JSW_Steel_IR_2018-19_Final.pdf - Integrated Report 2018-19 A Vision to Execute Better Everyday Shri O P Jindal August 7 1930 to Visionary and Founder O

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Unformatted text preview: Integrated Report 2018-19 A Vision to Execute Better. Everyday. Shri O. P. Jindal August 7, 1930 to March 31, 2005 Visionary and Founder - O. P. Jindal Group GREAT LEADERS INSPIRE COUNTLESS LIVES, LEAVE EVERLASTING MEMORIES, TO FOREVER GUIDE DESTINIES Way back in 1952, an age before the phrase entered public discourse, Shri O. P. Jindal heralded ‘Make in India’ with a small scale manufacturing unit in his home town of Hisar in Haryana. In its ground-breaking wake came a pipe manufacturing company, the Jindal Group, and an industrial folklore built with steel and power. For more than five decades, as young India, born from colonial subjugation to democratic freedom, built itself into a modern state, Shri O. P. Jindal epitomised enterprise, nationalism, innovation and social service. He sired and took his eponymous business organisation to stellar heights, strengthening at every step his commitment to social work and nation building. On this day, countless individuals in the Jindal family and beyond, salute his spirit, which will forever guide our destiny. Index 02 06 08 10 12 14 16 18 20 22 24 26 36 About the report Capital-wise highlights FY 2018-19 Corporate overview Geographic presence Product portfolio Landmark projects Message from the Chairman and Managing Director Key performance indicators Value chain Opportunities and challenges Business model Strategy and enablers Trade-offs Corporate overview Value chain 40 44 46 Stakeholder engagement and materiality Risk management Governance Key priority areas 54 Capacity building 62 Capability building 70 Cost leadership & financial discipline 74 Customer centricity 78 Climate change 82 Conserving resources 86 Community development 91 94 99 100 Assurance statement Business responsibility report SDG mapping GRI content index Statutory reports 103 Management discussion and analysis 150 Directors' report 200 Corporate governance report Financial statements 229 Standalone financial statements 314 Consolidated financial statements Page 8-9 Message from the CMD Page 16-18 Page 20-21 Key priority areas Page 52-53 About this report Reporting frameworks The statutory and financial section of the Report is in line with the requirements of the Companies Act, 2013 (including the rules made thereunder), Indian Accounting Standards, the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the Secretarial Standards. Our reporting suite Access our previous reports and presentations at investor-relations-steel The non-financial section* of the Report is in line with the International Integrated Reporting <IR> Framework by the International Integrated Reporting Council (IIRC). Reporting period The disclosures presented in the Report are mapped with the following additional reporting standards and principles on sustainable development: • Global Reporting Initiative (GRI) Standards: Core option • Sustainable Development Goals (SDGs) of the United Nations • National Voluntary Guidelines (NVGs) Management responsibility statement 1 April 2018 to 31 March 2019 Scope The information contained in the Report pertains to JSW Steel, its national and international subsidiaries, joint ventures and associate companies. The management of JSW Steel acknowledges their responsibility in ensuring the integrity of the Integrated Report. The management also confirms that the Report addresses all material matters pertaining to the organisation and its stakeholders, and communicates the organisation’s ability to pursue prospects and mitigate risks. The non-financial information is limited to the Company’s major manufacturing operations in India. * For more information, write to [email protected] Report navigation To aid navigation and to indicate cross-referencing, the below icons have been used through the Report. Manufactured Natural page reference risk Financial Financial capital Human Manufactured capital FinancialNatural capital Social Intellectual Social and relationship capital Intellectual capital Human Human capital Page reference strategic priority strategic priority Strategic priority Risk material issue risk Material issue CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS A vision to execute better. Everyday. At JSW Steel, we believe that better execution is the key to excellence. From our everyday operations to our strategic expansion projects, our key differentiator has always been better execution, backed by a strong vision. Be it operating at industry-leading efficiencies or expanding at the least per-tonne cost, our will to undertake challenges, plan with conviction and execute with passion, has sustained and improved over the years. In line with our Group philosophy of ‘Better Everyday’, we continue to deliver on our responsibilities with utmost prudence, across parameters. This year, we have yet again surpassed our previous records and have registered our best-ever performance. INTEGRATED REPORT 2018-19 JSW STEEL LIMITED 3 A VISION TO EXECUTE BETTER. EVERYDAY. Growing with India's aspirations Over the past decade, India has witnessed unparalleled growth. A strong vision for development, progressive policymaking, favourable demographics, fast-paced technology adoption and good governance have together enabled this growth. Consequently, India has emerged as a bright spot today in an otherwise tepid global economic scenario. With a goal to become a US$5 trillion economy by 2024, intensive investments, robust consumption and significant infrastructure development are expected in the next five years. 3rd largest Over 1 billion Aviation market by 20241 People in working-age by 20502 US$1.4 trillion $6 trillion ~Domestic consumer Investments in infrastructure by 2024, double the length of highways by 2022 spending by 20303 India A growing economic powerhouse 19.5 million Houses to be built in rural areas4 30% Electric vehicles target by 20305 300 MTPA Steel production target by 2031 announced by government 1. International Air Transport Association 2. Regional Human Development Report of the United Nations Development Programme (UNDP) 3. World Economic Forum 4. IBEF : Union Budget 2019-20 analysis 5. Niti Aayog 4 JSW STEEL LIMITED INTEGRATED REPORT 2018-19 CORPORATE OVERVIEW At JSW Steel, we are of the belief that tomorrow’s India will be built with the strength of steel. In line with this, steel consumption and production in India is expected to rise significantly. As one of the largest Indian steel companies, we are cognisant that our superior- quality and distinctive steel products have an important role to play in India’s growth story. STATUTORY REPORTS FINANCIAL STATEMENTS To continuously contribute to India’s growth, JSW is ramping up its domestic steelmaking capacity. 18 MTPA to 45 MTPA in 2019 in 2031 JSW Steel’s strategy to harness India’s growth potential Capex programme of `48,715 crore FY 2017-18 to FY 2021-22 33% 60% Growth in crude steel capacity (from 18 MTPA to 24 MTPA) Increase in downstream capacities (Increase by 3.95 MTPA) Growth opportunities Pursuing growth through participation in IBC Process Innovative and better products Cost saving projects Setting up facilities with backward integration (8 MTPA Pellet Plant; 3 MTPA coke oven; 225 MW CPP) Conveyor systems for material handling Increase VASP share to 60% in overall sales portfolio Growth enablers and support ecosystem Digitalisation Commitment to health and safety Skilled workforce In the last 25 years, we have built a long-lasting association with all our stakeholders and have contributed to the country’s economy. Inspired by this trust and confidence, we will continue to focus on all our economic, social and environmental commitments, and work towards contributing to a circular global economy. It is our singular aim to grow in an efficient and responsible way and participate in India’s progress. INTEGRATED REPORT 2018-19 JSW STEEL LIMITED 5 A VISION TO EXECUTE BETTER. EVERYDAY. Capital-wise highlights FY 2018-19 A year of record performance Financial capital Refers to the funds available to the Company to create value through asset creation and production processes, or funds generated by its operations. These include debt, equity, retained earnings, internal accruals and investments, among others. Read more on financial capital in the Cost Leadership & Financial Discipline [Page 70-74] discussion the Capacity Building [Page 54-61], Cost Leadership & Financial Discipline [Page 70-73], Climate Change [Page 78-81] and Conserving Resources [Page 82-85] discussions Capacity Building [Page 54-61], Capability Building [Page 62-69] and Customer Centricity [Page 74-77] discussions Capability building Read on page 54-61 Read on page 62-69 Cost Leadership & Customer focus Financial Discipline Read on page 74-77 Read on page 70-73 6 JSW STEEL LIMITED INTEGRATED REPORT 2018-19 Return on Capital Employed (ROCE) `18,952 crore Operating EBITDA 16.69 MnT** Crude steel production 9,500+ Exclusive and non-exclusive retail outlets `45 crore Read more on intellectual capital in the Read more about our performance across Key Priority Areas Capacity building 19.6% Installed capacity Read more on manufactured capital in Intellectual capital Covers the knowledge base of the organisation, and includes the systems, processes, patents, trademarks, copyrights and new value- added products developed through R&D, improvement initiatives and collaboration with institutions. Revenue from operations 18 MTPA* Manufactured capital Pertains to the facilities for steel production and processing, including the structures and equipment at the plants, along with supporting infrastructure for logistics, warehousing and sales. `84,757 crore R&D expenditure 52 New grades developed and customised 18 Patents filed during the year CORPORATE OVERVIEW STATUTORY REPORTS 5.38% Human capital Includes the skills, capabilities, experience, diversity and level of motivation of the on-roll and contractual employees along with their safety, wellbeing and the ability to align with the organisation’s vision. FINANCIAL STATEMENTS Employee attrition rate Read more on human capital in the 0.35 Capacity Building [Page 54-61] and Capability Building [Page 62-69] Lost Time Injury Frequency Rate (LTIFR) discussions 26 Training hours per employee `63 crore Social and relationship capital Refers to the trust-based, mutually beneficial relationships of the Company with key stakeholders such as investors, customers, vendors, society and government, among others. CSR expenditure Read more on social and relationship capital in Customer Centricity 4,89,225 [Page 74-77] and Community Development [Page 86-91] discussions Beneficiaries of community initiatives 3.88 out of 5 Customer satisfaction index 3 Natural capital Includes resources such as iron ore, coal and other minerals along with air, water, energy, land and biodiversity, which are either utilised by the Company or impacted by its operations. Read more on natural capital in Climate Change [Page 78-81] and Conserving Resources [Page 82-85] discussions Iron ore mines operationalised 3.79 m3/TCS Specific water consumption 4.5 MnT Material reused and recycled Note: The information for financial and manufactured capital is at the consolidated level, while other information pertains to JSW Steel Ltd., unless stated otherwise. *Million Tonnes Per Annum   **Million Tonnes Climate change Read on page 78-81 Conserving resources Read on page 82-85 Community development Read on page 86-91 INTEGRATED REPORT 2018-19 JSW STEEL LIMITED 7 A VISION TO EXECUTE BETTER. EVERYDAY. Corporate overview The world of JSW Steel. The world of better. JSW Steel, the flagship Company of the JSW Group, is one of India's largest integrated steel manufacturers with seven state- of-the-art domestic steelmaking facilities. With an installed crude steel production capacity of 18 MTPA, it is one of the most efficient steel producers in India with an ability to expand capacities at low cost. steel processing centres. To strengthen its global network, the Company has acquired a pipe- and plate-making steel mill in Baytown, Texas in the US. The Company’s global presence in steelmaking (US), value-added facilities (US and Italy) and mining assets (Chile, US and Mozambique) makes it a leading player in the industry. The Company has robust technological competence with a combination of state-of-the-art steel-making technologies such as Corex, Direct-Reduced Iron (DRI) and Blast Furnace (BF). To stay on the leading edge of technological advancement, the Company has entered into a collaboration with JFE Steel Corporation, Japan, for manufacturing high-strength and advanced high-strength steel for the automobile sector. JSW Steel has a strong marketing and distribution network across India, along with export presence in 100 countries across five continents. As on 31 March 2019, the Company had over 9,500 exclusive and non-exclusive retail outlets across India. The Company has also entered into a joint venture with Marubeni-Itochu Steel Inc., Tokyo, to set up state-of-the-art In line with the Indian Government's vision of increasing Indian steelmaking capacity to 300 MnT by 2031, JSW Steel envisions increasing its domestic capacity in India to 45 MnT over the same time period. Key metrics 12,599 Employees 48,715 crore ` Capex pipeline till FY 2021-22 Vision Values Bring positive transformation to every life we touch Confidence Courage Purpose Building world-class infrastructure, products and solutions Deploying world-class capabilities Nurturing our communities 8 JSW STEEL LIMITED INTEGRATED REPORT 2018-19 Commitment Compassion Collaboration CORPORATE OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS Leading with strengths One of the leading steel players in India Integrated manufacturing process Strong distribution network and export presence 6 Iron ore mines 7 Manufacturing facilities 100+ Countries Market presence Technological competence Diversified product portfolio Global presence INTEGRATED REPORT 2018-19 JSW STEEL LIMITED 9 A VISION TO EXECUTE BETTER. EVERYDAY. Geographic presence World-class steelmaking. Worldwide distribution. JSW Steel features among the list of the world’s top 20 steel producers in terms of tonnage. The Company is also one of the largest steelmakers in India with seven state-of-the-art, strategically located facilities within the country. Apart from its domestic production units, the Company has acquired facilities in Italy and in the US to further its strategic global footprint. The facilities, operating at one of the most efficient EBITDA/tonne levels, have enabled JSW Steel to be a leading producer with a large portfolio of Value-added and Special Products (VASP). JSW Steel's subsidiaries include JSW SCPL, JSW SPCL, JSW ARCL, JSW Industrial Gases and JSW Salav. Italy Dolvi Works Key product(s): Crude steel Capacity 5 MTPA Strategically connected to a 15 MTPA capacity jetty JSW Steel - Piombino (previously Aferpi) Read a detailed review on page 124 Acquired in 2018 Salav Works USA Key product(s): DRI/HBI# Capacity 0.90 MTPA Specialised in offering reduced iron and briquetted iron products JSW Steel - Baytown JSW Steel - Ohio (previously Acero Junction) Acquired in 2018 Read more on our inorganic expansions on page 56 Vasind Works Key product(s): GI/GL Capacity 0.45 MTPA India’s largest exporter of colour-coated products for the appliance industry # 10 JSW STEEL LIMITED INTEGRATED REPORT 2018-19 DRI/HBI - Direct Reduced Iron / Hot Briquetted Iron CORPORATE OVERVIEW Kalmeshwar Works STATUTORY REPORTS FINANCIAL STATEMENTS A far-reaching export presence Key product(s): GI/GL * Capacity 0.58 MTPA India’s first GI and colour-coated steel plant Tarapur Works Key product(s): GI/GL Capacity 0.76 MTPA India’s largest exporter of coated products to Europe, Africa, North and South Americas, and Middle East regions JSW Steel is one of India’s largest steel exporters with an average 15% of its produce exported globally per annum. The Company is nimble-footed and well-placed to strategically shift its focus between exports and domestic sales, in line with the market conditions. 100+ Countries – Export presence 5 Continents A wide-ranging domestic reach Vijayanagar Works Key product(s): Crude steel Capacity 12 MTPA • World’s sixth-largest steel plant • India’s largest single-location steel plant • India’s most productive steel plant Read a detailed review on page 121 Under the banner of JSW Shoppe, the Company has set up a vast retail presence across the length and breadth of India, where customers can access the top range of steel products and steel-related services, including financing. Run on a franchisee model, JSW Shoppe is an initiative by JSW Steel to offer branded steel and steel products to semi-urban and rural markets. 9,500+ Exclusive and non-exclusive retail outlets Salem Works Key product(s): Crude steel Capacity 1 MTPA India’s largest special alloy steel plant Read a detailed review on page 125 575 Districts covered ~50% Of total retail presence in underserved areas GI/GL - Galvanised/Galvalume * INTEGRATED REPORT 2018-19 JSW STEEL LIMITED 11 A VISION TO EXECUTE BETTER. EVERYDAY. Product portfolio A diversified and high-quality product range With a wide variety of flat and long products, JSW Steel has globally established itself as a manufacturer of high-end, quality steel. With a view to meet the ever-changing needs of its diverse customer base, the Company is also strengthening its value-added product portfolio. Flat products Applications Hot Rolled (HR) • Cold rolling and galvanising • Drawing and press forming • Electrical stampings and forming • Welded tubes and pipes • Line pipes and structural and general engineering Cold Rolled (CR) • Chequered sheets and plates for structural use • HSLA grade for automobile and other engineering applications • LPG cylinders, boiler tubes and pressure vessels • Medium carbon steel • High-tensile structural applications • Corrosion-resistant steel • Automobile • Drums and barrels • White goods • Furniture • Cold-formed sections Galvanised (GI) • Roofing and cladding • Solar heating panels • Ducting • Electrical and light fittings • Boxes • Agricultural equipment • Coolers • Sandwich panels • Furniture • Automotive • Heat plates Colour-coated products • White goods Electrical steel • Electric motors • Domestic appliances • Power generation • Transformers and automotive electricals • Construction • Nuclear power stations 12 JSW STEEL LIMITED INTEGRATED REPORT 2018-19 CORPORATE OVERVIEW STATUTORY REPORTS Long products Applications TMT bars • Construction Wired rods • Automobile • Wire ropes • General engineering • Tools • Cold drawing • Heat treatment • Cold forming • Bearings • Spring applications • Office and household equipment • Welding Special alloy steel FINANCIAL STATEMENTS • Infrastructure • Gears, crank shafts and bearings in the automotive sector Developing new products, capturing niche markets As part of its ongoing efforts to increase the share of VASP in its product portfolio, JSW Steel has developed several products that can cater to niche requirements and markets. Advanced high-strength steel for automobiles Colour-coated products • Enhanced focus on CR, GI and galvanneal products for body panels of automobiles • Manufactured at the new CRM-2 complex • Largest colour-coated facility to address construction, warehousing and roofing requirements • State-of-the-art colour coating line for appliance-grade products used in consumer durables Electrical steel • Commissioned CR non-grain oriented steel plant to address domestic demand by substituting imports of high-grade electrical steel INTEGRATED REPORT 2018-19 JSW STEEL LIMITED 13 A VISION TO EXECUTE BETTER. EVERYDAY. Landmark projects Helping build a stronger India JSW Steel has been an integral part of building the India of today and continues to partner public and private bodies ...
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  • Fall '19
  • Iron ore, Rajiv, JSW Steel Limited, JSW STEEL LTD.

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