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JSW Steel Ltd.

BSE: 500228 Sector: Metals & Mining
NSE: JSWSTEEL ISIN Code: INE019A01038
BSE 00:00 | 06 Feb 710.90 -21.40
(-2.92%)
OPEN

728.15

HIGH

732.65

LOW

708.00

NSE 00:00 | 06 Feb 711.05 -20.80
(-2.84%)
OPEN

727.85

HIGH

731.30

LOW

709.10

OPEN 728.15
PREVIOUS CLOSE 732.30
VOLUME 47548
52-Week high 789.95
52-Week low 520.10
P/E 33.02
Mkt Cap.(Rs cr) 171,839
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 728.15
CLOSE 732.30
VOLUME 47548
52-Week high 789.95
52-Week low 520.10
P/E 33.02
Mkt Cap.(Rs cr) 171,839
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JSW Steel Ltd. (JSWSTEEL) - Chairman Speech

Company chairman speech

A confident and sustainable future for all

Dear Stakeholder

The year 2022 is a momentous one for India as the country prepares to commemorate 75years of its journey as an independent and progressive nation. What makes this presenttime even more special is that India finds itself on a springboard for rapid growth thatwill enhance its economic standing in the global order. This growth will be underpinned byan infrastructure push digital inclusion and rising per capita income with the UnionGovernment taking the lead on capex to 'crowd in' private investments. Steel is anintegral part of this story. At JSW Steel we invest in the country's future and aregrowing hand in hand with India.

The financial year gone by was a mixed bag with most major economies rebounding fromthe negative effects of COVID-19. However commodity price volatility soaring energyprices lingering supply chain challenges and geopolitical conflicts have made therecovery increasingly fragile. Although global growth expectations have moderatedrecently the structural demand drivers for commodities like steel remain intact.

Another year of record performance

It gives me immense pleasure to share with you JSW Steel's record performance duringthe year under review despite the second wave of the pandemic in India testing ourcollective resilience and threatening to derail the economic recovery. However unlike thefirst wave we did not have to shut down our plants. Domestic demand was impactedinitially due to localised lockdowns and we focused on exports to offset the impactduring the second wave.

At the same time when the nation faced severe shortage in medical-grade oxygen wesupported the government's efforts by supplying liquid oxygen from our plants to healthfacilities and also by setting up COVID care facilities near our plants. The successfulrollout of the world's largest vaccination drive in India saw a rapid improvement insentiment in the second half of FY 2021-22 and we moved our focus back to the domesticmarket. Our capacity utilisation levels remained high at 89% and we delivered recordsteel production. We continued our focus on value added and special products (VASP) in ourportfolio mix with 60% of our sales being VASP in FY 2021-22. We commissioned our 5 MTPAexpansion at Dolvi during the year which is the largest ever single phase expansionundertaken by the Indian steel industry and comprises India's largest blast furnace andsteel melt shop. Commodity inflation impacted our cost structure with coking coal pricesreaching US$670 per tonne FOB Australia in March 2022 and energy prices at elevatedlevels. While steel prices rose we also focused on cost-efficiency initiatives to protectmargins.

We commissioned our 5 MTPA expansion at Dolvi during the year which is the largestever single phase expansion undertaken by the Indian steel industry and comprises India'slargest blast furnace and steel melt shop.

JSW Steel delivered its highest ever EBITDA of ?39007 crore and Net Profit of ?20938crore. The board has proposed a record dividend of ? 17.35 per share in line with ourdividend policy.

Our balance sheet remains strong with robust cash flow generation and the strongestcredit metrics in several years. Our Net Debt-to-EBITDA on a consolidated basis standsat a comfortable 1.45x.

Subsidiaries and acquisitions start to deliver value

Our subsidiaries and recent acquisitions also recorded strong performance andturnaround. We successfully consolidated the Bhushan Power and Steel (BPSL) acquisitionwhich delivered exceptional performance and generated strong EBITDA and cash flows. OurJoint Venture company JSW Ispat Special Products improved its performance and we haveannounced a merger of the company with JSW Steel subject to requisite approvals. Our USoperations turned profitable during the year.

Advancing with steel growing with india

Steel continues to be the essential material for newer urban constructions mobilityand renewable energy infrastructure. Key players in the Indian and global steel industryare today focused on producing value-added steel products made in the most efficient andresponsible ways. The steel industry is poised to benefit from the global spend oninfrastructure and the energy transition.

The World Steel Association is making notable strides in providing global leadership onall major strategic issues impacting the industry particularly focusing on economicenvironmental and social sustainability. I am honoured to serve as its Chairman and Iconsider this to be an opportunity to contribute and collaborate with various stakeholdersto create the market conditions necessary to transition to low-carbon steelmaking.

The future of the Indian steel industry is exciting with a steadily expanding domesticmarket. During FY 2021-22 Indian steel consumption grew to 106 MnT from the pre- pandemiclevel of 100 MnT. Demand is expected to grow at a healthy rate through the current decade.We view the export duties imposed on steel in May 2022 as a short- term headwind sincethey have been imposed with the objective of controlling inflation. We continue to engagewith the government on this matter and believe that the duties would be withdrawn onceinflation moderates.

India is a cost-competitive exporter of steel and has an opportunity to take on alarger role in the global steel trade. The Indian government continues to encouragemanufacturing-led growth and merchandise exports from India. We are expanding our Indiacapacity in a phased manner to 37 MTPA from 27 MTPA at present to tap the opportunities inthe domestic as well as global markets.

India is a cost-competitive exporter of steel and has an opportunity to take on alarger role in the global steel trade.

The expansion of our Vijayanagar plant from 12 MTPA to 19.5 MTPA is underway and capexcost is well below global benchmarks. BPSL is being expanded to 5 MTPA. BPSL has a strongpresence in the eastern India market and being located in Odisha it enjoys the strategicadvantage of proximity to iron ore mines. The Dolvi 5 MTPA expansion was commissioned inFY 2021-22 and will be highly cost competitive as it has the best-in-class technologiesfor higher efficiency.

The expansion of our Vijayanagar plant from 12 MTPA to 19.5 MTPA is underway and capexcost is well below global benchmarks.

Value-added products and responsible steel

We are further strengthening our business model by increasing capacity while reducingour environmental footprint. Our ongoing expansions are oriented towards producing steelwith higher use of renewable power best- in-class digitalisation to achieve operationalefficiency and best available technologies (BAT) to reduce associated CO2 emissions.We are consciously going beyond basic steel and are consistently maintaining the share ofVASP in our product mix to over 50%.

Our thrust on R&D and product development has made us the largest and preferredsupplier across categories from Advanced High Strength Steel (AHSS) to meet safety andlightweight requirements in automotive and tinplate used in food packaging tocorrosion-resistant steel for white goods.

The energy transition has provided a significant opportunity for steel players withhuge investments being made in renewable power generation and transmission &distribution infrastructure all of which are steel-intensive. Our brand Galvos is usedextensively in solar installations. We have also made significant inroads into electricalsteels which are used in various electrical devices such as transformers.

Digitalisation reaping substantial benefits

One of our top priorities has been the digitalisation of our operations with thedeployment of cutting-edge technology. At the outset we had set specific goals toinculcate a 'digital first' organisational culture enabled by systems people andtechnology. We implemented Industry 4.0 in our manufacturing process to make ouroperations efficient including automation augmented and virtual reality advancedrobotics loT AI and machine learning across 200+ lighthouse projects. These efforts havestarted bearing fruit with increased cost efficiency better turnaround times optimisedresource usage and enhanced safety performance.

Setting benchmarks in ESG performance

At JSW Steel ESG is core to everything we do and during FY 2021-22 we madesignificant progress towards our 17 focus areas. We retained our leadership rating of A-in the 2021 CDP Climate Change assessment being the only company in India and Asia(ex-Japan) to achieve this feat in our category. We were also included in the S&P DowJones Sustainability Index for Emerging Markets and were named Sustainability Champion byWorld Steel Association for the fourth consecutive year. We became the first steel companyin the world to issue a US dollar-denominated Sustainability Linked Bond (SLB). The US$500million SLB has a tenure of 10.5 years and is linked to our CO2 reductiontarget. We have committed to reduce our CO2 emissions intensity (Scope 1 and 2)by 42% by 2030 compared to the base year of 2005 aligned with India's NationallyDetermined Contribution (NDC).

We became the first steel company in the world to issue a US dollar- denominatedSustainability Linked Bond (SLB)

We have earmarked ? 10000 crore for investments to reduce our carbon emissions throughvarious initiatives such as increasing the use of renewable energy to replace thermalpower reduce our fuel rate through improved raw material quality via beneficiation anddeployment of Best Available Technologies (BAT). We have contracted for ~1 GW of renewableenergy of which 225 MW became operational in April 2022 and the balance will come onstream in phases. Meanwhile all our finished products underwent lifecycle analysis thisyear and received Environment Product Declaration through the International EPD System;this demonstrates our commitment to measuring and reducing the environmental impact of ourproducts and reporting these impacts in a transparent manner.

We have earmarked Rs. 10000 crore for investments to reduce our carbonemissions through various initiatives

I am happy to share that JSW Steel was honoured with World Steel Association's SteelieAward in the category of Excellence in Life Cycle Application. This recognition highlightsour focus on product sustainability and encourages us to continue to drive moresustainable products. Our stewardship across areas of water and waste will continue andwe will maintain our focus on making circular economy a reality for all.

Our focus on overall people experience and their health and safety remains steadfast.To this end we continue to carry out regular engagements training programmesinspections and audits and campaigns. Through the Contractor Assessment & Rating forExcellence in Safety (CARES) programme we are also ensuring contractor safety. To makeour commitment to greener operations more inclusive we have unveiled an EV Policy for ouremployees which is aimed at encouraging them to make sustainable mobility choices.

The JSW Foundation continued to positively impact the lives of millions. It's a matterof great pride that the JSW Foundation is now a member of the United Nations GlobalCompact and is the first Indian foundation to receive ISO 26000:2010 conformance forcontributing to social responsibility.

Our progress on ESG goals and continued business outperformance are outcomes of therobust governance mechanism that we have established. Our Board with credible andrenowned members plays a key role in guiding and progressing our ESG agenda. The Board'sdiverse experience collective intelligence and insights help us to think and act ahead ofthe curve and deliver sustained stakeholder value. All our statutory Board Committees arechaired by Independent Directors and the Audit Committee and Nomination &Remuneration Committee are fully independent.

Acknowledgements

I would like to take this opportunity to express my heartfelt condolences to the familyof our Independent Board Member Mr. Malay Mukherjee who passed away earlier this year.Mr. Mukherjee's counsel led by his unparalleled experience in building global level steelcapabilities has significantly helped JSW Steel in its journey. It is with fond memoriesthat we will remember him.

I would like to welcome Ms. Fiona Paulus to the board. With her global investmentbanking experience focused on the resources and energy sectors and leadership in thearea of risk management we look forward to her advice and counsel.

I also take this opportunity to thank all our stakeholders - the Central State andlocal governments our customers investors regulators lenders suppliers and advisors -for their continued support.

Finally my sincere thanks to JSW Steel's exceptionally talented and hardworking teamwho are relentlessly pursuing our mission of being Better Everyday.

As we continue to dream bigger challenge norms and do better I look forward to yourcontinued support.

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