JITF Infra Logistics Ltd Management Discussions.

COMPANY OVERVIEW

Your Companys business is to carry out infrastructure businesses through its subsidiaries and step down subsidiaries. The infrastructure businesses include (a) Waste to power which is being carried out by various SPVs under JITF Urban Infrastructure Limited; (b) Railway Rolling Stock Manufacturing business being carried out byjindal Rail Infrastructure Limited and (c) Water and waste water EPC business being carried out by JITF Water Infrastructure Limited.

INDUSTRY STRUCTURE AND DEVELOPMENT

India continued to be one of the fastest growing large economies in the world. Global economic recovery gathered pace, with the world economy growing at 3.7% in the year 2017-18. The sustained rise in global trade was led by a pickup in import demand in developed markets. FY 2017-18 marked a significant economic measure by the government. The Goods and Services Tax (GST) was implemented from July 2017 as the nation moved to one nation-one tax.

The Indian economy continued to grow strongly, as the economy recovered in the 2nd half post stabilisation of the GST regime, Industrial activity has rebounded with strong industrial production growth, led by a rise in consumption, manufacturing and electricity generation. Your Companys performance for the year 2017-18 has to be viewed in the context of aforesaid economic and market environment. Your Company expects to improve its performance in the coming times supported by the overall improvement in the business conditions in the country.

MAJOR SUBSIDIARIES & THEIR OPERATIONS:

The Company has business interest in various businesses including infrastructure business through its subsidiaries in India and abroad. JITF Infralogistics Limited is the holding company for infrastructure business which is consisting of water infrastructure business, municipal solid waste processing and power generation (infrastructure) business, and rail wagon manufacturing (fabrication) business.

JITF Water Infrastructure Limited (JWIL)

JWIL continues to operate in the water sector of India. The on-going projects consists of intake well, water treatment plant, overhead tanks and

distribution networks. Water sector in India offers a huge potential for EPC jobs. On the one hand, growing urbanization and industrialization needs additional water infrastructure and on the other hand, Government is focused on providing clean drinking water to each and every household in Urban and semi-urban areas. Union Budget 2018 has allocated Rs 19,428 crores for water supply projects under AMRUT schemes. The allocation for irrigation projects has also been increased from Rs 20,000 crores to Rs 40,000 crores. Apart from this many water related projects are funded by ADB and JAICA. Many states are targeting to provide clean drinking water to every household in the rural areas.

Above mentioned data clearly points to a very healthy outlook for future growth of JWIL.

With increasing focus on cleaning up our rivers, there is lot of focus from the Government to install Sewage Treatment Plants (STPs) to treat the urban waste. There is also a lot of focus on installing Common Effluent Treatment Plants (CETPs) to treat effluent discharged by cluster of industries. JWIL has gained considerable experience in building and operating CETP at Sitarganj and this experience can be channelized to make further inroads in this sector.

Further to augment the business of the Company, JITF Urban Infrastructure Services Limited QUISL), the unlisted material subsidiary of the Company has entered into a strategic Investment Agreement on July 16, 2018 with Technomechanical Services Private Limited (TSPL) pursuant to which JUISL has agreed to transfer up to 49% (Forty Nine Percent) shareholding in JWIL in favour of TSPL or its designated representatives. Flowever, JUISL shall continue to hold 51% (Fifty One Percent) of the paid-up share capital of JWIL along with the right to appoint the majority of directors of the JWIL.

JITF Urban Infrastructure Limited (JUIL)

JUIL is engaged in municipal solid waste management (SWM) & waste to energy (WtE) business. The environmental benefits of waste to energy, as an alternative to disposing of waste in landfills, are clear and compelling. Waste to energy generates clean, reliable energy from a renewable fuel source, thus reducing dependence on fossil fuels, the combustion of which is a major contributor to green-house gas emissions.

We have installed the countrys first WtE facility at Okhla, New Delhi wherein we are processing 1950 TPD of municipal solid waste and generating 16 MW of clean renewable energy.

JUIL has currently been allotted 3 WtE projects in the state of Andhra Pradesh, 2 WtE projects in Rajasthan & one each in Gujrat & Delhi region. In Andhra Pradesh at Guntur & Vishakhapatnam cluster, the company will process 1200 TPD of Municipal Solid Waste (MSW) and will generate 15 MW of clean energy while at Tirupati cluster the Company will process 400 TPD of MSW and will generate 6 MW of clean energy. Similarly, in Delhi, it will be the largest WtE project in India which will process 2400 TPD of MSW and will generate 25 MW of renewable energy.

According to the Ministry of New and Renewable Energy (MNRE), there exists a potential of about 1700 MW from urban waste (1500 from MSW and 225 MW from sewage) and about 1300 MW from industrial waste. Waste generation in India is expected to increase rapidly in the future. As more people migrate to urban areas and as incomes increases, consumption levels are likely to rise, as are rates of waste generation. The waste produced in urban areas of India is approximately 170 000 tonnes per day, equivalent to about 62 million tonnes per year, and this is expected to increase by 5% per year owing to increases in population and changing lifestyles. Urban India had generated 31.6 million tonnes of waste in 2001 which has increased to 47.3 million tonnes by 2018. By 2041, waste generation is predicted to be 161 million tonnes, a five-fold increase in four decades.

The problems caused by solid and liquid wastes can be significantly mitigated through the adoption of environment-friendly waste-to-energy technologies that will allow treatment and processing of wastes before their disposal. These measures would reduce the quantity of wastes, generate a substantial quantity of energy from them, and greatly reduce environmental pollution. Indias growing energy deficit is making the government central and state governments become keen on alternative and renewable energy sources. Waste to energy is one of these, and it is garnering increasing attention from both the central and state governments.

The ministry is also actively promoting the processing of waste & generation of energy from waste, by providing subsidies and incentives for the

projects through various schemes like - Swachh Bharat Mission (SBM), Swachh Survekshan, City Compost Policy etc. The central assistance through viability gap funding has been increased from 20% to 35%, chemicals and fertilizers ministry has extended market development assistance of Rs 1,500 for each tonne of compost sold and now retail selling of compost in the vicinity of production plant has been allowed. The estimated cost of implementation of SBM (Urban) based on unit and per capita costs for its various components is Rs 62,009 crores, out of which, the budget for solid waste management (SWM) is set to be Rs 7,365.79 crores.

Success in municipal solid waste management could lead to opportunities in other waste such as sewage waste, industrial waste and hazardous waste. Depending on the technology/route used for energy recovery, eco-friendly and "green" co-products such as charcoal, compost, nutrient rich digestate (a fertilizer) or bio-oil can be obtained. These co-product opportunities will enable the enterprise to expand into these related products, demand for which are increasing all the time.

Above mentioned data clearly points to a very healthy outlook for future growth of JUIL.

Jindal Rail Infrastructure Limited

The Railways Sector holds a strategic position in Indias freight transport infrastructure. Railway is cost-effective, environment friendly and reliable mode of transportation. However, despite these advantages, the share of Railways in freight transportation has not picked up commensurate with the growth of the countrys economy. Network congestion and under-investment in Railways are two key reasons impeding the growth of freight traffic in India. The Ministry of Railways is seized of the situation and has introduced a host of policy initiatives over past few years. Besides, Ministry has also committed massive investments to modernize rail infrastructure and boost freight traffic. As a result, Indian Railways has achieved the highest ever freight loading of 1,162 MT in 2017-18 and 1,107 MT in 2016-17. Freight earnings have also shot up with a 12% increase expected over the previous year, projected to be Rs 1.17 lakh Cr in 2017-18. The commissioning of Dedicated Freight Corridors in phases by 2019-20 will further boost the Indian economy.

The rolling stock market in India is experiencing multiple opportunities across freight wagons, coaches, EMU, DMU and locomotives. Indian Railways, which is the largest purchaser of Railway Wagons in India, has proposed to invest Rs 9,000 Crores over the next three years to procure about 38,000 new wagons by 2020. Several schemes have been launched to boost freight share. Railways plan to de-congest the route by investing in doubling and tripling the tracks and its speedy electrification along with the push for completion of DFC Projects augurs well for the industry. The overseas market, especially the neighboring countries, is also seeing an upsurge in Railway Infrastructure projects.

During the financial year 2017-18, optimal capacity utilization was not achieved on account of rolling back of wagon purchases by both Indian Railways and private sector in the past year. Indian Railways postponed its annual procurement programme for wagons due to various policy changes on account of introduction of GST.

Demand for wagons by Indian Railways is expected to substantially increase with the ongoing capacity augmentation and Port connectivity projects. Ministry of Railways is incentivizing Public Sector and Private Sector investment of Rolling Stock - General Purpose Wagon Investment Scheme has been announced on 26th April 2018 permitting Pvt. Sector ownership of General Purpose Wagons for Coal, Iron Ore, Steel etc. Besides, Revised LWIS and SFTO Schemes have been announced on 02nd July 2018 permitting use of IR Terminals by Pvt. Sector Train Operators. Substantial demand is expected for Open type wagons from Pvt Sector players such as Coal India Ltd., Adani Ports & SEZ Ltd.JSW Steel and JSPL etc. and for Special Purpose, High Capacity Wagons.

The overall performance of the Company during the financial year 2017-18 was subdued because of delays in placement of orders by the Indian Railways and due to low order book till last quarter. However, last quarter has witnessed a gradual pickup in demand. With the company winning new orders, its order book has risen. At present, orders for 878 wagons are under various stages of execution. Hence, performance is expected to improve going ahead.

JRIL is also pursuing a de-risking strategy through diversification. In order to reduce dependence on wagon segment, JRIL has received a developmental order for 2 nos Locomotive Shell Assembly from DMW, Patiala.

OPPORTUNITIES AND FUTURE OUTLOOK

The Company is engaged in the Infrastructure Business in various verticals comprising Water, Environment, Solid Waste Management and Rail Infrastructure. With the diversified business portfolio it has managed to mitigate the business risk to its optimum low level. Over the period the Company has executed projects awarded by various Private Sector, State Government, Government Undertaking and Public Sector Undertakings. It has always been the endeavor to plan and execute the projects undertaken in the most efficient and professional manner and the Companys Management and its workforce always strive towards achieving this goal. In the present scenario, the management is optimistic that with the strong leadership at the Centre with a vision of Vibrant India, the overall future outlook of the infrastructure sector in India looks bright and Company expects more opportunities to come its way to maintain healthy order book in the coming years and is confident that the financial performance of the Company shall continue to improve.

CHALLENGES

Every business carried out by any Company are full of challenges and risk and the success of any business always depend upon the ability of the Company how it faces the challenges and survive in the highly competitive market. Your Company is developing various systems and strategies to face the challenges in the competitive market. The challenges are not from the competitors but also from the domestic and global economic scenario. Your Company is taking all precautions to offset the associated risks.

RISK MANAGEMENT

Risk Management is a process of identifying the risks, analysis of its effect on the business operations of the Company, measures to be taken to mitigate such risks. As a business enterprise the Company is exposed to various risk some of which are identifiable and can be mitigated through defined Internal Control Mechanism. However there are certain risks which cannot be predicated and are unascertainable at a given point of time. These can be mitigated through the experience inherited by the Company and its management over the period. The Company has set up an elaborate system for identifying and mitigating the risk associated with

the nature of businesses undertaken by the Company which may threaten the existence of the Company. At senior management level roles and responsibilities of all the employees are well defined to facilitate timely identification and mitigation & management of the risks. We work in an environment where risks to the business and operations are evaluated regularly and suitable necessary steps are initiated by the Management to mitigate and alleviate such risks to the best possible way.

FINANCIAL PERFORMANCE

During the year, Company achieved Gross Income of Rs 240.98 lacs against Rs 365.11 lacs achieved during the previous year. The net profit for the year declined to Rs 27.27 lacs for the year under review as compared to Rs 155.97 lacs in the previous year. As at 31st March 2018, the Net worth of the Company increased to Rs 31,932.48 lacs from Rs 31,905.21 lacs as at 31st March 2017.

INTERNAL CONTROL AND INTERNAL AUDIT SYSTEM AND THEIR ADEQUACY

Your Company has put in place strong internal control systems in line with globally accepted practices. The processes adopted by the Company are best in class and commensurate with the size and nature of operations. All major business activities have been well defined and mapped into the ERP system and the controls are continuously reviewed and strengthened as per the business need.

The Company has adopted risk based framework which is intended for proper mitigation of risks. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.

The Company has employed experienced professionals to carry out the internal audits to review the adequacy and compliance to the laid down procedures to manage key risks.

The Audit Committee of the Board regularly reviews the adequacy & effectiveness of internal audit environment and implementation of internal audit recommendations including those relating to strengthening of Companys risk management policies & systems.

Your Companys philosophy is of zero tolerance towards all applicable legal non-compliances.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The importance of Human Resources has increased with the passing year. We continuously emphasize on strengthening employee-employer relationship by formulating effective strategies and improvising functional processes vital to achieve the Organizational goals. Recruitment and retention of human resources is always a challenge in the growing business organizations. The business as of now involves a limited number of professionals, however, with growing business needs, your Company may be required to hire the additional talent pool of requisite experience and qualifications.

CAUTIONARY STATEMENT

The Statement in this Management Discussion and Analysis report, describing the Companys outlook, projections, estimates, expectations or predictions may be "Forward looking Statements" within the meaning of applicable securities laws or regulations. Actual results could differ materially from those expressed or implied.