JSW Ispat Special Products Ltd Directors Report.

To the Members,

JSW Ispat Special Products Limited

(Formerly known as Monnet Ispat and Energy Limited)

The Board of Directors of JSW Ispat Special Products Limited ("the Company") present the 32nd Annual Report along with the audited financial statements for the financial year ended 31 March 2022.

1. Financial Summary

The financial performance (standalone and consolidated) of the Company for the financial year ended 31 March 2022 ("year under review") is as follows:

(Rs in Crores)

Standalone Consolidated

Particulars No. Year ended 31 March 2022 Year ended 31 March 2021 Year ended 31 March 2022 Year ended 31 March 2021
1 Income from operations
(a) Sales of products and services 6,011.54 4,150.14 6,011.54 4,150.14
(b) Other operating income 49.11 37.60 49.11 37.60
Total revenue from operations 6,060.65 4,187.74 6,060.65 4,187.74
Other Income 30.13 12.99 23.67 15.73
Total income 6,090.78 4,200.73 6,084.32 4,203.47
2 Expenses
(a) Cost of materials consumed 4,387.57 2,965.57 4,387.57 2,965.57
(b) Changes in inventories of finished goods, work-inprogress and stock-in-trade (95.94) 4.41 (95.94) 4.41
(c) Purchase of traded goods 13.88 - 13.88 -
(d) Employee benefits expense 129.72 115.58 129.72 115.58
(e) Finance costs 270.60 275.78 270.60 275.85
(f) Depreciation and amortization expense 223.21 227.47 223.21 228.46
(g) Power and fuel 476.00 267.07 476.00 267.07
(h) Other expenses 676.56 449.84 677.79 451.54
Total expenses 6,081.60 4,305.72 6,082.83 4,308.48
3 Profit/ Loss from operations before exceptional items and tax (1-2) 9.18 (104.99) 1.49 (105.01)
4 Exceptional items - 314.53
5 Profit / Loss before tax (3-4) 9.18 (104.99) 1.49 209.52
6 Tax expense:
(i) Current tax - -
(ii) Deferred tax - -
7 Profit/ Loss for the year (5 + 6) 9.18 (104.99) 1.49 209.52
8 Other comprehensive income/ loss (after tax) -
A. (i) Items that will not be reclassified to profit or loss (0.77) 2.51 (0.77) 2.51
(ii) Income tax relating to items that will not be reclassified to profit and loss - -
B. (i) Items that will be reclassified to profit or loss - (0.84) 7.25
(ii) Income tax relating to items that will be reclassified to profit and loss - -
9 Total comprehensive income / (loss) for the year (7+8) 8.41 (102.48) (0.12) 219.28
Total comprehensive income / (loss) for the year attributable to:
Owner of the company - (0.12) 220.33
Non-controlling interests - - (1.05)
Total (loss) / income for the year attributable to:
Owner of the company - (0.12) 210.57
Non-controlling interests - - (1.05)
Other comprehensive (loss) / income for the year attributable to:
Owner of the company - (1.61) 9.76
Non-controlling interests - - -

2. Operational Performance

The Company has two manufacturing facilities namely, at Raigarh and Raipur, in the State of Chhattisgarh. The Raipur unit continued with the production of Ferro-Alloys and Commodity products. The Raigarh unit ushered into Special Steel production in FY 2022.

During year under review, the country witnessed highly transmissible and deadly second wave of COVID-19 leading to imposition of fresh restrictions by governments thereby impacting economic activities and disruption in supply chain and logistics. However, despite such a situation, the plants of the Company were largely operating smoothly by following the necessary safety guidelines and Government Protocols.

The Company has stabilized special steel production and also commenced Slab production in FY22. On raw material front, the Company has secured supply of Iron ore from the mines of JSW Steel Limited and Coke conversion through Bhushan Power and Steel Limited (BPSL) and other party. On coal procurement for power plant, the Company entered into coal linkage agreement.

On logistics front, the Company concentrated on maximizing rail movement for both inward and outward movement of material.

Though, the demand for steel products from infrastructure, construction, automobile and real

estate sectors were fluctuating throughout the year, the last quarter of FY22 witnessed improvement in production, demand and prices for the products of the Company. This was also accompanied by increase in raw material prices.

The Company is in the process of increasing the production levels for special steel products both in Long Products and Slabs. The Company focuses on IATF Certification, API Certifications and RDSO (Indian Railway) Certifications. The Management is also preparing for ISO 50001 - Energy Management going forward.

During the financial year under review, the revenue of the Company touched Rs 6,061 crores, higher by ~45% over the previous fiscal. The Companys performance saw significant improvement over the last years performance in terms of production with 0.58 million tons of crude steel production registering YoY growth of 53%. The Company has posted EBIDTA of Rs 472.86 crores (~23% YoY growth) and generated standalone profits after seven years.

Following is the operational and financial performance of the Company for the financial year under review:

Standalone:

The Companys operational performance in terms of physical production and sales during the financial year ended on 31 March 2022, is as under:

Production (MT)-
Particulars FY 2022 FY 2021 Increase / (Decrease) (+)/(-) Variance
Sponge Iron 735,661 776,639 (40,978)
Billets 501,306 377,757 123,549
Structural Steel/TMT 127,159 218,448 (91,289)
Ferro Alloys 40,847 22,529 18,318
Pellets 1,205,700 1,825,681 (619,981)
Slab 76,503 Nil 76,503
Pig Iron 135,892 155,201 (19,309)
Sales Data (MT)-
Particulars FY 2022 FY 2021 Increase / (Decrease) (+)/(-) Variance
Sponge Iron 473,791 635,156 (161,375)
Billets 357,652 127,557 230,095
Structural Steel / TMT 145,476 212,779 (67,303)
Ferro Alloys 36,460 21,106 15,354
Pellets 383,263 1,026,580 (643,317)
Slabs 72,432 Nil 72,432
Pig Iron 135,881 176,340 (40,459)

During the year under review, the Companys revenue from operations was Rs 6,060.65 crores as against Rs 4,187.74 crores in the previous year. The Companys earnings before interest, tax, depreciation and amortization was Rs 472.86 crores for the financial year ended 31 March 2022 as compared to Rs 385.27 crores in the immediately preceding year.

Taking into account depreciation and interest costs, profit before tax (PBT) stood at Rs 9.18 crores as against loss before tax (LBT) of Rs 104.99 crores

in the previous year and total comprehensive income for the year was Rs 8.41 crores as against total comprehensive loss of Rs 102.48 crores in the previous financial year.

During the financial year under review, exports of the Company were Rs 983.94 crores as compared to Rs 292.54 crores in the preceding financial year.

Consolidated:

During the financial year under review, the Companys consolidated revenue from operations was Rs 6,060.65 crores as against Rs 4,187.74 crores in the previous year. Further, in the financial year ended 31 March 2022, the Company on consolidated basis made profit before tax of Rs 1.49 crores as compared to Profit Before Tax of Rs 209.52 crores in the previous year. During the previous year, the Company on consolidated basis had an exceptional gain on settlement of liabilities, forfeiture of advance and reassessment of realizable value of its overseas subsidiaries total amounting to Rs 314.53 crores (details mentioned below). There was no exceptional item in the current year.

(i) gain of Rs 318.50 crores on settlement of loan outstanding of Rs 294.29 crores and interest due thereon of Rs 42.60 crores at Rs 18.39 crores, pursuant to a settlement agreement entered into with its lenders.

(ii) loss ofRs 22.58 crores towards reassessment of realizable value of assets held for sale.

(iii) gain of Rs 18.61 crores on forfeiture of advance received from buyer pursuant to cancellation of agreement entered into for the sale of a subsidiary.

The performance and financial position of the subsidiary companies and joint ventures is included in the consolidated financial statement for the financial year under review.

Due to the second wave, the domestic demand and prices of steel and related products witnessed sharp drop in the first quarter of the financial year 2022. National Vaccination drive in the year under review enabled in learning to operate with COVID-19, as vaccination was not just a health response but also a buffer against economic disruptions caused by repeated waves of the pandemic.

The manufacturing operations of the Company are conducted in compliance with the relevant guidelines/ advisory issued by the Government and authorities, for taking necessary measures for the containment of COVID-19, including measures like maintaining social distancing.

The Company has conducted vaccination drive for the employees. This initiative is fueled by our commitment towards ensuring a protected and stronger India.

The Company while assessing the impact of COVID 19 in preparation of the financial Statements, has considered internal and external sources of information, and determined, exercising reasonable estimates and judgement, that the carrying amounts of its assets are recoverable. The impact of COVID 19 may be different from that estimated as at the date of approval of the financial Statements, and the Company will continue to closely monitor the developments.

Scheme of Arrangement

During the year under review, the Board of Directors of the Company on recommendation of the Audit Committee, approved Scheme of Arrangement between the Company ("Transferor Company") and Mivaan Steels Limited ("Transferee Company") and their respective shareholders and creditors with appointed date 31 March 2022 under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("the Act") for transfer the Specified Undertaking (defined below), on a going concern basis, by way of a slump sale subject to necessary approvals and terms of the Scheme ("Proposed Transaction").

The "Specified Undertaking" means the business undertaking of the Company pertaining to the manufacturing facilities at Raipur and mining facilities at Kanker and associated coal washery operations at Patherdih and certain other assets and properties.

The manufacturing facilities at Raipur comprises of a sponge iron manufacturing plant with a capacity of 0.3 MTPA, Ferro alloy plant and steel manufacturing plant with a capacity of 0.25 MTPA.

The profile of the products produced at the manufacturing facilities at Raipur pertain to the commodity grade market that caters to the structural and construction sectors with comparatively lower volume of production and serving customers predominantly around its operating area whereas, the focus of the other facility of the Company at Raigarh is on special steel products catering to HT grades, IBR grades, automotive, high manganese grades, cold rolling grades and API grades with comparatively higher volume of production, serving customers in the exports and domestic markets covering Northern, Eastern and parts of Western region of India.

With the transfer of the Specified Undertaking through the Proposed Transaction, the Company will be able to focus on special steel products and explore and develop markets for its special steel products. Accordingly, with a view to inter-alia achieve dedicated management focus on their respective grades of products and customer segments, facilitate strategic opportunities (including fund raising prospects), maximize value, increase efficiencies and enhance administrative control, the Company proposes to transfer the Specified Undertaking to

the Transferee Company which became a wholly owned subsidiary of the Company on 24 February 2022. This is expected to create and enhance stakeholders value by unlocking the intrinsic value and growth potential for the respective businesses of the Transferor Company and Transferee Company.

The Scheme was filed with respective Stock Exchanges and The Securities and Exchange Board of India (SEBI) for their No Observation Letter during the year under review. The Company proposes to seek approval of creditors and shareholders and file application with Honble National Company Law Tribunal, Mumbai Bench, (NCLT) in financial year 2022-23.

3. Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relates and the date of the Report

There were no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

4. Dividend and Reserves

In view of inadequacy of profits, the Board of Directors of the Company ("Board") has not recommended any dividend for the year under review and no amount was required to be transferred to the General Reserves.

5. Subsidiaries, Joint Ventures or Associate Companies

As on 31 March 2022, the Company has 3 direct subsidiaries 4 Joint Ventures. During the year under review, the Company acquired 100% equity share capital of Mivaan Steels Limited ("MSL"), a public unlisted company, and MSL has become a wholly owned subsidiary of the Company with effect from 24 February 2022.

The consolidated financial statements presented by the Company and its subsidiaries and joint ventures for the year under review is prepared in compliance with the applicable provisions of the Act, Indian Accounting Standards (Ind-AS) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations, 2015") which forms part of the Annual Report.

The subsidiaries of the Company had no operations for the financial year ended 31 March 2022 and their performance/contribution to overall performance of the Company is reported in the consolidated financial statement of the Company for the financial year under review. A gist of financial highlights/performance of the

subsidiaries and joint ventures is contained in Form AOC-1 and forms part of this report and annexed as Annexure-1.

The annual financial statements of the subsidiary companies are open for inspection by any shareholder at the Companys Registered Office and the Company will make available these documents and the related detailed information upon request by any shareholder of the Company or any shareholder of its subsidiaries, joint ventures companies who may be interested in obtaining the same. Also, the standalone financial statements, consolidated financial statements and financial statements of subsidiaries are available on the website of the Company viz www.aionjsw.in.

During the year under review, the entire stake held by Monnet Global Limited (wholly owned subsidiary of the Company) in PT Sarwa Sembada Karya Bumi (PT Sarwa) was sold to PT Srinata Mahajati Corpora (SMC), a corporation established under laws of Republic of Indonesia, at a net consideration of USD 1.075 million pursuant to binding Sale and Purchase of Shares Agreement executed on 29 March 2022.

6. Share Capital

As on 31 March 2022, the authorized capital of the Company was Rs 15,50,00,00,000/- (Rupees one thousand five hundred and fifty crores only) and the paid-up capital stands at Rs 9,95,52,75,340/- (Rupees nine hundred and ninety-five crores fifty-two lakhs seventy-five thousand three hundred and forty only) consisting of 46,95,47,534 equity shares of Rs 10 (Rupees ten) each and 52,59,80,000 Compulsory Convertible Preference Shares of Rs 10 (Rupees ten) each.

There was no change in share capital of the Company during the financial year under review.

7. Debentures

During the financial year under review, the Company has not issued or allotted any Debentures and does not have any outstanding Debentures.

8. Bank Facilities and Credit Rating

During the year under review, CARE Ratings Limited (Formerly known as Credit Analysis S Research Limited) in the month of February 2022 reviewed and reaffirmed the credit ratings of the Company as "A-" Stable for long term bank facilities (term loan and fund based-cash credit) and "A- Stable/A2+" for non-fund based long/short term bank facilities bank guarantees of the Company.

9. Public Deposits

During the year under review, the Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

10. Significant and Material Orders passed by the Regulators or Courts or Tribunals

During the year, there were no significant or material orders passed by the Regulators/Courts/Tribunals that could impact the going concern status of the Company and its future operations.

Further, members attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the financial statements.

11. Internal Controls, Audit and Internal Financial Controls

Internal control systems are integral to the Companys corporate governance. The internal control systems and procedures are designed to assist in the identification and management of risks, the procedure-led verification of all compliances as well as an enhanced control consciousness.

The Board/management are of the opinion that based on the knowledge/information gained by them about affairs of the Company from records of the Company, the Company has effective internal financial control systems and policies and such controls are operating effectively.

The internal control systems include documented policies, checks and balances, guidelines and procedures, that are supplemented by robust internal audit processes and monitored continuously through periodical reviews by management to provide reasonable assurance that all assets are safeguarded; and all transactions entered into by Company are authorized, recorded and reported properly.

Internal Audit plan and execution

The Internal Audit function prepares audit plan which is approved by the Audit Committee. The frequency of the audit is decided by risk ratings of areas/ functions. The audit plan is carried out by the internal audit team and reviewed periodically to include areas that have assumed significant importance in line with the emerging industry trend and the growth of the Company. In addition, the Audit Committee also places reliance on internal customer feedback and other external events for inclusion into the audit plan. Significant observations, if any, of Internal Auditor along with the Action Taken Report are reported to the Audit Committee every quarter.

Internal financial controls

The Company has sound internal controls including internal financial control framework which is commensurate with the size, scale and nature of business of the Company. The framework includes entity-level policies, processes and Standard Operating Procedures (SOP). The Company has SAP ERP system at Raigarh and Dynamics NAV system in Raipur, as a part of strengthening the internal control and internal financial control framework. The Audit

Committee of the Board of Directors, regularly reviews audit plans, significant audit findings, adequacy of internal controls and compliance with Accounting Standards, etc. The Company has also strong internal audit process and the internal auditor reports to the Audit Committee on regular basis with audit findings and the audit plans. The internal audit team has access to all information in the organization and this process is largely facilitated by ERP implementation in the Company.

These Internal controls are reviewed by the Internal Auditor every year. During the financial year under review, the controls were tested and no reportable material weakness in design and effectiveness was observed.

12. Directors and Key Managerial Personnel (KMP)

As on 31 March 2022, the Board of Directors of the Company comprised of 1 Whole-time Director (Executive), 3 Independent Directors and 4 NonExecutive Directors (details of the same are provided in the Corporate Governance Report which forms part of this Annual Report).

During the year under review following changes took place in the Board of Directors:

a) Mrs. Sutapa Banerjee (DIN: 02844650) resigned from the Board of Directors of the Company as the Independent Director with effect from 18 May 2021.

b) The tenure of Mr. Ravichandar Moorthy Dhakshana (Mr. D. Ravichandar) (DIN: 03298700), as Whole-time Director designated as Director (Corporate In-Charge) of the Company ended on 31 May 2021 and accordingly he ceased to hold office of Whole-time director and Key Managerial Personnel (KMP) of the Company with effect from close of business hours of 31 May 2021. The appointment of Mr. D. Ravichandar as the Whole-time Director for the tenure from 31 August 2020 to 31 May 2021 was approved by the Shareholders at the 31st Annual General Meeting held on 28 September 2021. Mr. D. Ravichandar also ceased to hold office as director of the Company with effect from closing of business hours of 31 May 2021.

c) The Board of Directors, upon the recommendation of the Nomination and Remuneration Committee (NRC) at the meeting held on 12 May 2021, appointed Mr. Mohan Babu Thirukkoteeswaran (Mr. T. Mohan Babu) (DIN: 09169018) as the Whole-time Director, for a period of 2 (two) years with effect from 1 June 2021 subject to approval of the shareholders at the 31st Annual General Meeting of the Company.

His appointment for a period of 2 (two) years with effect from 1 June 2021 to 31 May 2023 and remuneration has been approved by the

Shareholders at the 31st Annual General Meeting held on 28 September 2021.

d) The Board of Directors, upon the recommendation of the NRC, at its meeting held on 20 July 2021 approved the appointment of Mr. Krishna Deshika (DIN: 00019307) as an Additional Director (NonExecutive and Independent Director) of the Company with effect from 20 July 2021. His appointment as an Independent Director for a tenure of 5 years with effect from 20 July 2021 to 19 July 2026 was approved by the Shareholders at the 31st Annual General Meeting of the Company held on 28 September 2021.

e) The shareholders of the Company at the 31st Annual General Meeting held on 28 September 2021 approved the appointment (including the terms of appointment) of Mr. Kaushik Subramaniam (DIN: 08190548) as a director of the Company, liable to retire by rotation.

f) Mr. Seshagiri Rao Metlapalli Venkata Satya (DIN: 00029136) resigned from the Board of Directors of the Company as the Non-Executive (Non-Independent) Director with effect from 22 November 2021.

g) The Board of Directors upon the recommendation of the NRC, on 24 December 2021 approved the appointment of Mr. Naresh Kumar Lalwani (DIN: 07587109) as an Additional Director (NonExecutive-Non-Independent) on the Board of Directors of the Company with effect from 24 December 2021 and he is holding office of director upto the date of the ensuing Annual General Meeting.

Retirement by Rotation at ensuing Annual General Meeting

I n accordance with the provision of Section 152 of the Act and Articles of Association of the Company, Mr. Nikhil Gahrotra and Mr. Kaushik Subramanian, Directors, retire by rotation at the forthcoming Annual General Meeting and being eligible have offered themselves for re-appointment.

The Board recommends their re-appointment in the ensuing 32nd Annual General Meeting.

Appointment at ensuing Annual General Meeting

In terms of Section 161 of the Act, Mr. Naresh Kumar Lalwani who is holding the office as director until the date of the ensuing Annual General Meeting and being eligible, offers himself to be appointed as a Director of the Company.

The Board recommends the appointment of Mr. Naresh Lalwani in the category of Non-Executive Director in the ensuing Annual General Meeting and he shall be liable to retire by rotation.

The Company has received a notice under Section 160 of the Act, from member, proposing the candidature of Mr. Naresh Lalwani as Director of the Company. Further, Mr. Naresh Lalwani is not disqualified from being appointed as the Director of the Company by virtue of the provisions of Section 164 of the Act.

The details of profile, experience, other directorships, etc. in respect of Mr. Naresh Lalwani, Mr. Nikhil Gahrotra and Mr. Kaushik Subramaniam who are seeking appointment/ re-appointment as Directors of the Company as required under Regulations 26(4) and 36(3) of the SEBI Listing Regulations, 2015 and Secretarial Standard -2 issued by ICSI, are annexed to the Notice of forthcoming 32nd Annual General Meeting of the Company.

Statement on declaration by Independent Directors

Pursuant to provisions of Section 149 of the Act, Mr. Jyotin Mehta, Mrs. Anuradha Bajpai, and Mr. Krishna Deshika are Independent Directors of the Company. They have submitted a declaration that each of them meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) 17A, 25 (8) of the SEBI Listing Regulations, 2015. There has been no change in the circumstances affecting their status as Independent Directors during the year. Further, it has been confirmed by them that they are registered with the Independent Directors Databank as per the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019.

Key Managerial Personnel

In terms of Section 203 of the Act, the Key Managerial Personnel of the Company as on 31 March 2022 were: Mr. T Mohan Babu as the Whole-time Director, Mr. J Nagarajan as Chief Financial Officer and Mr. Ajay Kadhao as Company Secretary of the Company.

There were no changes in the Key Managerial Personnel of the Company during the financial year under review other than cessation of Mr. D Ravichandar as the Whole-Time Director and appointment of Mr. T Mohan Babu as the Whole-time Director of the Company.

13. Directors Responsibility Statement

Pursuant to the requirements under Section 134(3)

(c) of the Act, the Board of Directors, to the best of their knowledge and ability, state and confirm that:

(a) I n the preparation of the annual accounts for the financial year ended 31 March 2022, the applicable accounting standards have been followed and a proper explanation has been provided in relation to any material departures;

(b) such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the

financial year ended 31 March 2022 and of the profit of the Company for the year under review;

(c) proper and sufficient care has been taken 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 annual accounts for the financial year ended 31 March 2022 have been prepared on a going concern basis;

(e) i nternal financial controls were laid down to be followed by the Company and such internal financial controls were adequate and are operating effectively; and

(f) There were proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

14. Annual Evaluation of Performance of Board, its Committees and Directors

Pursuant to applicable provisions of the Act and the SEBI Listing Regulations, 2015, the Board has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual Directors, including Independent Directors ("the Performance Evaluation Policy").

For the financial year under review, the performance of the Board, each Board Member individually, including each of the Independent Directors, as well as the working of Board Committees was subjected to evaluation. The Board did not deviate from the assessment mechanism adopted in the previous year.

Details of the same are given in the report on Corporate Governance annexed hereto.

15. Number of Meetings of the Board of Directors

During the financial year under review, eight (8) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between these meetings was within the period prescribed under the Act and Regulation 17 of the SEBI Listing Regulations, 2015.

16. Committees of the Board

The Company has duly constituted the Committees required under the Act read with applicable Rules made there under and the SEBI Listing Regulations, 2015.

As on 31 March 2022, the Board had following Committees:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders Relationship Committee

d. Corporate Social Responsibility Committee

e. Business Responsibility Reporting (BRR) and International Trade Practice Committee

f. Risk Management Committee

g. Finance Committee

The details of composition of each Committee, terms of the reference and number of meetings held during the year under review are given in the Corporate Governance Report, annexed to this report.

17. Nomination and Remuneration Policy

The Companys Nomination and Remuneration Policy is in conformity with the requirements of Section 178(3) of the Act and SEBI Listing Regulations, 2015.

The Nomination and Remuneration Policy, as approved by the Board of Directors, is hosted on the website of the Company viz:-https://www.aionjsw.in/investors/ policies.

The Policy sets out the guiding principles for the NRC for identifying persons who are qualified to become Directors and persons who may be appointed in Senior Management and Key Managerial positions and also to determine the independence of Directors, while considering their appointment as Independent Directors of the Company. The Policy also sets out the guiding principles for the NRC for recommending to the Board the remuneration of the Directors, Key Managerial Personnel and other employees of the Company. There has been no change in the aforesaid policy during the year.

18. Vigil Mechanism Cum Whistle Blower Policy

i n terms of Section 177(9) of the Act read with the SEBI Listing Regulations, 2015, the Company has adopted a Vigil Mechanism Cum Whistle Blower Policy to deal with instances of fraud and mismanagement, if any.

Through this Policy, the Company seeks to provide a mechanism to the whistleblower to disclose any misconduct, malpractice, unethical and improper practice taking place in the Company for appropriate action and reporting, without fear of any kind of discrimination, harassment, victimization or any other unfair treatment or employment practice being adopted against the whistleblower. No person is denied access to the Chairman of the Audit Committee.

The policy is available on the website of the Company viz:-https://www. aionjsw.in/investors/policies.

19. Related Party Transactions

During the year under review, all related party transactions entered into by the Company, were approved by the Audit Committee and were on an arms length basis and in the ordinary course of business. Prior omnibus approval was obtained for related party transactions which were of repetitive nature and entered in the ordinary course of business and on an arms length basis. The statement giving details of all Related Party Transactions were placed before the Audit Committee / the Board for review and approval on a quarterly basis.

During the year under review, the Company has entered into material related party transactions with JSW Steel Limited and Bhushan Power and Steel Limited and in terms of Section 134 of the Act, details of the same are stated in Form AOC-2 in Annexure- 2 of this report. The material related party transactions entered by the Company are within the limits and in terms of the approval accorded by the Shareholders at previous Annual General Meeting. All related party transactions are mentioned in the notes to the accounts. The Company has developed a framework through Standard Operating Procedures for the purpose of identification and monitoring of such Related Party Transactions.

The "Policy on Materiality of Related Party Transactions and also on dealing with Related Party Transactions" (the Policy), as amended and approved by the Board of Directors has been uploaded on the website of the Company viz: https://www.aionjsw.in/investors/ policies. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. This Policy specifically deals with the review and approval of Related Party Transactions, keeping in mind the potential or actual conflicts of interest that may arise because of entering into these transactions.

20. Particulars of Loans, Guarantees or Investments

Details of Investments, Loans and Guarantees as covered under the provisions of Section 186 of the Act are given in the notes to the financial statements.

21. Corporate Social Responsibility

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Board of Directors of the Company has a Corporate Social Responsibility ("CSR") Committee. The policy on CSR as approved by the Board of Directors is also hosted on the website of the Company viz. https://www. aionjsw.in/investors/policies.

Pursuant to Section 135 of the Companies Act, 2013 read with CSR policy of the Company, it is required to spend two percent of the average net profit of the Company for three immediately preceding financial year. As the average net profit of the Company during previous three financial years is negative, the

Company is not required to spend any amount for the CSR purpose during the year under review.

Annual Report on mandatory CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, have been annexed as Annexure-3 and forms integral part of this Report. During the year, the Company has undertaken some voluntary CSR activities as stated in the Annexure- 3 of this Report.

22. Auditors

a) Statutory Auditor

At the 29th Annual General Meeting ("AGM") of the Company held on 19th July 2019, members of the Company had approved the appointment of M/s. Deloitte Haskins a Sells LLP, Chartered Accountant, Mumbai, (Registration Number 117366W/W-100018) as the statutory auditor for a period of 5 years with effect from the conclusion of the 29th AGM till the conclusion of 34th AGM of the Company.

The Auditors have audited standalone and consolidated financial statements of the Company for the financial year ended 31 March 2022 and no fraud has been reported by the Auditors under Section 143(12) of the Act requiring disclosure in the Boards Report. The Report does not contain any qualification, reservation or adverse remark or disclaimer requiring explanation or comments from the Board under Section 134(3) of the Act.

b) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company, at its meeting held on 12 May 2021 had appointed M/s S. Srinivasan a Co., a Company Secretaries firm, to conduct a secretarial audit of the Company for the financial year 2021-22. The Report of the Secretarial Audit carried out for the financial year 2021-22 is annexed herewith as Annexure -4.

The report does not contain any qualification, reservation or adverse remark or disclaimer requiring explanation or comments from the Board under Section 134(3) of the Act.

The Board of Directors of the Company, at its meeting held on 11 May 2022 has re-appointed M/s S. Srinivasan a Co., as Secretarial Auditor, for conducting Secretarial Audit of the Company for financial year 2022-23.

c) Cost Auditor

Pursuant to Section 148 of the Act read with the Companies (Cost Records and Audit)

Amendment Rules, 2014, the Company is required to get its cost accounting records audited by a Cost Auditor and accordingly such accounts and records are made and maintained by the Company.

Accordingly, the Board, at its meeting held on 12 May 2021, on the recommendation of the Audit Committee, had appointed M/s. Shome & Banerjee, Cost Accountants (Firm Reg. No. 00001) to conduct the audit of the cost accounting records of the Company for financial year 2021-22 and had recommended their remuneration to the shareholders which was ratified at the Annual General Meeting held on September 28, 2021.

Subsequent to the recommendation of the Audit committee, the Board has appointed M/s. Shome & Banerjee, Cost Accountants (Firm Reg. No. 00001) as the Cost Auditors of the Company for the Financial Year 2022-23 at its meeting held on 11 May 2022 and their remuneration is sought to be ratified by the shareholders at the forthcoming Annual General Meeting and is included as an agenda item in the Notice convening the 32nd Annual General Meeting of the Company.

The Cost Audit Report of the Company for the financial year ended 31 March 2021 was filed in XBRL mode on 18 August 2021.

23. Compliance with Secretarial Standards

During the financial year under review, the Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India respectively

i.e. SS- 1 and SS- 2 relating to "Meetings of Board of Directors" and "General Meetings" as applicable.

24. Risk Management

The Company has a Risk Management Policy of the Company duly adopted by the Board of Directors. The Policy is tailored to appropriately appraise the state of the Companys business risks. Management is empowered to identify, assess and leverage business opportunities and manage risks effectively.

The Company recognizes that the emerging and identified risks need to be managed and mitigated to protect its shareholders and other stakeholders interest, achieve its business objective and enable sustainable growth.

The Board oversees the Enterprise Risk Management framework to ensure execution of decided strategies with focus on action and monitoring of risks arising out of unintended consequences of decisions or actions related to performance, operations, compliance, incidents, processes and systems, transactions and the same are managed appropriately. Further, major risks have been identified by the Company and its mitigation process/measures have been formulated in the areas such as business, production, product quality, market, litigation, logistics, operational, financial, human resources, environment and statutory compliance. These process/ measures are reviewed and updated from time to time as required.

The Board on 12 May 2021, had constituted a separate Risk Management Committee comprising of Mrs. Anuradha Bajpai, Mr. Thirukkoteeswaran Mohan Babu, Mr. Nikhil Gahrotra and Mr. J Nagarajan as its Members.

25. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

In accordance with Section 134(3)(m) of the Act read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended, the information on conservation of energy, technology absorption and foreign exchange earnings and outgo are annexed as Annexure - 5 hereto and forms an integral part of this Report.

26. Particulars of Employees and Related Disclosures

Disclosures pertaining to remuneration and other details of the employees as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are annexed to this report as Annexure -6.

The details of employee information as required under provisions of Section 197 (12) of the Act read with Rules 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is set out in the annexure to this Report. In terms of the provisions of Section 136 (1) of the Act, the Report is being sent to the members excluding the aforesaid annexure and any shareholder interested in obtaining the copy of the same may write to the Company at isc_jispl@aionjsw.in and the said annexure is also available for inspection by the Members at the Registered office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting.

27. Annual Return

I n accordance with the provisions of the Act and amendment thereto, the Annual Return of the Company is placed on the website of the Company and is accessible at the web-link https://www. aionjsw.in/investors/.

28. Management Discussion & Analysis Report

A detailed analysis of the Companys performance is discussed in the Management Discussion and

Analysis Report, which forms part of this Annual Report and annexed as Annexure-7.

Certain statements in the Management Discussion and Analysis section may be forward-looking and are stated as required by applicable laws and regulations. Many factors may affect the actual results, which would be different from what the Directors envisage in terms of the future performance and outlook. Investors are cautioned that this discussion contains forward looking statement that involve risks and uncertainties including, but not limited to, risks inherent in the Companys growth strategy, dependence on certain businesses, dependence on availability of qualified and trained manpower and other factors discussed. The discussion and analysis should be read in conjunction with the Companys financial statements and notes on accounts.

29. Business Responsibilty Reporting

The Business Responsibility Report as stipulated under Regulation 34(2)(f) of SEBI Listing Regulations, 2015, describing the initiatives taken by your Company from an environmental, social and governance perspective, forms part of the Annual Report as Annexure-8.

30. Corporate Governance Report

The Company constantly endeavours to follow the corporate governance guidelines and best practice sincerely and disclose the same transparently. The Board is conscious of its inherent responsibility to disclose timely and accurate information on the Companys operations, performance, material corporate events as well as on the leadership and governance matters relating to the Company. Your Company has complied with the requirements of SEBI Listing Regulations, 2015 regarding corporate governance.

A report on the Corporate Governance practices followed by the Company, together with certificate(s) regarding compliance is given as Annexure-9 to this report.

31. Disclosure under the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013

The Company has laid down Anti Sexual Harassment policy on Gender Equality, Gender Protection, Prevention of Sexual Harassment and Redressal System as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, apprenticeship) are covered under this policy. No complaints pertaining to sexual harassment were received or pending to be resolved by the Company in this respect, during financial year 2021-22.

32. Acknowledgement

The Board of Directors wish to place on record their gratitude to the authorities, banks, business associates, shareholders customers, dealers, agents, and suppliers for their unstinted support, assistance and co-operation and faith reposed in the Company. The Board of Directors would also place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment.

By order of the Board
For JSW Ispat Special Products Limited
(Formerly known as Monnet Ispat and Energy Limited)
Jyotin Mehta
Place: Mumbai Chairman
Date: 11 May 2022 DIN: 00033518