jindal saw ltd Management discussions

1. Economic Overview

i. Global Economic Overview

According to IMF, Global growth is now expected to fall from 3.4 percent in 2022 to 2.9 percent this year, before rebounding to 3.1 percent in 2024. One of the reasons behind the cautiously optimistic outlook is the latest downward trend in inflation, which suggests that inflation may have peaked in 2022. The IMF predicts global inflation to cool to 6.6 percent in 2023 and 4.3 percent in 2024, which is still above pre-pandemic levels of about 3.5 percent, but significantly lower than the 8.8 percent observed in 2022. The global economic recovery after the pandemic was initially impeded by the conflict between Russia and Ukraine, causing increased geopolitical tensions and economic sanctions. While governments implemented stimulus packages to counteract the Covid-19 slowdown, supply chain constraints pushed inflation to unprecedented levels. Central banks responded by raising interest rates to fight inflation, which continued to impact economic activity. Additionally, the rapid spread of COVID-19 in China further slowed global growth in 2022.

Governments worldwide are trying to balance their monetary and fiscal policies to restore price stability and ease cost-of-living pressures. Unemployment rates in major economies like the USA and UK were below pre-pandemic levels, while concerted efforts to ease supply chain bottlenecks, promote equitable growth, and tackle the climate emergency could lead to greater economic stability. Chinas zero-Covid policy weakened local demand and delayed the global supply chain unclogging, leading to higher inflation. Chinas re-opening in November 2022 paved the way for a rebound in global activity and a gradual increase in commodity prices towards the end of the year.

The Russia-Ukraine conflict has brought about increased supply chain disruptions. Increasing commodity prices, such as food and energy, pushed up inflation, eroding the value of income and weighing on demand. Lower corporate confidence and increased investor uncertainty weighed on asset prices, tightened banking conditions, and prompted capital outflows from emerging nations. The security of the energy supply was a key challenge faced by the industrial sector. The energy crisis leading to increasing energy prices is likely to promote the transition of the energy market from fossil fuels to renewable energy resources.

Outlook

According to the IMF, global GDP growth will slow to 2.9 per cent in 2023 and recover to 3.1 per cent in 2024, driven by domestic factors such as robust private consumption and investment.

Particulars	Estimate	Projections
	2022	2023	2024
World Output	3.4	2.9	3.1
Advanced Economies	2.7	1.2	1.4
Emerging Market and Developing Economies	4.3	5.3	5.2
India	6.8	6.1	6.8

Global economic growth is expected to be impacted by several key factors. Headline inflation is predicted to decline from the highs seen in CY2021 and CY2022, mainly due to falling energy and food prices. The decline in inflation is expected to lead to a reduction in the pace and intensity of interest rate hikes by major central banks, although interest rates are expected to remain elevated for a longer period due to underlying inflationary pressures. The US Federal Reserves shift towards a less aggressive monetary policy will likely set the tone for the coming year.

However, the ongoing conflict between Russia and Ukraine and its impact on global geopolitical tensions remain a significant risk.

ii) Indian Economic Overview

Despite several challenges such as rising inflation and supply shocks caused by geopolitical crisis, the Indian economy has demonstrated extraordinary resilience and continues to recover. According to the NSO, the GDP grew at a 7% annual rate in 2022-23 compared to 8.7% growth in 2021-22. Retail inflation in India was 6.44% in January 2023, down from 6.52% the previous month.

The Russia-Ukraine conflict, which led to global supply chain disruptions, has indirectly impacted the Indian economy leading to inflation, economic decline, and higher logistics costs. The disruptions have also opened new opportunities for Indian companies, especially in agriculture. This also helps with Indias ‘AatmaNirbhar Bharat vision by making Indian companies less dependent on imports and building efficiency in-house. The Union Budget 2023-24 includes various measures to boost demand, mainly through increased public spending on capex, which is expected to stimulate private investment and improve overall demand. The government allocated Rs.111 lakh crore for infrastructure spending via the National Infrastructure Plan (NIP) in 2019. National Monetisation Plan (NMP) in 2021 will promote private sector investment for new infrastructure creation, with Rs.6 lakh crores expected to be completed by FY 2024-25. The government is also taking steps to simplify and streamline processes in various sectors to facilitate supply-side management while demand-creation efforts are underway.

Robust Goods and Services Tax (GST) collection reflects the nations burgeoning economy. In February 2023, GST collection stood at an impressive app. Rs.1.50 lakh crore, up 12% year-on-year. This marked the twelfth month where monthly GST revenues surpassed the Rs.1.4 lakh crore mark².

Outlook

Being one of the worlds largest economy, India has played an important role in global economic growth, adding about $1.3 trillion to global demand over the last decade³.

Rising inflation, fiscal deficit, and environmental concerns are the main difficulties confronting the Indian economy. Yet, the Indian economy has emerged stronger and fared better than other global economies, which can be attributed to the countrys well-considered policy reforms and effective regulatory measures. Indian economy benefits from a strong industrial policy via the Production Linked Incentive (PLI), a de-leveraged private sector, increased spending on infrastructure, and various other Government initiatives.

2. Industry a. Oil and Gas Industry i. Global Market

As per IEA⁴, Global oil demand will rise by 1.9 mb/d⁵ in 2023, to a record 101.7 mb/d, of which China will contribute almost 50% after lifting its Covid restrictions. World oil supply growth in 2023 is set to slow to 1 mb/d following last years OPEC+-led growth of 4.7 mb/d. An OPEC+ drop of 870 kb/d will temper an overall non-OPEC+ rise of 1.9 mb/d due to expected declines in Russia. The US ranks as the worlds leading source of supply growth.

Being the worlds largest importer of crude oil, Chinas low consumption of crude due to the Covid-19 situation led to the lowest Asian crude consumption numbers in the early FY22. Lockdown measures to curb Covid cases led to a decrease in demand for Chinese oil. The Russia-Ukraine conflict brought about an acute energy crisis leading to surging crude oil and international fuel prices. The global natural gas market suffered a setback when Russia cut its European pipeline deliveries. EU decided to impose a price cap on Russian crude purchases. The market is experiencing a conflict between an excess of supply and a low level of demand, resulting in stocks reaching levels not witnessed in a year and a half. A significant portion of the surplus is due to an abundance of Russian oil being redirected to alternative markets in response to EU trade restrictions. Despite this disruption in global trade, oil stockpiling has caused Brent crude oil futures to remain relatively steady between $80-85/bbl since the beginning of the year.

Striving for energy efficiency and booming sales of electric vehicles is likely to curb global 2023 demand growth by close to 900 kb/d this year. This is of vital importance in a supply-constrained oil market.

ii. Indian Market

India is heavily reliant on oil imports for its domestic consumption. India imports 85% of the crude oil it processes and around 55% of its natural gas needs. In CY2022, India imported crude oil from over

fifty countries, but the top three countries accounted for more than half of the total imports. Indias imports from Russia have increased by 162% between 2021-22 and 2022-23⁶. It has imported $24.7 billion worth of crude oil from Russia in FY23 (April22 to Jan23) against $2.5 billion in FY22 and $0.8 billion in FY13⁷. India is the third largest consumer of oil, consuming 5% of the worlds supply. Indias import of Russian oil has prevented a spike in energy prices. According to provisional data from the Ministry of Commerce, Russia will become the third-largest exporter of crude oil to India in 2022-23. Oil production is mainly dominated by the two public sector companies, ONGC and Oil India Limited. Indias petroleum product exports surged to $78.58 billion⁸ for the period April 2022 to January 2023, compared to $50.77 billion during the previous corresponding year. According to PPAC, Indias domestic consumption of petroleum products increased by nearly 10% y-o-y to 183.3 million tonnes from April22 to January23. However, the countrys crude oil production for the same period dropped by approximately 1%, amounting to 24.6 million tonnes. Meanwhile, crude oil imports during this period rose by 9.4% year on year to 192.4 million tonnes. In terms of value, crude oil imports for April to January stood at $136.2 billion compared to $94.2 billion in the corresponding period of the previous year⁹.

Government Initiatives

The Indian government has the vision to increase Indias exploration acreage to 0.5 million sq. km. by 2025 and 1.0 million sq. km. by 2030 and 25% of the global energy growth between 2020 and 2040 is going to come from India". By allowing 100% FDI in upstream and private sector refining projects, the Indian government intends to promote increased investments to meet the growing energy demand. The government is taking steps to ensure energy security by implementing four strategies. These include diversifying the countrys energy supplies, expanding the exploration and production (E&P) activities, promoting alternative energy sources such as biofuels, ethanol, and CBG, and addressing decarbonisation and energy targets through electric vehicles (EVs) and hydrogen, and improving energy efficiency through initiatives such as Surya Nutan and Ujala.

Union Budget 2023-24

• The customs duty on critical chemicals such as methanol, acetic acid and heavy feedstocks for petroleum refining was reduced.

• Rs.35,000 crore will be allocated towards priority capital investments to enable energy transition, achieve net zero targets and energy security. In addition, National Green Hydrogen Mission has been initiated with a budget of Rs.19,700 crore to aid the economys transition towards lower carbon intensity. This mission will help reduce the countrys reliance on imported fossil fuels.

• PM JI-VAN Yojana –Indian government has budgeted Rs.227 crores for the scheme, which supports setting up second-generation ethanol projects. The total financial outlay for the scheme is 1969.50 crores from 2018-19 to 2023-24. Intending to reduce dependence on crude oil, the Indian government is promoting commercial-scale bioethanol production, for which this program was introduced.

b. Water Industry i. Global Market

The fundamental human requirement for good health and well-being is access to safe water, sanitation, and hygiene, recognised as a basic human right. However, around the world, approximately two billion people do not have access to safe drinking water, and 40% of the population is impacted by water scarcity. Agricultural needs alone consume around 70% of water resources. Moreover, more than 90% of disasters are water-related, and climate change is exacerbating these issues. The demand for freshwater continues to rise, and it is projected to increase by over 40% by 2050, further straining water resources. The water sector is undergoing significant changes to cope with the effects of climate change and growing population demands. Academia and industry face substantial expectations to create sustainable water management techniques and technologies. The impact of climate change is evident in various aspects, including agricultural output, rising sea levels, occurrence of wildfires, floods, and droughts. The water industry plays a crucial role in purifying and preserving our water supply for future generations. Despite its significance, the industry often goes unnoticed. It is responsible for providing us with clean water for consumption and maintaining the safety of water sources for all living beings.

The United Nations predicts the global population will surpass nine billion by 2050. Increasing global food production by 70% is essential to ensure an adequate food supply for everyone. This means more arable land is necessary for crop production, and irrigation systems must become more extensive and efficient. These requirements put a strain on water resources and ecosystems. To achieve sustainable agriculture, irrigation management should be optimised with techniques such as erosion risk management, flood warning systems, and precision farming, which can increase crop yield while minimising water usage.

The dependability of water infrastructure can be enhanced with smart water network solutions, which improve data collection and analysis. By utilising Internet of Things (IoT) devices and data analytics, infrastructure management can be optimised, reducing non-revenue water losses, and supporting changes in water utility operations.

To make a water-secure future, UN 2023 Water Conference has laid down several steps to be taken. These include acknowledging water as a fundamental human right, decreasing stress on hydrological systems, exploring new, sustainable food systems to limit water use in agriculture, and establishing a comprehensive global water information system by 2030 to inform decisions and priorities.

At the conference, the US announced a commitment of up to $49 billion in investments to support climate-resilient water and sanitation infrastructure and services. The Asian Development Bank has committed to investing $11 billion in the water sector in the Asia-Pacific Region and $100 billion in the water sector globally by 2030¹⁰. ii. Indian Market

India is ranked 13th among the worlds most water-stressed countries, with a significant portion of its population (18% of the global population) residing in water-stressed regions that rely on the monsoon season to fulfil their water requirements. When it comes to producing wastewater, India leads among South Asian nations. A recent evaluation by the Central Pollution Control Board (CPCB) in 2020-21 revealed that around 72,368 million litres per day (MLD) of sewage are generated in India, but only 20,236 MLD (28%) is adequately treated. The remaining 72% of wastewater is discharged into lakes, rivers, open drains, and groundwater, contaminating these resources. The depletion of freshwater resources and the need for conservation have increased the demand for alternative water sources. To address this issue and promote treated water reuse as a sustainable solution to water scarcity, the Ministry of Jal Shakti (MoJS) launched the National Framework for Safe Reuse of Treated Water (SRTW) in 2020.

NITI Aayog and Atal Innovation Mission launched a white paper on ‘Urban Wastewater Scenario in India in 2022. It noted that using treated water in agriculture can boost crop yield by providing necessary nutrients and reducing fertiliser reliance by 40%. Research conducted by the International Water Management Institute has found that collecting and treating 80% of urban wastewater can fulfil 75% of the industrial water demand.

Government Initiatives

The Ministry of Jal Shakti was established in 2019 and is responsible for developing Indias water resources and providing quality drinking water and sanitation facilities to all citizens. The Ministry of Jal Shakti has been allocated Rs.97,278 crore in 2023-24 as against Rs.74,029 crore in 2022-23. Har Ghar, Nal Se Jal is a mission launched by the Indian government to provide tap water to every household in rural India by 2024. It is a part of the larger Jal Jeevan Mission, launched in 2019 to provide piped water supply to all households in India by 2024. The Ministry of Jal Shakti is implementing the mission in collaboration with state governments, and various agencies and organisations are involved in the execution of the mission.

The Indian government has committed more than US$ 240 Billion in the water sector. PM Krishi Sinchayee Yojana (PMKSY), launched in 2016-17, ensures optimum water utilisation. The Indian government has approved the extension of PMKSY for the period 2021-22 to 2025-26, with an overall outlay of Rs.93,068.56 crores.

As part of Azadi ka Amrit Mahotsav, Mission Amrit Sarovar was launched in April 2022 to develop and rejuvenate 75 water bodies in each district of the country. The massive opportunity in the water segment augurs well for the company owing to its ready pipe capacities and strong presence in rural India.

Union Budget 2023-24

• Jal Jeevan Mission has been allocated Rs.70,000 crore in 2023-24 as against 60,000 allocation in 2022-23. This initiative aims to provide a direct water supply to every household.

c. Steel Industry i. Global Market

As per World Steel Short-Range Outlook, the global steel demand contracted in 2022 by 2.3% to 1,796.7 million tonnes after witnessing an increase of 2.8% in 2021. Steel demand in the developed world declined by 1.7% in 2022 after recovering 16.4% in 2021 from the pandemic dip of 12.3%¹¹. The reason for the downward revision is the impact of consistently high inflation and increasing interest rates worldwide. Total world crude steel production was 1,878.5 million tonnes in 2022, a 4.2% decrease compared to 2021¹². With geopolitical tensions on the rise and business slowing down due to supply-chain constraints, steel market participants have decreased their production.

China, the worlds largest steel producer recorded production of 1,013 million tonnes, a 2.1% y-o-y decline in production. Lower steel prices, limited energy supplies and weak demand due to domestic adverse conditions such as an ailing real estate sector decreased Chinese steel output.

Japans production fell 7.4% y-o-y to 89.2 million tonnes. This was partly offset by higher production of 124.7 million tonnes in India, with a rise of 5.5% y-o-y.

Top 10 Crude Steel Production Countries

Rank		2022 (MT)	2021 (MT)	%2022/2021
1	China	1 013.0	1 034.7	-2.1
2	India	124.7	118.2	5.5
3	Japan	89.2	96.3	-7.4
4	United States	80.7	85.8	-5.9
5	Russia (e)	71.5	77.0	-7.2
6	South Korea	65.9	70.4	-6.5
7	Germany	36.8	40.2	-8.4
8	Turkey	35.1	40.4	-12.9
9	Brazil	34.0	36.1	-5.8
10	Iran	30.6	28.3	8.0

Source: World Steel Association

Outlook

The outlook for the steel industry is projected to improve in 2023-24 on the back of infrastructure-related demand. World Steel Association forecasts that this year, demand will see a 2.3% rebound to reach 1,822.3 Mt. Steel demand is forecast to grow by 1.7% in 2024 to reach 1,854.0 Mt. Manufacturing is expected to lead the recovery, but high interest rates will continue to weigh on steel demand. Next year, growth is expected to accelerate in most regions, but deceleration is expected in China. While demand will come from emerging economies, there will be increased investments in decarbonisation.

In 2022, recovery momentum after the pandemic shock was hampered by high inflation and increasing interest rates, the Russian invasion of Ukraine, and the lockdowns in China. As a result, steel-using sectors activity went down in the last quarter of 2022. This, combined with the effect of stock adjustments, led to worse than expected contraction in steel demand.

The outlook for steel firms in Europe appears bearish due to several factors, including expensive and unstable energy costs, a looming economic downturn, decreasing consumer confidence, and the pressing need to restructure supply chains for the steel industry and its end markets.

The steel market may experience fluctuations in the near future due to various factors, such as the developments in the Chinese real estate market that are influenced by the governments support measures and the easing of lockdown measures in the country. World Steel predicts that the U.S. economys strong recovery from the pandemic shock is ending due to the Federal Reserve Banks aggressive interest rate increases to contain inflation, resulting in a weak economic environment, strong dollar, and shifting consumer spending. However, due to pent-up demand and supply chain easing, the automotive sector is expected to maintain positive momentum. The construction sector will struggle, and non-residential sectors will experience a delayed recovery due to rising materials costs and high-interest rates. Nonetheless, Federal infrastructure spending and rising energy-sector investments will be positive for U.S. steel demand, resulting in stable U.S. steel demand.

ii. Indian Market

As per the Global Steel Experts led by the World Steel Association, India being the second largest crude steel producer in the world, is going to be the epicentre of the global steel growth. Whereas Indian steel industry grew at 6.1% in 2022 and is expected to grow at 6.7% in 2023¹³, the global steel production declines by 4.2% in the calendar year 2022. The domestic finished steel production for April – December 2022 increased 6.2% y-o-y and stood at 88.21 million tonnes (MT) against 83.01 mt during the corresponding period last year. The domestic consumption was at 85.88 mt, 11.9% higher than the corresponding period last year of 76.73 mt. Domestic crude steel production stood at 92.5 mt and was up by 5% over the same period last year of 88.07 mt¹⁴ .

Amidst geopolitical tensions and inflationary pressures due to supply chain bottlenecks, India stands out for its economic recovery and infrastructure investment-led growth. The rising automotive sector also played a crucial part in this growth. Government impetus on infrastructure also boosted steel demand.

Indias finished steel exports fell 52.2% to 5.33 million Tonnes for April – January owing mainly to a levy of export duty of 15% by the Indian government in May 2022, which was later revoked in November 2022. India imported 5 million tonnes of finished steel. Special-grade steel forms a significant part of the import and is witnessing good traction in domestic marking leading to growth in imports. Due to the sluggishness of European and American markets, major steel manufacturers such as South Korea, Japan, and Vietnam redirect their surplus production towards the Indian markets. Indian steel demand is largely driven by government projects associated with roads, railways, water, and sanitation. According to CareEdge Research, Indias steel production will be in the range of 117-119 million tonnes, up 3-5% year-on-year in FY23, and the consumption growth rate will be 10-12% in FY23. Government Initiatives

Indian Ministry of Steel has suggested exempting import duties on various raw materials, including coking coal, anthracite, met coke, ferro nickel, limestone, manganese ore, graphic electrodes, and chrome ore in the upcoming 2023-24 Budget. This proposal aims to decrease production costs by lowering the expenses on raw materials.

The governments Production Linked Incentive Scheme will boost domestic production of specialty steel. A total of 7 applications from 30 companies have been approved as part of the program with an outlay of Rs.6,322 crores. This will attract committed investment of Rs.42,500 Crore with a downstream capacity addition of 26 million tonnes and employment generation potential of 70000. India is also focussing on the decarbonisation of the steel sector. Indias steel sector accounts for 12% of Indias CO2 emissions with an emission intensity of 2.55 t CO2/TCS compared to the global average emission intensity of 1.85 t CO2/TCS. As a part of Glasgow commitments, India plans to achieve net zero emissions by 2070.

Union Budget 2023-24

• Government has increased capital investment outlay by 33% to Rs.10 lakh crores. It is a positive step towards infrastructure development and the steel industry.

d. Pipe Industry

Pipelines have been the preferred mode of transportation for fluids (like oil, gas, water, wastewater etc), from one point to another safely and efficiently. They are less damaging to the environment, less susceptible to theft, and more economical, safe, convenient, and reliable than other modes like transportation through trucks, train and other mobile options. Pipes (including iron, steel, PVC etc) are used in various industries – oil, gas, petrochemicals, water supply and sanitation, irrigation, construction, and industrial applications. The pipe industry can also be classified on the basis of the end user industry that it caters to – oil & gas and Non-oil & gas. In the oil & gas space pipes are used for exploration and production (E&P) and transportation. HSAW, LSAW, ERW and Seamless pipes are used in oil & gas. In the non-oil segment pipes are used in engineering, auto, power plants, water and sewage, metros, airports, and malls. Ductile Iron pipes, HSAW, ERW and Seamless pipes are also used in the non-oil segment.

Outlook for Pipe markets

As per the report of Lucintel, the future of the global industrial pipe market looks promising with opportunities in power generation, petrochemical, automotive, water, wastewater, and industrial processing. The global industrial pipe market is expected to reach an estimated $21.7 billion by 2028 and it is forecast to grow at a CAGR of 3.2% from 2023 to 2028. The major growth drivers for this market are increasing construction of new pipelines, replacement of aging pipelines, urbanization rate, and infrastructure development. Emerging trends which have a direct impact on the dynamics of the industry include increasing use of premium and technically advanced pipe and increasing focus on pipe strength and durability.

It is anticipated that rapid industrialization, rising population, and expansion in the manufacturing sectors are likely to all contribute to an increase in the growth of the construction industry segment, particularly in developing nations. This in turn is likely to result in an increase in demand for steel pipes. Globally the most important steel pipe markets are United States, China and India. APAC is expected to remain the largest market and witness the highest growth over next few years due to increasing infrastructure development, urbanization and government economic stimulus measures in this region.

The rapid growth of the oil and gas sector, automotive and chemical industries in the Asia Pacific is encouraging the growth of the market in the region. The rapidly growing chemical industry and increasing investments in wastewater development systems in developing countries like China, India, Germany, and others are driving the market for large diameter steel pipes.

Furthermore, owing to the increase in global population, the demand on the existing water infrastructure is exceeding its limits in many cities. Therefore, countries across the world are investing significantly in improving their water infrastructure; thereby, increasing demand for ductile iron pipe. Moreover, increase in population is driving growth in agriculture sector. Thus, the extensive use of ductile iron pipes for water supply in irrigation projects, is expected to positively influence the ductile iron pipes market growth.

2. Company Overview and Business Description

With a successful track record and strong industry relationship, Jindal SAW Limited ("JSAW" or "the Company") is a leading global manufacturer and supplier of iron and steel pipe products and fittings. The Company has a strategy of offering diversified mix of products which helped it improving its market share and positioning it as the leading pipe solution providers. Its offerings include the widest product range of pipes and tubes made of iron and steel, across the globe. The product range includes helically submerged arc-welded pipes ("HSAW"), longitudinally submerged arc-welded pipes ("LSAW"), ductile iron pipes, HDPE Pipes, seamless pipes and tubes made of carbon, alloy and stainless steel. The Company also has all varieties of anti-corrosion and protective coating facilities along with the necessary ancillaries like fittings, bends, flanges etc. to make it a total pipe solution provider in the world. The choice of the application of the company product rests with the customer as few of its products can be used as a substitute to other. For example, for oil & gas applications the customer may choose between LSAW and HSAW. The Companys business model is characterized by a high degree of diversification across key regions, markets, goods, sectors, and clients. This diversification offers significant protection against various risks and allows the Company to operate and perform effectively even in challenging economic and geopolitical conditions. As a result, the Company can be classified as having a self-hedging business model.

The Company has its manufacturing facilities at Kosi Kalan (Uttar Pradesh), Mundra (Gujarat), Nashik and Nagothane (Maharashtra), Bellary (Karnataka), Bhilwara (Rajasthan), Tembhurni (Maharashtra), and Indore (Madhya Pradesh). The facilities are strategically located across the country to stay closer to the customers and through its subsidiaries and associates, it has manufacturing facilities in US and UAE as well. The Company also owns low grade iron ore mines in Rajasthan, the only ones in Northern India, and has perfected the capabilities of producing high grade iron pellets through the beneficiation and palletisation process. All its manufacturing facilities are accredited and compliant with the most stringent global requirements and higher level of quality systems. Through its diversified product range, the Company can cater to the entire range of pipe requirements in the oil & gas sector, water sector, industrial use, and specialized sectors like nuclear power etc.

Over the last few years, the Company has identified pipes and pellets as its core activity and is committed to remain focused on the same. Therefore, through a series of corporate reorganization, the Company has demerged / de-subsidiarized / exited its non-core businesses. The Company is also in the process of merger of few of its domestic subsidiaries to achieve consolidation of business, operational synergies, pooling of financial, managerial, technical, and human resources, thereby creating stronger base for future growth and value accretion for the stakeholders.

To increase the quality, effectiveness, and safety of its products, Jindal SAW has invested in updating its manufacturing facilities and implementing new technology. Also, the business has created a variety of innovative products, such as corrosion-resistant coatings and high-strength steel pipes.

Jindal SAW is committed to sustainability and social responsibility and has developed several efforts to reduce its environmental effect and encourage community development. The Company has reported consistent revenue growth in recent years, owing to increased sales volumes, improved capacity utilizations and higher realisations. However, rising raw material costs and industry competition have had an impact on the Companys profitability. Even with the economic challenges posed by rising inflation and supply chain constraints this past year, the Company, through prudent business decisions, improved capacity utilization etc has reported revenue of app. Rs.15,282 Crore, a growth of app. 38.65 % yoy. Its focus on moving up the value chain and offering premium, value-added products has been instrumental in driving its revenue growth.

JV with Hunting Energy Services Pte Limited, Singapore

To establish Indias first "state-of-the-art" premium Oil Country Tubular Goods (OCTG) threading facility, Jindal SAW has entered into a Joint Venture with Hunting Energy Services Pte Limited Singapore (where JSAW holds 51% shareholding and balance 49% is held by Hunting). With the help of this JV, Hunting will offer its patented premium connection technology, which will be used to thread premium connections on seamless casing and tubing primarily used for deep drilling operations in the oil and gas industry. It will also become the first company to have such a manufacturing facility in India which shall offer premium connections for OCTG from India to different regions of the world. It would also serve as a substitute for imports for those involved in oil and petrol drilling, enabling India to become self-reliant in this market. The goal of the nation to become ‘AatmaNirbhar Bharat is matched with this Joint venture.

Under the terms of the joint venture agreement, Hunting and Jindal has built a dedicated premium connection threading facility in Nashik province near JSAW existing seamless mill operations, with a proposed 130,000 sq. ft. manufacturing footprint. The commissioning of the project is in advance stage and the trial run have commenced. The commercial production is slated to be launched in FY 24.

Acquisition of Sathavahana Ispat Limited ("SIL")

JSAW, submitted a Resolution Plan ("Resolution Plan") for acquisition of Sathavahana Ispat Limited ("SIL") and was adjudged as the Successful Resolution Applicant ("SRA") for acquisition of SIL. The Honble National Company Law Tribunal Hyderabad Bench (the "NCLT") approved the Resolution Plan, vide its order dated 31.03.2023 under Section 31 of the Insolvency and Bankruptcy Code, 2016 (the "IBC"). Further in terms of the approved Resolution Plan and in compliance with the order of the Honble NCLT, Hyderabad, the conditions precedents as contemplated under the approved Resolution plan were achieved on 26th April 2023 including the release of the entire payments by the JSAW as proposed under the approved Resolution Plan. Accordingly, in terms of the approved Resolution Plan M/s Sathavahana Ispat Limited stands merged with Jindal SAW Limited (SRA) as on 26th April 2023. SIL was engaged in the Manufacturing & Selling of DI Pipes, Metallurgical Coke & Pig Iron and generation & sale of power. It has the manufacturing facilities in South India (in Andhra Pradesh and Karnataka) with capacities of 2,50,000 MT mini blast furnace and 2,10,000 MT DI Pipe with 4,00,000 MT of coke facilities. Pursuant to the merger JSAW will effectively utilize the available capacities of SIL to increase production in order to benefit from the operating leverage.

3. Business Description

The Company has positioned itself as a total pipe solution provider since its product range includes helically submerged arc-welded pipes ("HSAW"), longitudinally submerged arc-welded pipes ("LSAW"), ductile iron pipes, HDPE Pipes, seamless pipes and tubes made of carbon, alloy and stainless steel. The Company also has all varieties of anti-corrosion and protective coating facilities along with the necessary ancillaries like fittings, bends, flanges etc. In India, Jindal SAW is the industry innovator and market leader in the production of longitudinal diameter submerged arc welded (LSAW) and spirally/helically welded (HSAW) pipes. With the opening of Indias first SAW pipe mill in Kosi Kalan, Uttar Pradesh, in 1987, the company started producing LSAW pipes. Since then, it has provided more than 40,500 km of line pipes and more than 17,800 km of SAW pipes for onshore and offshore pipeline projects worldwide.

With the advantage of many manufacturing facilities in India and a pipe coating plant in Baytown, Texas (U.S.A.) through one of its subsidiaries, Jindal SAW has ties with both international oil and gas businesses and EPC firms to market these products globally. It collaborates with EPC firms, federal and state governments, and other domestic entities.

The product portfolio of Jindal SAW includes long seam and spiral seam submerged arc welded pipes, anti-corrosion, concrete weight coating, induction bends, and connector casings. These products are suitable for a range of applications. Its factories can create pipes with an outside diameter up to 156 inches. Given the depth of the Companys expertise and capabilities, the majority of end users around the world have approved of its manufacturing facilities.

The Company has decent order book and can accommodate more orders at its current facilities without incurring significant capital investments. Its goal is to continue providing world-class solutions while creating value-added solutions to promote sustainable performance. The Company sells its goods in India and also exports to Latin America, the Middle East, and Africa. Further, Company also produces Ductile Iron pipes which finds its application in water supply and sewerage systems. The third-largest manufacturer of DI Pipes in the world, Jindal SAW exports its DI pipes products to more than 30 nations from its production in India and Abu Dhabi through a 100% owned subsidiary. For the production of DI Pipes, the Company operates three plants: two in India and one in UAE. Indian plants are located at Samaghogha, Dist. Kutch, Gujarat with annual capacity of 5,00,000 MT, and at Haresamudram, Dist. Anantpur, Andhra Pradesh with annual capacity of 2,10,000MT. UAE plant is located in Abu Dhabi, with annual capacity of 300,000 MT. The Abu Dhabi manufacturing facility focuses on large diameter ductile iron pipes for the MENA region. Abu Dhabi facility plans to boost the capacity of pipes for diameter 1,400 mm and above in view of upcoming demand for large-diameter pipes in the Gulf area, specifically for IRAQ. The Company is also planning to upgrade all the DI facilities in India with an emphasis on producing pipes in the 80-300 mm size range to meet the growing demand in India due to Jal Jeevan Mission. To maintain its competitive edge and boost sales during the past two years, the Company has increased its focus on niche products, including PU-coated pipes and double chamber restrained pipes. The Company also operates a Ductile Iron fittings plant at Tembhurni, Maharashtra, with annual capacity of 18,000 MT capacity, which caters to the requirement of ductile iron fittings for all the projects, wherein Jindal SAW is supplying pipes for domestic and export markets.

Jindal SAW also produces Seamless pipes and tubes which are popular because of their adaptability and numerous uses in various business sectors. This portfolio includes pipes and tubes for general mechanical engineering as well as line pipe, process pipe, OCTG and pipes for Boilers, heat exchangers, petrochemicals, exploration, oil and gas, and general engineering are the industries that largely utilise the companys goods.

Throughout all of its sites in India, Jindal SAWs manufacturing activities can produce 0.4 MTPA of pipes. The Nashik plant manufactures pipes with anti-corrosion coating in sizes up to 16 inches. The business has become a dependable supplier to significant domestic and international OEMs. ONGC, Oil India, GE, Thermax, Godrej, SKF, Petrofac, L&T, Proclad for ADNOC, among others.

Certified by the industrys highest standards and serving the public and private sectors, this business has helped the Company strengthen its position in the local market. The Company has consistently put a priority on improving capacity and connections with the industry. In 2019, the Company engaged in a strategic partnership with Singapores Hunting Energy Services PTE Limited (‘Hunting) to work exclusively to produce, market, and distribute the products specified and outlined in the agreement.

To establish Indias first "state-of-the-art" premium Oil Country Tubular Goods (OCTG) threading facility, Jindal SAW has teamed up with Hunting Energy Services. The first of its kind in Asia, the Company intends to construct a Center of Excellence to help its auxiliary units. It can offer superior items in the local market because of its partnership with Hunting. This has reduced its dependency on imports and helped the government achieve its goal of ‘AatmaNirbhar Bharat, or national self-sufficiency. The Company has adopted the most advanced manufacturing techniques/processes to produce the widest size range of Stainless Steel Welded and Seamless Pipes & Tubes. The Company has fully equipped laboratory to perform all required Chemical & Mechanical testing along with required facility to perform all critical testing i.e. Inter granular Corrosion (IGC), Eddy current testing (ECT), Hydro (up to 6000 PSI), Indian Boiler Regulations (IBR) and Ultrasonic testing (UT) testing. Leading Heat Exchanger OEMs, domestic process licensors such as Engineers India Limited (EIL), and global market leaders have approved the company for its products. It operates three cutting-edge facilities, fitted with cutting-edge technologies. Through these facilities, the Company serves industries such as oil and gas, refinery, fertiliser, petrochemical, water, food, and pharmaceuticals, all while satisfying demanding client and worldwide specification requirements. Equipped with 2500 MT Extrusion Press and 800 MT expander, the Company intends to offer 1 ? "to six" pipes in Austenitic Stainless Steel, Martensitic Stainless Steel, Duplex, Super\duplex, Ni alloys and Copper alloys. It intends to access strategic segments such as nuclear, defence, and aerospace with the inclusion of new facilities such as Auto UT and ECT.

Further, the Company is the owner and operator of a mine-head, integrated beneficiation, and pellet production facility with a 1.5 million MTPA capacity at Bhilwara, Rajasthan. The Company transforms low-grade magnetite iron ore through the beneficiation process into high-grade pellets with Fe levels over 65 per cent, which are then traded on domestic and international markets.

Given that commodity prices were at their highest during FY22, the pellet segments performance was at its best during that year. The performance of the pipe segments declined as a result of the sharp increase in raw prices. However, the pellet segment did remarkably well, illustrative of the Companys self-hedged business model.

4. Key Subsidiaries

The Company describes its core business as pipes and pellets. During several stages of corporate restructuring, it has exited several non-core companies, allowing the Company to solidify its position as a market leader in the core business and improve its financial performance. The Company currently runs a small number of subsidiaries, mostly tied to the core business, in India and abroad. The Companys principal operating subsidiaries are listed below: a. Jindal SAW Gulf LLC (Abu Dhabi, UAE)

Jindal SAW Gulf LLC ("JSGL") is an Abu Dhabi subsidiary of Jindal SAW Ltd, India. It has the Middle Easts first major state-of-the-art integrated facility, producing large-size Ductile Iron Pipes of various sizes. It concentrates on supplying high-quality techno-economic goods and solutions for water transportation and sewage systems throughout the GCC and MENA region. Ductile Iron Pipes are manufactured here in sizes ranging from DN 100 to DN 2200, and the factory has an installed capacity of 300,000 MT per year. The UAE facility has received approvals from customers and successfully supplied to nearly all countries within the GCC and MENA regions, and outside, namely Australia, Panama, Singapore, etc. JSGL has also developed value added products, including double chamber pipes, foam coated pipes, etc to capture premium markets that will drive better profit margins in the long run.

b. Jindal SAW USA LLC

Jindal SAW Limited has a double jointing and coating facility in Baytown, Texas under Jindal SAW USA, LLC, a 100% step-down subsidiary, to serve the North American market. Jindal SAW USA LLC, an ISO 9001: 2015 firm, was founded in the United States in 2007. This facility includes rail, road, and barge shipping capabilities within the North American market. The plant has a manufacturing capacity of 5 million square metres per year.

c. IUP Jindal Metals & Alloys Ltd.

IUP Jindal Metals & Alloys Ltd. is a market leader in producing High-Quality Precision Stainless Steel Strips and Soft Magnetic Nickel Alloys. It has a large selection of thin and super thin cold rolled strips. The exact qualities of the manufactured strips meet the most demanding criteria. Precession Stainless Steel and Nickel Alloys produce various products such as textile machinery, clocks, watches, and electrical equipment. The Jindal Groups technical, production, and logistical resources are accessible to IUP Jindal, located in Bahadurgarh (Haryana), close to New Delhi.

d.Jindal ITF Ltd.

Jindal ITF Limited (JITF), a 51 per cent subsidiary of Jindal SAW Limited, is in the business of transhipment and waterborne transportation. JITF has entered into contracts for providing its services to clients such as NTPC etc. Due to disputes on contractual terms, JITF has entered into arbitration with NTPC. In the matter of the contract with NTPC Limited, on 27th January 2019, the final award was pronounced by the Honble Arbitral Tribunal in favour of JITF, allowing various claims to the tune of 1,891 crores plus interest and applicable taxes. At present, NTPC and Jindal ITF have filed petitions which are being heard by the Honble High Court of Delhi. The proceedings have been delayed on account of COVID etc. however JITF is confident that the matter will be settled with favourable outcome on the matter, in its favour.

e. Others

With an objective to achieve consolidation of business, operational synergies, pooling of financial, managerial, technical and human resources, thereby creating stronger base for future growth and value accretion for the stakeholders, Jindal SAW Limited has filed a Scheme of Amalgamation ("Scheme"), with National Stock Exchange and Bombay Stock Exchange to amalgamate Jindal Quality Tubular Limited ("JQTL"), Jindal Tubular (India) Limited ("JTIL") and Jindal Fittings Limited ("JFL") with it for their in-principle approval. Whereas JQTL and JTIL are the subsidiaries of JSAW, JFL is its associate. After approval from National Stock Exchange and Bombay Stock Exchange, the above Scheme was filed with NCLT, Allahabad bench for their approval. Shareholders and creditors of Jindal SAW Limited and all the merging entities have already approved the Scheme. The process is subject to the approval of Honble NCLT Allahabad Bench which may be approved in next few months.

5. Business Strategy

a. Distribution/marketing/branding initiatives

The Company believes in maintaining long-lasting relationships with its clients spread globally across various business verticals, both in public and private space. Its clientele is some of the major names in the Oil and Gas and water industries. Its superior product quality and timely deliveries make the Company the preferred choice in this industry.

b. Value Added Products

In recent years, the Company has concentrated on value-added products to set it apart from its rivals and take advantage of higher margins in the steel pipe market. It has stood out in the competitive steel pipe market and increased margins by concentrating on value-added products. These goods have also assisted the business in growing its clientele and breaking into new markets, such as offshore oil and gas drilling, where there is a significant need for specialised goods.

c. Contribution to AatmaNirbhar Bharat Mission

AatmaNirbhar Bharat Abhiyaan (Self-reliant India campaign) represents the vision of Prime Minister Shri Narendra Modi for a new India. The aim is to make India self-reliant in its economy as well as infrastructure. It promotes import substitution and encourages businesses to manufacture and build capabilities in-house. The Company is in a unique position to benefit from this vision as it is moving towards value-added products and are key supplier of products which are imported..

FY23 Policy Drivers for the Industry

India has imposed anti-dumping duty on stainless steel tube imports from China for five years. The duty ensures fair trading practices and creates a level-playing field for domestic producers vis-a-vis foreign producers and exporters. The implementation of this antidumping duty is expected to boost the companys presence in the local market and accelerate the utilization of increased capacities beyond initial projections.

Exports incentive under RoDTEP Scheme (Remission of Duties and Taxes on Exported Products) drive exports further. With its focus on exports and growing order book, the Company stands to gain from this incentive.

6. SWOT Analysis

• Strengths o The value-added Products in the premium sector the Company is entering will increase the business prospects. o Company global presence is a crucial asset that has assisted its in expanding its reach, increasing sales and profitability, and staying ahead of the competition. o Well-known brand in the iron and steel piping products industries. Because of its diverse products and oligopolistic market position, the Company enjoys lower manufacturing costs Long-standing client relationships have been a significant strength for the company, allowing it to create a stable customer base, cultivate trust and dialogue with its customers, and obtain vital insights into industry trends and customer needs.

o Strong financials of Jindal SAW reflect its potential to generate long-term value for its shareholders, customers, and other stakeholders.

• Weakness o Cheaper imports mainly from China may put pressure on revenue and profitability of the Company. It becomes difficult to compete with the low prices. Cheaper imports can also result in a decline in domestic production and employment. o This industry by nature is a working capital intensive. Substantial funds are required to fund day-to-day operations and industries struggle to obtain the necessary working capital and competitive prices due to factors such as limited access to credit, high-interest rates, and complex lending processes. o With increasing interest rates, loans have become expensive and securing affordable financing has become a challenge. This can lead higher finance cost and resultant impact on profitability, and a lack of investment in new technologies and infrastructure. o Company is a large exporter and importer and thus exposed to imports and exports. Due to this the Company is also exposed to volatility in the foreign exchange rates. Even though the Company follows natural hedging policy but the foreign exchange volatility may impact the profitability of the Company.

• Opportunities o The Made in India and AatmaNirbhar Bharat initiatives of the Indian government aims to boost local production and increase the competitiveness of Indian industries. The Company has initiated steps to develop the value-added products in India. This may present prospects for Jindal SAW to grow its operations and enhance its local market share. o In the Oil and Gas business, various megatrends give prospects for Jindal SAW. Offshore exploration and production, shale gas exploration and production, and digital transformation of the oil and gas industry are among these megatrends. o Global demand for infrastructure development, such as transportation, water supply, and energy infrastructure, is increasing, and Jindal SAW is ideally positioned to advantage of this trend. o The domestic steel industry, which grew between 5% to 7% on a year-on-year basis, is expected to play a bigger role in enabling India to achieve the 5 trillion economy target by 2025. We anticipate that the recent government policy announcements about railways, roads, civil aviation, gas pipelines for affordable housing, and increased budgetary allocation to this sector would support a relatively solid demand recovery and drive the need for iron & steel products. o Government Policies like Production Linked Incentive (PLI), Jal Jeevan Mission, PM Ji-van Yojana targeting development in various sectors like infrastructure, housing and development pose a unique opportunity for Jindal SAW.

• Threats o Unexpected circumstances, such as the COVID-19 pandemic, can affect the Companys operations, supply chain, and product demand. The pandemic of COVID-19 has underlined the significance of having a resilient business model that can react to unforeseen occurrences and market changes. Jindal SAWs ability to adapt promptly to the pandemics problems demonstrates the companys agility and good leadership. o In the framework of international trade and foreign investments, geopolitical conflicts can present a threat to the Company business. Geopolitical conflicts can result in trade barriers, taxes, and other trade restrictions, limiting Jindal SAWs capacity to acquire raw materials and export completed goods. Furthermore, geopolitical conflicts might affect international investments and joint ventures, limiting the Companys access to new markets and growth prospects. o Indias native steel sector is particularly susceptible to lower-cost imports and changes in demand. By lowering their market share, income, and profit margins, less expensive imports may pose a challenge to Jindal SAWs operations. However, Jindal SAW may also take steps to counteract the effects of less expensive imports, including as raising the quality of their goods, streamlining their supply chain, and growing their clientele.

7. Risks and mitigations:

• Industry and macroeconomic risks

Because the Business operates in a volatile industry, its investments and performance are shaped by megatrends in the operating environment. The Companys operations and future performance depend on how these prevalent patterns affect its capacity to deliver on its commitments. Adverse regulatory or economic conditions in the worldwide market, for example, can directly and negatively influence the companys revenue, earnings, cash position, and outlook.

• Financial market risks

When the financial markets are in chaos, access to working cash and long-term borrowing is hampered. As a result of the companys exposure to volatile financial markets, it may incur higher borrowing costs and disruptions in financial activities. As a result, financial market volatility can directly influence the companys operations and balance sheet, as well as its capacity to mobilise appropriate financial resources at the most competitive terms and pricing.

• Foreign exchange risks

Because its operations span the globe, the Company engages in foreign currency transactions on regular basis. The import of raw materials and other goods, as well as the export of finished pipes and other products, all involves foreign currency transactions. As a result, any changes in foreign exchange rates may have an immediate impact on the Companys operations. To limit the impact of currency volatility, the Company has implemented a hedging policy that is resilient and fulfils evolving regulatory criteria. This is in addition to the natural hedge afforded to the Company by the nature of the business.

• Risks to direct costs

The Companys margins may be impacted by volatility in the costing and/or utilisation of raw materials, energy, or any other direct expense. The Company closely monitors price movements and implements the necessary strategy or measures to mitigate this risk, such as changing business models. However, a diversified business model of the Company mitigates this risk to a larger extent.

• Legal risks including those related to tax structure

The Company has a presence in India and other countries (through its subsidiaries and associates). It stays subject to legal compliances while shielding itself from the changing legal landscape. The Company need to ensure that it adheres to all legal obligations, including sanctions imposed by any government, etc. Furthermore, being an Indian corporation, the business is subject to a variety of direct and indirect taxes that apply at various phases of the business. As a result, the Company has a competent process and mechanism in place to deal with the continuously shifting tax environment, which includes a control framework for current tax risks, a procedure for identifying and reporting new risks, and compliance with the same.

• Environmental law risks

Because the Company relies on natural resources, some of its business operations may be subject to environmental restrictions, particularly at its production facilities. The expense and compliance associated with such rules can have a direct influence on the Companys day-to-day operations. As a responsible organisation, the business observes all statutory rules and legislation, as well as environmental conventions.

• Human Resource Risk

The workforces support is critical to the Companys operation and eventual its success. Jindal SAW has suitable systems, processes, and programmes in place to ensure talent recruitment and retention and to nurture a talent pool to drive the organisations future growth.

• Information technology risks

The Companys interconnected IT platforms provide access to information and data relating to operations and strategy. This can be dangerous if proper protections are not in place. The Company has (a) made considerable expenditures in improving and ensuring security robustness, including safeguards for hardware and software, and (b) built a highly qualified in-house staff to oversee training, implementations, development, and enhancements, among other things.

8. Information technology

Information technology is important to the Companys operational efficiency, serving the demands of both core and non-core business applications and communication.

SAP ERP has been installed in all of the Companys business locations in India, the United States, and the United Arab Emirates. Sales, Logistics, Procurement, Stores, Production, Maintenance, Projects, HR, and MIS are all covered by the system. The SAP ERP is integrated with workstations to automatically pick up and record data, wherever possible. The SAP application is hosted on servers co-located at the IBM data center in Mumbai. Each authorised user can access SAP over the office network or secure internet connectivity, ensuring operational continuity, which was proven during lockdowns, when working from home was the norm. A Disaster Recovery setup is hosted at the IBM Bengaluru data center to ensure a backup. The Company is proud of the fact that it did not have a single downtime in FY23.

Apart from SAP ERP many other applications are implemented to Digitize various process like Claims and Reimbursements etc. The Company utilises Microsoft 365 for email and office tools. It makes certain that the platforms and services it uses, to host its domains and websites are secure and capable of withstanding any hostile cyber-attack. In addition, IT uses best-in-class technology to assess risk performance, employee engagement, and internal system controls.

9. Human Resources

We at Jindal SAW Ltd. understand that employee satisfaction and happiness play a nonpareil role in the growth story of an Organization. We make constant efforts to instill our Core Values i.e., Team-spirit, Openness & Fairness, Commitment to Excellence, Customer Focus & Care for people in the culture of the Organization. We continuously emphasize on strengthening employee-employer relationship by formulating effective strategies and improvising functional processes critical in achieving the Organizational goals. We believe in Human Resource Development wherein pool of competencies are identified that are required for delivering tangible output and focus on development of required skill through continuous Training & Development. To improve technical knowledge and leadership skills, technical training is ensured along with behavioural training. The continuous development of our peoples capability is ensured through job rotations, functional trainings, and exposure to new technologies. This further helps in continuity planning for key positions to ensure a pipeline of qualified and talented people. The Company has devised a Policy for "Succession Panning" for identifying potential successors for the key positions in the organization. The organisation considers its human resource as most precious / valuable asset. Jindal SAW keeps reiterating its focus on investments in people through merit-oriented pay revisions and Promotions on yearly basis through a process "Target Based Performance Management System (TBPMS)". All the employees at all the Grades undergo a fair assessment and are appraised on their performances against their pre-decided KRAs. This process helps us in recognizing our "STAR" employees who can further be considered for Job enlargement, Succession planning etc., and also let us identify the employees who require further trainings, counselling or may be a change in nature of job. The company has "Performance Improvement Plan" in place for employees who are not able to perform up to the expectations in order to help and guide them to uplift their on-job performance. The company works to empower women and has an effective framework in place for managing its workforce. It has established strict policies for preventing sexual harassment of women at work as responsible employers, giving them a powerful platform for efficient and prompt grievance redressal. The Company routinely holds awareness workshops to promote employee awareness and foster a safe and supportive work environment for all the females wherein they can work contentedly. The Company has provided best amenities and working environment to all the employees like, best of medical facilities, educational assistance for self and children, well maintained townships, transportation, subsidized cafeteria, cultural and sports activities, festival celebration, etc. Also, we believe that our responsibility extends beyond our employees and goes till their families as we continuously work for their well-being and secured life. To provide a secured and good quality of life, we have covered all our employees under best of Insurances which secure both employee and his/her family and regular medical camps/ awareness talks/ life skills talks are conducted for employees and their families as well. All of these initiatives help in achieving a work-life balance for employees and creating an open and caring culture within the organization. Being compassionate towards the employees is Jindal SAWs DNA and that has been restated with two of the recent initiatives taken by the organization. One of the initiatives is the Benevolent Scheme for our contractual workmen by extending financial support to them/their families in case of permanent disablement or fatality which acts as a financial shock absorber in the event of loss of earning capacity. Secondly, eligible regular and contractual employee shall be assisted monetarily in education of his / her female child to build a better and secured future for her. Continuous review of Policies / Practices with the view to make them contemporary & uniform in application is an ongoing process. Necessary steps and measures are taken constantly to improve processes & systems at Unit levels for better control & productivity. Our SAP enabled ERP System facilitates the sequence of interactions & interventions for a better inter and intra department coordination and make the whole system steadfast. Mutual trust between our people at every level of the Organization is intrinsic to Jindal SAWs culture, reiterating an open, fair, and two-way communication channel between Management & employees. Our winning workplace culture can be witnessed by the lower attrition rate and higher level of satisfaction amongst the employees.

10. Health and Safety (New information yest to come - to be seen by the Concerned - may be elaborated more)

A robust system framework is in place at Jindal SAW Ltd. to ensure the health and safety of its employees, subcontractors, and visitors. Our EHS segment comprises of well-experienced members who are constantly and tirelessly working towards making our organization "Accident-free". . We follow the following health and safety procedures and practices as an integral part of our system:

• Regular safety audits are being conducted to identify potential workplace risks and hazards and further planning is carried out to chalk out the preventive measures.

• Safety Training sessions are imperative for each employee to equip them with knowledge and information regarding safety standards and procedures.

• To shield our employees from potential dangers like falls, cuts, burns etc. , the Company provides up-end Personal protective equipment (PPE) to all the employees working at shop floor.

• Jindal SAW believes in always being ready and equipped to respond to emergencies like fires, natural catastrophes, and medical problems by developing well-structured plans and protocols.

• Jindal SAW deploys environmentally friendly practices to minimise pollution and lessen its adverse effects on the environment.

• The Company ensures that it adheres to all the safety rules and guidelines as prescribed by the various government authorities.

11. Internal Control Systems and their Advocacy

To ensure effective internal controls across business processes and systems, the Company has established a robust framework that is designed to provide reliable and quality assurance related to the Companys financial and operational information so that it can comply with applicable laws and safeguard its assets. The framework comprises both entity-level controls and business process controls. The adequacy and efficacy of these controls are evaluated on a regular basis: To facilitate the same, following measures have been initiated:

• The Company has put in place robust data security management.

• The Company is employing data analytics in the internal audit.

• All operations are executed through Standard Operating Procedures (SOPs) in all functional activities, and these are updated and validated periodically as per the business need.

• The internal control systems are evaluated with respect to their compliance with the operating systems and policies of the Company across all locations.

• Advanced technology is employed to enhance operational efficiency, a major component in forming adequate internal controls.

• The Company has a robust risk management system which enables the organization to define the detailed risk associated with the business activities and putting the mitigation plans in place for all such identified risks.

• The Companys Books of Accounts are maintained in SAP and transactions are executed through SAP (ERP) setups to ensure precision and accuracy in transactions and integrity and reliability in reporting. SAP is widely used to standardize internal control processes across the Company.

• A Delegation of Authority (DOA) matrix schedule is integrated into the SAP setup which allows for approval of transactions and is periodically reviewed by the management and examined by auditors.

• The Company has zero tolerance towards statutory non-compliance and has a solid online legal compliance management system that is regularly monitored. Changes in the regulatory environment are periodically updated in the system.

• The Company has a robust Internal Audit Department. The scope and its functions are covered under an Internal Audit Charter which the Audit Committee has sanctioned. An internal audit is carried out every year, based on an Annual Internal Audit Plan established on risk assessment and carries the approval of the Audit Committee.

• The Audit team comprises both internal and outsourced auditors. The in-house auditors are professionally qualified accountants, engineers, and SAP experienced executives. The internal audit of all locations is carried out by Deloitte Haskins & Sells LLP, which is a premier global auditing firm. It identifies the risk governance areas that need to be worked upon. It is the prerogative of the Audit Committee to implement a corrective plan of action wherever gaps are identified. During internal audits, risks are reviewed, and any new risks that arise in the business are captured with the mitigation plan in the risk register.

• The Company has a code of ethics in place in accordance with SEBI-mandated guidelines. However, no cases of violation have been recorded so far. The Whistle Blower Policy allows reporting incidents where the code of ethics is breached. Redressal, as well as monitoring of reported cases is undertaken by a designated authority.

The Internal Audit plan is approved by Audit Committee at the beginning of every year. The conduct of Internal Audit is oriented towards the review of internal controls and risks in the Companys operations and covers all factories and centrally controlled businesses and functions. Every quarter, the Audit Committee is presented with a summary of significant audit observations and follow-up actions thereon.

Business Risk Assessment procedures have been set in place for self-assessment of business risks, operating controls and compliance with Corporate Policies. There is an ongoing process to track the evolution of risks and delivery of mitigating action plans.

The Companys has established a robust internal financial control framework, which is in accordance with the Committee of Sponsoring Organisation (COSO) framework. The same is commensurate with the size and operations of the business and is in line with requirements of the statute. The Companys internal financial controls framework is based on the ‘three lines of defense model. The Company has laid down Standard Operating Procedures and policies to guide the operations of the business.

Authorities, Responsibilities and Accountabilities have been fixed to ensure compliance with the policies and procedures laid down by the Management. Robust and continuous internal monitoring mechanisms ensure timely identification of risks and issues. The Management, Statutory and Internal Auditors undertake rigorous testing of the control environment of the Company.

Advanced technology is employed to enhance operational efficiency which is a major component in the formation of adequate internal controls

12. COMPANYS PERFORMANCE AND BUSINESS OUTLOOK

• Financial performance with respect to operational performance

						Lakhs
Particulars	2020-21	%	2021-22	%	2022-23	%
Gross Revenue from operations	8,63,181		11,02,227		15,28,231
Profit before finance cost, depreciation,	1,25,707	15%	1,38,513	13%	1,82,734	12%
exceptional items and tax
Profit before tax	50,677	6%	63,711	6%	92,450	6%
Profit after tax	32,905	4%	40,550	4%	70,931	5%
Cash Profit	67,504		77,726		1,08,306
Net Fixed assets (Excluding Intangible	6,06,118		6,01,054		6,01,905
Assets)
Net Worth Excluding Revaluation	7,13,818		7,48,906		8,13,960

• Major Financial Ratios:

S.No.	Particulars	FY 2022	FY 2023	Change in %
1	Interest Coverage Ratio	3.75	3.45	-8.00%
2	Debt equity Ratio	0.51	0.38	-25.49%
3	Operating Profit Margin	7.35%	6.87%	-6.60%
4	Net Profit Margin	3.61%	4.52%	25.30%
5	Return on Net Worth	5.41%	8.71%	60.94%
6	Current Ratio	1.37	1.39	1.57%

1. Profit before finance cost, depreciation and exceptional items has gone up to 1,82,733.75 lakhs from 1,38,512.85 lakhs mainly due to higher NSR in the Seamless and Pellet Segment and increase in efficiency in the operations during the year.

2. Finance cost has increased to 52,909.07 lakhs from 36,919.79 lakhs during the year because of increase in interest rates and increase in working capital requirement in terms of increase in Volume.

3. Depreciation and Amortisation charge increased to 37,375.08 lakhs from 37,176.52 lakhs on account of capitalisation.

4. Profit before tax increased to 92,449.60 lakhs from 63,711.22 lakhs mainly due increase in EBIDTA during the year.

5. Profit after tax during FY 2022-23 increased to 68,414.73 lakhs from 40,549.85 lakhs in FY 2021-22.

6. Cash Profit (PAT + Depreciation and Amortisation) increased to 1,05,789.81 lakhs during the FY 2022-23 year from 77,726.37 lakhs in FY 2021-22.

• Geographical Distribution of Gross Revenue from Operations

						Lakhs
Particulars	2020-21		2021-22		2022-23
Domestic Turnover	6,77,005	78%	9,02,588	82%	11,94,640	78%
Export Turnover	1,86,176	22%	1,99,639	18%	3,33,591	22%
Total	8,63,181		11,02,227		15,28,231

• Net worth

			Lakhs
Particulars	As on March 31, 2021	As on March 31, 2022	As on March 31, 2023
Equity Share Capital	6,395.19	6,395.19	6,395.19
Other Equity	7,07,423.07	7,42,510.46	8,05,048.08
Total	7,13,818.26	7,48,905.65	8,11,443.27

• Total Debt

			Lakhs
Particulars	As on March 31, 2021	As on March 31, 2022	As on March 31, 2023
Term Loans (including Current Maturities)	1,97,094.54	1,38,331.40	1,03,441.44
Working Capital Loans	1,55,159.23	2,78,926.96	2,08,719.56
Total	3,52,253.77	4,17,258.36	3,12,161.00

Total Debt of the Company has reduced from 4,17,258.36 lakhs as on March 31, 2022, to 3,12,161 lakhs on March 31, 2023, mainly on account of optimization of working capital cycle and efficient management of the working capital facilities. The Company has closing cash and cash equivalents and bank balance of 6,255.20 lakhs. Considering the cash, the adjusted net debt is calculated to be 3,05,905.80 lakhs as on March 31, 2023, as compared to 3,65,587.16 lakhs on March 31, 2022.

• Product Performance and Analysis

The financial year 2022-23 has registered increase in production and sales volumes as compared to previous financial year. The total pipe production (including pig iron) during 2022-23 was ~ 12,98,598 MT (including ~ 1,24,589 MT pipes produced on job work and 27,857 MT pig iron produced on job work) as compared to ~ 10,48,091 MT (including ~ 28,106 MT pipes produced on job work) during 2021-22. The Company has sold (including pig iron) ~ 12,85,619 MT (including ~ 1,15,220 MT pipes on job work and 15,668 MT pig iron on job work) as compared to ~ 10,68,728 MT (including ~ 23,231 MT pipes on job work) during 2021-22.