Jindal Stainless Ltd Management Discussions.

Economic overview & outlook Global economy

The global economy grew at an estimated 2.9% in 2019, following a slowdown across most advanced and developing nations. Trade policy uncertainty, geopolitical tensions, and stress in key emerging market economies continued to weigh on global economic activity especially manufacturing and trade in the second half of 2019.

Global growth is projected at –4.9% in 2020 owing to the unprecedented Covid-19 pandemic. The pandemic has had a significant impact on all global economies in the first half of 2020, and the recovery is projected to be gradual. In 2021 global growth is projected at 5.4%.

Indian economy

During FY20, the Indian economy witnessed series of challenges given the decline in overall investments, private consumption and regulatory uncertainty. Additionally, NBFC liquidity issues and rural stress further impacted the economy. To counter these challenges, the Central Government announced a series of structural reforms. Amongst these reforms, the announcement to substantial reduction of the corporate tax rate had been one of the most notable initiatives undertaken by the Government to boost sustainable economic growth.

Q4FY20 witnessed lower economic activity due to the restrictions and lockdowns in the month of March, owing to Covid-19 pandemic, which typically tends to be a month which sees increased output with businesses trying to meet targets before the end of the financial year. Overall, the pace of growth across key sectors, private consumption and investment saw a sharp decline during the quarter and was a drag on growth for the full year.

The GDP growth of the Indian economy during the CY2019 stood at 4.2%, according to International Monetary Fund(IMF) . This is the lowest growth that India has recorded in the past 11 years.

The International Monetary Fund (IMF) has projected that Indian economy would contract by 4.5% in CY20. Post this period of contraction, IMF has projected a 6% growth for India in CY21.

Global Stainless-Steel Scenario

The global stainless steel consumption has been on an upward trajectory in the past few years, primarily driven by a strong spurt in demand from the Asia-Pacific region, specifically China and India. According to International Stainless Steel Forum (ISSF), the total Stainless steel melt shop production increased from 38.5 MT - in CY2013 to 52.2 MT in CY2019, registering a healthy CAGR of 5.2% over the period. In the past two decades, stainless steel consumption has seen the strongest CAGR as against other major metals such as zinc, aluminium and carbon steel.

Domestic Stainless Steel Scenario

In India, the consumption of stainless steel has undergone a major transformation. Strong demand from end-user segments has led to higher consumption of stainless steel. In the late ‘90s, Stainless steel was primarily used for kitchenware with some exception for industrial goods. Over the years, there has been increased usage in various industries including automobile, railways, process & nuclear industry, and building and construction.

According to International Stainless Steel Forum (ISSF), India registered a total stainless-steel melt shop production of 3.92 MT in CY2019, witnessing an increase of 5% year-on-year. Total stainless steel flat products consumption grew by 7% in CY2019 in India. Due to the growing pace of stainless-steel adoption across different sectors, India was able to maintain its position as the second largest producer of stainless steel in the world in CY2019. Industry experts believe that India has a very promising stainless steel market; and given the multiple trends from Railways, Auto, Industrial, and Infrastructure usage, the consumption of Stainless steel in the country is expected to rise further .

To know more about Stainless Steel, please refer to the fact sheet available in the following link: About Stainless steel

Company Overview

Jindal Stainless Limited (JSL) is the largest stainless-steel manufacturer in India. Over the years, the Company has successfully established itself amongst the leading stainless steel manufacturer in the world.

Spread across ~800 acres, JSL operates a stainless-steel plant at Jajpur, Odisha. Recently, the Company enhanced its existing melting capacity of 0.8 million tonne to 1.1 million tonnes per annum. This expansion was undertaken though equipment and process de-bottlenecking for which the Company incurred a nominal capex. The facility is conveniently located in close proximity to raw-material sources and ports, which enables the Company to maintain low logistics and transportation costs. JSL is equipped with ‘State-of-the-art machinery and engineering from the best European suppliers.

The Company has a diverse product portfolio and a strong distribution network with extensive service centres in the domestic and in international markets. The Companys numerous innovative solutions have powered its use in new applications such as the development of Stainless steel E-rickshaw, food grade Stainless steel, SS fuel tanks and exhaust systems in commercial vehicle, stainless steel bus body, Railway coaches and wagons, and special finishes.

In past years JSLs growth has been supported by its peoples excellence, value driven business operations, customer centricity, adoption of one of the best safety practices in the stainless steel industry, and social responsibility. Over the years, JSL has not only invested deeply in people, processes and technology, but has also undertaken various initiatives to widen its entire product offerings. Today, the Company is well positioned to capitalize on the immense growth potential in the stainless steel industry.

Integrated Facilities Unit Capacity Equipment Suppliers
Steel Melting Shop (SMS) MMTPA 11,00,000 SMS Siemag, Germany
Cold Rolled Annealed Pickle (CRAP) MMTPA 450,000 Andritz, Austria
Ferro Alloys MMTPA 250,000 SMS Siemag, Germany
Captive Power Plant MW 264 BHEL, India

Opportunities

Healthy demand outlook

Over the past few years, increasing awareness on the various benefits of stainless steel has been leading to a substantial increase of its usage in various applications in railways, automobile, process industries, building and construction. Additionally, various initiatives undertaken by the Indian Government have been giving significant impetus to the domestic stainless steel industry.

Indian Railways has been one of the early adopters of stainless steel and is expected to remain one of the major consumers of stainless steel over the next decade. Strong push from the Government on safety and enhanced Life cycle costing along with increasing passenger trains has been leading to a strong shift towards stainless steel wagons and coaches, instead of the traditionally used carbon steel. Metro rail projects, which extensively use stainless steel for the construction of its light weight coaches and interiors, are coming-up in multiple cities across India. Railways are also taking initiatives to modernize the railway infrastructure, particularly with use of stainless steel in foot-over, rail-over bridges and station infrastructure. These initiatives are only expected to increase the countrys demand for stainless steel. Additionally, an increasing usage of stainless steel in various sectors including automobiles for BSVI exhaust compliance, process industry ,white goods, construction and infrastructure are expected to further enhance the countrys demand for stainless steel going forward. Considering the renewed emphasis on healthcare infrastructure in the country, stainless steel emerges as a natural choice in material selection, owing to its inherently hygienic properties. Hospital beds, isolation chambers, modular toilets and several other applications of stainless steel are expected to get impetus in the coming years.

Diversified range of product applications

In the past couple of decades, the Indian stainless steel consumption has seen a paradigm shift from its use only in household/durables to use in new value-added categories of ABC, ART and process industries.

Over the years, JSL has widened its product offerings to have a diversified product portfolio and insulated itself from any slowdown in a particular product or category to de-risk itself.

Today, the Companys portfolio includes a wide range of stainless steel products in 200 series, 300 series, 400 series and duplex stainless steel grades; which have a wide range of product applications across the spectrum of industries. JSL has well-equipped infrastructure set-up to produce various grades of stainless steel with distinct specifications relating to width, thickness, finish and weight, as per the precise specifications demanded by the customer. This has enabled the Company to be well-positioned to leverage on the changing market/demand dynamics.

Capacity expansion to meet domestic demand growth

The Companys Jajpur, Odisha facility which is spread across ~800 acres of land is well-equipped with high-quality infrastructure and facilities. During the year gone by, JSL expanded its capacities from 0.8 million tonnes to 1.1 million tonnes. This brownfield expansion was undertaken through equipment and process debottlenecking, which enabled the Company complete the project with a nominal capex.

Overall, the Jajpur plant has been established to accommodate a facility with a much larger capacity and has all the necessary resources & logistical facilities already in-place. So future brownfield expansion plans can be executed at low capex compared to any Greenfield capacity and in a timely manner. With the expansion to 1.1 million tonnes, the Company has clearly established itself as the largest stainless steel manufacturer in the country and has the potential to lead the countrys stainless steel capacity expansion in the future.

Professional management team with rich industry experience

The groups strong brand image and best in class working environment continues to attract and retain top talent, from across the country. The Companys senior and middle management are well qualified and have a rich repository of industry experience. JSLs proficient management team understands industry dynamics and trends and also possesses sound domain knowledge. Over the years, the strategies formulated by its management team of senior professionals have played a key role in the Companys performance and establishing its position as one of the countrys largest and most diverse suppliers of Stainless steel.

Extensive Reach and Scale

Over the years, JSL has steadily and gradually enhanced its presence to have a well-spread pan-India network. Today, JSL has 10 sales offices across the country and has multiple touch points; facilitating smoother access to its customers in availing best in class service. Internationally, the Company has a comprehensive global network with one Indonesian manufacturing facility and 14 international sales/representative offices spread across, US, EU, United Arab Emirates, Russia and Vietnam. JSLs sales office and service center distribution network enables it to better manage its inventory, cater to domestic and international customers, and obtain the customer feedback needed to deliver more customized products.

Strong Marketing and Branding initiatives

Over the years, the Company has consistently undertaken a number of notable marketing initiatives, which have enabled to substantially improve JSLs brand salience and its overall market share. The Corporate Marketing Department of the Company has been making persistent efforts in strengthening the demand ecosystem for stainless steel. Some of the recent notable marketing initiatives undertaken by the Company are mentioned below:

• During financial year 2019-20, the Corporate marketing team executed a co-branding scheme with more than 60 customers in the stainless steel pipe and tube segment. The initiative entails the right to use JSLs logo along with the pipe and tube manufacturer logo in order to staunch the counterfeit market and increase the Company and its customer share of wallet. The Company is confident that this initiative will help it to limit the counterfeit market, expand its presence, counter forgery and bring genuine stainless steel products to the consumers.

• As a new business development initiative towards sustainable transportation, the Company is in discussion with manufacturers to facilitate roll out of Stainless steel electric rickshaws. According to the transport sector, estimates nearly 6 lakhs e-rickshaws are sold in India annually and this sale is expected to grow to the tune of 16% CAGR in the next 5 years. JSL is keen to tap this huge opportunity and is working with manufacturers to design and produce stainless steel models.

• During the year gone by, JSL continued with its initiative of increasing the on-ground advocacy of Stainless steel. The Company has created four special Stainless steel showcase vans which have been travelling the length and breadth of the country, highlighting the benefits of Stainless steel. Christened as the Stainless Academy, these vans have helped train fabricators.

• The Company has trained over 9,000 fabricators across 61 cities in collaboration with the ‘Skill India campaign to up-skill this industrys technical manpower. The Company is also working very closely with National Skill Development Council on this part.

• Additionally, the Company also commenced courses in IIT-Kharagpur in 2019-20 and other premier institutes to train engineers and architects in varied applications of Stainless steel.

• The Company also actively participated in various exhibitions and seminars to pro-actively engage prospective customers and industry veterans.

The consistent and innovative marketing efforts of the Company have been successful in attracting substantial interest and demand for JSLs offerings. Going ahead, JSL will continue to various marketing development activities to build brand fondness, loyalty and purchase of JSLs stainless-steel offerings through potential business and existing consumers alike.

Structural Government Initiatives

The demand of stainless steel is witnessing an increase with the support of Government initiatives like ‘Make in India, domestically manufactured iron and steel products policy (DMISP) and is likely to be benefitted from soon to be announced scrap policy. National infrastructure plan of Rs 102 lakh crore is expected to further aid stainless steel demand across sectors. . The Government has also undertaken a number of initiatives to protect the domestic industry from the unwarranted increase in imports and thereby improving performance. The recent decision to opt out of the Regional Comprehensive Economic Partnership (RCEP) agreement is a step taken in the right direction to help maintain a level playing field for the Indian industry. Trade remedial measures are also being considered by the government in view of surge in imports and this is expected to curb unfair trade practices.

In order to monitor imports, the Government has also instituted the Steel Import Monitoring System (SIMS), which is applicable to all steel products. SIMS is a noteworthy step, as the Government will suo moto monitor and act with policy interventions in case any significant patterns in the import quantum of steel products are observed. Lastly, the decision taken by the Indian Government to reduce the corporate tax is expected to go a long way in giving the necessary boost to the domestic stainless steel industry.

Threats

JSL is committed to recognizing and managing the risks it is exposed to, and has put in place mechanisms to handle the same. The Companys management systems, organizational structures, processes, standards, and code of conduct together form its internal control systems, which govern how it conducts its business and manage all associated risks.

The business of the Company is susceptible to certain risks and uncertainties arising out of the following macroeconomic factors:

Political, legal and regulatory risks

There exists a possibility of a change in the overall duty structure on key raw-materials/finished goods by the Government. Further, the Company has been exporting its products to many countries across the globe which has varying degrees of political and commercial stability. Any instability in such countries could impact the Company and pose challenge to its overall performance.

Disruption Risks

The Company operates in a global environment and can be affected by the general unprecedented crises like the recent outbreak of Covid-19 pandemic. This crisis has severely impacted economic activity across the globe. The manufacturing industry globally has been under stress as the supply chain was disrupted with restrictions on movement of goods and growing market uncertainty. Unprecedented situations like lockdown may also impact business. The pandemic also resulted disrupting the domestic and international demand for Stainless steel.

Rising stainless steel imports from FTA countries

Change in the demand-supply scenario can cause disruptions in the global market which could have an adverse effect on the Companys overall performance. Higher production in ASEAN countries including China could pose a threat to the outlook of the domestic industry. The Indian Stainless steel manufacturers are exposed to a threat of increased dumping of irrationally priced imports. This scenario of rising imports under FTAs into the country could force the Indian manufacturers including JSL to under-utilize its capacities.

Despite having anti-dumping duties in place on certain products from China other countries, goods are getting circumvented through other FTA countries. This scenario could lead to a steep increase in channel inventories which would severely impact the overall pricing in the Indian market and have an adverse impact on the Companys performance.

Volatility in key raw-materials

The Company is exposed to price changes to some of its key raw-materials. This aspect could lead to a scenario of demand deterioration when prices fluctuate. The volatility in these materials could lead to an increase in inventories leading to some impact on the Companys performance.

Financial Risks

The Companys debt servicing capabilities could get affected due to any volatility in financial markets. The Company could face incremental challenges in a changing interest rate scenario. Further, the Company is also exposed to currency risks arising due to a considerable amount of import and export of goods it undertakes.

Risk Mitigation

Currently, the Company has been taking swift affirmative actions to mitigate the negative impact caused due to the Covid-19 pandemic. JSL has also been closely monitoring the external environment and optimizing operations to align with the market conditions.

JSL continues to undertake continuous modernization programs to maintain efficient operations of its products and engineering activities. The Company ensures that a majority of the products are contracted with pass through clauses thereby minimising adverse impact from raw material fluctuation.

Company also target to source maximum possibly available scrap from the domestic market and balance requirement is sourced from the nearby shores to curtail the risk of raw material price fluctuation and reduce the lead time.

Healthy cash flow generation by the Company has gone a long way in reducing the overall debt. JSL aspires to further deleverage and maintain a healthier balance sheet. Additionally, the management actively benchmarks relevant operational parameters and ensures adequate level of liquidity is maintained for smooth operations.

Lastly, the Company is working closely with the Indian Government and other regulatory authorities on the issue of unabated dumping which has been happening into the country. JSL is confident that the Indian Government will proactively review all the existing FTAs provision to strengthen and ensure the level-playing field for the domestic industry.

• During FY20, JSL successful exited from the Corporate Debt Restructuring (CDR) framework. Pursuant to this, the Company fully paid a recompense of Rs. 275 crore to its CDR lenders. The exit from CDR marks a significant step forward for the Company. This positive development is expected to provide the necessary financial and operational stability to the business.

• Additionally, the Company was also able to fully redeem the outstanding OCRPS of Rs. 558 crore, along with its recompense; This was largely done with the issuance of non-convertible debentures worth Rs. 400 crore through Kotak Special Situation Fund.

During FY20, the Company successfully expanded its capacities from 0.8 million tonnes to 1.1 million tonnes. This brownfield expansion was executed by debottlenecking and process improvement.

Performance Highlights – FY2020 vs. FY2019

Particulars (Rs in crore) Standalone Consolidated
FY2020 FY 2019

YoY (%)

FY2020 FY 2019

YoY (%)

Net Revenue from operations 12,320.11 12,585.01 (2%) 12,950.87 13,557.33

(4%)

Total Expenditure 11,145.29 11,449.07 (3%) 11,811.39 12,392.76 (5%)
EBITDA 1,174.82 1,135.94 3% 1,139.48 1,164.57 (2%)
Other Income 36.98 27.58 34% 39.89 32.61 22%
Finance Cost 566.89 614.09 (8%) 585.53 636.87 (8%)
Depreciation 408.86 335.08 22% 425.16 351.50 21%
PBT 244.36 220.66 11% 165.26 221.71 (25%)
Tax 91.48 81.62 12% 92.64 76.60 21%
PAT 152.88 139.04 10% 72.62 145.11 (50%)
EPS (Diluted) 3.16 2.90 9% 1.48 2.97 (50%)

The standalone net revenue from operations has decreased by 2% at Rs. 12,320.11 crore as compared to Rs. 12,585.01crore during previous year 2018-19. The Company recorded a 7% year-on-year improvement in its sales volumes which stood at 9,15,909 metric tons in FY 2020 as compared to 8,52,479 metric tons in FY 2019.

Standalone EBITDA stood at Rs. 1,174.82 crore as compared to Rs. 1,135.94 crore during previous year. The interest costs registered a decrease of around 8% at Rs. 566.89 crore in FY20. Accordingly, the profit after tax for the year stood at Rs. 152.88 crore as compared to Rs. 139.04 crore during previous year. EPS for the year was Rs. 3.16 against Rs. 2.90 for the previous year.

Key Financial Ratios

Key Financial Ratios (Standalone) FY20 FY19 FY18
EBITDA margin (%) 9.5% 9.0% 11.9%
PAT Margin (%) 1.2% 1.1% 3.0%
Net Debt to Equity 1.4 1.7 2.0
Net Debt to EBITDA 3.1 3.6 3.7
Return on Equity (%) 6.0% 5.8% 15.5%
Return on Capital employed (%) 11.6% 12.0% 15.6%
Debtors Turnover 15.2 15.1 13.2
Inventory Turnover 5.2 5.7 5.1
Interest Coverage Ratio 2.14 1.89 2.45
Current Ratio 0.8 0.8 0.9

* Net Debt to Equity is calculated as Total Debt less Cash and Bank Balance / Equity * Net Debt to EBITDA is calculated as Total Debt less Cash and Bank Balance / EBITDA * ROE (%) is calculated as PAT / Avg. Networth * ROCE(%) is calculated as Earning before Interest & Tax/Avg. Capital employed

* Inventory Turnover is calculated as COGS including employee cost, manufacturing & Admin Expenses and depreciation /Avg. Inventories * Debtors Turnover is calculated as Sales /Avg. Account Receivable * Interest Coverage Ratio is calculated as Earning before Depreciation, Interest, Tax & Exceptional Items / Finance cost * Current Ratio is calculated as Current Asset /Current Liabilities

Description – Borrowings (Rs. crore) As on March 2020 As on March 2019 As on March 2018
Long term debt 2,357 2,050 2,457
Inter corporate loan from related party 900 900 900
OCRPS* - 695 607
Total Long-Term Debt 3,257 3,645 3,963
Short term borrowing (less than 12 months) 398 473 766
Total Debt 3,655 4,118 4,729
Cash & Investments 44 14 37
Net Debt 3,610 4,104 4,692
Long term debt
Long Term Debt Breakup:
-INR Debt 2,981 3,139 3,248
-Foreign Currency Debt 276 506 715

 

Note : *Optionally Convertible Redeemable Preference Shares

Borrowings (Subsidiaries) (Rs. crore) As on March 2020 As on March 2019 As on March 2018
Long-Term Debt - - -
Short-Term Debt 248 270 286
Total 248 270 286

The Companys total debt stood at Rs. 3,655 crore as of 31st March 2020. This is lower by Rs. 1,074 crore over the past two years. On the back of healthy cash flows, the Company Net Debt/Equity ratio has improved from 2.0x in FY18 to 1.4x in FY20. Thus, the Company has been able to considerably strengthen its balance sheet.

Key Raw Materials – Price Trends

The Companys consolidated net revenue from operations stood at Rs. 12,950.87 as against Rs. 13,557.33 in FY2019. Consolidated EBITDA stood at Rs. 1,139.48 crore in FY 2020 as compared to Rs. 1,164.57 crore in FY 2019.. PAT for the year at Rs. 72.62 crore as compared to Rs. 145.11 crore during previous year. EPS for the year was Rs. 1.48 against Rs. 2.97 for the previous year.

Awards and Accolades – FY20

Received GOLD Award under Apex India Safe Workplace Award 2019 in Metal & Mining Sector for the year 2019-20 for outstanding achievement in Safety Management.

Received Fame Environment Excellence Award 2019 (Platinum Award) from FAME (Foundation for Accelerated Mass Empowerment) in Metal & Mining Sector.

Received 19th Annual Greentech Environment Award – 2019 (Gold Award) in Metal & Mining Sector. CCQC Gold Award at Bhubaneswar Chapter NCQC Par Excellence Award at Varanasi 32nd Convention on Quality Circle organized by CII.

Lean Quality Circle Team "Chrome" from Steel Melt Shop, JSL Jajpur was adjudged the winner (First Position) in the 32nd CII QC Circle Odisha State level Competition on 20th December 2019, organized by CII Bhubaneswar

National Convention on Quality Circle organized by QCFI

All four team on Steel Melt shop bagged Par-Excellence Award in NCQC-2019 Varanasi Chapter

SMS Team Won 1st Runner-Up trophy at CII National Energy Efficiency Circle competition Under Best Energy Efficient Organisation category"

SMS AOD Team fetched 3rd Prize at National Level 19th Skill Supervisory competition at Jamshedpur organized by CII, INDIA

Integrated Management Systems

Quality & Quality Management Systems

CERTIFICATIONS AND QUALITY STANDARDS

Your Company is certified for integrated management systems comprising of Quality management system (ISO 9001:2015), Environment management system (ISO 14001:2015) and Occupational health & safety management system. The occupational health & safety management system has successfully been upgraded to latest version ISO 45001:2018. The company is also certified to Energy management system and the same has been upgraded to the latest version ISO 50001:2018.

All the testing laboratories (comprising of incoming raw materials, steel melt shop, coal testing and mechanical & metallurgical testing) of the company are NABL (National Accreditation Board of Testing and Calibration Laboratory) accredited as single entity "Central laboratory & technical services" as per laboratory management system ISO/IEC

17025:2017. NABL accreditation has strengthened its overall technical competency which has resulted in becoming world class laboratory with acceptance of its test results worldwide.

The company is certified as per Construction Product Regulation (CE Marking) with incorporation of ferritic & duplex grades of stainless steel with validity of certificate till December 2023. This will further enhance companys preference as certified manufacturer of stainless steel for construction field in the European market with 14 grades covered under the scope of CE marking. CPR first surveillance audit 2019 -20 has successfully been completed. The company is also certified for Pressure Equipment Directive AD/ PED with ferritic & duplex grades of stainless steel under the scope with validity of certificate until January 2022. PED/AD first surveillance audit 2019-20 has also been successfully completed. The PEMEX certification for oil and gas sector is valid until December 2020. Your Company is re-certified as DNV GL approved manufacturer for Marine Application and the approval from Bureau Veritas as per Marine & Offshore General Conditions is valid until May 2022.

Your Company has REACH/RoHS certification for 200, 300 & 400 series stainless steel grades. This includes compliance to all restricted substances under REACH and RoHS latest regulations.

Your Company has ISI mark/ BIS certification for various grades of Stainless Steel including BIS licenses as per IS 5522: 2014 (Stainless Steel Sheets and Strips for Utensils) and IS 15997:2012 (Low Nickel Austenitic Stainless Steel and Strip for Utensils and Kitchen Appliances), enabling us as preferred stainless steel manufacturer with BIS license.

Your Company also holds JIS Mark Certification as per JIS (Japanese Industrial Standard) JIS G 4304, JIS G 4305 and JIS G 4312 requirements for stainless steel products. This has enabled the company to be able to sell stainless steel products in Japan and East Asian countries.

Environment

In the pursuit of Excellency in sustainable environment, Jindal Stainless Limited (JSL), Jajpur has taken various measures towards environment protection by way of efficient use of all key resources through its effective management, technological advancement and sound environmentally workforce for up-gradation of Integrated Management System (IMS) that includes ISO 9001: 2015 for Quality Management System (QMS), ISO 14001:2015 for Environment Management System (EMS) and ISO 45001:2018 for Occupational Health & Safety Management System (OHSMS) in line with the requirement.

Environment Surveillance monitoring of Air quality (ambient air and stack), Water quality, and Noise at various locations is being regularly carried out. Real time online monitoring of Ambient Air Quality, stack and effluent quality has been made operational continuously and data is being transmitted to SPCB/CPCB server uninterruptedly. 5nos. of PTZ Camera has been installed at various locations inside plant for round the clock supervision of Process emission and discharge of water.

Various environmental measures has been taken for control of Air Pollution at Ferro Alloys Complex with replacement of all PTFE laminated fiber glass filter bags at SAF # 1 & 2 and SAF # 3, 4 & 5 bag House Hoppers. One separate de-dusting system having adequate capacity has been installed for tapping fume extraction at SAF # 3. Work for installation of standalone de-dusting system for SAF # 5 has been initiated. A new dust cyclone separator has also been installed at Fume de-dusting system of Coke Oven Plant. A dedicated Effluent Treatment Plant (ETP) has been constructed for new 0.3 MTPA CRM Project to take care of the process effluent.

As a part of surface runoff water management, surface runoff study has been undertaken by NIT, Rourkela to find out the remedial measures for control of seepage water. To mitigate the on-going surface runoff water issue with respect to VISA Steel & KJ Ispat; dedicated RCC drain of around 2.3 KM all along the VISA Steel & KJ Ispat boundary is being constructed. Work for installation and commissioning of 250 m3/hr Effluent Treatment Plant has been initiated for treatment of surface runoff water.

As a part of compliance towards Pollution Prevention and sound environmental performance, JSL has made substantial efforts in last six years towards 100 % fly ash utilization by way of supplying fly ash to bricks manufacturing unit, Asbestos manufacturing Plant & Cement Plants. Further bottom ash is being disposed at nearby SPCB approved abandoned mines, supplied to NHAI for road construction as well as sent to other land development sites as per the instruction of district administration.

To be harmony with nature and green environment, JSL has undertaken mass plantation programmes in and around the Plant to create thick greenbelt and avenue plantations. As on 31st March, 2020 JSL has undertaken tree plantation of more than 3.4 Lakhs nos. inside plant covering an area of 193.62 Ha. (38.7 % of total plant area). Further, more than 1.39 Lakhs nos. of trees has been planted outside plant under Avenue Plantation and free distribution of more than 95,000 nos. of saplings to local villagers.

JSL is committed towards sustainable clean and green environment with compliance to all statutory obligations.

Health & Safety

Jindal Stainless Limited (JSL) firmly believes in creating a Safety culture among all employees by adopting 4-Es (Engineering Control, Education, Encouragement & Enforcement) principles and through effective management practices by implementation of ISO 45001:2018 for Occupational Health & Safety system and promote safety at various stages to roll out "ACCIDENT FREE STEEL".

A robust management system framework and a sound safety governance structure drive our health and safety measures. To achieve our objective of Zero LTI (Loss time injury), long-term Safety Strategies are being implemented across JSL. We endeavour to achieve the goal of "Committed to Zero" i.e. to achieve zero LTI for any unsafe act/s when it comes to Safety.

JSL, Jajpur has set online systems for reporting unsafe condition/act in the workplace, besides offering features for online detection of hazardous gases as well as visual displays of the shop floor for better understanding of work processes. EHS Department, comprising of well experienced & empowered Safety Officers, Fire Officers, coupled with area- wise safety responsibility has been constituted to devise best practices & procedures for creating a safe work environment with ensuring applicable safety compliances. Supervisor Responsibility on safety i.e Line Responsibility is inherently adopted thus driving safety ownership at respective shop floors to enhance "Surakhya Chakra". JSL, Jajpur had well structured and experienced fire fighting team all round the clock to deal with any emergency situations at Plant. A dedicated SAFETY TRAINING CENTRE (STC) with multimedia facilities to conduct safety training on various topics and impart audio-visual aided induction & job specific safety trainings on daily. In addition, various Safety Promotion campaigns, awareness drive, publicity & propaganda including Weekly Open House Safety Meeting at different Shop floors are undertaken at regular intervals to instil safety culture.

We are committed to our goal of ensuring zero harm to our employees, our contractors and the communities in which we operate. This is integral to our business process and is laid down in the JSL Health and Safety Policy, through which we have achieved the Zero Fatality

Human Resource

The joy of an engaged and high performing workforce has been at the root of Jindal Stainless Limiteds (JSLs) progression into a strong and endearing enterprise. As on March 31, 2020, the Company total employee strenghth of 8,058 (including contractual staff).

Engagement forms the core of all HR initiatives. Several employee connect initiatives, like SAMPARK and Coffee with MD, give a direct platform to the employees to get their queries addressed by companys Managing Director. Events like Utsav gave an opportunity to bring together our employees to bond better and extend the gratitude to the actual support system – their families. Further, our engagement with employees in last Financial Year continued to strengthen through the Climate Survey, which was launched to solicit their opinions, perceptions and feelings regarding the organisations environment.

As a performance-driven organization, we recently introduced the concept of Continuous Performance Management (CPM). The process of quarterly goal setting coupled with regular check-ins and coaching brings in focus the significance of the dialogue between the Manager and his direct Reports on the functional priorities and the results, thereby enabling employees to perform at their optimum levels.

The graduate engineering trainees (GET) hired from leading engineering & diploma colleges across India, went through our flagship program - ARISE. The 9-months induction program was launched with an objective to "Shape Stainless Engineers" of the future while preparing them for the transition from academic to the corporate world.

Learning & Development has been an important focus area with the objective to ‘build a strong Learning culture, inspiring individuals to expand their capabilities & maximize their performance in their career at Jindal Stainless. We completed the 12 month journey of Masterful Management, a flagship leadership development program for middle managers that focused on leadership capabilities for the changing business landscape. Capability of our workmen is enhanced continually with technical programs like Arohan as well as through Pratigyan - a unique up skilling and empowerment initiative for women. Leveraging the power of technology, our online courses ensured that we could focus on the learning and development of all employees, despite location or lockdown constraints.

In our effort to ensure prevention of any form of sexual harassment and to be more inclusive and safer for female employees, online module on POSH was launched across all management levels. The objective of the module is to create awareness amongst employees regarding the subject and to reiterate our commitment towards becoming a zero tolerance organization against sexual harassment of women at workplace.

The efforts to have world class people practices are also recognized by the industry with several awards we have won in FY20, Business World Best Learning and Development Practise Award 2019, Workers Education Award 2019 and Manufacturing Today Awards 2019 in the Platinum category, to name a few. We are committed to make JSL the most preferred organisation to work for in the manufacturing sector.

Way Forward

Several internal and external factors augur well for the Companys future. Today, JSL enjoys a deep repository of experience of decades, a comprehensive pan-India and global distribution network, a large team of experienced and professionally-run human resource and a well-diversified product portfolio of stainless steel products.

Over the years, the Company has not only undertaken initiatives to increase its overall capacities and distribution network, but has also made significant efforts to strengthen its balance sheet. Going ahead, JSL remains focused on maintaining a healthier balance sheet which will assist the Company to face some of the near-term macro level challenges. Today, the Company is well positioned to benefit from the expected recovery in demand and trajectory of growth as the economy stabilizes. The strategic initiatives undertaken in recent years are expected to provide the necessary resilience to successfully overcome challenges through different parts of the business cycle. On a longer-term basis, the Company remains confident that its strategic initiatives will provide levers for high quality and sustainable growth and profitability.

Forward-Looking Statement

This Annual Report includes forward-looking statements regarding guidance, industry prospects, or future results of operations or financial position. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward looking statements. Forward looking statements reflect managements current expectations and are inherently uncertain. Actual results could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events and the rate of growth among others. The Company assumes no responsibility to amend, modify or revise any such statements. The Company disclaims any obligation to update these forward-looking statements except as may be required by law.