Impact

Our primary raw materials, iron ore and coking coal, and other commodities like thermal coal, natural gas, contribute to a significant portion of our operating cost. Iron ore, coking coal and other commodities' prices and availability depends on:

• Global price and currency fluctuations and parity of landed cost considering price, freight, tariff and exchange rates
• Government policies on mining, allocation and tariff
• Domestic demand-supply gap, constraints and vendor actions interruptions in production by suppliers, demand for raw materials and suppliers’ allocation to other purchasers leading to the risk of production disruptions due to non-availability of coking coal as we are solely dependent on coking coal imports
• Uncertainty in availability given that no major additional capacities are being added globally
• Few of the commodities have high dependence on certain geographies

Response strategies

Iron ore

• Iron ore requirements are primarily met by iron ore mines owned by us (i.e., captive mines) and balance sourcing from vendors in Odisha and Karnataka. This has significantly reduced our dependence on imported iron ore. During FY 2022-23, captive mines supplied 41% of the total iron ore requirements
• Augment the iron ore captive mines by participating in the mine auctions conducted by the Government

Coking coal

• Prices are expected to remain volatile in view of the global geopolitical events
• Diversifying sources across various geographies to ensure availability of coking coal. Sourcing being done from countries like Canada and USA in addition of Australia
• Blending of different types of coal to minimise the impact of rising prices
• Trial of new grades of coal for better value in use to reduce the cost of sourcing

Impact

Exchange rate changes/fluctuation between two currencies.

Response strategies

• A robust hedging policy in place to mitigate the risk of currency and commodity fluctuations and reviewed by the committee of Board of Directors
• Hedging strategy with a judicious mix of forward contracts and options
• Adequate hedging of long-term foreign currency borrowings
• Export duty has been withdrawn since November 2022, thereby boosting exports enabling better natural hedges.

Impact

Interest rate increases in the key global economies could slowdown foreign currency inflows into the country, which could affect the value of domestic currency and interest rates and thus, adversely impact our ability to secure financing on favourable terms.

Response strategies

• Optimum mix of fixed/floating interest rate and INR/ Foreign currency loan for borrowings
• Improved financial parameters leading to improvement in credit ratings
• Our Company has successfully negotiated a lower spread on new loans
• Delayed impact of rising interest cost by availing rupee loans at 1-year MCLR (Marginal Cost of funds-based Lending Rate)

Impact

Risk of disruption in production due to non-availability of water/inadequate power supply for enhanced capacity.

Response strategies

Water

• Vijayanagar: Increase in production will require additional sanction of water for which government approval has been received and budget has been allocated. We are undertaking several initiatives to recycle and reuse water
• Dolvi: Propose to have reservoir with additional capacity near plant; land has been identified

Electricity

• Power will be sourced from captive power plant and the long term power purchase agreements with JSW Energy Limited and its subsidiaries
• Additional transmission line is planned
• Power purchase agreement with a subsidiary of JSW Energy Limited to source solar power and wind power for 958 MW
• At Dolvi, commissioned the 175 MW waste heat recovery boiler and 60 MW captive power plant to harness flue gases and steam from coke dry quenching.

Impact

Human capital with the requisite skillset and experience is critical to maintain the current level of operations and upcoming expansion at plant. Acquiring and retaining Response strategies talent is necessary to keep pace with business growth.

Response strategies

Senior leadership support in setting the tone at the top

• Strong HR policies and processes in place for hiring and retaining talent
• Robust performance management system to reward performers, which helps attract and retain talent
• Succession planning for all leadership roles and Grade wise leadership development and talent identification tracks
• JSWSL OPJ Samruddhi Plan 2021, our ESOP plan launched for employees to retain talent
• Candid Conversation Programme to enable greater interaction between employees and senior leaders so as to build strong relationships
• A separate pool of employees identified across bands for grooming for next level roles through specially designed Future-Fit Leadership Development programmes from IIM Ahmedabad, ISB Hyderabad and Cornell University, US
• Gender diversity initiative ‘Springboard’ launched for high-performing female employees
• Online learning courses for employees in collaboration with Skillsoft to develop project management, team building, communication and other skills.

Impact

The steel sector is subject to extensive health and safety laws, regulations and standards. Any safety lapses would result in damage or destruction of property, assets and human capital.

Response strategies

Ensuring compliance with local and international laws, regulations and standards with a primary focus on protecting employees and communities from harm and operations from business interruptions.

• Certified for ISO 45001-Safety management systems and in compliance with International best practices in safety management
• Matured Safety Governance Structure is established including Group Safety Council, Safety Steering Committee, Apex safety Committee and other sub committees for review of safety aspect, fatal accidents/ near miss accidents, if any
• Periodic Safety inspections, internal and external safety audits ensure that our systems are properly implemented and compiled
• Regular safety trainings are conducted based on the Training needs identified across different skill levels of both staff and workmen
• Mandatory usage of PPEs such as safety shoes, safety helmets, appropriate hand gloves etc., as per the PPE Matrix is strictly implemented at all our plants
• Safety made a mandatory Key Result Area (KRAs up to 15%) for employees in performance appraisal and compensation
• Medical facilities, mediclaim policy cover for employees and their families; Group insurance policy for employees
• Robust security arrangements like security checkpost, entry pass/identity cards, access control system, CCTVs at critical locations

Key safety initiatives

• India’s first Safety Experience Centre inaugurated at Vijayanagar; another one being set up at Dolvi
• Mandatory skill assessment for contractor’s workmen; over 1 lakh workmen assessed
• Exposition on human-machine interface reduction conducted at Vijayanagar; 100+ scenarios identified and eliminated
• Smart Speed Cameras installed across the plants for road safety improvement
• Contractor safety management strengthened with stringent pre-qualification assessment for contract workforce

Impact

Cybersecurity risk could damage reputation and lead to financial loss. Such threats arise from:

• Theft of corporate information
• Theft of financial information (e.g., financial results and bank details)
• Ransomware: Cyber extortion
• Disruption to business (e.g., inability to carry out
• SAP transactions, online payments)
• Loss of business or contract

Response strategies

• All the Information Technology management system conforms to ISO 27001:2013
• Controlling system vulnerability through:
  • Vulnerability assessment and penetration testing for all public facing assets
  • Firewall hardening rule sets implemented
  • Firewall remediation tool deployed and improvements done in identified areas
• Breach assessment done with subject expert partners through:
  • Strengthening the cybersecurity posture
  • Self-assessment and continuous monitoring
  • Third-party view and peer benchmarking comparison
• Cybersecurity awareness programme conducted across all the locations in view of growing threats of cyberattacks due to increased online trades and transactions
• Multifactor authentication for critical IT services (remote VPN access)
• Network Visibility and Access Control (NAC) solution
• Monitor threats and respond, investigate and remediate cybersecurity-related incidents and data breaches
• Subscribed to cyber-insurance policy
• Prevention mechanism for Distributed Denial of Services (DDoS)
• Endpoint Detection & Response (EDR) solution deployed.

Impact

Evolving regulatory framework may have material impact on operations. Non-compliance and non-adherence may impact reputation.

Response strategies

• Robust Legal Compliance management systems to ensure awareness and compliance
• Technology is being utilised to track compliance, timelines with suitable escalations, action plans and reviews
• Compliance review by Senior Management and Board of Directors on quarterly basis and initiation of remedial action.

Impact

• Steelmaking inherently involves the emission of CO2, dust and other co-products gases/waste (slag), along with significant water consumption, posing a risk to environment and sustainable growth
• There is a need to decarbonise steel making for environmental sustenance for which India has committed to achieve Net Zero emissions by year 2070. In India, as elsewhere, climate action is intensifying but any drastic change in carbon emission regulations may adversely impact our business and operations
• Compliance with new and more stringent environmental obligations related to greenhouse gas (GHG) emissions may require additional capital expenditure or modifications in operating practices and additional reporting obligations
• Capacity expansion projects require adherence to legal requirements like environmental assessments, environmental impact studies and/or plans of development before commencing work
• Water availability along with climate change is also posing as an emerging risk to our operations due to its imminent importance in steel making. Resultant weather patterns relating to climate change may pose as a challenge for water availability for operations
• Expiration or delay in approvals could prevent us from carrying out our operations in full.

Response strategies

• We are complying with all the applicable norms through use of Best Available Technologies (BAT)
• We select the right equipment, technology, processes, and inputs, and we monitor and report our sustainability parameters
• We have started using renewable power in steelmaking aiming to increase its share every year
• We have also installed MEROS technology in sinter plants to further reduce dust emissions which are CapEx intensive.
• Slag-to-sand projects, waste plastic usage in steelmaking have been innovated and implemented to constantly ensure circularity in operations
• We are operating Carbon Capture and Utilisation to capture carbon and divert to different applications
• For our mining operations, we have undertaken comprehensive Reclamation & Rehabilitation (R&R) programmes, in line with government mandates, ensuring enhancement and preservation of biodiversity.
• Utilisation of waste heat and waste process gases is being practiced to ensure energy efficiency
• We believe in transparently disclosure of information through various platforms such as CDP–Climate and water programme, Dow Jones Sustainability Index (DJSI), along with public disclosures in the annual integrated report
• Product sustainability is a focus area and 14 of our finished products have obtained Environment Product Declarations (EPDs) and three products are GreenPro certified.
• We have implemented water-efficient technologies and ensure maintenance of Zero Liquid Discharge at our operations.
• We are aligning with the recommendations of Task Force on Climate Related Financial Disclosures (TCFD), allowing us to focus on climate-related risks and opportunities.