JSW Holdings Ltd Management Discussions

1. Background

The global economy continues to operate amidst elevated uncertainty arising from trade and tariff barriers, geopolitical tensions and conflicts in various regions, including the Middle East, which have resulted in supply chain disruptions, inflationary pressures, particularly in energy markets, and volatility in interest rates. Despite these challenges, the global economic outlook remains resilient. According to the International Monetary Fund (IMF), global GDP is projected to grow by 3.1% in 2026, followed by 3.2% in 2027.

Amid global uncertainties, India continues to demonstrate strong economic resilience and reinforce its position as one of the worlds fastest-growing major economies. The IMF projects Indias real GDP growth at 6.5% for FY 2026-27, reflecting the strength of its macroeconomic fundamentals and domestic demand. Key developments such as the India-UK Free

Trade Agreement, continued policy reforms, rapid technological advancements and the Governments sustained focus on manufacturing and infrastructure development under the Make in India initiative are expected to support long-term economic growth and enhance Indias global competitiveness.

Inflation rate moderated during the year, supported by easing food prices and favorable policy measures.

The benign inflation environment enabled the Reserve Bank of India to adopt an accommodative monetary stance, including reductions in the repo rate by 100 basis points, thereby supporting economic growth, investment activity and improved liquidity conditions in the economy.

Your Company is a Core Investment Company ("CIC") with an asset size of above Rs.100 Crore. As the Company is not accessing public funds, it is not required to be registered under Section 45IA of the Reserve Bank of India Act, 1934 and is termed an Unregistered CIC under Reserve Bank of India (Core Investments Companies) Directions, 2025 ("Directions"). Your Company continues to carry on the business permitted to Unregistered CICs under the Directions and, as a pre-requisite, continues to hold at least 90% of its investments, loans, advances, etc. in Group Companies, with significant investment in equity shares of JSW Steel Limited.

As of March 31, 2026, your Company holds 7.42% of the equity share capital of JSW Steel Limited, with a market value of more than Rs.20,000 Crore. The Company also holds strategic investments in various other Group Companies, details of which are disclosed in the relevant sections of this Annual Report.

2. Overview of Financial and Operational Performance

Your Company has recorded good performance during

F.Y. 2025-26 on both a standalone and consolidated basis. This Report should be read in conjunction with the

Companys financial statements and other information included elsewhere in this Annual Report.

A. Standalone Performance

For the Financial Year under review, your Company earned a total revenue on Standalone basis of

Rs.17,945.23 Lakh, comprising of income by way of interest of Rs.11,971.03 Lakh, dividend of Rs.5,193.76 Lakh, pledge fees of Rs.181.11 Lakh, Management

Advisory Services fees of Rs.496.08 Lakh and gain on fairvaluechangesofRs.103.25 Lakh. The Profit before interest, depreciation and tax was Rs.16,542.46

Lakh and after providing for depreciation of Rs.0.63 Lakh and Tax of Rs.4,138.44 Lakh the Net Profit for the year was Rs.12,159.05 Lakh.

B. Consolidated Performance

During the year under review, your Company earned total Consolidated Revenue of Rs.17,945.23 Lakh, comprising of income by way of interest of Rs.11,971.03 Lakh, dividend of Rs.5,193.76 Lakh, pledge fees of Rs.181.11 Lakh, Management Advisory Services fees of Rs.496.08 Lakh and gain on fair value changes of Rs.103.25 Lakh. Your Company has two Associate Companies and after considering the share of profit from associates of Rs.2,505.91 Lakh, the consolidated profit after tax for the year was Rs.14,664.97 Lakh.

C. Significant changes in Key Financial Ratios

As compared to the figures of previous year, there was significant change in following ratios: i. There was a decrease in Debtors Turnover Ratio (number of days) from 240 days to 170 days by 29.24% due to decrease in Turnover. ii. There was a decrease in current ratio from 9.22 times to 2.87 times by 68.85% primarily due to a reduction in interest accrued on loans, which forms part of the Companys current assets. iii. Return on Net-worth for the year has decreased from 0.64% to 0.39% by 38.77% owing to decrease in Profit After Tax.

Apart from above, there are no significant changes

(i.e. change of more than 25%) in any other key financial ratios during the current financial year as compared to immediately preceding financial year.

Economic Overview & Future Prospects

A. Economic Overview

The global economy has shown resilience despite the headwinds outlined above and the severe inflationary trends in several economies.

Robust technology investments and dilution of the originally announced US tariffs supported growth. Recession was avoided due to a resilient banking system, and several major emerging market economies performed better than expected. Manufacturing activity, however, has remained subdued, while service sector has exhibited strength.

Indias economic growth momentum is expected to remain strong in FY 2026-27, supported by robust public capital expenditure, resilient domestic demand, and continued emphasis on manufacturing and infrastructure development. The Union Budget 2026-27 has proposed a record public capital expenditure of Rs.12.2 lakh crore, reflecting an 11.5% YoY increase, with significantly higher allocations for public housing and defence. The Government has continued its focus on supporting manufacturing-led growth, infrastructure, strategic sectors, exports, MSMEs, and employment generation, which is expected to accelerate private investment and industrial expansion. Indias macroeconomic fundamentals remain robust, driven by robust foreign exchange reserves, fiscal consolidation measures, and stable financial sector conditions, despite global geopolitical and trade-related uncertainties.

The Indian economy reflected strong fundamentals in H2FY26, with double-digit growth in auto volumes, spurred by GST reforms, benign inflation and healthy rural indicators. The government has been calibrating policy measures to navigate the supply shock and inflationary risks emanating from the Middle East conflict.

In India, healthy steel demand growth continues, aided by ongoing infrastructure spends by the government and tailwinds from major steel-consuming sectors, including construction, infrastructure, automobile, engineering and defence.

B. Future Prospects

As set out above, the Companys business prospects are closely tied to those of JSW Steel

Limited and the steel industry generally.

The Indian steel industry put up a strong performance in FY 2025-26, consolidating its position as the worlds second-largest producer while navigating global uncertainties and price pressures.

Growth in steel consumption remained healthy in India at 7.9% in FY 2025-26, following four consecutive years of double-digit growth.

The strong demand took the countrys steel consumption beyond 164 MnT during the year, while per capita consumption crossed 115 kg. Both flat and long products (excluding stainless steel) recorded similar growth of 8.3% in FY 2025-26.

In the first half of the year, growth in government capex remained strong, while the second half was marked by strong momentum in automobile and other consuming sectors that gained from GST reforms. The last quarter saw consumption growth of 10.5%.

Steel production outpaced consumption during the year, with new capacities coming on stream and crude steel output increasing by 11%. Growth in iron ore output lagged at 7.4%, leading to a sharp spurt in iron ore imports. Steel exports recovered in FY 2025-26, erasing much of the decline seen in the previous year. Imports declined after the imposition of safeguard duty. Indias trade in steel was broadly balanced in FY 2025-26 after two years of being a net importer, and recorded a small net export.

. Opportunities, Threats and Developments

India has emerged as the fastest-growing major economy in the world. It is currently the fifth largest economy globally, on track to become the third largest over the next three years. Despite ongoing geopolitical tensions, the Government has supported Indias economic growth through financial stimulus packages with focus on infrastructural development.

India is poised to fortify its position as a global hub for innovation and research, with Government initiatives emphasizing the role of R&D and positioning the nation as a manufacturing stronghold toward self-reliance.

As a CIC, the Company remains less exposed to the broader NBFC sector environment. It sees significant potential for increased steel demand in India, and JSW Steel Limiteds domestic and overseas operations position the Company to benefit from this in the long term.

These factors point towards high growth potential for the Indian steel industry and a bright prospect for

Indian steel manufacturers. As a result, the Company looks forward to sustainable growth in its investee companies in the coming years, which would enhance shareholders value.

?. Government Initiatives

India continues to be a key driver of growth in the global steel industry. With strong prospects for steel-use sectors, the outlook for the industry remains robust. Private capex outlook is also improving, with strong traction seen in commercial real estate, power generation, transmission capacity additions, data centres, defence, and maritime sectors.

Industrial demand is expected to be driven by overall economic momentum and Indias trade deals with developed countries, which are likely to be operationalised in the coming quarters. Potential supply-chain disruptions from the Middle East situation bear watching for their effect on manufacturing sector growth.

Despite these macro headwinds, Indias finished steel consumption is expected to keep up last years momentum. While the World Steel Association projected a 7.4% rise in 2026, ICRA Ratings pegged steel demand growth at 9-10% for FY 2026-27, and CRISIL estimated demand growth at 5.5-7.5%. Beyond the near-term headwinds, Indias steel consumption buoyancy is likely to remain undented into the medium term, supported by structural tailwinds and the ongoing nation-building phase.

Steel exports from India may face challenges in the near term due to geopolitical tensions and increasing protectionism in markets, including the CBAM in Europe. The Indian steel industry remains in an expansionary phase, aligned to the National Steel Policy target of 300

MnT of crude steel capacity by the end of the decade

(from an estimated 220 MnT as of FY 2025-26); a commensurate increase in iron ore availability remains key. Government policies have been supportive through auctioning of more mines and encouraging use of low-grade iron ore.

Industry Structure

Non-Banking Financial Companies ("NBFCs") are an integral part of the Indian financial system. The

Company, however, operates as an Unregistered CIC rather than a conventional NBFC.

The Companys investment portfolio is predominantly concentrated in strategic investments in Group Companies, with a significant investment in JSW

Steel Limited. The Company continues to focus on preserving long-term shareholder value through prudent investment management, robust governance practices, and strict adherence to the applicable regulatory framework.

Risks & Concerns

The Companys performance is significantly influenced by the value and performance of its investment portfolio, which is primarily concentrated in the steel sector. Accordingly, any adverse developments affecting the steel industry, including fluctuations in steel prices, changes in demand-supply dynamics, economic slowdowns, trade restrictions, geopolitical developments, increases in input costs or changes in government policies, may impact the financial performance and valuation of the

Companys investments.

The Company is also exposed to market risk arising from fluctuations in equity markets, interest rates and overall economic conditions, which may affect the fair value of its investments and treasury operations. Since a substantial portion of the Companys assets is invested in a steel company, the Companys financial results may be influenced by the operational and financial performance of the investee company.

Further, the Company operates in a regulated environment and is subject to various laws, regulations and guidelines issued by the Reserve Bank of India and other regulatory authorities. Changes in the regulatory framework, compliance requirements or accounting standards may affect the Companys operations and financial reporting. The Company is also exposed to operational, liquidity and cybersecurity risks inherent in the financial services sector.

The Company has established an adequate system of internal controls and risk management processes to identify, monitor and mitigate key risks. Through prudent oversight of its investment portfolio, regular monitoring of market developments and adherence to sound governance practices, the Company seeks to effectively manage risks and safeguard stakeholders interests.

Material Developments in Human Resource/ Industrial Relations Front

There have been no material developments on the Human Resource and Industrial Relations front during the year under review. The Company had 3 employees as at 31 March 2026. Employee relations remained cordial throughout the year, and the Company continued to maintain a harmonious work environment.

Internal Controls, Audit and Internal Financial Controls

A. Overview

Our Management holds the primary responsibility for establishing and maintaining an effective system of internal control over financial reporting.

This framework is designed to offer reasonable assurance that financial and operational information is accurately recorded and presented to the Board of Directors.

Ourinternal-controlstructureiscomprehensiveand robust-anchored by clear policies, documented Standard Operating Procedures, and consistent implementation across all operational areas. It is tailored to align with the Companys size and business characteristics, and forms a cornerstone of our corporate governance framework.

B. Risk Management

In todays fast-evolving economic, geopolitical, regulatory, and market landscape, your Company has continued to build on its risk management strengths. Effective risk management involves a structured framework for identifying, evaluating, managing, and monitoring risks that could hinder the organizations goals. The Company employs both top-down and bottom-up approaches to spot risks and opportunities, consolidating and calibrating findings into a comprehensive enterprise-wide view, and treats risk management as a core expertise, addressing threats proactively.

At the centre of this effort is a risk management framework aligned closely with capital management and business strategy, keeping the Company on course toward its objectives and supporting sustainable growth.

Oversight comes from the Risk Management Committee, chaired by Independent Director

Mr. N. K. Jain. The committee regularly reviews risk trends, evaluates exposures, and discusses their potential impact on company operations.

C. Compliance

The Company is committed to upholding the highest standards of compliance, both in regulatory matters and its internal policies and guidelines. The Company Secretary supports

Management in designing and implementing the compliance framework-identifying, assessing and addressing risks through tailored policies and procedures-which is periodically reviewed and enhanced to ensure transactions are effectively monitored, regulatory implementation is tested, and governance structures remain robust. The

Company maintains proactive engagement with regulators, including participation in industry-level initiatives.

Additionally, at each Board meeting, the Board reviews, compliance with applicable laws.

D. Internal Control

The Company maintains a seasoned internal audit function that adopts global best standards and practices from leading international organizations.

To preserve impartiality, the internal audit team reports functionally to an expert Audit Committee of Independent Directors, ensuring full objectivity.

Their mandate, scope, and responsibilities are clearly outlined in an Internal Audit Charter.

Each year, the internal audit team develops a risk-based audit plan approved by the Audit Committee.

The frequency and focus of audits are determined by the risk rating of various areas and functions.

The plan is dynamic-periodically updated to reflect emerging industry trends, corporate expansion, internal feedback, and external developments.

The Committee also holds independent sessions with internal auditors and management to assess the adequacy and effectiveness of internal financial controls.

E. Internal Financial Controls

Under Section 134(5)(e) of the Companies Act, 2013, the Board of Directors is accountable for instituting and maintaining a robust system of internal financial controls, offering reasonable assurance about the adequacy and effectiveness of controls related to financial reporting, operations, and regulatory compliance.

The Company has established a comprehensive internal financial control framework, incorporating:

- Clear delegation of authority, well-defined policies and procedures, and IT systems tailored to business requirements

- Risk-based internal audits aligned with a dynamic risk management framework

- A whistle-blower mechanism to enhance transparency and accountability In adherence to regulatory standards, entity-level policies-such as anti-fraud measures, confidentiality, whistle-blower safeguards, insider trading, HR and organization-structure policies are supplemented by detailed Standard Operating

Procedures for each process area.

During the year, controls were rigorously tested, and no material weaknesses in design or operational effectiveness were identified.

Management, statutory auditors, and internal auditors all performed due diligence on the control environment and confirmed the absence of any significant deficiencies impacting financial reporting.

Internal financial controls encompass policies and procedures to ensure orderly business conduct, asset protection, error/fraud prevention, accurate record-keeping, and timely preparation of reliable financial information. The auditors report must confirm both the existence and operating effectiveness of these controls, reinforcing transparency in financial reporting.

> . Cautionary Statement

Statements made in this Management Discussion and

Analysis (MDA) describing the Companys objectives, projections, estimates and expectations may be

forward looking within the ambit of applicable laws and regulations. Actual results may differ from those expressed or implied owing to the Companys ability to successfully implement its strategies, growth and expansion, global and Indian economic conditions, political stability, stock market performance, changes in government regulations, tax regimes, economic developments and other incidental factors. Except as required by law, the Company does not undertake to update any forward-looking statements to reflect future events or circumstances. The Company makes no representation or warranty, express or implied, as to, and does not accept any responsibility or liability with respect to, the fairness, accuracy, completeness or correctness of any information or opinions contained herein. Investors are advised to exercise due care and caution while interpreting these statements.