomination and Remuneration Committee and the Board. Mr. Seshagiri Rao M.V.S Dr. VinodNowal and Mr. Jayant Acharya Whole-time Directors of the Company have been granted127968 127968 and 119436 options respectively towards the second grant under theESOP Plan.

3388444 options have been granted under this plan by the JSWSL ESOP Committee in itsmeeting held on May 15 2018 under the third and final grant to the eligible employees ofthe Company and its Indian Subsidiaries including the Whole-time Directors of theCompany. The Grant of ESOPs to the Whole-time Directors of the Company has been approvedby the Nomination and Remuneration Committee and the Board. Mr. Seshagiri Rao M.V.S Dr.Vinod Nowal and Mr. Jayant Acharya Whole-time Directors of the Company have been granted87841 87841 and 81985 options respectively towards the third grant under the ESOPPlan.

As per the ESOP Plan 50% of these options will vest at the end of the third year andthe balance 50% at the end of the fourth year.

In terms of clause 4.2 of the "JSWSL Employees Stock Ownership Plan –2012" ("ESOP-2012 Plan") that came into force on the July 26 2012 theESOP-2012 Plan was terminated on the Closing Date of September 30 2017 and any StockOptions that remained unexercised after the Closing Date has automatically lapsed.

The applicable disclosures relating to the earlier ESOP–2012 Plan as well as thecurrent ESOP plan of 2016 as stipulated under the ESOP Regulations pertaining to theyear ended March 31 2018 is hosted on the Company's website athttp://www.jsw.in/investors/investor-relations-steel and forms a part of this Report.

Voting rights on the shares if any as may be issued to employees under the aforesaidESOP Plans are to be exercised by them directly or through their appointed proxy; hencethe disclosure stipulated under Section 67(3) of the Companies Act 2013 is notapplicable.

There is no material change in the aforesaid ESOP Plans and the same are in compliancewith the ESOP Regulations.

The Certificate from the Statutory Auditors of the Company certifying that theCompany's Stock Option Plans are being implemented in accordance with the

ESOP Regulations and the resolution passed by the Members would be placed at the AGMfor inspection by Members.

25. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company firmly believes that in order to be a responsible corporate citisen in itstrue sense its role is much more than producing steel. As such the Company aims tocontinuously foster inclusive growth and a value-based empowered society. For this theCompany engages through the JSW Foundation to carry out a consultative needs assessmentascertain joint action with a range of stakeholders and bring in strategic partnerships.

The Company continues to strengthen its relationships with the communities in theDirect Influence Zone (DIZ) of its plant locations and beyond through a meaningful andpurposeful engagement implementation of a range of programmes covering all importantaspects of their lives from education health and sanitation to skill developmentlivelihoods environment and water management and augmenting arts and cultural heritage.

The Company is committed to not only continue to allocate resources towards specialcorpus for Corporate Social Responsibility (CSR) as per the categories of the CompaniesAct 2013 but also to:

Assess the programmes and their impact through external agencies for culling outlearnings and also continually evolve its own monitoring processes

Continue its stakeholder engagement in a mutually respectful manner and through socialprocesses that help identify essential needs of the community for its overall growth

Spread the culture of volunteerism through the process of social engagement

Align its actions to achieve not only the desired results at the grassroots level butto also contribute towards the attainment of Sustainable Development Goals (SDGs)

STRATEGY

The JSW Foundation administers the planning and implementation of all the CSRinterventions. It is guided by the CSR Committee appointed by the Board which reviews theprogress from time to time and provides guidance as necessary.

Taking a note of the importance of synergy and interdependence at various levels theCSR programmes are carried out directly as well as through strategic partnerships and inclose coordination with the concerned State Governments.

While priority is given to the villages in the immediate vicinity of the plantlocations defined as DIZ in order to get maximum effectiveness at times activities arealso taken up in related villages too. This context is defined as Indirect Influence Zone(IIZ).

Convergence with Government schemes and programmes and regular dialogue with thefunctionaries is the cornerstone of the CSR activities of the company.

The programmes are collated under various themes for bringing in best practices and thethematic heads at the head office of the Foundation regularly and closely work with thelocation-specific teams to achieve more focused results.

THEMATIC AREAS

The Company has aligned its CSR programmes under Education Health & NutritionAgriculture Environment & Water Skill Enhancement Rural Women's BPO Sports and Art& Culture. This helps the Company cover the following thematic interventions as perSchedule VII of the Companies Act 2013:

Improving living conditions (eradication of hunger poverty malnutrition etc.)

Promoting social development (education skill development livelihood enhancementsetc.)

Addressing social inequalities (gender equality women empowerment. etc.)

Ensuring environmental sustainability Promotion of sports Swachh Bharat Mission

The disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed to this Report as Annexure D.

26.ENVIRONMENTAL INITIATIVES

Your Company is firmly committed to conservation of natural resources; reduction ofemissions and discharges to the environment and preservation of biodiversity in all itsoperations. The Company recognises the need to be proactive and integrate thoughts intoprocesses to reduce risks and harness opportunities and set targets beyond complianceconsidering the future changes and carrying out the required changes in the processesfocussing on social and environmental concerns to better manage the long term expectationsof the stakeholders.

This approach demonstrates sensitivity to the environment in the areas of conservingresources such as water energy and input materials; minimising waste while maximisingrecirculation reuse and recycling and enhancing local biodiversity. The awareness of theenvironment complemented with decisions and actions that the Company take towards aresponsible behaviour leads to innovation and value creation for the Company.

The following actions were taken in 2017-18 to improve environment:

Conservation of natural resources:

Efficient operation as well as effective monitoring of pollution control equipmentultimately leads to reduced wastage of materials. During the year stack emissionmonitoring systems dust analysers gas monitors on stacks CCTVs and effluent monitorswere installed across the steel complex.

Enhancing steam generation through additional waste heat recovery boilers at Salem(WHRB #4 and #5) resulted in reduction of coal consumption (about 22000 MT/Annum) incoal-based boilers thereby minimising the fossil fuel consumption.

Water conservation: Water security is essential for un-interruptedoperations of steel plant units. Vijayanagar & Salem plants are located in waterscares areas. During the year several measures were taken to conserve water by improvingwater use efficiency; recycling treated waste water; treated sewage and recovering highquality water through reverse osmosis plants.

The following initiatives for water conversation has been carried out during the year:

Treatment of sewage and recovering quality water through reverse osmosis.

Installation of Roof-top rain water harvesting system at 12 plant buildings at Dolviand the collected rain water is stored in nearby water utility system for reuse.

Increased the cycles of concentration in all cooling towers across all plant locationsresulting in reduced waste water generation.

Installation of an RO system in the upstream water system instead of downstream (highTDS water) resulting in elimination of softening systems which generates high TotalDissolved Solids (TDS) effluents and reduction in energy consumption.

Recycle of Solid Waste: Solid waste materials such as sludge and collected dustare generated during the operation of air and water pollution control system. During theyear at Vijayanagar Biogas plant for food waste and sewage waste was installed. Gasproduced in the process is being transferred to the central canteen and the solidsgenerated were composted. Pilot trial for treatability study of ammonia and cyanide hasbeen completed at Vijayanagar.

Slag sand:

During the year the Company sold 2.87 lakhs tonnes of slag sand for use as fineaggregates in construction replacing natural river sand thereby helping conserve theriver beds. Granulated slag sold during the year was 45.6 lakhs tonnes. The Company hasinstalled second line of granulated slag crusher of 40 TPH capacity resulting in doublingthe daily production of slag sand.

Steel Slag:

The Company has developed an innovative technology which can convert the steel slag asa useful product as construction aggregate especially in roads and pavements. Thetechnology is being patented and is expected to increase steel slag utilisationsubstantially in the future years. 2023 tons of granulated BF slag 33302 tons of slagsand 178575 tons of dry pit slag and 60617 tons of steel slag was sold during the yearfor NHAI project Ballari-Hospet. This highway is termed as "Green Highway".

Reduction of emissions and discharges:

Air emissions: Owing to handling of large volume of solid materials emissions ofdust remain a major area of concern in all integrated iron and steel plants. During theyear several measures were taken to reduce emissions by installing bag filters in highdust areas. Some of the other measures includes:

At Dolvi 13 Dust Extraction (DE) systems at junction houses were installed to controlfugitive emission during the material transfer through conveyors.

The Company also has established Pneumatic conveying for dust transfer to feeding binand a new DE system at pellet discharge junction house. The other initiatives to reduceemissions include installation of Electro Static Precipitator for discharge end of thepellet making process and construction of 0.5 km of concrete road in the raw materialhandling area to minimise fugitive emission and easy vehicular movement.

Installation of water sprinklers / wind nets and dry fog and wet fog systems in the rawmaterial handling areas to reduce the fugitive emission which leads to improvement inambient air quality in the plant premises.

Established two telescopic chutes and replacement of trucks with bulkers resulted incurbing the fugitive emissions during loading of GCP dust.

Zero Liquid Discharge:

All the units of Company have installed requisite facilities to maximise theutilisation of water. These include cascaded water use recycling in less criticalapplications use for greenery development etc. These actions has facilitated in ensuringzero liquid discharge from all the steel plants.

Biodiversity:

The steel plant at Vijayanagar is in an arid area with poor rainfall and devoid ofvegetation. With the continued efforts on tree plantation over the years by the Companyand surrounding community the micro climate in the surrounding area has improvedsubstantially facilitating improved bio diversity.

With an effort to improve the greenery beyond the steel plant area tree plantation hasbeen carried out over an area of 450 acres belonging to the forest department atVijayanagar. 429497 sq. ft. area has been added under green cover inclusive of lawnsplanting local species of trees shrubs and herbs.

Million Trees Plantation Mission:

The million tree plantation project has been initiated in nearly 127 acres of degradedforest areas at Dolvi and Karav with a vision to plant 1 million trees by F.Y.2021-22.

27. AWARDS AND ACCOLADES

Vijayanagar Works

1) Ranked sixth among the best operating steel plant in the world by World SteelDynamics in June 2017.

2) Vijayanagar Works has been recognised as the second best integrated steel plant inthe country for the performance. It was awarded the Steel Minister's Trophy for the years2014-15 and 2015-16.

3) JSW Steel (Vijayanagar Works) has been awarded the prestigious Ispat SurakshaPuraskar - 2017 by the Joint Committee on Safety Health & Environment in the steelindustry for zero fatalities during the calendar years 2015 and 2016 in the followingzones:

Steel melting shops and continuous casting shops

Blast furnaces slag granulation plant sinter plants and the raw material department

4) Water Management Excellence Award 2017 by ASSOCHAM on June 30 2017 at Hotel LeMeridian New Delhi

5) National Sustainability Award-2017: First Prize among the Integrated Steel PlantsCategory by the Indian Institute of Metals

6) Winner of the International and Best CSR Practice award 2018 at International NGOand CSR Summit February 28 2018 Bengaluru.

7) Awarded the India CSR Project of the Year award for Mission against Malnutrition(MAM) in the state of Karnataka on May 26 2017

8) JSW Steel Ltd. Vijayanagar Works awarded as "MODEL EMPLOYER" felicitatedby Ministry of Labour and Employment Sri Bandaru Dattatreya May 16 2017

Dolvi Works

1) PM's Trophy 2013-14: Certificate of Appreciation for Maximum Incremental Improvementamongst ISP

2) CII Exim Bank Award 2017 for Significant Achievement in Nov'17

3) CoRe program stood 1st Runner up in Frost & Sullivan PERP 2017 Award in Dec'17

4) Ispat Suraksha Puraskar for zero fatal in 2018

Salem Works

1) Best ITI - Skill Development through the PPP Model:

JSW Steel Salem won the Silver Trophy by ASSOCHAM India in recognition of outstandingcontribution in Best ITI – Skill Development

2) IIM Sustainability Award:

Won the second prize in the alloy steel category by the Indian Institute of Metals

28. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134 subSection 3(c) and sub-Section 5 ofthe Companies Act 2013 your Directors hereby state and confirm that:

a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures.

b) Such accounting policies have been selected and applied consistently and judgementsand estimates have been made that are reasonable and prudent to give a true and fair viewof the Company's state of affairs as on March 31 2018 and of the Company's profit or lossfor the year ended on that date.

c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.

d) The annual financial statements have been prepared on a going concern basis.

e) Internal financial controls were laid down to be followed and that such internalfinancial controls were adequate and were operating effectively.

f) Proper systems were devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and were operating effectively.

29.DISCLOSURES

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year eight Board Meetings were convened and held the details of which aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013 and Regulations 17 of theSecurities and Exchange Board of India (Listing Obligation and Disclosure Requirements)Regulation 2015.

AUDIT COMMITTEE

The Audit Committee comprises of three Non-Executive Directors all of whom areIndependent Directors. Mr. K. Vijayaraghavan is the Chairman of the Audit Committee. TheMembers possess adequate knowledge of Accounts Audit Finance etc. The composition ofthe Audit Committee meets the requirements of Section 177 of the Companies Act 2013 andRegulation 18 of the Securities and Exchange Board of India (Listing Obligation andDisclosure Requirements) Regulations 2015.

There are no recommendations of the Audit Committee that have not been accepted by theBoard.

EXTRACT OF ANNUAL RETURN

In accordance with the provisions of Section 134(3)(a) of the Companies Act 2013 theextract of the annual return in Form No. MGT–9 is annexed (Annexure B) hereto andforms a part of this Report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has a vigil mechanism named Whistle Blower Policy / Vigil Mechanism to dealwith instances of fraud and mismanagement if any. Details of the same are given in theCorporate Governance Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SEC. 186

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant or material orders passed by the Regulators/ Courts/ Tribunalsthat could impact the going concern status of the Company and its future operations.

However Members' attention is drawn to the statement on contingent liabilitiescommitments in the notes forming part of the Financial Statements.

PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 regarding conservationof energy technology absorption and foreign exchange earnings and outgo is given in thestatement annexed (Annexure A) hereto and forms a part of this Report.

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 is set out as Annexure F to thisReport.

Having regard to the provisions of the first proviso to Section 136(1) of the CompaniesAct 2013 an abridged version of the Annual Report excluding the aforesaid informationis being sent to the members of the Company and others entitled thereto. For those personswho have registered their e-mail addresses with the Company the full version of theAnnual Report containing the aforesaid information is being sent to them electronically.Members and other entitled persons who have not registered their e-mail addresses with theCompany may access the full version of the Annual Report up to the date of the ensuing AGMon the website of the Company; or by physically inspecting the full version of the AnnualReport at the Registered Office of the Company on all working days of the Company between10.00 a.m. and 1.00 p.m.; or by requesting a physical copy by writing to the CompanySecretary.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. An Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporary andtrainees) are covered under this policy. No complaints pertaining to sexual harassmentwere received during F.Y. 2017-18.

OTHER DISCLOSURES / REPORTING

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions pertaining to these items during the yearunder review:

1. Details relating to deposits covered under Chapter V of the Companies Act 2013.

2. Issue of equity shares with differential rights as to dividend voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOPs referred to in this Report.

4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.

30.APPRECIATION

Your Directors take this opportunity to express their appreciation for the cooperationand assistance received from the Government of India; Republic of Chile MauritiusMozambique the US and the UK; the State Governments of Karnataka Maharashtra TamilNadu West Bengal; Jharkhand and Odisha and the financial institutions banks as well asthe shareholders and debenture holders during the year under review. The Directors alsowish to place on record their appreciation of the devoted and dedicated services renderedby all employees of the Company.

For and on behalf of the Board of Directors
Place: Mumbai Sajjan Jindal
Date: May 16 2018 Chairman