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JSW Steel Ltd.

BSE: 500228 Sector: Metals & Mining
NSE: JSWSTEEL ISIN Code: INE019A01038
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OPEN 697.00
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VOLUME 160281
52-Week high 776.50
52-Week low 257.70
P/E 11.73
Mkt Cap.(Rs cr) 164,865
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 697.00
CLOSE 689.40
VOLUME 160281
52-Week high 776.50
52-Week low 257.70
P/E 11.73
Mkt Cap.(Rs cr) 164,865
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

To the Members of JSW STEEL LIMITED

The Board of Directors are pleased to present the Fourth Integrated Report along withthe financial statements of the Company for the financial year ended March 31 2021. Abrief summary of the Company's performance is given below.

1. Company Performance

' in crores

Standalone

Consolidated

FY 2020-21 FY 2019-20 FY 2020-21 FY 2019-20
I Revenue from operations 70727 64262 79839 73326
II Other income 669 628 592 546
III Total income (I + II) 71396 64890 80431 73872
IV Expenses:
Cost of materials consumed 28743 33073 32623 38865
Purchases of stock-in-trade 199 420 233 135
Changes in inventories of finished goods work-inprogress and stock-in-trade (872) (27) (348) (270)
Mining premium and royalties 6972 651 6972 651
Employee benefits expense 1501 1496 2506 2839
Finance costs 3565 4022 3957 4265
Depreciation and amortisation expense 3781 3522 4679 4246
Other expenses 14925 16132 17712 19233
Total expenses 58814 59289 68334 69964
V Profit before share of profit / (losses) from joint ventures exceptional items and tax (III-IV) 12582 5601 12097 3908
VI Share of profit / (loss) from joint ventures (net) 1 (90)
VII Profit / (loss) before exceptional items and tax (V+VI) 12582 5601 12098 3818
VIII Exceptional items 386 1309 83 805
IX Profit before tax (VII-VIII) 12196 4292 12015 3013
X Tax expenses / (credit):
Current tax 2162 789 2467 943
Deferred tax 1641 (1788) 1675 (1849)
3803 (999) 4142 (906)
XI Profit for the year (IX-X) 8393 5291 7873 3919
XII Other comprehensive income
A i) Items that will not be reclassified to profit or loss
a) Re-measurements of the defined benefit plans 26 (19) 33 (23)
b) Equity instruments through Other Comprehensive Income 385 (255) 459 (304)
ii) Income tax relating to items that will not be reclassified to profit or loss (10) 6 (12) 7
Total (A) 402 (268) 480 (320)
B i) Items that will be reclassified to profit or loss
a) The effective portion of gains and loss on hedging instruments 369 (719) 426 (825)
b) Changes in Foreign Currency Monetary Item Translation Difference account (FCMITDA) - 87 - 87
c) Foreign currency translation reserve (FCTR) 25 (316)
ii) Income tax relating to items that will be reclassified to profit or loss (129) 221 (143) 253
Total(B) 240 (411) 308 (801)
Total Other comprehensive income / (loss) (A+B) 642 (679) 788 (1121)
XIII Total comprehensive income / (loss) (XI+ XII) 9035 4612 8661 2798
Total Profit /(loss) for the year attributable to:
- Owners of the company 7911 4030
- Non-controlling interests (38) (111)
7873 3919
Other comprehensive income/(loss) for the year attributable to:
- Owners of the company 770 (1076)
- Non-controlling interests 18 (45)
788 (1121)
Total comprehensive income/(loss) for the year attributable to:
- Owners of the company 8681 2954
- Non-controlling interests (20) (156)
8661 2798

2. Results of Operations

The financial year 2020-21 would go down in history as an extraordinary one. Thecoronavirus outbreak in the first quarter of CY 2020 sent shockwaves across the worlddisrupting trade and supply chains besides overwhelming the already fragile healthcareinfrastructure in many countries. Most governments around the world imposed lockdowns ofvarying intensity to contain the spread of COVID-19. This led to a steep fall in demandand weakened consumer sentiment. Large-scale stimulus measures were announced by majoreconomies to minimise the impact of economic fallout while multilateral agencies such asthe International Monetary Fund and the World Bank called for concerted efforts to supportvulnerable economies.

Beginning July 2020 synchronised fiscal policies and novel support measures played avital role in supporting business sentiment. Backed by accommodative monetary policies ofcentral banks global growth showed some signs of revival. However global economicrecovery slackened in the latter part of CY 2020 and the first quarter of CY 2021 asseveral countries battled with the second wave of COVID-19 infections especially the morevirulent strains. With massive vaccination drives underway risks to the recovery areexpected to abate and economic activity may regain momentum in the second half of CY 2021.According to the International Monetary Fund (IMF) global growth declined by 3.3% in CY2020.

India's economic growth too moderated due to weak domestic consumption sluggishmanufacturing and subdued investments. There was a swift revival of economic activity withthe easing of lockdown restrictions in June 2020 and the subsequent opening up of theeconomy. Several high frequency economic indicators performed better than the initialexpectations pointing to a robust recovery. Passenger vehicles and motorcycle salesrailway freight traffic and electricity consumption are on the rebound. The Indianeconomy contracted by 7.3% in FY 2020-21.

The global steel industry like many commodities witnessed a year of two halves in CY2020. The first half witnessed a sharp decline in both steel demand and production whilethe second half saw a sharper-than-expected recovery. The large infrastructure spendsfueled by the several Governments' economic stimulus package led to a surge in demand forcommodities. In the recent past increased Environment Social and Governance (ESG)scrutiny has constrained investments in several core and commodity sectors. TheGovernments- led commodity intensive infrastructure spend led to a demand surgeoverwhelming an already investment starved commodity supply chain. China's recovery fromthe pandemic much ahead of others contributed to the recovery of demand in commodities.

Global crude steel production declined to 1864 MnT in CY 2020 from 1880.1 MnT in CY2019 largely on account of the lacklustre demand in the beginning of the year. Steelprices remained under pressure until the second quarter of CY 2020 after which theyrallied higher driven by increasing demand from the construction automobile and retailsegments. Similarly raw material prices maintained an uptrend in the second half exceptfor seaborne metallurgical coal prices which trended downwards owing to certainstructural changes in China's global sourcing strategy. Crude steel production in Asiagrew 1.5% y-o-y to 1374.9 MnT with China recording the highest growth at 5.2% y-o-y with1053 MnT production in contrast to the developed markets of EU and North America thatreported a decline of 5.3% and 15.5% on y-o-y basis respectively. Even though the yearbegan with dampened market conditions growth across the global steel industry seems tohave stabilised.

In India the steel industry experienced a weak first quarter of FY 2020-21 due to theCOVID-19 induced slowdown that adversely impacted consumption and spending oninfrastructure. However the government implemented a series of measures to revive theeconomy and the Reserve Bank of India (RBI) pitched in with calibrated monetary policiesto keep interest rates steady through the year. Together these measures helped arrest thedecline and put the economy back on the growth path.

The domestic steel industry witnessed a sharp demand recovery driven by restocking andhigher demand from automotive machinery construction and infrastructure sectors on theback of increased government spending specific policy initiatives such asProduction-Linked Incentive (PLI) schemes to encourage manufacturing in India andtargeted stimulus packages for the Micro Small and MediumSized Enterprise (MSME) sector.

In FY 2020-21 crude steel production in India fell 5.6% y-o-y to 103.04 MnT. Totalfinished steel consumption stood at 94.14 MnT in FY 2020-21 registering a 6% decline overFY 2019-20. However finished steel consumption in March 2021 saw a growth of 45.7% overMarch 2020 indicating a strong demand rebound. Steel exports from India increased by29.1% making India a net exporter of finished steel in FY 2020-21 given the increasedavailability especially in the first half of the year.

FY 2020-21 started on a difficult note due to the pandemic as lockdowns across theglobe led to weakened consumption and decline in economic growth in Q1 FY 2020-21.However with the synchronised monetary and fiscal policy measures the Indian and globaleconomy witnessed revival with improving business and consumer sentiment together withhigher demand and pricing. Infrastructure spending being one of the focus areas ofgovernments led to strong demand for steel and other metals globally. Although servicesremained constrained due to the pandemic manufacturing picked up strongly across theworld.

Amidst the fluctuations and uncertainties across the economic landscape in India andthe world the Company was able to deliver strong operational and financial performanceduring FY 2020-21.

(A) Standalone Results

The Company was able to gradually normalise its operations from Q2 FY2021 and ramp upproduction to cater to the surge in demand following the pick-up in economic activity inIndia and globally. Crude steel production was 15.08 MnT and average capacity utilisationlevels reached ~96% in March 2021. Production volumes were lower by 6% y-o-y primarilydue to lower capacity utilisation in the first quarter of FY 2020-21 as the Company scaleddown operations owing to disruption and slowdown of economic activity and supply chainconstraints on account of the COVID-19 outbreak. The Company achieved 99% of its revisedcrude steel production volume guidance of 15.2 MnT for FY 2020-21.

Saleable steel sales volume stood at 14.88 MnT down 1% y-o-y. The Company exported3.72 MnT of steel up 41% y-o-y and accounting for 25% of the total sales as against 18%in FY 2019-20. The Company also achieved 99% of its standalone sales volume guidance of15.0 MnT for FY 2020-21. Sales of Value-added and Special Products (VASP) accounted for52% of the total sales volume for the year. The Company has established strong brands overthe years and branded products' sales stood at 48% of the total retail sales.

Revenue from operations grew 10% y-o-y to '70727 crores primarily due to an 11%increase in sales realisation as well as sale of iron ore from Odisha mines.

The Company continues to focus on backward integration by investing in its resourcebase to secure critical raw materials for the steel-making operations. Mining operationsbegan in all the newly acquired mines in in Karnataka and Odisha during FY 2020-21. TheCompany was declared a "preferred bidder" for seven additional iron ore mines inthe auctions held by the governments of Karnataka and Odisha in FY 2019-20. The mines haveestimated resources of approximately 1.20 billion tonnes. The Company started miningoperations in July 2020 in the acquired mining blocks of Nuagaon Narayanposhi Jajang andGanua in Odisha and ramped up production and dispatches. The Company has also commencedproduction in the three recently acquired mines in Karnataka during the year. With thisall nine mines situated in Karnataka and the four situated in Odisha are operational. Thisis expected to further enhance the raw material security of the Company and lead tointegrated and efficient operations. Overall dispatches from captive mines during theyear constituted 35% of iron ore requirements of the Company.

Cost reduction strategies such as optimising fuel consumption by increasing pulverisedcoal injection reducing coke moisture utilisation of pipe conveyor system for thetransport of iron ore from mines to reduce supply chain costs also helped the Companybring down costs. The Company also undertook multiple initiatives to improve efficienciesby leveraging technological and digitalisation tools reducing fixed cost base optimisingprocurement costs conserving liquidity and ramping up sales and marketing efforts tofind new markets and customers to remain competitive.

The Company achieved its highest ever annual Operating EBITDA of '19259 crores up by54% y-o-y with an EBITDA margin of 27.2% led by enhanced spreads due to betterrealisations favourable product mix lower coking prices and power costs. However thiswas partly offset by higher prices of iron ore which almost doubled in view of theshortage of iron ore in the domestic market due to lower production and higher volume ofexports.

The depreciation and amortisation charge for the year was '3781 crores registering a7% increase over the previous year due to depreciation charged on asset capitalisation forprojects and sustaining capex. Further amortisation costs was higher on account ofamortisation of mining intangible assets as the Company started mining operations fromOdisha iron ore mines. The finance costs for the year was '3565 crores a reduction of11% over the previous year.

Exceptional items for the quarter and year ended March 31 2021 represents impairmentprovision of '386 crores on the value of loans given and interest receivable from overseassubsidiaries on the assessment of recoverable value of the US operations determined byindependent external valuers using cash flow projections.

Consequently profit after tax increased by 59% to '8393 crores as compared to theprevious year.

The Company's net worth stood at '46977 crores as on March 31 2021 vis-a-vis '38362crores as on March 31 2020. Gearing (net debt-to-equity) was at 0.90x (as against 1.23x)and net debt to EBITDA stood at 2.20x (as against 3.78x).

(B) Consolidated Results

The Company's revenue from operations on a consolidated basis for FY 2020-21 was'79839 crores. Operating EBITDA at '20141 crores registered a rise of 70% y-o-y. Theoperating EBITDA increased primarily due to higher operating EBITDA from the standaloneresults better operating margins from the downstream business and lower operating lossesfrom the overseas businesses. The domestic subsidiaries contributed an operating EBITDA of'2131 crores during the year as against the operating EBITDA of '1038 crores during theprevious year. The overseas subsidiaries posted an operating EBITDA loss of '829 crores asagainst an operating EBITDA loss of '1231 crores during the previous year.

Exceptional items for the quarter and year ended March 31 2021 represent impairmentprovision of '83 crores relating to the US coal business towards the value of theproperty plant equipment and goodwill on the basis of values determined by independentexternal valuers using cash flow projections of respective businesses and assets.

The Company's net profit improved to '7873 crores for FY 2020-21 vis-a-vis '3919crores in the last financial year. The performance and financial position of thesubsidiary companies and joint arrangements are included in the consolidated financialstatement of the Company. The Company's net worth on March 31 2021 was '46145 crorescompared to '36024 crores on March 31 2020.

The debt has come down by '858 crores despite the spending on capex expenditure/acquisitions aggregating to around '15000 crores during FY 2020-21. The Company'sconsolidated Net gearing (net debt-to-equity) at the end of the year stood at 1.14x (asagainst 1.48x as on March 31 2020) and net debt to EBITDA stood at 2.61x (as against4.50x as on March 31 2020).

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.

(C) Outlook

The COVID-19 pandemic is regarded as a 'black swan' event for the global economy andhumanity. But the global and Indian economies have shown a remarkable capacity to bounceback rapidly supported by strong fiscal and monetary stimuli. Even though countriesacross the globe are now combating fresh COVID-19 outbreaks the economic environment isexpected to stay resilient. Resurgence of infection is undoubtedly a dampener on economicrecovery but much depends on the severity of the wave and extent of the lockdowns thatneed to be imposed. As experience shows subsequent lockdowns have generally been lessstringent and more localised with the vaccination pace picking up across the world.According to the IMF global growth is projected to grow by 6% in CY 2021 and theexpected recovery will be determined by the effective pace of vaccination. The US economyis expected to gain more momentum with an accommodative monetary policy and fiscalstimulus underpinning growth outlook. In China economic activities have picked up sincethe last quarter of CY 2020 and broad-based growth is projected across investmentmanufacturing and services. Synchronised policy measures and widespread availability ofCOVID-19 vaccines across the globe are expected to aid economic recovery.

As for the Indian economy the high frequency indicators have been positive.Sufficiently supported by government spending and resilient rural consumptionmanufacturing - especially consumer non-durables - and some categories of services suchas passenger vehicles and railway freight the economy appears to be on its way to agradual recovery. India is in the midst of a severe second wave and although the lockdownsare less stringent in comparison to the national lockdown of 2020 the spread of infectionand the resultant impact on society are unfortunately more severe. Medical expertsbelieve that the current wave may have peaked in India and one can expect a reduction incases and a gradual easing of lockdowns. Vaccinations will be a major counter to thevirus helping reduce mutations and subsequent waves.

Steel demand bounced back strongly in India as well as globally. Supply however isconstrained due to underinvestments in the sector for the past several years leading toimproved realisations. With the Government of India's planned outlay for publicinfrastructure the steel industry is expected to witness steady demand. In Q4 FY 2020-21India's finished steel consumption grew by 17.1% as compared to that of Q4 FY 2019-20.Though the domestic market may face pressure owing to the second phase of the pandemic agradual recovery in domestic demand is expected in the second half of FY 2021-22. Whilethe timing and trajectory of the reopening of the Indian economy will follow the declinein cases the government's pro-growth policies and the Union Budget 2021-22 should helpthe economy recover to levels prior to the onset of the second wave.

India's growing urban infrastructure and manufacturing sectors indicate that demand forsteel is likely to remain robust in the coming years. This will be further supported bygovernment initiatives such as providing affordable housing expanding road and rail waynetworks and developing the domestic shipbuilding industry. In the Union Budget 2021-22the government proposed a capital expenditure of '5.54 lakhs crores with a push forinfrastructure. Demand for steel is thus projected to remain robust in the coming years.The Company is in step with the country's aspiration to become one of the fastest growingeconomies in the world.

3. Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profit in the profitand loss account. Accordingly the Company has not transferred any amount to the'Reserves' for the year ended March 31 2021.

4. IMPACT of COVID-19

In the first half of CY 2020 the COVID-19 pandemic had an adverse impact acrossregional and global economies and financial markets. Most governments reacted byinstituting lockdowns business shutdowns quarantines and restrictions on travel.Businesses also implemented safety measures to reduce the risk of transmission. Suchactions led to disruption of economic activity leading to many economies encountering adeep slump. However towards the second half with the end of lockdown in many countriesand resumption of economic activity consumption picked up and green shoots becamevisible.

The Company did face some operational disruptions in the beginning of FY 2020-21 whichimpacted the business. However it was agile enough to work on a mitigation plan toovercome the challenges and combat the impact of the economic slowdown induced by thepandemic. It made all possible efforts to ramp up capacity utilisation and resumenearnormal run rates by the end of the first quarter of FY 2020-21. In the first quarterthe Company focused on exports to increase sales volumes including liquidation ofinventory to offset the loss of sales volumes in the domestic market and improve cashflows. Gradually as domestic consumption picked up the Company focused on improvingmarket share in India and domestic sales rose substantially. At the same time itundertook targeted cost saving measures to recalibrate the cost base across all areas ofoperations and leveraged technology and digitalisation to continually drive value.

As a long-term plan the Company also identified key focus areas to ensure seamlessbusiness continuity. One such area is digitalisation which it will continue to leverageby undertaking digital initiatives using digital tools to access markets and digitalplatforms to ensure operational excellence. It will also reduce its cost base and maintaincontinuity of its supply chains. Most importantly it will remain committed to itsenvironmental social and governance goals.

The Company is playing a major role in supporting communities and the nation during thepandemic. It is one of the largest contributors of medical oxygen and has set upoxygenated hospital beds in record time - take the 1000 bed massive hospital atVijayanagar and a 100-bed (to be scaled up to 500 beds) hospital at Dolvi.

5. Dividend

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

In terms of the Policy Equity Shareholders of the Company may expect dividend if theCompany has surplus funds and after taking into consideration the 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 with Lenders / Bond holders.

In line with the said policy the Board of Directors has recommended dividend at '6.50per equity share on the 2417220440 equity shares of '1 each for the year ended March31 2021 subject to the approval of the Members at the ensuing Annual General Meeting.

The total outflow on account of equity dividend will be '1571 crores vis a vis '483crores paid for FY 2019-20.

6. Prospects

Management Discussion and Analysis covering prospects is provided as a separatesection in the Annual Report.

7. Management Discussion and Analysis

Management Discussion and Analysis is provided as a separate section in the AnnualReport.

8. Projects and Expansion Plans

In FY 2017-18 the Company initiated a three-year capex plan. The strategic objectiveof the plan was to create incremental capacity at a low specific investment cost so thatit remains return-accretive. The key projects approved by the Board of Directors included:

• Expansion of overall steelmaking capacity from 18 MTPA to 24 MTPA

• Enriching the product mix with additional downstream capacity

• Acquiring and developing iron ore mines to achieve raw material security

• Achieving cost reduction through backward integration

The Company has been on track in achieving the set targets and some projects areawaiting commissioning.

Update on all key projects are as below:

(A) Upstream Projects - Augmenting crude steel capacity at Vijayanagar and Dolvi

1) In Vijayanagar during the fourth quarter of this fiscal year the Companycommissioned a new 160T Zero Power Furnace and 1 x 1.4 MTPA Billet Caster along withassociated facilities at SMS-3 to enhance steelmaking capacity. Wire Rod Mill No.2 of 1.2MTPA capacity was commissioned during Q3 FY 2020-21. Capacity upgradation of BF-3 from 3.0MTPA to 4.5 MTPA along with the associated auxiliary units is under implementation.

2) In Dolvi the Company successfully commissioned two of its key units i.e. 8 MTPAPellet Plant-2 which is one of the world's largest pellet plants and 5 MTPA Hot StripMill-2 plants. The Company commenced production of Hot Rolled Plates from the new 5 MTPAHot Strip Mill facility in March 2021.

Completion of work pertaining to the blast furnace and Steel Melt Shop (SMS) has beenimpacted by the ongoing COVID-19 disruption. The BF-2 is expected to be fully commissionedby the end of Q2 FY 2021-22. The 5 MTPA SMS-2 is close to commissioning and all twosubstations have been successfully charged. Similarly coke and pellet feeding to BF-2 andlimestone/dolomite feeding to LCP 5/6/7 is in the final commissioning phase. In LimeCalcination Plants (LCP 5/6/7) one of the three kilns' (Kiln-5) pressure testing has beencompleted and is ready for heating. Refractory works is already completed in all threekilns. The Company now expects full integrated operations of the expanded 5 MTPA at Dolviby September 2021.

(B) Enriching product mix

1. As part of the capacity expansion of CRM-1 complex at Vijayanagar conversion ofexisting standalone Pickling line and twin stand compact Cold Mill to Pickling Line andTandem Cold Mill (PLTCM) of 1.80 MTPA and one of the two new lines of 0.45 MTPA each forconstruction grade galvanised products were commissioned during the fourth quarter of FY2020-21. The second Continuous Galvanising Line (CGL) is expected to be commissioned bythe second quarter of FY 2021-22.

2. A new 0.3 MTPA line for colour-coated products is also underway in Vijayanagar andis expected to be commissioned during the second quarter of FY 2021-22.

3. Modernisation and capacity enhancement at Vasind and Tarapur by increasing GI/GLcapacity by 0.9 MTPA and increase in colour coating capacity by 0.3 MTPA has beencommissioned in phases during FY 2020-21.

4. Capacity enhancement of colour-coated products (PPGI/PPGL) at Vasind and Kalmeshwarby 0.5 MTPA is expected to be commissioned in Q1 FY 2021-22.

5. The 0.5 MTPA of new Continuous Annealing Line (CAL) at Vasind is expected to becommissioned in the fourth quarter of FY 2021-22.

6. Additional Tin Plate Line (through BAF route) of 0.25 MTPA at Tarapur is expected tobe commissioned in the first quarter of FY 2022-23 to enhance the tin plate product-mix.

(C) Cost reduction projects and manufacturing integration

1) Setting up of 8 MTPA pellet plant and 1.5 MTPA coke oven plant at Vijayanagar:

In order to decrease the facility's requirement of expensive lump iron ore the Companyhas set up an 8 MTPA pellet plant at Vijayanagar. The project was commissioned and iscurrently under trial run. The construction of Coke Oven Battery of 1.5 MTPA atVijayanagar is currently under progress and is expected to be commissioned in phases fromQ3 FY 2021-22. The Company has also decided to expand the coke oven capacity by another1.5 MTPA at Vijayanagar which is expected to be commissioned in the second half of FY2021-22. The projects cumulatively will contribute to substantial cost savings as thecurrent coke requirements are being procured from the Dolvi unit.

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

The Company is setting up 175 MW Waste Heat Recovery Boilers (WHRB) and a 60 MW captivepower plant to harness flue gases and steam from the Coke Dry Quenching (CDQ). These powerplants are expected to be commissioned during Q1 FY 2021-22.

D) New projects:

The Board of Directors has approved some key projects that will enable the Company tocontinue to meet the growth in steel demand in India in line with the government'sNational Steel Policy which projects a requirement of 300 MTPA capacity by 2030. The newprojects approved entail a capex of '25115 crores (including sustenance and other capexof '6565 crores) spread over three years from FY 2021-22 to FY 2023-24.

5 MTPA expansion at Vijayanagar

The Company will expand its steel making capacity by 5 MTPA at Vijayanagar from theexisting 12 MTPA at a capex cost of '15000 crores through its wholly-owned subsidiaryJSW Vijayanagar Metallics Limited.

Vijayanagar is India's largest single-location steel plant and this brownfieldexpansion through its subsidiary will be completed by FY 2023-24 further reinforcing thatdistinction. The Company will leverage its strong capabilities and track record ofimplementing brownfield expansions efficiently.

Iron ore mines in Odisha

The Company has four iron ore mine leases in Odisha that were acquired in auctions inFY 201920. The Company has successfully operationalised and ramped up operations in allthese mines in FY 2020-21. It will enhance its mining capabilities and efficiencies at acapex of '3450 crores which will enhance its mining infrastructure and reduce relianceon outsourced mining. It will also implement digitalisation and set up grinding andwashing facilities to improve the quality of the ore which will lead to higherproductivity at the steel-making operations.

Colour Coated facility in Jammu & Kashmir

To cater to the growing demand for steel and to support economic development in thestate the Company would set up a 0.12 MTPA colour coated downstream steel facility inJammu & Kashmir. This will entail a capex of '100 crores.

With the completion of the above projects the Company's overall steelmaking capacitywould increase to 30.5 MTPA.

9. Mergers and Acquisitions

FY 2020-21 was a successful year on the inorganic growth front with the Companycompleting several strategic acquisitions:

Asian Colour Coated Ispat Limited (ACCIL):

• Acquired in October 2020 for '1550 crores through the IBC process

• Pure-play downstream company with a capacity of 1 MTPA with productionfacilities in Maharashtra and Haryana

• Major products: Galvanised and colour-coated coils and sheets mainly for whitegoods industrial sheds pipes drums and barrels etc.

Bhushan Power and Steel Limited (BPSL):

• Acquired in March 2021 with current stake of 49% through IBC process. Payment tofinancial creditors in IBC process for 100% stake was '19350 crores. The cash outgo fromthe Company was '5087 crores

• Integrated steel producerwith liquid steel capacity of over 2.5 MTPA inJharsuguda Odisha primarily flat steel. Downstream facilities in Kolkata and Chandigarh

• Acquisition gives the Company strategic presence in Eastern India

Plate and Coil Mill Division (PCMD) of Welspun Corp Ltd.:

• Acquired for '850 crores

• Manufactures high-grade steel plates and coils. Located in Anjar a port-basedfacility in Gujarat with a capacity of 1.2 MTPA

• Acquisition enables the Company's entry into different grades of steel productsespecially plates.

10. Technical Collaboration with JFE Steel Corporation Japan (JFE)

The strategic collaboration agreement that was signed between JFE and the Company inthe year 2010 was one of the largest FDIs in India in the Metals and Mining space.

The strategic technical collaboration with JFE 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.

The collaboration with JFE has immensely helped the Company in imbibing thetechnological best practices. It has further created a culture of continuous learning andprocess improvements which ensure medium to long-term value creation.

The collaboration has helped the Company to drive excellence in process and productdevelopment improve product quality productivity yield and energy efficiency acrossplants. It has also helped in the standardisation of system parameters towards providing amore sustainable environment and imbibing best practices in safety and waste management.

In the last decade there has been a tremendous synergy in the working relationshipbetween the two companies both at the strategic and operational level and their workingrelationship has only become bigger and stronger. The people exchange programme betweenJFE and the Company has also matured over the years with seamless sharing of informationknowledge and best practices. Throughout these years of collaboration JFE Steel'sexperience and understanding has helped the Company to consolidate its leadership positionin the value-added and special products space in some of the most challenging end-usesegments in India such as Automotive Steel Electrical Steel and so on.

The partnership with JFE has majorly contributed towards strengthening and establishingthe Company as a preferred supplier with large domestic customers in India which hashelped them to localise their steel requirements that were hitherto imported.

JFE has also assisted the Company by providing technology to upgrade productsprocesses and systems for making high-value-added and special steels such as Advance HighStrength Steel and Electrical Steel.

In FY 2020-21 the COVID-19 pandemic caused several disruptions in the global marketthat forced each company to adopt unique ways to improve efficiency and to becomeresilient. Under such circumstances joint collaborations help in learning new practicesfrom each other and implementing them quickly. Remote assistance by JFE experts forsolving several operational problems in different plant locations of the Company has beenvery useful during these times.

During FY 2020-21 JFE has provided technical assistance in the following areas:

• Improvement in Blast Furnace operations at Dolvi and Vijayanagar

• Technical support in low tapping ratio operations due to COVID-19 restrictionsand operational guidelines for stable operations during low production

• Technical support provided for Blast Furnace life prolongation addressingequipment issues operational issues and improvement of tapping conditions

• Improvement of the Blow in Practices in Blast Furnace in Dolvi Works

• Adoption of best-in-class practices at SMS shop for ferro alloy cost reductionand mechanical property prediction system at Hot Strip Mill

In order to further strengthen the relationship the Company and JFE Steel are in theprocess of entering into new technical assistance agreements for quality and processimprovements in the Company's Salem unit and Tarapur unit of its wholly-owned subsidiaryJSW Steel Coated Products Limited. While the agreement with the Tarapur unit will focus ontin plate products the technical assistance with Salem Works of the Company is for Wireand Bar Mill Products.

The Company and JFE have also signed a Memorandum of Understanding to conduct afeasibility study for setting up a manufacturing and sales JV in India for Cold RolledGrain Oriented (CRGO) Electrical Steel Products. The demand for CRGO in India is metpresently by imports. With this facility the Company is likely to have a first moveradvantage to service customers in JSW STEEL LIMITED ANNUAL REPORT 2020-21

India with local steel. This would also strengthen the Company's position as India'sleading manufacturer of advance steel products that lead to reduced CO2 emissions andproducing sustainable steel products.

With the huge expansion plan that the Company has embarked on the collaborationagreement is likely to add immense value to both partners. The partnership with JFE since2010 has provided the Company cutting-edge technologies and world-class technicalexpertise to enhance the Company's operational excellence.

11. Subsidiary and Joint Venture (JV) Companies

The Company has 51 direct and indirect subsidiaries and eight JVs as on March 31 2021and has acquired or incorporated certain domestic subsidiaries during the year. As per theprovisions of Section 129(3) of the Act a statement containing the salient features ofthe financial statements of the Company's subsidiaries and JVs in Form AOC-1 is attachedto the financial statements of the Company. In accordance with provisions of Section 136of the Act the standalone and consolidated financial statements of the Company alongwith relevant documents and separate audited accounts in respect of the subsidiaries areavailable on the website of the Company. The Company will provide the annual accounts ofthe subsidiaries and the related detailed information to the shareholders of the Companyon specific request made to it in this regard by the shareholders.

The details of the major subsidiaries and JVs 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 and catersto both domestic and international markets. With three manufacturing facilities at VasindTarapur and Kalmeshwar in the state of Maharashtra this Company is engaged in themanufacture of value-added flat steel products comprising tin plates galvanised andGalvalume coils/sheets and colour-coated coils/sheets. JSW Steel Coated reported aproduction (Galvanising/ Galvalume products/Tin Product) of 1.84 MnT an increase by 4%y-o-y this year. Its sales volume increased by 17% y-o-y to 2.175 MnT during FY 2020-21.The revenue from operations for the year under review was '14963 crores. The operatingEBITDA during FY 2020-21 was '1231 crores as against '550 crores in FY 2019-20. Theoperating EBITDA margin during FY 2020-21 was at 8% compared to 5% in FY 2019-20 primarilydue to improved sales mix higher realisations and lower conversion costs. The net profitafter tax stood at '733 crores compared to '296 crores in the last financial year.

2) Amba River Coke Limited (ARCL)

Amba River Coke Limited (ARCL) is a wholly- owned subsidiary of the Company and has setup a 1 MTPA coke oven plant and a 4 MTPA pellet plant. ARCL produced 0.94T of coke and3.21 MnT of pellet during FY 2020-21. The coke and pellets produced are primarily suppliedto the Dolvi unit of the Company. The operating EBITDA for the year under review increasedto '467 crores due to higher margins as against '388 crores in FY 2019-20. Its profitafter tax decreased to '168 crores in FY 2020-21 from '194 crores in the previous year asthe higher EBITDA earned was offset by higher depreciation charge and one off tax creditin the previous year on account of a reversal of deferred tax liability due to expectedtransition to the new tax regime.

3) JSW Industrial Gases Private Limited (JIGPL)

JSW Industrial Gases Private Limited (JIGPL) is a wholly-owned subsidiary of theCompany. The Company sources oxygen nitrogen and argon from JIGPL for its Vijayanagarplant. The profit after tax was '37 crores in FY 2020-21 ais-a-vis '44 crores in FY2019-20. The profit after tax reduced as compared to the previous year due to one-timegain in tax credit on account reversal of deferred tax liability due to change in thecorporate tax rate .

4) JSW Vallabh Tinplate Private Limited (JSWVTPL)

The Company has completed acquisition of 13237227 equity shares representing 26.45%of the issued and paid-up share capital of JSW Vallabh Tinplate Private Limited (JSWVTPL). As a result JSW VTPL has become wholly-owned subsidiary of the Company.

It produces tin plates and has a capacity of 1.0 lakh tonnes. With a production of 0.86lakh tonnes during FY 2020-21 (0.84 lakh tonnes during FY 2019-20) its EBITDA for theyear was '47 crores compared to '47 crores the previous year. Its net profit after tax forFY 2020-21 was '18 crores against '12 crores in FY 2019-20.

5) Vardhman Industries Limited (VIL)

VIL manufactures colour-coating products. Its manufacturing unit is at Rajpura Patialain Punjab. VIL has a colour-coating line with a capacity to produce 40000 tonnes perannum and a service centre to cater to white goods customers in North India.

In FY 2020-21 VIL produced 46542 tonnes and its EBITDA stood at '30 crores comparedto '3 crores in FY 2019-20* Its net profit after tax for FY 2020-21 was '25 crorescompared to '1 crore in FY 2019-20*.

• Financial performance FY 2019-20 is calculated from the date of acquisition onDecember 31 2019.

6) Asian Colour Coated Ispat Limited (ACCIL)

ACCIL manufactures downstream steel products and has two manufacturing units located atBawal Haryana and Khopoli Maharashtra. ACCIL has a capacity of 1 MTPA with 3 lakhtonnes of cold-rolled steel and colour-coated steel.

The Company has generated an EBIDTA of '250 crores from the date of acquisition tillMarch 31 2021.

7) Other Projects Being Undertaken by Domestic Subsidiaries

The Company as part of the its long term growth strategy had initiated a few greenfieldprojects in the states of West Bengal Jharkhand and Odisha.

• JSW Bengal Steel Limited (JSW Bengal Steel) - As a part of its overall growthstrategy the Company had planned to set up a 10 MTPA capacity steel plant in phasesthrough its subsidiary JSW Bengal Steel. However due to uncertainties in theavailability of key raw materials such as iron ore and coal after the cancellation of theallotted coal blocks the JSW Bengal Steel Salboni project has been put on hold.

• JSW Jharkhand Steel Limited (JJSL) - This was incorporated in relation to thesetting up of a 10 MnT steel plant in Jharkhand. The Company is currently in the processof obtaining approvals and clearances necessary for the project.

• JSW Utkal Steel Limited (JUSL) was formed for setting up an integrated steelplant of 12 MTPA steel capacity and a 900 MW captive power plant in Odisha. The Company isin the process of obtaining the necessary approvals and licences for the project.

(B) Overseas Subsidiaries

1) Periama Holdings LLC and Its Subsidiaries Viz. JSW Steel (USA) Inc - Plate and PipeMill Operation and its Subsidiaries - West Virginia USA-Based Coal Mining Operation

a) Plate and pipe mill operation JSW Steel (USA) is in the process of modernising theexisting facilities at Baytown Texas. The first phase is nearing completion with the coldcommissioning completed and the hot commissioning in progress. The second phase of themodernisation of the plate mill has started and expected to be completed in FY 2022-23.The facility was shut down for part of the year in conjunction with the shutdown at theOhio steel-making facility and is now ramping up well.

The unit produced 0.13 million net tonnes per annum (MNTPA) of plates and 0.004 MNTPAof pipes with capacity utilisation of 14% and 1% respectively. During FY 2020-21 JSWSteel (USA) reported EBITDA loss of US$ 9.2 million ('73 crores) compared to the previousyear's negative EBITDA of US$ 31.69 million ('214 crores). Net loss after tax for FY2020-21 was US$ 75.63 million ('605 crores) compared to net loss after tax of US$ 117.82million ('822 crores) in FY 2019-20.

b) Coal mining operation Periama Holdings LLC has 100% equity interest in coal miningconcessions in West Virginia US along with permits for coal mining and owns a 500 TPHcoal-handling and preparation plant. During the year total production stood at 77928 NTas against 123458 NT during FY 2019-20. Its coal mining operations reported EBITDA lossof US$ 5.52 million ('43 crores) for the year compared to EBITDA of US$ 4.23 million ('30crores) in the previous year. Loss after tax stood at US$ 19.64 million ('146 crores)vis-a vis Loss after tax of US$ 11.31 million ('80 crores) in FY 2019-20.

2) Acero Junction Holdings Inc (ACERO) and its Wholly-Owned Subsidiary JSW Steel USAOHIO Inc (JSWSUO)

JSWSUO has steelmaking assets consisting of 1.5 MNTPA electric arc furnace (EAF) 2.8MNTPA continuous slab caster and a

3.0 MNTPA hot strip mill at Mingo Junction Ohio in USA. The EAF was shut down for partof the year for upgradation. In March 2021 JSWSUO completed the modernisation of EAF andrestarted production in mid-March 2021 and is now ramping up well. Majority of the slabsproduced from this facility would be supplied to Baytown facility for further valueaddition in the form of plates and pipes. JSWSUO had entered into a longterm tollingagreement for rolling slabs to HRC with Allegheny Technologies Inc. which has highquality mills and capabilities. This arrangement will provide the flexibility to meetcustomer requirements as well as feed the US Plate and Pipe Mill.

It reported a total HRC production of 0.03 MnT during FY 2020-21. JSW Ohio reported anEBITDA loss of US$ 68.51 million ('510 crores) compared to EBITDA loss of US$ 113.07million ('792 crores) last financial year. Loss after tax for FY 2020-21 was US$ 116.09million ('863 crores) compared to Loss after tax of US$ 144 million ('1011 crores) in FY2019-20.

3) JSW Steel Italy Piombino S.P.A. (JSW Piombino) (Formerly Known As Aferpi S.P.A)Piombino Logistics S.P.A. - A JSW Enterprise (Formerly Known as Piombino Logistics

S.P.A.) and Gsi Lucchini S.P.A JSW Piombino produces and distributes special long steelproducts viz. rails wire rods and bars. It has a plant at Piombino in Italy comprisinga Rail Mill (0.32 MTPA) Bar Mill (0.4 MTPA) Wire Rod Mill (0.6 MTPA) and a captiveindustrial port concession. PL manages the logistics infrastructure of Piombino's portarea. The port managed by PL has the capacity to handle ships up to

60000 tonnes. During FY 2020-21 operations generated an EBITDA loss of € 22.65million ('191 crores) compared to EBITDA loss of €31.91 million ('236 crores) lastyear. Loss after tax for the year amounted to €30.1 million ('247 crores) againstloss after tax of € 49.1 million ('364 crores) in FY 2019-20.

(C) Joint Venture Companies

1) JSW Ispat Special Steel Products Limited (JISPL) (Formerly Known as Monnet ISPAT& Energy Limited (MIEL))

In July 2018 the National Company Law Tribunal (NCLT) approved the resolution plansubmitted by a consortium comprising the Group and AION Investments Private II Limited forthe acquisition of Monnet Ispat and Energy Limited (MIEL) (now known as JSW Ispat SpecialProducts Limited or JISPL). JISPL owns a 1 MnT integrated steel plant with the ability toscale up to 1.5 MnT along with a 0.8 MnT sponge iron plant 2.20 MnT pellet plant a 0.96MnT sinter plant and a 230 MW captive power plant in Chhattisgarh. The acquisition wascompleted on August 31 2018 and currently the Company directly and indirectly holds23.1% of the equity shares of JISPL.

JISPL operations turned around during the year and posted the consolidated operatingEBITDA of '384 crores in FY 2020-21 as compared to EBIDTA loss '46 crores in FY 2019-20.The profit after tax was '210 crores in FY 2020-21 as compared to loss after tax of '492crores in FY 2019-20.

2) JSW Severfield Structures Limited and its Subsidiary JSW Structural Metal DeckingLimited (JSSL)

JSW Severfield Structures Limited (JSSL) is operating a facility to design fabricateand erect structural steel work and ancillaries for construction projects. These projectshave a total capacity of 55000 TPA at Bellary Karnataka. JSSL produced 33912 tonnes(including job work) during FY 2020-21. Its

order book stood at '1039 crores (85043 tonnes) as on March 31 2021 and EBITDA inFY 2020-21 decreased to '41 crores from '102 crores in FY 2019-20. The loss after tax forFY 2020-21 was '16 crores as compared to profit after tax of '50 crores in FY 201920. JSWStructural Metal Decking Limited (JSWSMD) a subsidiary company of JSSL is engaged in thebusiness of designing and roll forming of structural metal decking and accessories such asedge trims and shear studs. The plant's total capacity is 10000 TPA. EBITDA in FY 2020-21decreased to '6 crores from '12 crores in FY 2019-20. The profit after tax for FY 2020-21was '2 crores compared to '9 crores in FY 2019-20.

3) JSW MI Steel Service Centre Private Limited (MISI JV)

The Company and Marubeni-Itochu Steel signed a JV agreement on September 23 2011 toset up 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 commissioned its steel service centre in Palwal Haryana with 0.18 MTPAinitial capacity. The service centre is equipped to process flat steel products such ashot-rolled cold- rolled and coated products. Such products offer just-in time solutionsto automotive white goods construction and other value- added segments. EBITDA in FY2020-21 was '41 crores as compared to '21 crores in FY 2019-20. MISI JV earned a profitafter tax of '18 crores during FY 2020-21 as compared to '7 crores during FY 2019-20.

4) Bhushan Power and Steel Limited (BPSL)

Pursuant to the Corporate Insolvency Resolution Process under the Insolvency andBankruptcy Code 2016 the Resolution Plan submitted by the Company for Bhushan Power andSteel Limited (BPSL) was approved by NCLAT vide order dated September 5 2019 andsubsequently an appeal preferred by the Company has been allowed by NCLAT vide its orderdated February 17 2020. The erstwhile promoters of BPSL certain operational creditorsand the Enforcement Directorate (ED) preferred an appeal before the Hon'ble Supreme Courtagainst the NCLAT Order which are pending for adjudication.

On March 26 2021 the Company completed the acquisition of BPSL by implementing theresolution plan approved under IBC Code basis an agreement entered with the erstwhilecommittee of creditors. This provides an option/right to the Company to unwind thetransaction in case of unfavourable ruling on certain specified matters by Hon'ble SupremeCourt.

On the basis of the Resolution Plan the Company has also entered an arrangement withJSW Shipping & Logistics Private Limited (JSLPL) through which the Company and JSLPLholds equity of Piombino Steel Limited (PSL) in the ratio of 49% and 51% respectively andthus gaining joint control of PSL.

The Company has invested in aggregate '5087 crores in equity shares Optionally FullyConvertible Debentures (OFCD) and share warrants. PSL has received additional equitycontribution from JSLPL amounting to '1027 crores (including share warrants) and raisedfurther debt. PSL has invested '8550 crores in Makler Private Limited (Makler) and Maklerhas raised further debt and paid '19350 crores to the financial creditors of BPSL inaccordance with the approved Resolution Plan. Pursuant to the merger of Makler with BPSLin accordance with Resolution Plan BPSL has become a wholly-owned subsidiary of PSL.

BPSL operates a 2.5 MTPA integrated steel plant located at Jharsuguda Odisha and alsohas downstream manufacturing facilities at Kolkata West Bengal and Chandigarh Punjab.

The Company continues to explore inorganic growth opportunities that meet theoperational financial and sustainable goals of the business.

12. Sustainability

Steel is deemed a resource-intensive sector and sustainable operations are highlyrelevant for steelmakers globally demanding an efficient business response. The processof steelmaking involves complex activities that require heavy energy utilisation andeffective waste and emissions management. The Company is mindful of the impact itsoperations have on the environment and attempts to minimise its environmental footprintthroughout the operations.

The Company's long-term sustainability ambition is guided by a Vision - the Companyshould demonstrably contribute in a socially ethically and environmentally responsibleway to the development of a society where the needs of all are met and do so in a mannerthat does not compromise the ability of the future generation to meet the needs of theirown.

The Company's commitment of demonstrating fulfillment of its Sustainability Visionemanates from our Sustainability Strategy based on seven key elements- leadershipstakeholder engagement communication planning improvement monitoring and reporting.These seven pillars enable the Company to take well- informed decisions pertaining to ESGwhile remaining aligned with stakeholder expectations and business growth objectives.

To attain the Sustainability Vision the Company is developing a SustainabilityFramework that takes into consideration the key principles of various fundamental nationaland international guidelines and frameworks.

The Company has deployed the double materiality exercise to arrive at the materialissues. The assessment was undertaken in early 2021 and has reinforced that the Company'scurrent focus areas remain relevant in this ever-changing scenario.

Sustainability Governance

The Company's sustainability journey is steered by a robust governance structure. TheCompany has a Board-level Business Responsibility/Sustainability Reporting Committeewhich has six Directors and is chaired by an Independent Director. The Company's seniormanagement looks into sustainability-related issues each month via an Executive Committee(EC) and review the progress of key performance indicators. The Company has also createdcommittees/working- groups to address specific issues like the Climate Action Group (CAG)or the Working Group on Waste Management and Circular Economy. The Climate Action Groupconducted nine meetings in FY 2020-21.

The Company has clearly defined goals and set ambitious targets against varioussustainability Key Performance Indicators (KPIs) for the year 2030. These are furtherbroken down into yearly targets the progress against which are reviewed monitored andreported to all stakeholders on an annual basis. About '557 crores was earmarked to bespent on Best Available Technologies (BAT) for environmental sustainability during FY2020-21.

Tackling Climate Change

With a looming climate crisis in the background the Company has devised a climateaction plan to improve its net carbon emission intensity beyond India's NationallyDetermined Contributions (NDC) and achieve more than 41% reduction by 2030 from the baseyear of 2005.

This would be achieved through

• Improvement of input raw material quality through beneficiation

• Increased use of renewable energy

• Increased use of scrap

• Reducing coke in Blast Furnaces (BFs) increased Pulverised Coal Injection (PCI)and Natural Gas (NG) use in BFs

• Energy efficiency and process efficiency improvements through best availabletechnologies

• Continue efforts and collaborations towards development of deep decarbonisationtechnologies such as Carbon Capture Utilisation/Storage (CCUS) use of hydrogen in ironreduction etc.

The Company has an operating Carbon Capture Utilisation (CCU) plant at Salav facilitywhich is capturing carbon from the exhaust gases generated by sponge iron operationstreating and converting it to approximately 100 TPD CO2 (99.5% purity) and selling it tothe food and beverage industry for use.

The Company also plans to use renewable energy across steel operations at Vijayanagarby utilising around 800 MW RE (solar + wind) power.

Multiple operational interventions were implemented during the year to further improveon the sustainability performance and aid the achievement of our targets like installationof Waste Gas Recovery at Sinter Plant 4 resulting in fuel saving increasing TRT powergeneration by 22.5% from 8.03 MW in FY 2019-20 to 9.84 MW in FY 2020-21 resulting inreduction in purchased power requirement.

Energy

One crucial intervention to inculcate sustainability in the steelmaking process isdecreasing its energy intensity which also has a direct bearing on the reduction of CO2emission. The Company is continually innovating to meet and go beyond the compliances ofPerform Achieve and Trade (PAT) mechanism. The Company has voluntarily participated inStep-up Programme by worldsteel Association for efficiency improvement focusing on energyprocess reliability process yield and raw material quality and benchmarking performancetogether with companies in the top 15 percentile across the world. Increasing usage ofnon-conventional sources for energy such as waste-gas heat recover technologies isreducing the Company's energy intensity.

Product Sustainability

The Company has made Environmental Product Declarations (EPDs) for its products (HotRolled Coils and Cold Rolled Closed Annealed) and completed lifecycle assessment for 14products. It communicates its environmental impacts transparently to all stakeholders.Currently the Company is working on TMT bars and other construction materials coveredthrough GreenPro Eco-labelling to demonstrate its superior environmental andsustainability performance. The Company endeavours to deliver sustainability through itshigh quality value added products like tin plate products Advanced High- Strength Steelshigh end corrosion resistance steel Electrical steel etc. enabling the Company to meetits commitment towards sustainability throughout the value chain.

Circular Economy and Resource Conservation

The Company has adopted an integrated strategy towards efficient waste and wastewatermanagement focusing on 'Zero waste to Landfill' and 'Zero Liquid Discharge' withtechnological innovations like using plastic waste in steel melting process use of steelby-products in making of paver blocks replacement of river sand and so on. The Companyhas established the process for utilisation of dry pit slag of blast furnace as areplacement of natural aggregate. The Vijayanagar facility is also conducting a study forthe utilisation of steel slag as fertiliser in coordination with the government and otherindustry leaders.

1 Water Management

All facilities follow Zero Liquid Discharge principles. While more than 50% of therevenue comes from sites operating in water-stressed regions the Company has cautiouslytaken steps to enhance water conservation and harvesting in these regions. The Company hasdeveloped critical infrastructure necessary for water conservation both inside and outsideplant boundaries together with environmental infrastructure in the community and minessuch as check dams gabions coir matting. The plants have extensive water managementplans in place which accelerate water conservation. The Company has implemented a projectwherein the sewage water of the township at Vijayanagar is being processed and used asprocess water in operations. The Company will soon be replicating and scaling up thisacross other townships at Vijayanagar.

Air Emissions

The Company continues to upgrade and implement better pollution control systems whileseeking expansion and improvement. From introducing mobile de-dusting systems toinstallation of yard sprinklers to large scale interventions like installation of MEROSde-dusting systems the Company has been able to consistently manage its air emissionsefficiently.

In Vijayanagar in Raw Material Handling System (RMHS) a de-dusting system of capacity150000 m3/h was commissioned at 5MT JH14-15. It covers around 50-60 dust sourceseffectively and attains work zone emissions at less than 2mg/m3.

In Dolvi RMHS open yards are going to be fully covered with conventional/space framecovered shed. Covered storage shed will prevent dust emission in the environment duringoperation of the yard.

In Salem installation of mobile de-dusting system in the Blast Furnace resulted inreduction of fugitive emission from 12500 ug/m3 to 3200 ug/m3.

Biodiversity

With a target for 2030 of achieving no net loss to biodiversity the Companycontinuously looks for opportunities to enhance the biodiversity by deploying techniquesof Miyawaki plantations mangrove plantations and other plantations of high carbonsequestration species. The Company has Biodiversity Management Plans and has facilitatedmonitoring of wildlife with the help of cameras forest tankers and patrolling vehicles.The Company reports on the 10-point framework of Indian Business and Biodiversity Initiate(IBBI) biennially and has also aligned with 12 National Biodiversity Targets (NBTs). TheCompany has collaborated with People for Environment and Bombay Natural History Society toenhance biodiversity.

The Company plans to incubate a biodiversity park at Vijayanagar to provide a safecompound for native species and accelerate the process of carbon sequestration.

Capacity Building

The Company is focused on strengthening its internal capacity as well as that of itsbusiness partners relating to sustainability issues. In the same light the Companyconducts regular webinars discussion fora and external-capacity building programmesespecially curated to suit the needs of the organisation by globally-renowned facilitatorssuch as the Global Reporting Initiative (GRI).

Health & Safety

For the Company employees' and contractors' health safety and well-being are a toppriority. The Company has witnessed a steady decline in LTIFR from 0.42 in FY 2017-18 to0.26 in FY 2020-21. The Company's Health and Safety Vision is: 'Vision 000' which aims atthree goals - to achieve zero major accidents zero injuries and zero harm.

The Company has initiated a certification programme for line managers as 'SafetyChampions' in collaboration with British Safety Council to develop line managers as safetyambassadors at the workplace.

As a leading steel manufacturer it is extremely critical that the Company works withthe right partners at sites. To achieve this the pre-qualification assessment ofcontractors has been revised to reflect the enhanced safety requirements in line with thecontractor safety management strategy. Once the pre-qualified contractors start working atlocations they are assessed through the JSW CARES Program. JSW CARES (ContractorAssessment and Rating for Excellence in Safety) is a key contractor safety managementinitiative launched as a progressive capability building tool for contractors to improveand excel in their respective safety management systems and performance.

In FY 2020-21 high-risk safety audits by the British Safety Council were conductedacross Salem and Dolvi.At Dolvi the Company has engaged DuPont Sustainable Solutions(DSS) for developing Centre of Excellence (CoE) in Process Safety Management.

Social interventions

The Company carries out its social and out of fence environment initiatives through JSWFoundation following a holistic life-cycle based approach. The interventions range fromstrengthening educational institutions to provisioning of secondary & tertiaryhealthcare and strengthening of public health system helping communities to access basicsanitation & promoting hygiene contributing towards water and environmentconservation facilitating women-centric livelihoods and promoting agribusiness approach.

In the last four financial years the Company has consistently increased the share ofCSR expenditure. The CSR spend has increased every year from '43 crores in FY 2016-17 to'139.73 crores in FY 2019-20. During the current financial year the Company has spent anamount of '78.32 crores towards CSR expenditure and an additional '86.49 crores wastransferred to the unspent CSR account for executing ongoing projects. The Company's CSRinterventions have reached out to communities across more than 255 villages in five statesof India with following key outcomes:

• 1 million families supported during COVID-19

• 7.95 lakh cubic metre additional water storage capacity created

• 7100 farmers supported with ~1800 tonnes of commodities linked to markets

• ~57000 people reached out through health screening services

• ~2400 students supported through JSW UDAAN Scholarship for pursuing Highereducation

• 139000 applications facilitated for linking with Government support schemes

A significant part of the Company's CSR philosophy is community- and employeevolunteer-driven. The employee engagement is across various initiatives e.g. support tothe neonatal care unit at Bellary Government Hospital waste collection drive sanitationdrives mangrove plantation awareness building programmes for local communities and othersuch activities. In the last fiscal to combat COVID-19 Vijayanagar setup three dedicatedcare centres in the township to provide medical aid to infected patients. Additionallydoorstep awareness sessions were conducted for over

38000 people from 7100 households in 13 villages and 75000 masks were distributedacross 21 villages. With Akshaypatra Kitchen over 580000 meals were provided (16000meals per day) during the lockdown period. The facility also supplied 320 tons/day ofoxygen supply across Karnataka and in neighbouring states.

Pursuant to the Ministry of Corporate Affairs (MCA) notification dated January 22 2021in CSR Rules 2014 company has adopted a revised CSR policy in line with the abovechanges. The policy has been approved by the Company's Board of Director and the same isnow available at the website of the Company at https://www.jswsteel.in/investors/jsw-steel-governance- and-regulatory-information-policies-0

In view of the solid foundation laid for the long-term projects in this fiscal and theenvisioned scaling up of the on-going CSR projects the Company will continue to createvalue for its and further for a wider range of stakeholders. The disclosure as per Rule 9of the Companies (Corporate Social Responsibility Policy) Rules 2014 (as amended) isannexed to this Report as Annexure C.

Sustainability resides at the heart of JSW Steel. Recognising the potential impact thata company of a scale as large as JSW Steel can create the Company aims to continuouslymonitor improve report and accelerate growth in the ESG domain. A detailed review of theESG performance and strategy can be accessed in the Integrated Report.

13. Innovation and Technology

The Company continued its innovation journey with vigour in FY 2020-21. Following thedisruptions induced by the pandemic this financial year turned out to be one of 'DigitalAwareness' across the world as digitalisation accelerated globally in the new normal. InFY 2020-21 the Company extended its digitalisation drive across new frontiers whileconsolidating and ensuring consistent impact from earlier deployed initiatives. Across allthe integrated plants sales and marketing and other support functions JSW employeesparticipated in the journey with vigour and enthusiasm.

Nearly 6000+ employees have directly engaged in the cultural transformation journeywith 200+ digital ideas being generated in-house by plants and functions teams. This wasfurther matched by deploying some of the world's best and most cost-effective cutting-edgetechnology solutions such as Artificial Intelligence/ Machine Learning Fog ComputingDeep Learning Internet of Things (IoT) Computer Vision Robotics and so on.

14. Human Resources

A Company's continued success depends on the ability to attract develop and retain thebest talent at every level. The Company's Human Resource (HR) management practices arerooted in ensuring a fair and reasonable process for all-round development of its talent.The Company strives to maintain a skilled and dedicated workforce representing diverseexperiences and viewpoints. During the year the Company continued to introduceinitiatives and tools that helped continuous learning and the development of new skills.

In the backdrop of the pandemic and the way it impacted life across the world the HRinitiatives increasingly focused on supporting employee well-being. Initiatives likemaintaining a safe work environment providing healthcare facilities and enablingend-to-end work- from-home facility for a large section of the human capital remained thefocus.

The Company finds it imperative to follow policies and regulations that produce anunbiased and safe work environment. In the last fiscal the Company focused on buildingsystems and tools that help track career paths provide guidance to develop new skillseducate employees on varied topics and recognise and reward top performers.

A detailed report on Human Resource Management and initiatives implemented through thefiscal is included as part of the Management Discussion and Analysis.

15. Integrated Report

The Securities and Exchange Board of India (SEBI) in its circular dated February 62017 had advised the top 500 listed companies (by market capitalisation) to voluntarilyadopt Integrated Reporting (IR) from FY 2017-18. The Company published its firstIntegrated Report the same year in line with the International Integrated ReportingFramework laid down by the

International Integrated Reporting Council (IIRC). The framework pivots the Company'sreporting approach around the paradigm of value creation and its various drivers. It alsoreflects the Company's belief in sustainable value creation while integrating a balancedutilisation of natural resources and social development in its business decisions. AnIntegrated Report intends to give a holistic picture of an organisation's performance andprospects to the providers of financial capital and other stakeholders. It is thus widelyregarded as the future of corporate reporting. The previous Integrated Reports of theCompany have been well-received by various stakeholders and have been recognisedinternationally for its disclosures. Over the past four years the reporting approach ofthe Company has further evolved. Together with the integrated reporting framework itsdisclosures have been mapped with other leading frameworks and guidelines.

These include:

• Global Reporting Initiative (GRI) Standards

• United Nations Sustainable Development Goals (UN SDGs)

• Carbon Disclosure Project (CDP)

• Principles under United Nations Global Compact (UNGC)

• National Guidelines on Responsible Business Conduct (NGRBC)

The necessary disclosures under these guidelines together with the articulation ofCompany's approach to long-term value creation has improved the Company's corporatereporting practices.

16. Corporate Governance

The Company constantly endeavours to follow corporate governance guidelines and bestpractices sincerely and disclose the same transparently. The Board is conscious of itsinherent responsibility to disclose timely and accurate information on the Company'soperations performance material corporate events as well as on leadership and governancematters relating to the Company.

The Company has complied with the requirements of the Securities and Exchange Board ofIndia (Listing Obligation and Disclosure Requirements) Regulations 2015 regardingcorporate governance. A report on the Company's Corporate Governance practices and theAuditors' Certificate on compliance of mandatory requirements thereof are given as anannexure to this Report and the same is also available on the website of the Company athttps://www.jswsteel.in/investors/.

17. Business Responsibility/ Sustainability Report

The Company is committed to pursuing its business objectives ethically transparentlyand with accountability to all its stakeholders. It believes in demonstrating responsiblebehaviour while adding value to the society and the community as well as ensuringenvironmental well-being from 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 describingthe environmental social and governance initiatives taken by the Company. In its circulardated February 6 2017 SEBI has further advised the top 500 listed companies (by marketcapitalisation) to voluntarily adopt Integrated Reporting (IR) from FY 2017-18.Subsequently SEBI vide its Notification dated December 26 2019 and consequent amendmentscarried out to the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 has made the Business Responsibility andSustainability Report applicable to the top 1000 listed entities (by marketcapitalisation) for reporting on a voluntary basis for FY2021-22 and on a mandatory basisfrom FY 2022-23.

As stated earlier in the Report the current financial year marks the fourth year ofthe Company's transition towards Integrated Reporting focusing on the 'capitals approach'of value creation. The fourth Integrated Report includes the Company's performance as perthe IR framework for the period April 1 2020 to March 31 2021.

The Company has also provided the requisite mapping of principles of the NationalGuidelines on Responsible Business Conduct to fulfil the requirements of the BRR as perSEBI's directive as well as guidelines for integrated reporting and the Global ReportingInitiative (GRI). The Report which forms a part of the Annual Report can along with allthe related policies be also viewed on the Company's website https://www.jswsteel.in/investors/.

18. Directors and Key Management 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 (AGM) and beingeligible offers himself for re-appointment.

Mr. Seturaman Mahalingam (DIN 00121727) who was appointed as Director of the Companyin the category of Independent Director holds office up to the conclusion of the ensuingAGM of the Company ('first term' in terms of Section 149(10) of the Companies Act 2013).

The Company has received a notice under Section 160 of the Companies Act 2013 from ashareholder of the Company proposing the re-appointment of Mr. Seturaman Mahalingam forthe Office of Director of the Company in the category of Independent Director for a secondterm up to July 20 2026 or up to the conclusion of the 32nd AGM of the Company in thecalendar year 2026 whichever is earlier.

Further in the opinion of the Board Mr. Seturaman Mahalingam is a person of highintegrity expertise and experience and qualifies to be appointed as an IndependentDirector of the Company.

In terms of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules2014 all Independent Directors of the Company have enrolled themselves on the IndependentDirectors' Databank and will undergo the online proficiency self-assessment test withinthe specified timeline unless exempted under the aforesaid Rules.

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

Karnataka State Industrial Infrastructure and Development Corporation Limited (KSIIDC)had nominated Mr. M.S. Srikar IAS (DIN 07882939) as its nominee on the Company's Boardwith effect from October 23 2020 in place of Mr. Gangaram Baderia IAS whose nominationwas withdrawn w.e.f. October 7 2020. KSIIDC subsequently withdrew the nomination of Mr.M.S. Srikar (vide letter dated February 19 2021) and nominated Dr. V. Ram PrasathManohar IAS (DIN 08079851) as its nominee on the Company's Board with effect from May 212021.

Your Directors place on record their deep appreciation of the valuable servicesrendered by Mr. Gangaram Baderia IAS and Mr. M.S. Srikar IAS during their tenure on theBoard of the Company.

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

Further disclosures with respect to the remuneration of Directors KMPs and employeesas required under section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given inAnnexure E to this Report.

19. Policy on Directors' Appointment and Remuneration

Matching the needs of the Company and enhancing the competencies of the Board are thebasis on which the Nomination and Remuneration Committee selects a candidate forappointment to 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 March 31 2021 the Board of Directors comprises 12Directors of which eight are Non-Executive including two women Directors and two NomineeDirectors. The number of Independent Directors is six which is one half of the totalnumber 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 is governed bythe Nomination Policy. The remuneration paid to the Directors is in accordance with theRemuneration Policy of the Company.

More details on the Company's policy on Director's appointment and remuneration andother matters provided in Section 178(3) of the Act have been disclosed in the CorporateGovernance Report which forms a part of this Report.

20. Declaration of 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 ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.

21. Board Evaluation:

The Board carried out an annual evaluation of its own performance the performance ofthe Independent Directors individually as well as an evaluation of the working of theCommittees of the Board. The performance evaluation of all the Directors was carried outby the Nomination and Remuneration Committee.

The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors. Details of the same are given in the Report onCorporate Governance annexed hereto.

22. Auditors and Auditor's Report

(A) Statutory Auditor's and Audit Report

At the Company's 23rd AGM held on June 29

2017 M/s. S R B C & CO. LLP (324982E / E300003) Chartered Accountants has beenappointed as the Statutory Auditor of the Company for a term of 5 years to hold officefrom the conclusion of the 23rd Annual General Meeting until the conclusion of the 28thAnnual General Meeting of the Company.

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

The Statutory Auditors have not reported any instance of fraud committed in the Companyby its Officers or Employees to the Audit Committee under section 143(12) of the CompaniesAct 2013 details of which needs to be mentioned in this Report.

(B) Cost Records & Cost Auditor

Pursuant to Section 148(1) of the Companies Act

2013 the Company is required to maintain cost records as specified by the CentralGovernment and accordingly such accounts and records are made and maintained.

Pursuant to Section 148(2) of the Companies Act

2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014 theCompany is also required to get its cost accounting records 11 audited by a Cost Auditor.Accordingly the Board at its meeting held on May 21 2021 has on the recommendation ofthe Audit Committee re-appointed M/s. Shome & Banerjee Cost Accountants to conductthe audit of the cost accounting records of the Company for FY 202122 on a remuneration of'1850000 plus taxes as applicable and reimbursement of actual travel and out-of-pocketexpenses. The remuneration is subject to the ratification of the Members in terms ofSection 148 read with Rule 14 of the Companies (Audit and Auditors) Rules 2014 and isaccordingly placed before the Shareholders for ratification. The due date for filing theCost Audit Report of the Company for the financial year ended March 31 2020 was September30 2020 and the Cost Audit Report was filed in XBRL mode on August 17 2020.

(C) Secretarial Auditor & Secretarial Audit

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 for FY 2020-21. The Report of theSecretarial Audit is annexed herewith as Annexure B. The Report does not contain anyobservation or qualification requiring explanation or comments from the Board underSection 134(3) of the Companies Act 2013.

The Board at its meeting held on May 21 2021 has re-appointed M/s. S. Srinivasan& Co. as Secretarial Auditor for conducting Secretarial Audit of the Company for FY2021-22.

Secretarial Audit of Material Unlisted Indian Subsidiary

M/s. Vanita Sawant & Associates Practicing Company Secretaries had undertakenSecretarial Audit of the Company's material subsidiary i.e. JSW Steel Coated ProductsLimited for FY 2020-21. The Audit Report confirms that the material subsidiary hascomplied with the provisions of the Act Rules Regulations and Guidelines and that therewere no deviations or non-compliances. As per the provisions of Regulation 24A of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Report of the Secretarial Audit is annexed herewith as Annexure B1.

Annual Secretarial Compliance Report

During the period under review the Company has complied with the applicableSecretarial Standards notified by the Institute of Company Secretaries of India. TheCompany has also undertaken an audit for FY 2020-21 pursuant to SEBI Circular No.CIR/CFD/CMO/I/27/2019 dated February 8 2019 for all applicable compliances as per theSecurities and Exchange Board of India Regulations and Circular/ Guidelines issuedthereunder. The Report (Annual Secretarial Compliance Report) has been submitted to theStock Exchanges within 60 days of the end of the financial year ended March 31 2021.

23. Risk Management

The Company follows the globally recognised 'COSO' framework of Enterprise RiskManagement (ERM). ERM brings together the understanding of the potential upside anddownside of all those factors which can affect the organisation with an objective to addmaximum sustainable value to all the activities of the organisation and to variousstakeholders.

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

• Protect its shareholders and other stakeholders' interest

• Achieve its business objective

• Enable sustainable growth

Pursuant to the requirement of Regulation 21 of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 and CompaniesAct 2013 the Company has a Risk Management Framework in place. It has constituted asub-committee of Directors to oversee the ERM framework to ensure resilience such that -

• I ntended risks are taken prudently so as to plan for the best and be preparedfor the worst

• Execution of decided strategies and plan with focus on action

• Unintended risks like performance incident process and transaction risks areavoided mitigated transferred (like in insurance) or shared (like throughsub-contracting). The probability or impact thereof is reduced through tactical andexecutive management policies processes inbuilt systems controls MIS internal auditreviews etc.

24. Internal Controls Audit And Internal Financial Controls

(A) Overview

The Company has a robust system of internal control commensurate with the size andnature of its business and complexity of its operations.

(B) Internal Control

The Company has a proper and adequate system of internal control. Some significantfeatures of the internal control systems are:

- Preparation of annual budgets and its regular monitoring

- Control over transaction processing and ensuring integrity of accounting system bydeployment of an integrated ERP system

- Well documented authorisation matrix policies procedures and guidelines coveringall important operations of the Company

- Deployment of compliance tool to ensure compliance with laws regulations andstandards

- Ensuring reliability of financial information by testing of internal financialcontrols over reporting by Internal Auditors and Statutory Auditors

- Adequate insurance of the Company's assets / resources to protect against any loss

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

- Oversight by Board appointed Audit Committee which comprises Independent Directorswho are experts in their respective fields. The Audit Committee regularly reviews auditplans significant audit findings adequacy of internal controls and monitorsimplementation of audit recommendations

(C) Internal Audit

The Company has a strong and independent internal audit function that inculcates globalbest standards and practices of international majors into the Indian operations. TheInternal Audit team consists of professionally qualified accountants and engineers. TheChief Internal Auditor reports directly to the Chairman of the Audit Committee. The teamhas successfully integrated the COSO framework in its audit process to enhance the qualityof its financial reporting compatible with business ethics effective controls andgovernance.

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 is largelyfacilitated by ERP implementation across the organisation.

(D) Audit Plan And Execution

At start of the year the Internal Audit Department prepares an Annual Audit Plan afterconsidering Business and Process Risks. The frequency of the audit is decided by riskratings of areas/functions. The audit plan is carried out by the internal team andreviewed periodically to include areas that have assumed significant importance in linewith the emerging industry trend and the aggressive growth of the Company. In additionthe Audit Committee also places reliance on a few internal audits carried out by externalfirms.

(E) 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.

The Company has already developed and implemented a framework for ensuring internalcontrols over financial reporting. This framework includes entity-level policiesprocesses controls IT general controls and Standard Operating Procedures (SOPs).

The entity-level policies include anti-fraud policies (such as code of conductconflict of interest confidentiality and whistle blower policy) and other policies (suchas organisation structure insider trading policy HR policy IT security policy treasurypolicy and business continuity and disaster recovery plan). The Company has also prepareda risk control matrix for each of its processes such as procure to pay order to cashhire to retire treasury fixed assets inventory manufacturing operations etc.

These internal controls are reviewed by Internal Auditors every year. The Company hascarried out evaluation of design and effectiveness of these controls and has noted nosignificant material weaknesses or deficiencies that can impact financial reports.

25. 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.

26. Share Capital

The Company's authorised share capital during the financial year ended March 31 2021remained at '90150000000 (Rupees Nine Thousand Fifteen crores only) consisting of'60150000000 (Rupees Six Thousand Fifteen crores only) equity shares of '1/- (Rupee Oneonly) each and '3000000000 (Three Hundred crores) preference shares of '10/- (RupeesTen only) each.

The Company's paid-up equity share capital remained at '2417220440 comprising of2417220440 equity shares of '1 each whereas the paid-up preference share capital ofthe Company as at the financial year ended March 31 2021 is Nil.

27. Foreign Currency Bonds

During the year under review the Company's subsidiary Periama Holdings LLC issued5.95% Fixed Rate Senior Unsecured Notes guaranteed by the Company aggregating to US$ 750million due in April 2026.

As on March 31 2021 the outstanding Notes issued by the Company are aggregating toUS$ 1400 million and outstanding Notes issued by the Company's subsidiary are aggregatingto US$ 750 million. All the outstanding Notes issued in the international market arelisted on the Singapore Exchange Securities Trading Limited (the "SGX-ST").

28. Issuance of Non-Convertible Debentures

During the year under review the Company issued and allotted 10000 8.50% RatedListed Unsecured Redeemable Non-Convertible Debentures (NCDs) of '1000000 each of theCompany aggregating to '1000 crores (Rupees One Thousand crores) and 40000 8.50%Rated Listed Secured Redeemable Non-Convertible Debentures (NCDs) of '1000000 eachof the Company aggregating to '4000 crores (Rupees Four Thousand crores) to investors onprivate placement basis.

As on March 31 2021 the outstanding NCDs are aggregating to '10000 crores. All theoutstanding NCDs are listed on BSE Limited.

29. Credit Rating

In April 2020 Moody's Investors Service had placed Ba2 Corporate Family Rating andSenior Unsecured Bond Rating due in 2022 2024 and 2025 respectively under review fordowngrade. In July 2020 Moody's Investors Service reaffirmed Corporate Family Rating andSenior Unsecured Bond Rating at Ba2 with outlook changed to Negative. In March 2021 theagency reaffirmed the ratings at Ba2 with outlook changed to Stable.

Also in May 2020 Fitch Ratings downgraded the Company's long-term Issuer DefaultRating (IDR) and Senior Unsecured Bond rating due in 2022 2024 and 2025 respectively toBB- with a Negative outlook. Fitch Ratings vide their release dated May 19 2021 hasreaffirmed the Company's rating at BB- with outlook revised to Positive.

The short-term debt / facilities of the Company continue to be rated at the highestlevel of "A1+" by CARE Ratings and ICRA Ltd. In September 2020 the domesticcredit rating for long-term debt facilities/ NCDs was reaffirmed at "CARE AA-"with Stable outlook by CARE Ratings. In December 2020 the domestic credit rating forlong-term debt facilities/ NCDs was reaffirmed by ICRA Ltd at "ICRA AA-" withoutlook changed from Negative to Stable. In March 2021 the domestic credit rating forlong-term debt facilities/ NCDs by ICRA Ltd was again reaffirmed at "ICRA AA-"with outlook changed from Stable to Positive.

In September 2020 India Ratings and Research has assigned long-term issuer rating andrating for the outstanding NCDs of the Company as "IND AA" with Negativeoutlook. Further in March 2021 the agency reaffirmed rating at "IND AA" withoutlook changed to Stable.

30. Employee Stock Option Plan

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 be implementedthrough the JSW Steel Employees Welfare Trust (Trust) with an objective of enabling theCompany to attract and retain talented human resources by offering them the opportunity toacquire a continuing equity interest in the Company which will reflect their efforts inbuilding the growth and the profitability of the Company. The ESOP Plan involvesacquisition of shares from the secondary market.

A total of 28687000 (Two crores Eighty-Six Lakhs Eighty-Seven Thousand) options wereavailable for grant to the eligible employees of the Company and its Director(s)excluding Independent Directors and promoter Directors and a total of 3163000 (Thirty-One Lakh Sixty Three Thousand) options were available for grant to the eligible employeesof the Indian Subsidiaries of the Company and their Director(s) excluding IndependentDirectors under the ESOP Plan.

Accordingly 15944271 options have been granted over a period of three years underthis plan by the JSWSL ESOP Committee to the eligible employees of the Company and itsIndian subsidiaries including the Whole-time Directors of the Company. The details of theESOPs granted to Mr. Seshagiri Rao M.V.S Dr. Vinod Nowal and Mr. Jayant AcharyaWhole-time Directors of the Company are as given in the given table. The grant of ESOPsto the Whole-time Directors of the Company has been approved by the Nomination andRemuneration Committee and the Board.

JSWSL ESOP Committee Meeting

Total options granted —

Options granted to Whole-time Directors of the Company

Mr. Seshagiri Rao M.V.S Dr. Vinod Nowal Mr. Jayant Acharya
May17 2016 (1st Grant) 7436850 192680 179830 179830
May 16 2017 (2nd Grant) 5118977 127968 127968 119436
May 15 2018 (3rd Grant) 3388444 87841 87841 81985
Total 15944271 408489 395639 381251

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. The applicable disclosures relating to ESOPplan of 2016 as stipulated under the ESOP Regulations pertaining to the year ended March31 2021 is posted on the Company's website at https://www. jswsteel.in/investors/ andforms 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 Regulationsand the resolution passed by the Members would be available for inspection during themeeting in electronic mode and the same may be accessed upon login tohttps://evoting.kfintech.com

31. JSWSL Employees Samruddhi Plan 2019

The JSWSL Employees Samruddhi Plan 2019 ("Plan") was approved by a specialresolution passed by the shareholders of the Company by way of a postal ballot on May 172019. The Plan has been effective from April 1 2019. The scheme is a one-time schemeapplicable only for permanent employees of the Company working in India (excluding anemployee who is a promoter or a person belonging to the promoter group a probationer anda trainee) in the grade L01 to L15 ("Eligible Employee") who were not coveredunder the earlier JSWSL Employees Stock Ownership Plan - 2016.

The Indian subsidiary companies have a similar scheme to cover their employees. TheCompany in terms of the applicable provisions of the Companies Act 2013("Act") the rules framed thereunder and all other applicable rules andregulations including those issued by the SEBI to the extent applicable has implementedthe Plan wherein the Eligible Employee will be eligible to acquire equity shares of facevalue '1 each directly from the open market.

The Eligible Employee will be able to purchase the equity shares from the open marketby availing a loan provided by a bank / non-banking financial institution ("LendingAgency") and a broker identified by the Company to facilitate acquisition of equityshares by the Eligible Employees under the Plan. The equity shares bought by the EligibleEmployee will be subject to a lien in favour of the Lending Agency for a period of twoyears. After expiry of the said period of two years the Eligible Employee can eitherrepay the entire loan amount after which the equity shares will become free of the lienor the Lending Agency will recover the principal amount by selling the equity shares andwill transfer the difference if any between the principal amount and the sale value(i.e. market price as on the date of the sale x. no. of equity shares sold) to theEligible Employee. The interest on the loan will be serviced by the Company and theEligible Employee in the ratio of 3:1 (the Company will bear 75% of the total interestliability owed to the Lending Agency and the balance 25% will be borne by the EligibleEmployee).

The Plan is being administered through the existing JSW Steel Employee Welfare Trust inaccordance with applicable laws. The number of equity shares that are the subject matterof the Plan in terms of the approval accorded by the Members by way of a postal ballot onMay 17 2019 shall not be more than 12497000 representing

0.517% of the issued equity share capital of the Company.

As on March 31 2021 the outstanding number of shares under the Plan stands at6698000 shares subscribed by 5638 employees.

32. Awards Vijayanagar

- CII National Award 2020 for Excellence in Energy Management (Metal Sector) for plantsthat achieve excellence in energy conservation

- Golden Peacock Award 2020 for Energy Efficiency in Steel Sector for encouraginginitiatives in promoting activities relating to energy efficiency improvement

- CII National Award for Excellence in Water Management 2020 for pre-eminence in thefield of water resource management

- Awarded the Second Prize at IIM National Sustainability Award for best quality andregistering highest product development and environmental performance

- Mr. S P Singh recognised with IIM - SMS Demag Excellence Award for outstandingcontribution to the Iron and Steel Industrial sector

- Mr. A Srinivas Rao honoured with IIM - TSL New Millennium Iron Award for outstandingand original contribution in the area of blast furnace based iron making

- Misrilall Jain Environment Award (FIMI Awards) for efforts towards environmentalprotection and management

- Outstanding performance by Quality Circle teams at State National and InternationalForums

The improvement projects were presented at State

National and International forums through video

conference. The summary is described below.

• State Level

30 Gold and 5 Silver Awards with highest participation (single location) and highestnumber of Gold Awards in the Karnataka region

• National Level

16 Par Excellence 13 Excellence and one Distinguished Award

• International Level

11 Platinum Awards

Dolvi

• National Level Award at CII SIXSIGMA competition held in September 2020 for SixSigma project on longitudinal crack reduction at CSP Caster

• 25 Quality Circle teams won Gold Award at CCQC- 2020 competition held inSeptember 2020 and 23 Quality Circle teams won Par Excellence/ Excellence awards atNational Convention on Quality Concepts (NCQC-2020) competition held in November 2020

Salem

• 7 teams that participated in the International Convention on Quality ControlCircles won Platinum awards

• 16 teams nominated for NCQC; 13 won Par Excellence and 3 won Excellence Awards

• In the state level Quality Circle Convention 25 teams were nominated and 23 wonPar Excellence and 2 won Excellence Awards

• IMC Ramakrishna Bajaj National Quality award for MQH Best practices: Bestinnovative project under manufacturing category for the project "Manufacture of PaverBlock from Steel-making Slag - Waste to Wealth"

• 2nd runner up at ISQ TOPS convention I for the project from SMS "Ferroalloy cost optimisation in Rail steel grades"

• 1st S 2nd runner up awards at ISQ TOPS Convention II for the project from BRM("Pass life improvement in NTM stand #28") and BF ("Enhancing PCI rate inBF#1")

• Kaizen competition (organised by ABK-AOTS DOSOKAI): Five teams (PPC MaterialsAdmin IT Security and HR) clinched awards

Other Awards

The Company is the only Indian company ranked among the top 10 steel-producers in theworld by World Steel Dynamics for the last 10 consecutive years. The Company has beenwidely recognised for its business and operational excellence. Key honours and awardsinclude:

• World Steel Association's Steel Sustainability Champion for three consecutiveyears - 2020 2019 2018

• Deming Prize for Total Quality Management at Vijayanagar and Salem

• Carbon Disclosure Project (CDP) rated JSW Steel Ltd. at Leadership Level (A-)signifying the implementation of current best practices to mitigate climate change

• Golden Peacock Award for Sustainability 2020

• Recognition of the Integrated Report FY 201920 as the world's best IntegratedReport in the Materials space (Platinum category) in its class by League of AmericanCommunications Professionals LLP

• Marked its entry into The Sustainability Yearbook 2021 released by SSP Global

33. Directors' Responsibility Statement

Pursuant to the requirements under Section 134 subsection 3(c) and sub-section 5 ofthe Companies Act 2013 the Board of Directors to the best of their knowledge andability 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 judgmentsand 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 2021 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 operating effectively.

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

34. Related Party Transactions

All Related Party Transactions (RPT) that were entered into during the financial yearwere on an arm's length basis and predominantly in the ordinary course of business.Specific approvals as required under the Companies Act 2013 has been obtained fortransactions that are not in the ordinary course of business.

The policy on dealing with RPT as approved by the Board is uploaded on the Company'swebsite (https://www. jsw.in/investors/investor-relations-steel). 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) read withSection 188(2) of the Companies Act 2013 in Form AOC 2. The details of the material RPTentered into during the year by the Company as per the policy on RPTs approved by theBoard is given in Annexure D to this Report.

Your Directors draw your attention to Note No. 24 of the Standalone financialstatements which sets out related party disclosures.

35. Disclosures

(A) Number of Meetings of the Board of Directors

During the year four 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 Disclosures Requirements)Regulation 2015.

(B) Audit Committee

The Audit Committee comprises one Executive Director and three Non-ExecutiveIndependent Directors. Mr. Seturaman Mahalingam is the Chairman of the Audit Committee.The Members possess adequate knowledge of Accounts Audit Finance etc. The compositionof the Audit Committee meets the requirements of Section 177 of the Companies Act 2013and Regulation 18 of the Securities and Exchange

Board of India (Listing Obligation and Disclosure Requirements) Regulations 2015.There were no recommendations of the Audit Committee that have not been accepted by theBoard.

(C) Copy of Annual Return

Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act 2013copies of the Annual Return of the Company prepared in accordance with Section 92(1) ofthe Act read with Rule 11 of the Companies (Management and Administration) Rules 2014 areplaced on the website of the Company and are accessible at the web-link:http://www.jsw.in/investors/investor- relations-steel

(D) Whistle Blower Policy / Vigil Mechanism

The Company has a mechanism in the form of the Whistle Blower Policy / Vigil Mechanismto deal with instances of fraud and mismanagement if any. Details of the same are givenin the Corporate Governance Report.

(E) 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.

(F) 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.

(G) 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.

(H) Disclosure under the sexual harassment of women at workplace (PreventionProhibition and 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. All employees (permanentcontractual temporary and trainees) are covered under this policy. The Company has alsocomplied with the provisions related to the constitution of an Internal ComplaintsCommittee (ICC) under the said Act to redress complaints received regarding sexualharassment. The Company received no complaints pertaining to sexual harassment during FY2020-21.

(I) 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 Wholetime Directors of the Company receive anyremuneration or commission from any of its subsidiaries.

Your Directors further state that no application has been made against the Companyduring the financial year 2020-21 nor are there any proceedings pending against theCompany under the Insolvency and Bankruptcy Code 2016 (31 of 2016) as at the end of thesaid financial year. Also there were no instances of one time settlement with any bank orfinancial institution during the FY 2020-21.

36. Acknowledgment

Your Directors take this opportunity to express their appreciation for the cooperationand assistance received from the Government of India Republic of Chile MauritiusMozambique Italy the US and the UK the State Governments of Karnataka MaharashtraTamil Nadu West Bengal Jharkhand and Odisha and the financial institutions banks aswell as the shareholders and debenture holders during the year under review. The Directorsalso wish to place on record their appreciation of the devoted and dedicated servicesrendered by all employees of the Company and support extended by suppliers/vendors andCustomers.

For and on behalf of the Board of Directors

Sajjan Jindal

Chairman

Place: Mumbai

Date : May 21 2021

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