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JSW Holdings

BSE: 532642|NSE: JSWHL|ISIN: INE824G01012|SECTOR: Finance - Investments
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Directors Report Year End : Mar '18    Mar 17

Dear Members,

The Directors take pleasure in presenting the Seventeenth Annual Report of your Company, together with Standalone and Consolidated Financial Statements for the year ended 31st March, 2018.

1. Financial Results

Your Company has achieved a very good financial performance during the financial year 2017-18, which is summarized below:

Financial Highlights

(Rs. in Lakhs)

Standalone

Consolidated

Particulars

F.Y. 2017-18

F.Y 2016-17

F.Y 2017-18

F.Y 2016-17

Total Revenue

8,931.90

6,335.16

8,934.00

6,335.16

Profit Before Depreciation & Tax

8,422.87

5,939.88

8,424.97

5,939.88

Less : Depreciation

3.00

1.54

3.00

1.54

Profit Before Tax

8,419.87

5,938.34

8421.97

5,938.34

Less: Tax Expense

1,610.65

1200.00

1610.65

1,200.00

Profit after Tax but before share of profit from Associates

6,809.22

4,738.34

6,811.32

4,738.34

Add: Share of profit from Associates

54.24

82.48

Profit after tax

6,809.22

4,738.34

6,865.56

4,820.82

Add: Balance brought forward from previous year

27,852.09

23,113.75

29,170.34

24,349.52

Amount available for Appropriation

34,661.31

27,852.09

36,035.90

29,170.34

Less: Appropriations: Transfer to Reserve Fund

Nil

Nil

Nil

Nil

Balance carried forward

34,661.31

27,852.09

36,035.90

29,170.34

2. Dividend

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

3. Review of Operations

(A) Standalone Results:

Your Company has recorded a very good performance during the year under review. During the year, the Company has received income by way of Dividend of Rs.3,955.37 Lakhs, Interest of Rs.3,573.15 Lakhs, Pledge Fees of Rs.1,336.59 Lakhs, and Other income of Rs.66.79 Lakhs, the Total Revenue is Rs.8,931.90 Lakhs as against Total Revenue of Rs.6,335.16 Lakhs in the previous year. The Profit before depreciation and tax is Rs.8,422.87 Lakhs. After providing for depreciation of Rs.3.00 Lakhs and Tax of Rs.1,610.65 Lakhs, the Net Profit is Rs.6,809.22 Lakhs as against Rs.4,738.34 Lakhs in the previous year, an increase of around 43.70%.

(B) Consolidated Results

Your Company has recorded a very good performance during the year under review. During the year, the Total Revenue on consolidated basis stood at Rs.8,934.00 Lakhs comprising of Dividend of Rs.3,955.37 Lakhs, Interest of Rs.3,573.15 Lakhs, Pledge Fees of Rs.1,336.59 Lakhs and Other Income of Rs.68.89 Lakhs as against Total Revenue of Rs.6,335.16 Lakhs in the previous year. The Consolidated Profit before depreciation and tax is Rs.8,424.97 Lakhs. After providing for depreciation of Rs.3.00 Lakhs and Tax of Rs.1,610.65 Lakhs, the Consolidated Net Profit after tax but before Share of Profit from Associates is Rs.6,811.32 Lakhs. The Share of Profit from Associates is Rs.54.24 Lakhs and Consolidated Profit after Tax is Rs.6,865.56 Lakhs as against Rs.4,820.82 Lakhs in the previous year, an increase of around 42.41%.

4. Future Prospects

Your Company holds significant investments in Equity Shares of JSW Steel Limited besides certain other investments in other JSW Group of Companies, therefore the business prospects of the Company largely depends on the business prospects of JSW Steel Limited and the steel industry.

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

India was the world’s third-largest crude steel producer till 2017. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour. Consequently, the steel sector has been a major contributor to India’s manufacturing output. India overtook Japan to become the world’s second largest crude steel producer in the world in February, 2018. Based on increased capacity addition in anticipation of upcoming demand, and the new steel policy, that has been approved by the Union Cabinet in May 2017, is expected to boost India’s steel production. Huge scope for growth is offered by India’s comparatively low per capita steel consumption and the expected rise in consumption due to increased infrastructure construction and the thriving automobile and railways sectors. The year 2018 has given more benefits to the steel industry in terms of demand, costs of production, market realisation and exports than what was experienced in the previous year.

The higher consumption crucially dependent on infrastructure investment from public and private sources in port-led, rail and road-led development, more spending by the household and the government in real estate, affordable housing, smart cities, would enable the demand to grow by a minimum 7-8% from the current level of 5.2%. A brighter market demand would make India’s crude steel production to grow by a minimum 8% to reach 108 MT by 2018. The NCLT resolution during the year would also enable Indian steel industry to achieve a higher capacity utilisation in crude steel production by the second half of 2018.

This backdrop of a favourable market scenario of global steel industry is likely to give India a good platform to maximise exports and a much lesser threat of cheap imports in 2018. It is possible to enhance the export share of finished steel production from the current 9.6% to a minimum 12%.

Your Company is looking forward for a sustainable growth in its investee Companies in the coming years which would enhance the shareholders’ value. Considering the forecasted growth in the economy as a whole and the steel industry in particular, the Company expects to enhance its entrenched value for the benefit of the shareholders’ at large.

The Company will continue to focus on making longterm strategic investments in various new ventures promoted by JSW Group, besides consolidating the existing investments through further investments in the existing companies.

5. Holding, Subsidiary& Associate Company

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

i. Sun Investments Private Limited

Sun Investments Private Limited (SIPL) is a NonBanking Financial Company registered with the Reserve Bank of India. SIPL was formed with the main object of investing and financing. The net worth of SIPL as on 31.03.2018 is Rs.246.16 crores.

ii. Jindal Coated Steel Private Limited

Jindal Coated Steel Private Limited (JCSPL) was formed with the main object of trading and manufacturing various types of steel and allied products. The net worth of JCSPL as on 31.03.2018 is Rs.11.54 crores.

iii. Jindal Overseas Pte Limited

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

As per the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Company’s associate companies in Form AOC-1 is attached to the financial statements of the Company.

6. Fixed Deposits

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

7. Extract of Annual Return

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

8. Number of meetings of the Board

The Board meets to discuss and decide on Company/ business policy and strategy apart from other Board business. A tentative date of the Board and Committee Meetings is circulated to the Directors in advance to facilitate them to plan their schedule and to ensure meaningful participation in the meetings. However, in case of a special and urgent business need, the Board’s approval is taken by passing resolutions through circulation, as permitted by law, which are confirmed in the subsequent Board meeting. Usually the meetings of the Board/ Committees are held in Mumbai.

During the year under review, the Board met four times on 24.04.2017, 03.08.2017, 02.11.2017 and 05.02.2018. The maximum interval between two meetings did not exceed 120 days as prescribed under Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [“SEBI (LODR) Regulations, 2015”] and Secretarial Standards SS-1.

9. Directors Responsibility Statement

Pursuant to the requirements under Section 134(5) of the Companies Act, 2013, your Directors hereby state and confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures;

b. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year on 31st March, 2018, and of the profit of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. they have prepared the annual accounts on a going concern basis; and

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

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

10. Declaration of Independence

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and Regulation 16 of the SEBI (LODR) Regulations, 2015. The following are the Non-Executive Independent Directors of the Company:

a) Mr. Atul Desai

b) Mr. Imtiaz Qureshi

c) Mrs. Sutapa Banerjee

11. Company’s policy on Directors’, KMP & other employees’ appointment and remuneration

The Policies of the Company on Directors’, KMP & other employees’ appointment including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of section 178, is appended as Annexure B to this Report. The Remuneration Policy is forming part of Corporate Governance Report and detailed policy has also been published on the website http://www.jsw.in/investors/investor-relations-jsw-holdings for investor’s information.

12. Auditors

a. Statutory Auditors:

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

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

b. Secretarial Auditor:

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

Annexure C.

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

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

The Company has provided following investments, loans and guarantees pursuant to Section 186 of the Companies Act, 2013:

Details for investments, loans & guarantees:

Loans given:

(Rs. in Lakhs)

Name of the party

Amount at the beginning of the year

Transactions during the year (Net)

Balance at the end of the year

Gagan Trading Co. Ltd.

130.20

(130.20)

-

JSW Investments Pvt. Ltd.

4,452.50

(10.00)

4,442.50

JSW Techno Projects Management Ltd.

12,000.00

2,500.00

14,500.00

Realcom Reality Pvt. Ltd.

11,999.50

-

11,999.50

Reynold Traders Pvt. Ltd.

2,858.00

(335.00)

2,523.00

JSW Holdings Employees Welfare Trust

540.50

(215.15)

325.35

Total

31,980.70

1,809.65

33,790.35

Investments: Refer Note 7 of Standalone Financial Statements

Details for securities provided:

(Rs. in Lakhs)

Name of the party

Purpose for giving security

Amount

JSW Techno

Pledge of shares

110,862.83

Projects

for Loan availed by

Management Ltd.

JSW Techno

(‘JSW Techno”)

SJD Advisory Services Pvt. Ltd. (“SJD”)

Pledge of shares for Loan availed by SJD

49,080.59

JSW Projects Ltd. (“Projects”)

Pledge of shares for Loan availed by Projects

99,457.85

Jindal Stainless Ltd. (“Stainless”)

Pledge of shares for Loan availed by Stainless

361.90

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

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

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

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

16. Particulars regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

As your Company is not engaged in any manufacturing activity, particulars under Section 134(3)(m) of the Companies Act, 2013, regarding conservation of energy, technology absorption are not applicable.

There were no foreign exchange transactions during the year.

17. Risk Management Policy

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

18. Corporate Social Responsibility

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

JSW Foundation administers the planning and implementation of all our CSR interventions. All the CSR initiatives are approved by the CSR Committee in line with the CSR Policy approved by the Board on April 28, 2014 and the same are reviewed periodically. The CSR Policy formulated is uploaded on the website of the Company at http://www.jsw.in/investors/investor-relations-jsw-holdings.

Following are the Company’s initiatives proposed to be undertaken as per Schedule VII of the Companies Act, 2013:

i. Improving living conditions (eradication of hunger, poverty, malnutrition etc.) - Providing medical aid to cancer patients, cataract patients and to children below 10 years old.

ii Promoting social development (education, skill development, livelihood enhancements etc.) -Providing educational support to economically weak children.

The details about the initiatives taken by the Company on Corporate Social Responsibility during the year under review to be provided as per the “annexure attached to the Companies (Corporate Social Responsibility Policy) Rules, 2014” have been appended as Annexure D to this Report.

19. Formal Annual Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 and Part D of Schedule II, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration, Stakeholders’ Relationship, Risk Management, Corporate Social Responsibility and ESOP Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.

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

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

21. Adequacy of Internal Financial Controls:

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

22. Directors

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

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

23. Reserve Bank of India’s Guidelines

Your Company is a Core Investment Company (“CIC”) in terms of the Core Investments Companies (Reserve Bank) Directions, 2011. The Company continues to carry on the business permitted to CIC in terms of the Core Investment Companies (Reserve Bank) Directions, 2011.

24. Corporate Governance

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

Pursuant to Schedule V of the SEBI (LODR) Regulations, 2015, Report on Corporate Governance along with the Auditors’ Certificate on its compliance is annexed separately to this Annual Report.

25. Management Discussion and Analysis Report

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

26. Human Resources

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

27. E-Voting Platform

In compliance with provisions of Section 108 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, your Company is registered with Karvy Computershare Private Limited for E-Voting services to set up an electronic platform to facilitate shareholders to cast vote in electronic form to exercise their right of voting at General Meetings /business to be transacted by means of voting through e-voting or poll or ballot paper as provided under the Companies Act, 2013.

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

The JSWHL Employees’ Stock Ownership Plan- 2016 approved by the shareholders vide special resolution dated 22.03.2016 is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (“the SEBI ESOP Regulations”).

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

29. Particulars of Employees and related disclosures

The information required to be disclosed in the Directors’ Report pursuant to Section 197 of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been appended as Annexure E and Annexure F respectively to this Report.

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

30. Prevention of Sexual Harassment

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

31. Appreciation & Acknowledgements

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

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

For and on behalf of the Board of Directors

Place : Mumbai Sajjan Jindal

Date : 27th April, 2018 Chairman

Source : Dion Global Solutions Limited
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