jindal steel & power ltd share price Directors report


Dear Members,

The Board of Directors are pleased to present the Companys 44th Annual Report and the Companys audited financial statements (Standalone & Consolidated) for the Financial Year ended March 31, 2023.

FINANCIAL RESULTS

The Companys financial results for the year ended March 31, 2023, are summarized below:

Standalone Consolidated

Particulars

2022-23 2021-22 2022-23 2021-22
Total Income 51,228.99 49,533.46 52,768.23 51,135.92
EBITDA 9,533.14 15,036.73 9,934.89 15,513.44
Depreciation & Amortisation Expenses 2,165.94 2,232.16 2,690.95 2,096.78
Finance Costs (Net) 1,285.78 1,414.79 1,445.89 1,887.71
Other Income 48.91 102.01 57.05 50.36

Profit / (loss) before tax, exceptional items and associate

6130.33 11491.79 5855.10 11579.31

profit/loss from continuing operations Share in loss of associates (Net of Tax)

0.15 0.23
Exceptional Items(Net) 3258.26 323.71 1369.46 406.24

Profit/ (Loss) before tax after exceptional items and associate

2,872.07 11,168.08 4,485.49 11,172.84

profit/loss from continuing operations

Less: Provision of tax 445.24 2,884.66 1,292.28 2,924.53

Profit/ (Loss) after tax and associate profit/loss

2,426.83 8,283.42 3193.21 8,248.31

Profit/ (Loss) before tax after exceptional Items from discontinued operations

981.68 (255.65)
Less: Provision of tax 200.80 1,226.93

Profit/ (Loss) after tax from discontinued operations

780.88 (1,482.58)

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION AND CHANGE IN BUSINESS

There have been no material change(s) and commitment(s), except elsewhere stated in this report, affecting the financial position of the Company between the end of the financial year of the Company i.e., March 31, 2023, and the date of this Report.

There has been no change in the nature of business of the Company during the financial year ended on March 31, 2023.

OPERATIONAL HIGHLIGHTS

Notwithstanding massive disruption caused by the Russia-Ukraine Crisis in late FY22, the Companys wide product profile and geographical diversification stood the Company in good stead. For the full year, standalone production (incl. pig iron) decreased by 1% Y-o-Y (7.89 MT vs. 8.01 MT in FY 22) ,however, standalone Steel (incl. pig iron) sales reached the highest ever level of 7.68 MT (up 1% Y-o-Y). Despite turbulent export markets, Companys sales efforts resulted in export volumes at 1 MT. Exports share declined to 13% in FY23 compared to 33% in FY22 owing to export duty imposed on Steel & Iron Ore by Government of India during May22 to Nov22.

Improved steel realisations and higher sales resulted in Gross revenues rising by 8% Y-o-Y to 59,470 crore. Standalone EBITDA decreased by 37% Y-o-Y to 9,533 on account of increase in Raw Material prices, primarily coking coal. Companys net profit landed at 2,427 crore in FY 23.

The Pellet production of 7.57 MT in FY 23 fell 2% Y-o-Y. Higher captive consumption and export duty imposition resulted in 69% fall in pellet external sales (0.23 MT vs. 0.75 MT in FY22).

KEY DEVELOPMENTS

Divestment of stake in Jindal Power Limited, a subsidiary company

On May 30, 2022, the Company concluded the divestment of its entire 96.42% stake in equity capital and preference investment in Jindal Power Limited.

DIVIDEND

The Board of Directors of your Company is pleased to recommend a Final Dividend of 2/- per equity share of face value 1/- each for the financial year ended March 31, 2023.

The Company has framed Dividend Distribution Policy in accordance with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The Policy may be accessed on the website of the Company at: www.jindalsteelpower.com The objective of this policy is to establish the parameters to be considered by the Board of Directors of your Company before declaring or recommending dividend.

TRANSFER TO RESERVES

The Company has not transferred any amount to reserves for the financial year ended March 31, 2023.

DEPOSITS

The Company has not accepted/received any deposits during the year under report, falling within the ambit of Section 73 of the Companies Act, 2013 (the act) and the Companies (Acceptance of Deposits) Rules, 2014.

CREDIT RATING

Your Companys domestic credit ratings, as on March 31, 2023, are as follows:

Rating Agencies

Long – term debt facilities Short-term debt facilities

Credit Analysis & Research Ltd. ("CARE")

AA(-), Positive Outlook A1(+)

ICRA Limited

AA(-), Positive Outlook A1(+)
India Ratings & Research - A1(+)

During FY23, Credit Ratings of the Company were revised from AA(-), Stable/A1(+) to AA(-), Positive /A1(+) for Long Term/Short Term debt facilities of JSP by CARE & ICRA both and India Ratings & Research assigned the credit Rating of A1(+) for short term debt facilities during the year.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Companies Act, 2013 ("the Act"), the Listing Regulations and Ind AS, the audited consolidated financial statements are provided in the Annual Report.

SHARE CAPITAL

The Companys Authorised Share capital during the financial year ended March 31, 2023, remained at 3,00,00,00,000/- (Rupees Three Hundred crore only) consisting of 2,00,00,00,000 (Two Hundred crore) equity shares of 1/- (Rupee One only) each and 1,00,00,000 (One crore) Preference Shares of 100/- (Rupees One Hundred only) each. The Companys paid-up equity share capital remained at

1,02,00,88,097/- (Rupees One Hundred Two crore Eighty-Eight Thousand and Ninety Seven only) comprising of 1,02,00,88,097 (One Hundred Two crore Eighty Eight Thousand and Ninety Seven) equity shares of 1/- (Rupee One only) whereas the paid-up preference share capital of the Company for the financial year ending March 31, 2023, was Nil.

EMPLOYEE STOCK OPTION SCHEME/ EMPLOYEE SHARE PURCHASE SCHEME

In order to motivate, incentivize and reward employees, your Company instituted Employee Share Purchase Schemes namely JSPL ESPS-2013, JSPL ESPS-2018 and Employee Stock Option Scheme namely JSPL ESOP Scheme-2017 and Jindal Steel & Power Employee Benefit Scheme-2022. The Nomination and Remuneration Committee ("NRC") monitors the implementation of JSPL ESPS-2013, JSPL ESPS-2018 and Employee Stock Option Scheme namely JSPL ESOP Scheme-2017 and Jindal Steel & Power Employee Benefit Scheme-2022, which are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations"). Relevant disclosures pursuant to SEBI SBEB Regulations, as on March 31, 2023, are available on the website of the Company at www.jindalsteelpower.com Certificate from M/s RSMV & Co., Company Secretaries, New Delhi (CP No. 11571), Secretarial Auditors, with respect to the implementation of JSPL ESPS-2013, JSPL ESPS-2018 and Employee Stock Option Scheme namely JSPL ESOP Scheme-2017 and Jindal Steel & Power Employee Benefit Scheme-2022 and will be available on the website of the Company at www.jindalsteelpower.com.

NON_CONVERTIBLE DEBENTURES

There were no outstanding Non-Convertible Debentures as on March 31, 2023.

RELATED PARTY TRANSACTIONS

In terms of Section 188 of the Act read with rules framed thereunder and Regulation 23 of the Listing Regulations, your Company has in place Related Party Transactions Policy dealing with related party transactions. The policy may be accessed at: www.jindalsteelpower. com During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were at arms length and in the ordinary course of business. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and entered in the ordinary course of business and on an arms length basis. The Company did not have any contracts or arrangements with related parties in terms of Section 188

(1) of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section 134

(3)

(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2022-23 and hence does not form part of this report. Details of related party transactions entered into by the Company, in terms of Ind AS-24 and Listing Regulations have been disclosed in the notes to the standalone/consolidated financial statements forming part of this Integrated Annual Report.

PARTICULARS OF LOANS, GUARANTEES, SECURITIES AND INVESTMENTS

The particulars of loans, guarantees, securities and investments, covered under the provisions of Section 186 of the Companies Act 2013, are furnished in the financial statements.

SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE COMPANIES

A separate statement containing performance and highlights of Financial Statements of subsidiary, associate and joint venture companies is provided in the prescribed form AOC-1, attached to the Consolidated Financial Statements and forms part of this report. The names of companies which have become or ceased to be subsidiary or joint venture or associate companies, if any, during FY 23 have been mentioned in the notes to the accounts.

The financial statements of subsidiary companies are kept open for inspection by the shareholders at the registered office of the Company during business hours on all days except on Saturdays, Sundays and on public holidays upto the date of the Annual General Meeting ("AGM") as required under Section 136 of the Act. Any member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office or Corporate Office.

The audited financial statements including the consolidated financial statements and all other documents required to be attached thereto and financial statements of each of the subsidiaries have been uploaded on the website of your Company at www.jindalsteelpower.com. Your Company has framed a policy for determining "Material Subsidiary" in terms of Regulation 16(c) of Listing Regulations. The policy may be accessed on the website of the Company at: www.jindalsteelpower.com

DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors:

The Board of Directors appointed Mr. Ramkumar Ramaswamy and Mr. Sunil Agrawal as Additional Directors, with effect from July 15, 2022, to hold the office upto the AGM of the Company. Subject to the approval of shareholders of the Company, Mr. Ramkumar Ramaswamy and Mr. Sunil Kumar Agrawal were also appointed as Whole-time Directors of the Company for a period of 3 years with effect from July 15, 2022.

Mrs. Shallu Jindal, Non-Executive Director decided to step-down from the Board with effect from July 16, 2022 and Mr. Anil Wadhwa, Independent Director completed his term on the Board and ceased to be Independent Director with effect from July 29, 2022.

Mr. V.R. Sharma completed his three-year term as Managing Director on August 13, 2022 and ceased to be director w.e.f the said date. The Board approved the appointment of Mr. Bimlendra Jha as an Additional Director with effect from August 14, 2022, to hold the office upto AGM of the Company, subject to the approval of shareholders of the Company. Mr. Bimlendra Jha was appointed as Managing Director for a period of 5 years w.e.f. August 14, 2022.

The Board of Directors appointed Mr. Rohit Kumar as an Additional Director in the category of Independent Director with effect from September 20, 2022, to hold the office up to the AGM of the Company. Subsequently, the Shareholders of the Company in the AGM held on September 30, 2022, approved the appointments of, Mr. Ramkumar Ramaswamy and Mr. Sunil Agrawal as Directors and Wholetime Directors for a term of 3 years with effect from July 15, 2022, Mr. Bimlendra Jha as Director and Managing Director with effect from August 14, 2022, for a term of 5 years and Mr. Rohit Kumar, as Independent Director for a term of consecutive 5 years with effect from September 20, 2022. The Board approved the appointments of Mr. Damodar Mittal and Mr. Sabyasachi Bandyopadhyay as Additional Directors with effect from March 28, 2023, to hold the office upto AGM of the Company, subject to the approval of shareholders of the Company. Mr. Damodar Mittal and Mr. Sabyasachi Bandyopadhyay were also appointed as Wholetime Directors of the Company for a period of 3 years with effect from March 28, 2023.

Mr. Dinesh Kumar Saraogi and Mr. Sunil Agrawal stepped down from the position of Wholetime Directors of the Company with effect from March 29, 2023.

The Board of Directors places on record their deep appreciation for the contributions and guidance provided by the outgoing directors during their respective tenures on the Board.

Retirement by Rotation:

In accordance with the provisions of Section 152 of the Act and in terms of the Articles of Association of the Company, Mr. Naveen Jindal and Mr. Ramkumar Ramaswamy, Directors of the Company are retiring by rotation at the ensuing AGM of the Company and are eligible for re-appointment. Your Board recommends the re-appointment of Mr. Naveen Jindal and Mr. Ramkumar Ramaswamy, as Directors of the Company. The particulars in respect of Mr. Naveen Jindal and Mr. Ramkumar Ramaswamy as required under Regulation 36(3) of Listing Regulations and SS-2, are mentioned in the Notice of AGM.

Key Managerial Personnel:

In terms of Section 203 of the Act, Mr. Ramkumar Ramaswamy has been appointed as the Chief Financial Officer of the Company, effective from May 21, 2022.

BOARD EVALUATION

The Board carried out an annual performance evaluation of its own performance, the performance of the Directors individually as well as the evaluation of the various Committees of the Board. Details of the same are given in the Corporate Governance Report which forms part of this report.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from each of the Independent Directors that they, respectively, meet the criteria of independence prescribed under Section 149 read with Schedule IV of the Act and rules made thereunder, as well as Regulations 16 and 25

(8) of the Listing Regulations. Based on the declarations received, the Board considered the independence of each of the Independent Directors in terms of above provisions and is of the view that they fulfil the criteria of independence and are independent from the management. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including pro_ciency in terms of Section 150

(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs and will undergo the online pro_ciency self-assessment test within the specified timeline, unless exempted under the aforesaid Rules.

MEETINGS OF THE BOARD AND COMMITTEES

The Board of Directors met 8 (Eight) times during the period under review. The details of number of meetings of the Board and various Committees of the Board of your Company are set out in the Corporate Governance Report, which forms part of this report.

SECRETARIAL STANDARDS

The Directors state that applicable secretarial standards i.e., SS-1 and SS-2, relating to meetings of the Board of the Directors and General Meetings have been duly followed by the Company.

REMUNERATION POLICY

In accordance with the provisions of Section 178 of the Act and Part D of Schedule II of the Listing Regulations, the policy on Nomination and Remuneration of Directors, KMPs and Senior Management of your Company is uploaded on the website of the Company and may be accessed at: www.jindalsteelpower.com. During the year under review, there has been no change to the Policy.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules and the disclosures relating to remuneration and other details, is annexed as Annexure – A to this report.

STATUTORY AUDITORS

M/s Lodha & Co., Chartered Accountants (ICAI Firm Registration No. 301051E), New Delhi, were appointed as the Statutory Auditors for a period of 5 years from the conclusion of 42nd AGM till the conclusion of 47th AGM of the Company.

The Statutory Auditors have confirmed that they are not disqualified from continuing as the auditors of the Company.

The Statutory Auditors have issued an unmodified opinion on the Companys Financial Statements for the financial year ended March 31, 2023.

There are no instances of any fraud reported by the Statutory Auditors to the Audit Committee or the Board pursuant to section 143(12) of the Act.

SECRETARIAL AUDITORS

M/s RSMV & Co., Company Secretaries, New Delhi (CP No. 11571) were appointed to conduct the Secretarial Audit of the Company for the financial year 2022-23.

Secretarial Audit Report issued by M/s. RSMV & Co., Company Secretaries, New Delhi of the Company is annexed herewith as Annexure – B to this Report.

COST AUDITORS

In terms of sub-section (1) of Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain the cost records. Accordingly, such accounts and records have been maintained by the Company.

M/s Ramanath Iyer & Co., (FRN 000019), Cost Accountants, were appointed as the Cost Auditors of the Company for auditing the cost records of the Company for the financial year 2023-24, subject to rati_cation of their remuneration by the Shareholders of the Company in the 44th AGM of the Company. Accordingly, an appropriate resolution seeking rati_cation of the remuneration for the financial year 2023-24 of M/s Ramanath Iyer & Co., Cost Auditors, is included in the Notice convening the 44th AGM of the Company.

RISK MANAGEMENT

The Company has in place a robust risk management framework which identifies and evaluates business risks and opportunities. The Company recognises that the applicable risks need to be managed and mitigated to protect the interest of the shareholders and stakeholders, to achieve business objectives and enable sustainable growth. The risk management framework is aimed at effectively mitigating the Companys various business and operational risks, through strategic and tactical actions. Risk management is embedded in our critical business activities, functions and processes. The risks are reviewed for the change in the nature and extent of the major risks identified since the last assessment. It also provides control measures for risks and future action plans.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements and such internal financial controls are operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

CORPORATE SOCIAL RESPONSIBILITY

The Company strongly believes that sustainable community development is essential for harmony between the community and the industry. The Company endeavours to make a positive contribution especially to the underprivileged communities by supporting a wide range of socio-economic, educational and health initiatives.

The Health, Safety, CSR, Sustainability and Environment Committee ("HSCSE Committee") of the Board of Directors of the Company oversees the implementation of CSR Policy of the Company.

In line with the provisions of the Act and on the recommendations of the HSCSE Committee, the Board of Directors has approved the CSR Policy of the Company. Detailed CSR Policy of the Company has been uploaded on the website of the Company at www.jindalsteelpower. com.

The Annual Report on the CSR activities for the financial year 2022-23 is annexed herewith as Annexure – C to this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material order(s) were passed by the regulators/ courts which would impact the going concern status of the Company and its future operations during the year under review.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Act, your Directors state that: (a) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards and Schedule III to the Act, have been followed and there are no material departures from the same; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2023 and of the profit of the Company for the year ended on that date; (c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) The Directors have prepared the annual accounts on a going concern basis; (e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

OTHER DISCLOSURES / REPORTING

Business Responsibility and Sustainability Report

As stipulated under Listing Regulations, a separate section titled "Business Responsibility and Sustainability Report" forms part of this Annual Report which offers more detailed information on your Companys actions and initiatives related to environmental, social, and governance matters.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As stipulated under Listing Regulations, a separate section titled "Management Discussion and Analysis Report", forms part of this Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars related to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure – D to this Report.

ANNUAL RETURN

In accordance with the provisions of Sections 92 and 134(3)(a) of the Act read with the Companies (Management and Administration) Rules, 2014, the Annual Return in e-form MGT-7 for the financial year ended March 31, 2023 has been uploaded on the website of the Company i.e. www.jindalsteelpower.com.

CORPORATE GOVERNANCE

Your Company is committed to achieve the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India. Your Company has also implemented several best Corporate Governance practices as prevalent globally.

The report on Corporate Governance as stipulated under the listing regulations for the Financial Year 2022-23 and a certificate issued by M/s Navneet K. Arora & Co. LLP, Company Secretaries in Practice confirming compliance with the conditions of Corporate Governance is annexed herewith as Annexure – E to this report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

Your Company has formulated a robust vigil mechanism to deal with instances of unethical behaviour, actual or suspected fraud or violation of Companys code of conduct or ethics policy. The details of policy are explained in the Corporate Governance Report and also uploaded on website of the Company at: www.jindalsteelpower.com

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder, your Company has constituted an Internal Complaints Committee having designated independent member(s) to redress complaints regarding sexual harassment. For details of the complaints received etc. during the period under review please refer the Corporate Governance Report (Annexure –E).

DISCLOSURE UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

There was no application made by the Company initiating insolvency proceedings against any other entity nor are any proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review.

DIFFERENCE IN VALUATION IN THE CASE OF ONE TIME SETTLEMENT OF LOAN FROM BANK OR FINANCIAL INSTITUTION

There was no one time settlement of loan from banks or financial institutions by the Company during the year under review. Accordingly, there are no details regarding difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions.

CAUTIONARY STATEMENT

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward looking within the meaning of applicable Securities Laws and Regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in Government Regulations, Tax Laws, Economic Developments within the country and other factors such as litigation and industrial relations.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for the sincere services rendered by Companys staff and workers at all levels. Your Directors also wish to place on record their appreciation for the valuable co-operation and support received from the Government of India, various State Governments, the Banks/ Financial Institutions and other stakeholders such as shareholders, customers and suppliers, among others. The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companys success. The Directors look forward to their continued support in future.

For & on behalf of the Board of Directors
Naveen Jindal
Place : New Delhi Chairman
Date : May 16, 2023 DIN : 00001523