MIRA
INFORM REPORT
|
Report Date : |
11.06.2007 |
IDENTIFICATION DETAILS
|
Name : |
JSW STEEL LIMITED |
|
|
|
|
Formerly Known As : |
JINDAL VIJAYNAGAR
STEEL LIMITED |
|
|
|
|
Registered Office : |
|
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
31.03.2007 |
|
|
|
|
Date of Incorporation : |
15.03.1994 |
|
|
|
|
Com. Reg. No.: |
11-152925 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L27102MH1994PLC152925 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
MUMJ05285A |
|
|
|
|
PAN No.: [Permanent
Account No.] |
AAACJ4323N |
|
|
|
|
Legal Form : |
Public Limited
Liability Company. The company's shares
are listed on the Stock Exchanges |
|
|
|
|
Line of Business : |
Manufacturers of
Hot Rolled Coils/Steel Plates. |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Maximum Credit Limit : |
USD 2228916 |
|
|
|
|
Status : |
Satisfactory |
|
|
|
|
Payment Behaviour : |
Slow and Correct |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is a well-established company of
the Jindal Group, a reputed Industrial House of India. It is manufacturing
and marketing Hot Rolled Steel Coils/Steels/Strips and Plates. It’s
commercial production started in the middle of the year 2002. There has been
spectacur improvements in the company’s turnover and profits during the
financial year 2003-04, as compared to the previous period in which it had
incurred losses. Pursuant to
the shareholders’ approval at the Court convened meeting of the Company held
on 29th January 2004 to the Scheme of Arrangement and Amalgamation (Scheme),
the steel business of Jindal Iron and Steel Company Limited is proposed to be
merged with the Company with effect from the appointed date of 1st
April, 2003. Trade relations
are reported as fair. Payments are slow, but correct. The company can be
considered good for business dealings at usual trade terms and conditions. |
LOCATIONS
|
Registered
Office : |
|
|
Tel. No.: |
91-22- 23513000 |
|
Fax No.: |
91-22- 23526400 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Regional
Office : |
|
|
Tel. No.: |
91-22-23513000/23520980 |
|
Fax No.: |
91-22-23526400/23522600 |
|
E-Mail : |
|
|
|
|
|
Factory : |
Ø
P.O. Toranagallu, Sandur Taluk, Bellary District,
Karnataka - 583 123. Ø
Vasind, Shahapur Taluk, Thane - 421 604., Ø
Tarapur, MIDC Boisar, Thane - 401 506, |
|
|
|
|
Branches : |
Located at :- v
No.
121, The ‘Estate’, Tel. No. 91-80-25559869-73 Fax. No. 91-80-25598898 v
6-C, Tel. No. 91-44-24331930/24362691 Fax. No. 91-44-24339130 v
201,
Mahavir House, 3-6-322, Hyderguda, Tel. No. 91-40-23225252/23227240 Fax. No. 91-40-23225252/7240 v
Aishwaria,
196/43, Tel. No. 91-422-2550602/2550013 Fax. No. 91-422-2550602 v
Jindal
Centre, 12, Tel. No. 91-11-26188345-60 Fax. No. 91-11-26170691 v
402
Royal Gold, 4A, Tel. No. 91-731-5043586/25043613 Fax. No. 91-731-5043586 |
DIRECTORS
|
Name : |
Mrs. Savitri
Devi Jindal |
|
Designation : |
Chairperson |
|
Date of Birth
: |
30/03/1949 |
|
Date of
Appointment : |
18/04/2005 |
|
Qualification
: |
Under graduate |
|
Other
Directorship : |
Rohit Towers
Building Limited |
|
|
|
|
Name : |
Mr. Sajjan
Jindal |
|
Designation : |
Vice Chairman
& Managing Director |
|
Date of Birth
: |
45 years |
|
Experience : |
24 years |
|
Qualification
: |
B. Engineering
(Mech.) |
|
Date of
Appointment : |
04/07/1922 |
|
|
|
|
Name : |
Dr. B.N. Singh |
|
Designation : |
Jt. Managing
Director & Ceo (Upstream Sbu) |
|
Date of Birth
: |
01/06/1948 |
|
Date of
Appointment : |
13/10/2003 |
|
Qualification
: |
BSc (Metallurgy),
M.Tech (Metallurgy) , MBA and Doctorate in Metallurgy. |
|
|
|
|
Name : |
Mr. Seshagiri
Rao M.V.S |
|
Designation : |
Director
(Finance) |
|
|
|
|
Name : |
Dr. S.K. Gupta |
|
Designation : |
Director |
|
Date of Birth
: |
18.03.1938 |
|
Date of
Appointment : |
25.04.1994 |
|
Qualification
: |
B.Sc (Met. Engg),
Ph. D(Tech) & D.ScfTech) |
|
Other
Directorship / Chairmanship in other
Indian Public Limited Companies |
Jindal South West
Holdings Limited Vesuvius India
Limited Encore Software
Limited Shareholders/Investor Grievance
Committee Jindal South West
Holdings Limited (M), Vesuvius India
Limited (M) Audit Committee Vesuvius India
Limited (C), Encore Software Limited
(C) |
|
|
|
|
Name : |
Mr. Anthony Paul
Pedder |
|
Designation : |
Director |
|
Date of Birth
: |
28/06/1949 |
|
Date of
Appointment : |
18/04/2005 |
|
Qualification
: |
B.Sc (Maths) M.Sc
(Operation Research and Management Studies) |
|
|
|
|
Name : |
Mr. I. M.
Vittala Murthy, Ias |
|
Designation : |
Nominee Director
Of (KSIDC) |
|
|
|
|
Name : |
Mrs. Sobha
Nambisan |
|
Designation : |
Nominee (KSIDC) |
|
|
|
|
Name : |
Dr. Vijay Kelkar |
|
Designation : |
Director |
|
Date of Birth
: |
15/05/1942 |
|
Date of
Appointment : |
09/05/2005 |
|
Qualification
: |
BS MS and PhD |
|
Other
Directorship : |
IDFC Asset
Management Company Limited, Tata Chemicals Limited, Jet 'Airways ( |
|
|
|
|
Name : |
Mr. Sudipto
Sarkar |
|
Designation : |
Director |
|
Date of Birth
: |
21/03/1946 |
|
Date of
Appointment : |
09/05/2005 |
|
Qualification
: |
B.Sc.
(Maths-Hons), BA (Law Tripos), LL.M.
(International Law), M.A. (Law) Barrister, Gray's
|
|
|
|
|
Name : |
Mr. Jambunathan,
I As (Retd.) |
|
Designation : |
Nominee Director
Of Uti Asset Management Company Private Limited |
|
|
|
|
Name : |
Mr. K. V.
Krishnamurthy |
|
Designation : |
Nominee Director
of Industrial Development Bank of |
|
|
|
|
Name : |
Mrs. Zarin
Daruwala |
|
Designation : |
Nominee Director
of ICICI Bank Limited |
|
|
|
|
Name : |
Mr. Uday Chitale |
|
Designation : |
Director |
|
|
|
|
Name : |
Mrs. Lancy
Varghese |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Promoters |
70537082 |
44.93 |
|
NRI |
1933233 |
1.23 |
|
FII |
27941798 |
17.80 |
|
OCB |
88861 |
0.06 |
|
FBC |
11591685 |
7.38 |
|
IFI |
7509553 |
4.78 |
|
IMF |
5331402 |
3.40 |
|
Banks |
2076015 |
1.32 |
|
Employees |
121311 |
0.08 |
|
Bodies Corporate |
8117605 |
5.17 |
|
Public |
21372623 |
13.62 |
|
Trust |
354349 |
0.23 |
|
TOTAL |
156975517 |
100.00 |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturers of
Hot Rolled Coils/Steel Plates. |
|
|
|
|
Products : |
Item Code No. (ITC Code) Product Description 72.08
Hot Rolled Steel Strips / Sheets / Plates 72.09
MS
Cold Rolled Coils / Sheet 72.10
MS
Galvanized Plain / Corrugated Coil/ Sheet |
|
|
|
|
Exports to : |
Africa, Europe
and |
|
|
|
|
Imports from : |
|
|
|
|
PRODUCTION STATUS
|
Particulars |
|
Unit |
Installed Capacity |
Actual Production |
|
Hot Rolled
Coils/Steel Plated/Sheets |
|
MT |
2000000 |
2147850 |
|
Galvanized Coils
/ Sheet |
|
MT |
900000 |
782226 |
|
Cold Rolled Coils
/ Sheet |
|
MT |
1000000 |
844576 |
|
Hot Rolled Steel
Plates |
|
MT |
280000 |
86259 |
|
Colour Coating
Coils/Sheets |
|
MT |
100000 |
12153 |
GENERAL INFORMATION
|
No. of Employees : |
2500 |
|
|
|
|
Bankers : |
Ø
Allahabad Bank Ø
ICICI Bank Limited Ø
Punjab National Bank Ø
State Bank of Ø
State Bank of Ø
State Bank of Ø
State Bank of v
Vijaya Bank |
|
|
|
|
Facilities : |
|
|
|
|
|
Banking Relations : |
Satisfactory |
|
|
|
|
Auditors : |
STATUTORY AUDITORS Lodha & Company §
Chartered
Accountants §
6, Karim
Chambers, 40A, Doshi Marg ( CONCURRENT AUDITORS S. R. Batliboi
& Company §
Chartered
Accountants |
|
|
|
|
Associates : |
|
|
|
|
|
Parent Company
: |
Jindal Group |
|
|
|
|
Memberships : |
Confederation of
Indian Industry |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
2000000000 |
Equity shares |
Rs. 10/- each |
Rs. 20000.000 millions |
|
1000000000 |
Preference Shares |
Rs. 10/- each |
Rs. 10000.000 millions |
|
|
Total |
|
Rs. 30000.000 millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital : (as on
31.03.2006
|
No. of Shares |
Type |
Value |
Amount |
|
156975517 |
Equity shares |
Rs. 10/- each |
Rs. 1569.800 millions |
|
|
Add : Shares forfeited |
|
Rs. 610.500 millions |
|
279034907 |
10% Cumulative Redeemable Preference Shares |
Rs. 10 each |
Rs.
2790.300 millions |
|
|
Total |
|
Rs. 4970.600 millions |
|
|
|
|
|
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES
OF FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
SHAREHOLDERS
FUNDS |
|
|
|
|
|
1] Share Capital |
5040.400 |
4970.600 |
4691.300 |
|
|
2) Reserves &
Surplus |
50682.500 |
38591.600 |
26805.900 |
|
|
3) Advance
against Share Capital |
0.000 |
0.000 |
2679.700 |
|
|
4] (Accumulated
Losses) |
0.000 |
0.000 |
0.00 |
|
NETWORTH
|
55722.900 |
43562.200 |
34176.900 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
36325.000 |
40587.100 |
35684.400 |
|
|
2] Unsecured
Loans |
5405.300 |
373.400 |
0.000 |
|
TOTAL BORROWING
|
41730.300 |
40960.500 |
35684.400 |
|
|
DEFERRED TAX
LIABILITIES |
0.000 |
7420.300 |
3054.900 |
|
|
|
|
|
|
|
TOTAL
|
97453.200 |
9194.300 |
72916.200 |
|
|
|
|
|
|
|
APPLICATION OF FUNDS
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block]
|
81891.000 |
65179.800 |
60763.900 |
|
Capital work-in-progress
|
20029.300 |
18619.000 |
3493.000 |
|
|
|
|
|
|
|
INVESTMENT
|
1929.400 |
850.800 |
2295.700 |
|
DEFERREX TAX ASSETS
|
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES
|
|
|
|
|
|
|
Inventories
|
10113.500
|
9242.300
|
7434.100
|
|
|
Sundry Debtors
|
2451.600
|
2291.900
|
2666.000
|
|
|
Cash & Bank Balances
|
3378.000
|
988.700
|
1224.900
|
|
|
Other Current Assets
|
0.000
|
9794.200
|
0.000
|
|
|
Loans & Advances
|
10087.500
|
5137.100
|
7615.000
|
Total Current Assets
|
26030.600 |
27454.200
|
18940.0000
|
|
Less : CURRENT LIABILITIES & PROVISIONS
|
|
|
|
|
|
|
Current Liabilities
|
33623.600
|
19268.600
|
13759.500
|
|
|
Provisions
|
752.200
|
3932.600
|
2323.100
|
Total Current Liabilities
|
34375.800 |
23201.200
|
16082.600
|
|
Net
Current Assets
|
(8345.200) |
4253.000
|
2857.400
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES
|
1948.700 |
3040.400 |
3506.200 |
|
|
|
|
|
|
|
TOTAL
|
97453.200 |
9194.300 |
72916.200 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
Sales Turnover [including other income]
|
94497.600 |
65630.600 |
66983.400 |
|
|
|
|
|
Profit/(Loss) Before Tax
|
19148.300 |
13011.400 |
14726.100 |
Provision for Taxation
|
6228.300 |
4365.500 |
6025.000 |
Profit/(Loss) After Tax
|
12920.000 |
8645.900 |
8701.100 |
|
|
|
|
|
Export Value
|
NA |
20494.800 |
28462.400 |
|
|
|
|
|
Import Value
|
NA |
23394.000 |
19850.300 |
|
|
|
|
|
Total Expenditure
|
72333.900 |
52619.200 |
52224.000 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity
Ratio |
|
0.83 |
1.06 |
1.85 |
|
Long
Term Debt-Equity Ratio |
|
0.80 |
1.01 |
1.81 |
|
Current
Ratio |
|
0.78 |
0.87 |
1.06 |
|
TURNOVER
RATIOS |
|
|
|
|
|
Fixed
Assets |
|
0.99 |
0.86 |
0.98 |
|
Inventory |
|
9.65 |
8.16 |
13.02 |
|
Debtors |
|
38.39 |
26.79 |
19.94 |
|
Interest
Cover Ratio |
|
5.71 |
3.53 |
4.10 |
|
Operating
Profit Margin(%) |
|
30.20 |
25.09 |
34.37 |
|
Profit
Before Interest And Tax Margin(%) |
|
24.86 |
19.12 |
29.01 |
|
Cash
Profit Margin(%) |
|
19.17 |
15.27 |
18.32 |
|
Adjusted
Net Profit Margin(%) |
|
13.84 |
9.30 |
12.96 |
|
Return
On Capital Employed(%) |
|
26.24 |
17.59 |
30.80 |
|
Return
On Net Worth(%) |
|
26.98 |
17.41 |
39.89 |
STOCK PRICES
|
Face Value |
Rs. |
|
High |
Rs.600.00 |
|
Low |
Rs.579.30 |
LOCAL AGENCY FURTHER INFORMATION
History
Subject was
incorporated on 15th March 1994 at
Subject was promoted
by Jindal Iron and Steel Company (JISCO) and its associated companies of the
Jindal Group, together with the Karnataka State Industrial Investment and
Development Corporation (KSIIDC), has set up an integrated steel plant to
manufacture 1.65 mtpa of hot-rolled coils at Torangallu (Ballary), Karnataka
(estimated cost Rs. 33000.000 millions), which includes a pellet plant at an
estimated cost of Rs. 3000.000 millions.
The company will
use theCorex-BOF (basic oxygen furnance) process developed by Voest Alpine,
Austia, for this mega project. The project was part financed by the proceeds of
the successful Rs. 12250 millions equity-cum-debenture issue in February, 1995.
In 1994-95, a
joint venture company – Jindal Tracteble Power Company, was established for
supply of power, in collaboration with Tractebel, Belgium, Another joint
venture company Jindal Praxair Oxygen Company (Private) Limited was established
in 1995-96, in collaboration with Praxair, USA, for setting up oxygen plants.
During
1999-2000, it completed the Corex-01, BOF-01 ontinous Slab Claster – 01 and
Lime Calcination plant. The pelletisation plant and Corex-02 is under
implementation and is expected to be completed by the end of 2000.
It has entered
into a technical collaboration with Voest Alpine, for technical details with
respect to productivity etc.
It has also
entered into joint venture agreements for power supply, oxygen plant and
mining.
The total hot
rolled coils produced in 2000-01 was 788336 tonnes and the company made full
effort to complete the balance project viz. Pelletisation plant, Corex-02 and
continuous casting plant-02 in the same year. The re-circulation system for the
SGP, extension of the coil yard of HM and CTL bays, gasholder of 100000-m3
capacity was the projects completed in 2001-02.
Change of Name of the Company:
It is proposed to change the name of the Company from Jindal Vijayanagar Steel
Limited to 'JSW Steel Limited' to bring it more in line with the brand image
being created under JSW group (part of O.P. Jindal group) and to forge a
separate and distinct identity of its own. The proposal regarding change of
name is placed for the approval.
AS PER
WEBSITE
JSW Steel
Limited is today a fully integrated steel plant having units across Karnataka
and maharashtra producing from pellets to colour coated steel .
JSW's
history can be traced back to 1982, when the Jindal Group acquired Piramal
Steel Limited which operated a mini steel mill at Tarapur in
In 1994,
to achieve the vision of moving up the value chain and building a strong,
resilient company, JISCO promoted Jindal Vijayanagar Steel Limited (JVSL) now
known as JSW Steel Limited (Upstream) .Its plant is located at Toranagallu in
the Bellary-Hospet area of Karnataka, the heart of the high-grade iron ore
belt, and spread over 3,700 acres of land. It is just 340 kms from
The
steel industry then was on the threshold of adopting new technology, and the
Jindal Group took a lead in adopting the latest technology of steel making,
known as 'COREX,' developed by Voest Alpine of Austria. The then JVSL was the
first
Press Release
JVSL POSTS
NET PROFIT OF RS. 5286.800 MILLIONS FOR THE YEAR 2003-04
Jindal
Vijayanagar Steel Limited (JVSL) has posted a Net Profit of Rs. 2568.200
millions for the 4th Quarter of 2003-04 vis-à-vis Rs. 891.500 millions during
the corresponding quarter in the previous financial year. The Company reported
a Net Profit of Rs. 5286.800 millions for the financial year 2003-04, vis-a-vis
Net Loss of Rs. 1106.700 millions during the preceding financial year 2002-03.
The company has
shown significant improvement in the performance during the year with all
plants operating above the rated capacity. Compared to last Year there has been
a growth of 11% in Production and 12% in Sales Volume. The increase in Net
sales realization coupled with higher sales volume pushed up the net sales by
31% over the last financial year.
During the 4th
Quarter 2003-04, the Production was 0.415 million MT and sales 0.409 million
MT. The Earnings before Interest, Depreciation and Tax (EBIDTA) achieved for
the quarter was Rs. 3496.900 millions, on a total turnover of Rs. 10517.300
millions (Net of excise duty Rs.
9674.200 millions). The Company achieved highest ever EBIDTA Margin of 36% on
Net Sales during the quarter. The Company made a cash profit of Rs. 2995.400
millions during the Quarter and after providing for interest, depreciation,
amortisation and tax, the net profit after tax was Rs. 2568.200 millions
(including exceptional item of Rs. 1483.000 millions).
During the
financial year 2003-04, the Earnings before Interest, Depreciation and Tax
(EBIDTA) is Rs. 10855.600 millions, on a total turnover of Rs. 35963.100
millions (Net of excise duty Rs
32797.800 millions). The Company achieved EBIDTA Margin of 33% on Net Sales
during the year. The Company made a cash profit of Rs. 6762.800 millions and
after providing for interest, depreciation, amortisation and tax the net profit
after tax was Rs. 5286.800 millions (including exceptional item of Rs. 3907.600
millions) for the year 2003-04. The
interest cost has come down by 27% due to significant debt reduction (Rs.
11540.000 millions) during the year.
The company has
effected repayment/prepayment of loans to the extent of Rs. 115 millions during
the quarter and Rs. 4160 millions (cumulative) during the financial year
2003-04.
The
company is confident of continuing the trend of improvement in the operational
performance in the current financial year and is continuing its efforts for
further reduction in cost of production.
The company enhanced its Pellet Plant capacity from 3 MTPA to 4.2 MTPA
in May 2004. The Steel Plant capacity is
also being upgraded to 2.5 MTPA from July 2004 on commissioning of Blast
Furnace set up by Euro Ikon Iron & Steel Private Limited. The Blast Furnace, on its commissioning will
be operated by JVSL under Operations & Maintenance Agreement. The company will also have captive coke
supply from September 2004 onwards on commissioning of Coke Project being set
up by Euro Coke Energy Private Limited.
JVSL will also have similar arrangement with ECEPL as that of the Blast
Furnace Project, for operation of Coke Oven Plant Project. JSW Power Limited. promoted by Jindal Thermal
& Power Company Limited, a Jindal Group is setting up a Power Plant of 200
MW to meet the requirement of JVSL by utilising the Corex/BOF/BF/Coke Oven
Gases. The project is expected to be
operational in phases December 2004 (100 MW) and September 2005 (100 MW). The power cost to JVSL will come down on commissioning
of these units. These initiatives are expected to improve the financial profile
of the company further.
Assuming that
the respective High courts approves the said merger, the combined financial
figures for the year 2003-04 shows a total turnover of Rs. 46787.600 millions
(Net of excise – Rs. 43546.600 millions) and Earnings before Interest,
Depreciation Tax and amortisation (EBIDTA) would be Rs. 14997.4 Millions, with
the combined operating margin of 34% on net sales for the year. Profit before
tax for the year was Rs. 9631.000 millions and Net Profit after tax was Rs.
8022.000 millions for 2003-04. The combined financial figures mentioned above
are provisional and not conclusive.
Actual results can differ from those expressed based on the disposal of
the “Scheme”. Readers of the statement
are cautioned that the “Scheme” is under implementation and the Company assumes
no responsibility for any action taken based on the above information or to
update the same as circumstances change.
Subject has shown
improved performance for the 3rd Quarter 2003-04. The company has
posted a net profit of Rs. 2255.300 millions vis-à-vis Net Loss of Rs. 598.800
millions in corresponding quarter in the previous financial year.
The company has
shown significant improvement in the performance during the 3rd
quarter 2003-04 registering growth in volume of production and sales by around
7% and 10% respectively over the corresponding quarter in the previous
financial year 2002-03. The increase in net sales realisation coupled with
higher sales volume pushed up the net sales value by around 19% compared to
that of corresponding quarter in the previous financial year.
Fixed
Assets
- Buildings
- Plant &
Machinery
- Furniture
& Fixtures
- Vehicles &
Aircraft
Director Report:
Company has successfully commissioned 1.3 MTPA crude steel capacity
expansion, modernization of Hot Strip Mill increasing the capacity from 2 to
2.5 MTPA, expanding the capacity of pellet plant from 4.2 MTPA to 5 MTPA during
the financial year under review which contributed to achieve a Crude Steel
production of 2.652 million tonnes showing a growth of 18%. The cost reduction
initiatives namely increasing the proportion of captive coke and power, Coal
Dust Injection (CDI) in the Blast Furnace, use of Sinter fines in Corex acted
as a mitigant against raising input costs. Higher volumes, improved
realisations and cost savings initiatives pushed the EBIDTA margin to 34%. The
Company posted a net profit of Rs.12.920 millions on net sales of Rs.85944.00
millions for the year. The long term debt gearing has come down to 0.75 from
0.96 in the previous year due to repayment of loans aggregating to Rs.10180.000
millions during the year.
One of the furnaces was to be shut down in February 2007 due to
accidental fire, which resulted in loss of production, and this furnace was
recommissioned on April 12, 2007 after repairs. The insurance claim towards
loss of profits receivables from Insurance Company along with one other claim
aggregating to Rs.658.500 millions was included in other income.
Pursuant to Accounting Standard (AS) - 21 on 'Consolidated Financial
Statements' issued by the Institute of Chartered Accountants of India,
Consolidated financial statements presented by the Company include financial
information of its subsidiaries. On an application made by the Company under
Section 212 (8) of the Companies Act 1956, to the Central Government seeking
exemption from attaching a copy of the Balance Sheet, Profit & Loss account
and other documents of the subsidiary companies required to be attached under
section 212 (1) of the Act to the Balance Sheet of the Company, the Central
Government has vide its letter No. 47/194/2007-CL-III dated 18th April, 2007
granted exemption from complying with this requirement. However, the aforesaid
documents relating to the subsidiary companies and the related detailed
information will be made available upon request by any member or investor of
the Company / subsidiary companies. Further, the Annual Accounts of the
subsidiary companies will be kept open for inspection by any investor at the
registered office of the Company and also that of the subsidiary companies.
The Consolidated financial Statements also reflect minority interest in Associates
as per Accounting Standard (AS) - 23 on 'Accounting for Investments in
Associates in Consolidated Financial Statements' and proportionate share of
interest in Joint venture as per Accounting Standard (AS) - 27 'Financial
Reporting of Interests in Joint Ventures'.
PROJECTS AND EXPANSION PLANS
a) Projects under Commissioning in
FY 2007-08 to 2009-10
* The 1 MTPA Cold Rolling Mill complexes is expected to be operational in
second quarter FY 2007-08. The Phase II Modernization of Hot Strip Mill
increasing the capacity from 2.5 to 3.2 MTPA and modernization of Blast Furnace
- I to increase capacity from 0.9 to 1.2 MTPA will be ready during 2007 to
2009.
* Setting up of new Hot Strip Mill with 2 MTPA expandable at a marginal
investment to 5 MTPA is also expected to be commissioned by end of September
2009
.
* Further expansion of Crude Steel capacity by 2.8 MTPA to reach 6.8 MTPA
by March 2009 is under way.
The work on these projects is progressing quite satisfactorily. They are
expected to be operational in phases showing volume growth and improvement in
the product mix.
b) New Projects:
a) Expansion of capacity to 10
MTPA
*
* The Company's new Hot Strip Mill being set up at an initial capacity of
2 MTPA can be expanded to 5 MTPA with marginal investment. The inherent
capacity available in the Hot Strip Mill is also an added advantage to create
crude steel capacity as a backward integration to enhance the value.
* The project configuration includes : New sinter plant, Coke oven, Blast
furnaces, 2 Converters, 2 Casters, 2 Lime Kilns, 300 MW captive power plant,
dedicated water pipe line from Almatti dam from Andhra Pradesh, dedicated
railway corridor for transporting Ore from mine to the plant with all other
associated logistics, utilities and common facilities.
* The implementation period is estimated to be 3 years starting from is'
October 2007. The cost of the project is worked out at Rs.70.000 millions to be
financed by way of cash accruals Rs.20.000 millions and balance through Foreign
Currency Convertible Bonds / EURO bonds / Foreign Currency loans / Structured
finance products / Rupee loans. The Company is in touch with various Investment
/ Merchant bankers to work out the right mix of debt to finance this project
and other ongoing projects. Considering the attractive returns on project
faster brownfield expansions at low specific investment cost per tonne,
favourable capital market environment to raise resources to finance the Capital
Expenditure Programme of the Company and positive steel industry scenario, it
is decided to take up the implementation of this project to be commissioned by
2010. The Company expects to maintain the debt gearing below 1 and debt to
EBIDTA below 3 including the proposed debt financing up to 10 MTPA on the
assumption of stable steel price outlook.
OTHER DEVELOPMENTS
a) MOU signed with State Govt. of
Jharkhand
Their Company had signed a Memorandum of Understanding with State Govt.
of Jharkhand for setting up a 10 MTPA green field steel plant in phases with an
investment of Rs.350.000 millions.
Company had applied for allocation of captive coking coal blocks to the
Ministry of Coal for the captive consumption of coal at its existing steel
plant at Vijayanagar as well as the proposed steel plant at Jharkhand
.
Ministry of Coal, Government of India has allotted Rohne Coal Block in
the state of Jharkhand with geological reserves of 410 million tonnes and 250
million tonnes of mineable reserves of Medium and High grade Coking Coal
jointly to the Company, and two other allottees in the ratio of 69%, 24% and 7%
respectively. The annual capacity of the mine will be 8 Mtpa and the output
will be divided among the three companies in the ratio of their
allotment.
A suitable consortium structure shall be formed between the Company and
other Allottees for the development of mine and the infrastructure. The
necessary environmental, forests and mining plan approvals shall be obtained in
due course.
b) Formation of Joint Venture
Subsidiary to implement
Company had executed a Development Agreement on 11th January 2007 with the
Government of West Bengal, West Bengal Industrial Development Corporation
(WBIDC) and West Bengal Mineral Development & Trading Corporation Ltd.
(WBMDTC) for setting up a 10 MTPA steel plant in West Bengal in suitable phases
at an estimated cost of Rs, 350.000 millions within 12 years from the date of
execution of the Development Agreement (11th January, 2007).
A Joint Venture subsidiary for the purpose was incorporated on 20th
April, 2007 by the name of JSW Bengal Steel Limited'.
c) Clean Development Mechanism
(CDM) Project
As a part of Clean Development Mechanism (CDM) initiatives, their Company
has developed a 100 MW captive power plant using waste gases as a Clean
Development Mechanism (CDM) Project, which was commissioned in April, 2005.
This project has been registered by CDM Executive Board of UNFCCC on 12th
January, 2007. As per the registered project design document, the company is
eligible for a total 7673254 Certified Emission Reductions (CER's) from April
2005 to March 2015. The CER's will be issued after examination by the CDM
Executive Board.
d) Acquisition of Cold Rolling
Mill
Jindal Steel & Alloys Ltd. (JSAL), owns a 230,000 tonnes of Cold
Rolling facility at Vasind adjacent to the Value Added Facility of their
Company. As the operations of this Company are integrated with Downstream
business, their Company has taken this facility on Conducting Basis for a
period of 3 years which expires on 28th February 2009. In order to carry out
the integrated operations uninterruptedly, it is in the interest of their
Company to acquire this facility. Accordingly their Board has approved the
acquisition of this unit on the terms to be approved by a Committee of
Directors based on valuation by Independent Valuer. Subsequent to receipt of
independent valuation report, the Committee of Directors approved the
acquisition of this unit for a consideration of Rs.633.400 millions to be
discharged by taking over the liabilities of Rs.619.800 millions and the
balance of Rs.13.600 millions to be paid in cash subject to certain approvals
to be received from JSAL. This acquisition will be completed on receipt of
requisite approvals from JSAL.
PROSPECTS
The global finished steel consumption is expected to touch 1.178 billion
tones in 2007 showing a growth of 5.8%. The policy announcements, namely
reduction / removal of export rebates on steel products, imposition of export
tax on semis, discouraging tolling activities through the levy of taxes,
imposition of quantity restrictions on export of certain products show the
intent of the Chinese policy makers to discourage export of low value added
steel products. It is estimated by certain steel analysts that the net steel
exports in 2007 from
FORMATION OF SUBSIDIARIES
The Board of Directors of their Company at its meetings held on
19.10.2006 & 22.01.2007 approved the formation of subsidiaries to augment
its expansions & global reach.
Accordingly, the following
subsidiaries were formed during the year under review:
A wholly owned subsidiary overseas by the name of JSW NATURAL RESOURCES
LIMITED to pursue acquiring coal assets / other assets relating to steel business.
A Memorandum of Understanding has been signed to take-over of certain
licenses in
ii. A wholly owned subsidiary Company in London (UK) by the name of JSW
STEEL (UK) LIMITED to strengthen and widen the Company's presence in the
International Market and also to identify and speed up the acquisitions in
Steel related businesses.
Subject Independent Steel owns a steel processing center strategically
located at
is proposed to be acquired for a consideration of pound 3.75 million to
be discharged by taking over the existing long term debt of pound 2.1 million
and the balance pound 1.65 million payable is instalments by 31.12.2007 subject
to satisfactory compliance of certain conditions. This acquisition will have
synergies with the operations of the Company in leveraging the expertise of the
target Company in the service centre, access to existing customer base in
iii. A wholly owned subsidiary Company in India by the name of JSW STEEL
PROCESSING CENTRES LIMITED to set up service centres with a view to expand the
reach of CRCA and HRPO steel products manufactured across the value chain and
to meet the exacting demands of the user industry.
ASSOCIATED
COMPANIES FOR POWER, OXYGEN AND MINING
* JSW ENERGY (VIJAYANAGAR)
LIMITED
JSW Energy (Vijayanagar) Limited (JEVL) is setting up a 600 MW Power
Plant adjacent to steel plant of the Company in the state of Karnataka. A
long-term Power Purchase Agreement has been signed by their Company with JEVL
to buy 300 MW Power on two part tariff basis. The balance 300 MW of power is
intended to be sold to third parties by this Company. The captive Power Plant
of 230 MW of their Company alongwith 300 MW under this long term Power Purchase
Agreement will be adequate to meet the power requirement of their Company's
Upstream unit upto 6.8 MTPA. Their company has committed to invest a total of
Rs.1250.000 millions representing 26% shareholding in JEVL, against which an
equity investment of Rs.800.000 millions has already been made on 31st March,
2007.
* JINDAL PRAXAIR
OXYGEN COMPANY PRIVATE LIMITED (JPOCL):
As per last Audited Financial Statement for the year ended 31st March,
2006 of JPOCL, the reported turnover and net profit after tax were Rs. 2964.800
millions and Rs. 540.000 millions respectively.
JPOCL has initiated arbitration proceedings before an arbitral tribunal
of three arbitrators on certain items relating to consideration for the sale
and supply of products such as oxygen, nitrogen and argon to the Company, as
well as taxes and interest thereon. The arbitration proceedings are in
progress. The claims of JPOCL have not been acknowledged by their Company as
debts and have been classified as Contingent Liability. Similarly, the claims
made by their Company have not been accounted pending their settlement.
* VIJAYANAGAR MINERALS PRIVATE
LIMITED (VMPL):
During the F.Y 2006-07, VMPL has supplied 1.20 mt of
VMPL has bagged Excellency Award for Community Development during Mines
Environment & Mineral Conservation Week Celebration 2007 held in February
2007. This award has been given in recognition of VMPL's social upliftment and
care for the society surrounding their mine. This has given them the strength
and belief that progress and prosperity has to get alongwith society and not in
isolation.
AWARDS & RECOGNITION
Company and its employees are the proud
recipients of the following awards during the year:
1. National Sustainability Award-2006: Second Prize amongst the
integrated Steel Plants Category by Indian Institute of Metals.
2. CII Award for Business Excellence-2006: 'Commendation certificate for
significant achievement' towards business excellence
.
3.
4. Greentech Foundation: Gold Award in metal and mining sector-2006 for
outstanding achievement in Environment Management.
5. CIO 100 - Giant 100 Honouree 2006' (IT Award).
6. ATHYUNNATHA SURAKSHA PURASKARA of National Safety Council - Karnataka
Chapter for the year 2005
7. DMA Erehwan HR Innovative Awards-2006:
8. IMC Ramkrishna Bajaj National Quality Award 2006: Commendation
certificate
9. Greentech Foundation: Silver Award in metal and mining sector-2006 for
outstanding achievement in Safety Management by Greentech Foundation.
10. NMD - ATM 2006: JSW Steel presented the maximum number of papers (30)
and won the following:
* 1st Prize in Oral Presentation in Mineral Section
* 1st Prize in Oral Presentation in Processes Section
* 2nd Prize in Metallography
2nd Prize in Poster Competition
CORPORATE GOVERNANCE
Their Company has complied with the requirements of clause 49 of the
listing agreement regarding Corporate Governance.
A report on the Corporate Governance practices followed by the Company,
the Auditors' Certificate on compliance of mandatory requirements thereof, CEO
/ CFO Certification and Management Discussion and Analysis are given as
annexure to this report.
FOREIGN EXCHANGE
USED AND EARNED
a) Activities relating to exports, initiatives taken to increase exports,
development of new export markets for products and services: and export
plans
The Company's exports comprised H R Coils C R Coils, Galvanized products,
H R Plate, Slabs, Pig Iron and Colour Coated sheets. While virgin markets are
being explored, their Company is leveraging its brand name in
b) Total foreign exchange used and earned
Foreign exchange earnings during Financial Year 2006-07 were Rs.
33163.300 millions as against Rs. 20494.800 millions during the previous year,
while the foreign exchange outgo during the year was Rs. 3399.800 millions as
against Rs. 24700.5 00 millions during the previous year.
Indian steel:
supply - demand
Today,
* White goods and consumer appliances sectors are clocking a double digit
growth due to an improvement in the standard of living, which augurs well for
steel demand.
* Infrastructure development: The government is offering a level-playing
field to Indian industry through the upgradation, augmentation and development
of world class infrastructure. Besides,
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON DESIGNATED
PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.73 |
|
|
1 |
Rs.80.43 |
|
Euro |
1 |
Rs.54.44 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
7 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
7 |
|
--CREDIT LINES |
1~10 |
7 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
63 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|