MIRA
INFORM REPORT
|
Report Date : |
10.05.2008 |
IDENTIFICATION
DETAILS
|
Name : |
JINDAL STEEL AND
POWER LIMITED |
|
|
|
|
Registered Office : |
O.P. Jindal Marg, Delhi
Road, Hisar-125005, Haryana |
|
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|
|
Country : |
India |
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|
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|
Financials (as on) : |
31.03.2007 |
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|
Date of Incorporation : |
28.09.1979 |
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Com. Reg. No.: |
05-9913 |
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CIN No.: [Company
Identification No.] |
L27105HR1979PLC009913 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
JBPJ00181G /
DELJ03437A |
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|
Legal Form : |
Public Limited
Liability Company. The company’s
shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturers of Sponge
Iron and Mild Steel Slabs, Mining of Ferro Chrome and Generation of
Electricity. |
RATING &
COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
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 |
|
Maximum Credit Limit : |
USD 99000000 |
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|
|
|
Status : |
Good |
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|
Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a
well-established and multi product Company of the Jindal Group, reputed
industrial house in India. The Company is
making steady progress in its turnover and profits. Directors are very
resourceful and respectable businessmen. Trade relations are fair. Payments
are usually correct and as per commitments. The Company can
be considered normal for business dealings at usual trade terms and
conditions. |
LOCATIONS
|
Registered Office : |
O.P. Jindal Marg, Delhi
Road, Hisar-125005, Haryana, India |
|
Tel. No.: |
91-1662-222471-75
/ 83 |
|
Fax No.: |
91-1662-222476 |
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E-Mail : |
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Website : |
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Area : |
Owned |
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Location : |
Industrial Area |
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|
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|
Marketing Office : |
v Jindal Enclave, Old Standard Mill
Compound, Behind Maratha Udyog Bhawan, Prabha Devi Marg, Mumbai - 400 025,
Maharashtra Tel. No. 91-22-24328000 Fax. No. 91-22-24238312 E-mail jindal@bom2.vsnl.net.in v 4C, Century
Plaza, 560-562, Anna Salai, Chennai – 600018 Tel. No. : 91-44-52132134, Fax No. : 91-44-52132334 E-mail : jsplchennai@vsnl.net |
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|
|
|
Corporate Office : |
Jindal Centre 12,
Bhikaiji Cama Place, New Delhi - 110 066, India |
|
Tel. No.: |
91-11-26188345-60 |
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Fax No.: |
91-11-26161271/26170691 |
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E-Mail : |
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Factory 1 : |
·
Karsia Road,
Post Box No. 16, Raigarh - 496 001, Chhattisgarh Tel. No.:91-7762-227001-5 Fax No.:91-7762-227021-23 Telex : 0650-1202 JSL-R IN E-Mail : jsplrgh@gwr1.dot.net.in
·
30 KM Stone,
G.E. Road, Mandir Hasaud, Raipur - 492001, Chhattisgarh Tel. No.: 91-771-2471205-07 Fax No.: 91-771-2471404-2471214 ·
TRB Iron Ore
Mines, P O Tensa - 770 042, Dist. Sundergarh, Orissa Telfax. No. 91-6614-2736023/24 ·
Jindal Open
Cast Coal Mines Village, Dongamauha, P.O. Dhaurabhata, Tal. Gharghoda, Dist.
Raigarh, Chhattisgarh Tel. No. 91-7767-247484-85 ·
Gare Coal Fields,
Mand, Raigarh, Chhattisgarh ·
28,
Najafgarh Road, New Delhi 110015, India Tel. No.:
91-11-30589739-41 Fax No.:
91-11-25928677 / 25928118 |
|
Area : |
Owned |
|
Location : |
Industrial area |
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|
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|
Branches : |
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DIRECTORS
|
Name : |
Ms. Savitri
Jindal |
|
Designation : |
Chairperson |
|
|
|
|
Name : |
Mr. Naveen Jindal
|
|
Designation : |
Executive Vice
Chairman and Managing Director |
|
Qualification : |
M.B.A. from University
of Texas at Dallas U.S.A and B.com (Hons) from Delhi University. |
|
Profile : |
He was the Joint
Managing Director of Jindal Strips Limited for three and half years and the
managing director of Jindal Overseas
(ME) FZE, Dubai for a period of nine months. He is the Managing Director of
the Company for the past six years and possesses vast knowledge and
experience in managing the affairs of the business and industry. He is mainly
responsible for enhancing production capacity of Sponge Iron, Steel and
generation of Power. During the period of six years and under his leadership,
supervision and guidance, the Company has grown manifold. In his maiden
attempt, he won Loksabha seat from Kurukshetra Constituency in the state of
Haryana on 13.05.04 with a very high margin and is one of the young members
of Parliament. |
|
|
|
|
Name : |
Mr. Vikrant
Gujral |
|
Designation : |
Vice Chairman
& Chief Executive Officer |
|
Qualification : |
Mechanical
Engineer |
|
Experience : |
40 years experience
in Steel Plants of India Limited. |
|
Profile : |
He was Executive
Director and Chairman of Indian Iron and Steel Company Limited (IISCO),
Chairman of Maharashtra Elektrosmet Limited. In November 2003 he was awarded
the coveted “National Metallurgist” award for the year 2003 by Ministry of
Steel, Govt. of India in recognition of his outstanding contribution in Iron
and Steel Plant modernizing projects technology. He was also Director of
Hindustan Steel Works Construction Limited and Bhilai Oxygen Private Limited.
He joined the Company In April 2001. Rail and Universal Beam Mill Project was
completed and commissioned under his guidance. |
|
|
|
|
Name : |
Mr. Ratan Jindal |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Suresh Baid |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Rajendra
Singh |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. S.
Ananthakrishnan |
|
Designation : |
Director (Nominee
– IDBI Bank Limited) |
|
|
|
|
Name : |
Mr. Ashok Alladi |
|
Designation : |
Director (Nominee
- ICICI Bank Limited) |
|
|
|
|
Name : |
Mr. Anand Goel |
|
Designation : |
Whole-time
Director |
|
|
|
|
Name : |
Mr. Sushil K.
Maroo |
|
Designation : |
Vice President
(Corporate Finance) |
|
|
|
|
Name : |
Mr. T. K. Sadhu |
|
Designation : |
Company Secretary
|
|
|
|
|
Name : |
Mr. P. S. Rana |
|
Designation : |
Whole Time
Director |
|
|
|
|
Name : |
Mr. A K Purwar |
|
Designation : |
Director |
SHAREHOLDING
PATTERN
As on 31.03.2008
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
Shareholding of
Promoter and Promoter Group |
|
|
|
Indian |
|
|
|
Individuals/Hindu
Undivided Family |
1825760 |
1.19 |
|
Bodies Corporate |
76698855 |
49.82 |
|
Foreign |
|
|
|
Individuals(Non-Resident
Individuals) |
104400 |
0.07 |
|
Bodies Corporate
i.e. OCBs |
11999600 |
7.79 |
|
Public
Shareholding |
|
|
|
Institutions |
|
|
|
Mutual Funds/UTI |
7450601 |
4.84 |
|
Financial
Institutions/Banks |
51930 |
0.03 |
|
Insurance Companies |
8300 |
0.01 |
|
Foreign
Institutional Investors |
35177317 |
22.85 |
|
Non-Institutions |
|
|
|
Bodies Corporate |
3617765 |
2.35 |
|
Individual
Shareholders holding nominal Share Capital value upto Rs. 0.100 Million |
14993895 |
9.74 |
|
Any Other
(specify) |
|
|
|
Trust |
75965 |
0.05 |
|
NRI's |
1956507 |
1.26 |
|
OCB's |
100 |
0.00 |
|
Foreign
Nationals |
345 |
0.00 |
|
Total |
153961340 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturers of
Sponge Iron and Mild Steel Slabs, Mining of Ferro Chrome and Generation of
Electricity. |
|
|
|
|
Products : |
Item Code No. Product Description 72.03 Sponge Iron 72.02 Ferro
Chrome 72.07 Mild
Steel |
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|
|
|
Terms : |
|
|
Selling : |
Credit (60 days) |
|
|
|
|
Purchasing : |
Credit (60 days) |
PRODUCTION STATUS
|
Particulars |
Unit |
Installed
Capacity |
|
At Raigarh |
|
|
|
Sponge Iron |
M.T. |
1370000 |
|
Mild Steel |
M.T. |
2400000 |
|
Ferro Alloys |
M.T. |
36000 |
|
Oxygen Gas |
M.CUM |
198930 |
|
Power |
M.W. |
290 |
|
Hot Metal/Pig
Iron |
M.T |
250000 |
|
Rail &
Universal Beam Mill |
M.T |
750000 |
|
Coke |
M.T |
400000 |
|
Lime &
Dolomite |
M.T |
108000 |
|
At Raipur |
|
|
|
Machinery and
Castings |
M.T. |
11500 |
|
Ingots |
M.T. |
30000 |
|
CF Castings |
M.T. |
3000 |
GENERAL
INFORMATION
|
Suppliers : |
·
Southern
Eastern Coal Fields Limited, Bilaspur ·
TISCO,
Kolkata, West Bengal ·
Naaraayani
Sons, Orissa |
|
|
|
|
Customers : |
·
Sunflag Iron
and Steel Company Limited ·
Aarti Steels
Limited ·
Garg Furnace
Limited ·
Jindal Iron
and Steel Company, Mumbai, Maharashtra ·
Jindal Strips Limited, Hisar, Haryana ·
Madhya Pradesh Electricity Board |
|
|
|
|
No. of Employees : |
1366 |
|
|
|
|
Bankers : |
P Block, Connaught
Circus, New Delhi - 110 001
B.O. 7, Bhikaji Cama
Place, New Delhi - 110 066
|
|
|
|
|
Banking
Relations : |
Satisfactory |
|
|
|
|
Auditors : |
STATUTORY AUDITORS:
S.S. Kothari Mehta & Company Chartered
Accountants 9A, Atma Ram
House, 1, Tolstoy Marg, New Delhi – 110 001 COST AUDITORS:
Ramanath Iyer
& Company Cost Accountants 4/4 Singh Sabha
Road, Shakti Nagar, Delhi – 110 007 |
|
|
|
|
Associates : |
·
Jindal
Strips Limited ·
Infovergix
Technologies Limited ·
Jindal Iron
and Steel Company Limited ·
Brahamputra
Capital and Finance Limited ·
Nalwa Sponge
Iron Limited ·
Bir
Plantation Private Limited ·
Jindal
Systems Private Limited |
|
|
|
|
Subsidiary : |
|
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
40,000,000 |
Equity Shares |
Rs. 5/- each |
Rs. 200.000 Millions |
|
10,000,000 |
Redeemable
Cumulative Preference Shares |
Rs. 100/- each |
Rs. 1000.000 Millions |
|
|
Total
|
|
Rs. 1200.000 Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
32,792,268 |
Equity Shares |
Rs. 5/- each |
Rs. 154.000 Millions |
|
2000000 |
13 % Redeemable
Preference Shares |
Rs. 100/- each |
Rs. 10.000 Millions |
|
|
Total |
|
Rs. 164.000 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SHAREHOLDERS
FUNDS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
1] Share Capital |
164.000 |
164.000 |
164.00 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
24620.100 |
18232.600 |
13029.800 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
24784.100 |
18396.600 |
13193.800 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
21156.100 |
17807.700 |
11595.100 |
|
|
2] Unsecured Loans |
13921.100 |
9646.000 |
3363.500 |
|
|
TOTAL BORROWING |
35077.200 |
27453.700 |
14958.600 |
|
|
Employee’s Stock Options
outstanding |
0.000 |
50.500 |
0.000 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
2802.900 |
2142.600 |
|
|
|
|
|
|
|
|
TOTAL |
59861.300 |
48703.700 |
30295.000 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
41472.800 |
27007.200 |
21685.200 |
|
|
Capital work-in-progress |
9378.400 |
11462.700 |
3457.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
7098.200 |
4303.000 |
333.800 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
6424.400 |
5686.500 |
2575.500 |
|
|
Sundry Debtors |
3203.100 |
2995.400 |
1729.100 |
|
|
Cash & Bank Balances |
529.700 |
313.000 |
332.900 |
|
|
Loans & Advances |
8195.900 |
5910.100 |
5725.400 |
|
Total
Current Assets |
18353.100 |
14905.000 |
10362.900 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
12618.800 |
6260.200 |
3754.200 |
|
|
Provisions |
3854.800 |
2721.400 |
1800.00 |
|
Total
Current Liabilities |
16473.600 |
8981.600 |
5554.200 |
|
|
Net Current Assets |
1879.500 |
5923.400 |
4808.800 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
32.400 |
7.400 |
10.200 |
|
|
|
|
|
|
|
|
TOTAL |
59861.300 |
48703.700 |
30295.000 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
38998.100
|
28774.600
|
24481.700
|
|
|
Other Income |
723.400
|
372.500
|
231.000
|
|
|
Stock Adjustments |
568.600
|
1839.800
|
138.500
|
|
|
Total Income |
40290.100 |
30986.900 |
24851.200 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
9445.400 |
7278.500 |
6776.200 |
|
|
Provision for Taxation |
2415.500 |
1549.100 |
1619.100 |
|
|
Profit/(Loss) After Tax |
7029.900 |
5729.400 |
5157.100 |
|
|
|
|
|
|
|
|
Export Value |
5928.400 |
3718.500 |
3251.100 |
|
|
|
|
|
|
|
|
Import Value |
0.000 |
6690.400 |
3072.100 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Raw Materials |
7833.800
|
4503.500
|
3416.700
|
|
|
Excise Duty |
3967.100
|
3129.100
|
1962.600
|
|
|
Power & Fuel Cost |
3412.700
|
4288.900
|
4290.700
|
|
|
Other Manufacturing Expenses |
5029.800
|
3945.900
|
2801.900
|
|
|
Employee Cost |
937.000
|
728.100
|
484.500
|
|
|
Selling and Administration
Expenses |
3783.600
|
3239.900
|
2127.600
|
|
|
Miscellaneous Expenses |
784.100
|
660.900
|
609.900
|
|
|
Interest & Financial Charges
|
1731.900
|
1022.400
|
856.300
|
|
|
Depreciation |
3364.700
|
2191.700
|
1524.800
|
|
Total Expenditure |
30844.700 |
23710.400 |
18075.000 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2007 |
30.09.2007 |
31.12.2007 |
|
Type |
1st Quarter |
2nd Quarter |
3rd Quarter |
|
Sales Turnover |
12231.300
|
12690.400
|
13956.100
|
|
Other Income |
96.000
|
29.000
|
118.000
|
|
Total Income |
12327.300
|
12719.400
|
14074.100
|
|
Total Expenditure |
7439.500
|
7283.700
|
8632.500
|
|
Operating Profit |
4887.800
|
5435.700
|
5441.600
|
|
Interest |
370.800
|
791.000
|
499.700
|
|
Gross Profit |
4517.000
|
4644.700
|
4941.900
|
|
Depreciation |
1114.700
|
1178.200
|
1187.900
|
|
Tax |
616.200
|
691.800
|
563.500
|
|
Reported PAT |
2501.100
|
2774.700
|
3190.500
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Debt-Equity Ratio |
1.45 |
1.34 |
1.16 |
|
Long Term Debt-Equity Ratio |
1.23 |
1.19 |
1.06 |
|
Current Ratio |
0.88 |
1.03 |
1.10 |
|
TURNOVER RATIOS |
|
|
|
|
Fixed Assets |
0.95 |
1.00 |
1.16 |
|
Inventory |
6.44 |
6.97 |
10.78 |
|
Debtors |
12.58 |
12.18 |
12.75 |
|
Interest Cover Ratio |
6.45 |
8.12 |
8.73 |
|
Operating Profit Margin(%) |
37.29 |
36.46 |
37.49 |
|
Profit Before Interest And Tax Margin(%) |
28.66 |
28.84 |
31.26 |
|
Cash Profit Margin(%) |
26.65 |
27.53 |
27.29 |
|
Adjusted Net Profit Margin(%) |
18.03 |
19.91 |
21.07 |
|
Return On Capital Employed(%) |
21.15 |
22.43 |
32.60 |
|
Return On Net Worth(%) |
32.58 |
36.30 |
47.45 |
LOCAL AGENCY
FURTHER INFORMATION
The company has ISO
9002 certifications for its plants at Raigarh.
The Raigarh and Raipur Divisions are being managed by Mr. Naveen Jindal.
The company’s fixed
assets of important value include land (freehold and leasehold), live stock,
buildings, plant & machinery, electrical installation, furniture &
fixture and vehicles
History
Persuant to a
scheme of arrangement, Raigarh and Raipur Divisions of Jindal Strips Limited
have been hived off into subject company with effect from 2nd April,
1998.
Jindal Strips was restructured
and the Raigarh and Raipur divisions of the company were hived off to give
birth to the company.
From being the
Asia's largest and the world's second largest coal based Sponge Iron Plant with
a capacity of 500000 MTPA, it has now been expanded to 650000 MTPA by addition
of a 6th Kiln to become the world's largest coal based Sponge Iron
Plant.
The second core
strength of the company is Power. From the captive power generation capacity of
28 MW in 1995-96, the present generating capacity is 95 MW. The company is
presently generating approximately 75 MW power out of which about 30 MW power
is being supplied to Chhatisgarh Electricity Board on regular basis. It uses
hot gases (generated during manufacture of sponge iron), coal washery rejects,
char and coal fines for generation of power and this makes the operations
highly economical and environment friendly. The captive power plant capacity is
being further expanded by 110 MW. The company also has facility to manufacture
Mild Steel Slabs and Ferro Chrome. The company has gone in for backward
integration by acquiring Iron Ore Mines at Tensa, Orissa and Coal Mines at Gare
Coal fields, Raigarh, Chattisgarh.
It is also
increasing its power generation capacity and proposes to set up a rail and
universal beam mill that would manufacture high quality, high value rails for
Indian Railways with a production capacity of 550000 TPA at its existing plant
at Raigarh, Chhattisgarh at a cost of Rs. 4000 millions.
It stabilised the
Steel Melting Shop after a gap of 2 years in the fiscal 2001. During the same
period, the Round Caster unit in Raigarh was commissioned. It is also setting
up a Mini Blast Furnace with a capacity of 0.250 millions MT of Hot metal and
2.5 millions MT of Coal Washery to reduce the variable cost.
During February,
2002 at Raigarh the 120 Mtr Rail & Universal Beam Mill project was
commenced with a production capacity of 550,000 MT per annum of rails, H beams,
columns and sheet piles. The total cost of the project was Rs.4000.00 millions.
In August, 2002 the Coal Washery Plant with annual capacity of 2.5 million was
commissioned. The company has started the 55 MW power proejct at Raigarh in
September, 2002. The estimated outlay for the project is Rs.2070.00 millions
and the project was expected to commission by September,2004. After completion
of the project the total enhanced capacity will be 250 MW.
The company has plans to expand the capacity of Sponge Iron by setting up
additional four kilns each of 1.65 lac MT capacity at Raigarh. The estimated
outlay for the project will be Rs. 2000 millions and the project work is being
taken up in phased manner. The Phase I and Phase II will be completed by March
2005 and September, 2005 respectively. Since the Sponge Iron Plant will
generate flue gases, the company propose to utilize the flue gases by way of
setting up 2 power plants of 25 MW each at a cost of Rs. 1500 millions. After
installation the enhanced power generation capacity will be 50 MW. Out of the 2
power plants one 25 MW will be set up by March,2005 and the another will be by
September,2005.
Jindal Strips was restructured and the Raigarh and Raipur
divisions of the company were hived off to give birth to Jindal Steel &
Power Limited.
From being the Asia's largest and the world's second largest coal based Sponge
Iron Plant with a capacity of 5,00,000 MTPA, it has now been expanded to
6,50,000 MTPA by addition of a 6th Kiln to become the world's largest coal
based Sponge Iron Plant.
The second core strength of the company is Power. From the captive power
generation capacity of 28 MW in 1995-96, the present generating capacity is 95
MW. The company is presently generating approx. 75 MW power out of which about
30 MW power is being supplied to Chhattisgarh Electricity Board on regular basis.
It uses hot gases (generated during manufacture of sponge iron), coal washery
rejects, char and coal fines for generation of power and this makes the
operations highly economical and environment friendly. The captive power plant
capacity is being further expanded by 110 MW. The company also has the facility
to manufacture Mild Steel Slabs and Ferro Chrome. The company has gone in for
backward integration by acquiring Iron Ore Mines at Tensa, Orissa and Coal
Mines at Gare Coal fields, Raigarh, Chhattisgarh.
During February,2002 at Raigarh the 120 Mtr Rail & Universal Beam Mill
project was commenced with a production capacity of 550,000 MT per annum of
rails,H beams,columns and sheet piles. The total cost of the project was
Rs.4000 Millions. In august,2002 the Coal Washery Plant with annual capacity of
2.5 million was commissioned. The company has started the 55 MW power proejct
at Raigarh in September,2002. The estimated outlay for the project is Rs.2070
Million s and the project is expected to commission by September,2004. After
completion of the project the total enhanced capacity will be 250 MW.
The company is proposed to expand the capacity of Sponge Iron by setting up
additional four kilns each of 1.65 lac MT capacity at Raigarh. The estimated outlay
for the project will be Rs.2000 Million s and the project work is being taken
up in phased manner. The Phase I and Phase II will be completed by March 2005
and September,2005 respectively. Since the Spong Iron Plant will generate flue
gases,the company propose to utilize the flue gases by way of setting up 2
power plants of 25 MW each at a cost of Rs.1500 Million. After installtion the
enhanced power generation capacity will be 50 MW. Out of the 2 power plants one
25 MW will be set up by March,2005 and the another will be by September,2005.
OPERATIONAL REVIEW :
During the
year, the Company has achieved an aggregate income of Rs.35487.800 millions
registering an increase of 36% over the previous year. Profit before tax has
increased to Rs.9448.400 millions from previous year's Rs.7278.500 millions
registering an increase of 30%. Profit after tax has increased by 23% to
Rs.7029.900 millions from previous
year's Rs.5729.400 millions. Reserves and Surplus have increased to
Rs.24620.000 millions.
Sponge Iron:
The Company has produced 11,96,330 MT of Sponge Iron in the year under report
as against last year's production of 10,17,746 MT and achieved capacity
utilization of 87.32%.
Steel:
The production
of steel products during the year under report as compared to last year is
given below:
Production in MT Product (2006-07)
1. Finished Steel Products 2,09,417. Semi Steel Products 8,05,675
The production of finished steel products was lower due to shut down of Rail
and Universal Beam Mill from July to October 2006 on account of its
upgradation.
Ferro Chrome:
The Company has produced 31,070 MT of HC Ferro Chrome during the year as
against 32,452 MT in the previous year. The production was lower due to non
availability of chrome ore.
Power:
The Company has increased generation of power to 2,668 million Kwh during the
year as against 2,225 million Kwh of the last year registering an increase of
20%. Another 50 MW (2 X 25MW) capacity power plant was commissioned during the
year thereby enhancing power generation capacity to 333MW.
Raipur Unit:
Raipur Unit produced 1,207 MT of MS ingots, 1,166 MT of casting and has done
machining of 3,045 MT as against last year's figures of 779 MT, 1,256 MT and
2,501 MT respectively.
Mining:
The production of calibrated Iron Ore at captive mine at Tensa in Orissa was
6.04 lac MT as against last year's production of 5.04 lac MT. The Company has
exported 14.19 lac MT of Iron Ore Fines. The production of coal at captive mine
was 59.68 lac MT as against last year's production of 53.10 lac MT.
STATUS OF PROJECTS:
I) Completed
Description Capacity
1. Sinter Plant 2.5 million TPA2. Blast Furnace 1.25 million TPA3. Coke oven
0.1 million TPA4. Power Plant 25 MW 25 MW
ii) Under Implementation:
Plate Mill of 1.0 million TPA capacity has been commissioned successfully and
commercial production has started in April'07.
iii) Projects Initiated:
a) Steel Plant in Angul, Orissa The Company has signed a Memorandum of
Understanding with the Government of Orissa for setting up a 6 Million TPA
Integrated Steel Plant near Kerajang Railway Station in Angul District of State
of Orissa at an estimated cost of Rs.165600.000 millions The plant will pursue the
coal gasification technology for the production of DRI and blast furnace route
for the production of hot metal. It is also proposed to set up 1000 MW Captive
Power Plant for supplying power to the steel plant. Work for acquiring land,
seeking various approvals from State and Central Government, arranging funds
and development of infrastructure has already begun.
b) Steel Plant in Patratu, Jharkhand:
The Company is setting up, in its first phase, 3 million TPA Integrated Steel
Plant at Patratu in the State of Jharkhand at an estimated cost of Rs.64090.000
millions The technology to be adopted will be the conventional BF / BFO route.
The plant will focus on long products. Work for acquiring land, seeking various
approvals of State and Central Government, arranging funds and development of
infrastructure has already begun.
The Company has purchased through auction ordered by Hon'ble High Court of
Judicature, Ranchi the assets of Bihar Alloys & Steel Limited (renamed as
UMI Special Steels Limited) located at Patratu near Ranchi in the State of
Jharkhand. The assets include melting and rolling facilities of 0.1 million
TPA, power connection, unencumbered 551 acres of land. This plant is located
near the location of proposed Steel Plant at Patratu and will help in taking a
significant gain in lead time over competition. Steps are being taken to
renovate and restart the existing rolling facilities.
c) El-Mutun Iron Ore Mine, Bolivia:
The Company has won the tender for development of 20 billion tonnes of Iron Ore
reserve in the Republic of Bolivia in South America. The Company proposes to
invest USD 2.1 billion in 8 years, from the contract becoming effective, for
mining of iron and will set up 1.7 Million tonnes capacity steel plant through
a subsidiary company namely, Jindal Steel Bolivia SA (JSB). The formal
agreement for development rights of the mine will be signed shortly with the
Government of Bolivia. This project will be funded by debt and equity in the
ratio of 60:40.
iv) Projects Under Contemplation:
a) Cement Plant:
The Company has signed a Memorandum of Understanding with the Government of
Chhattisgarh on 30.03.2007 for setting up 2 million TPA Cement plant and 30 MW
Power Plant in Raigarh at an estimated cost of Rs.7200.000 millions
b) Power
Plant:
The
Directors also propose to set up a pit head 270 MW (2 X 135 MW) Power Plant at
Coal Mine of the Company at Raigarh at an estimated cost of Rs.12000.000
millions
c)
Steel Plant:
The
Company has signed a Memorandum of Understanding with the Government of
Chhattisgarh on 04.05.2007 for setting up 3.0 million TPA steel plant in
Raigarh at an estimated cost of Rs.80000.000 millions
SUBSIDIARY COMPANIES & THEIR
BUSINESS:
The
particulars of subsidiary companies are given below:
Name of Subsidiary Date and Country of Date of becoming Incorporation
Subsidiary Company
1. Jindal Power Limited 30.01.1995; India 09.06.2005
2. Jindal Minerals and Metals Africa Limited 08.02.2006; Mauritius
19.06.2006
3. Jindal Minerals and Metals Africa Congo SPRL 27.12.2006; Congo
27.12.2006
4. Jindal Steel & Power (Mauritius) Limited 06.02.2007; Mauritius
06.02.2007
5.
Trans Atlantic Trading Limited 12.03.2007; Guernsey 12.03.2007
6.
Jindal Steel Bolivia SA 29.11.2006; Bolivia 19.04.2007
i) Jindal
Power Limited (JPL) is setting up 1,000 MW power project in Raigarh
(Chhattisgarh) and has spent Rs.26410.000 upto 30.04.2007. First unit of 250 MW
will be commissioned in the third quarter 2007-08 and plant will be fully
operational by September, 2008. Arrangements for sale of power are being
finalized with various buyers including State Electricity Boards. During the
year under report the Company has invested Rs. 2869.000 millions in the equity
share capital of this subsidiary.
ii)
Jindal Minerals & Metals Africa Limited and its subsidiary Jindal Minerals
and Metals Africa Congo SPRL are pursuing the business of mining, processing
and marketing of diamond, precious stones, semi precious stones and other
minerals and metals. During the year under report the Company has invested US$
6 million in the equity share capital of Jindal Minerals & Metals Africa
Limited.
iii) Jindal Steel & Power (Mauritius) Limited and its subsidiary Trans
Atlantic Trading Limited will pursue the business of trading in steel and
minerals. At the time of incorporation, Company has agreed to subscribe to 100
shares of US$ 1 each of Jindal Steel & Power (Mauritius) Limited.
iv) Jindal Steel Bolivia SA was successful bidder for development of El-Mutun
Iron Ore Mine in the Republic of Bolivia. One of the conditions of the bid was
that the successful Bidder should have a subsidiary company incorporated under
the laws of the Republic of Bolivia which will develop the mine and set up
steel plant. 40,000 partly paid up (25Bolivinos per share) shares of the face
value of 100 Bolivinos each were allotted to the Company on April 19, 2007 at a
total Consideration of 10,00,000 Bolivinos equivalent to approximately US$
1,27,500.
TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND:
Pursuant to Section 205C of the Companies Act ,1956, the Company has
transferred, during the year under report, following amounts to the Investor
Education and Protection Fund of Govt. of India.
FUTURE OUTLOOK:
The year under review was high growth oriented year for economy in general and
steel industry in particular. Price of sponge iron and steel products has not
only steadied but improved on the back of the firm demand. Overall global
demand for steel is rising. Boom in Construction sector, setting up of SEZs
pushing further industrialization, renovation and setting up of airports /
ports, enlarging of road network in the country through Highways and
Expressways, replacing and expanding new railway lines and increasing interest
of foreign enterprise to set up manufacturing facilities in India will increase
the demand for steel. Timely decision of the Board few years back to enhance
production capacities of sponge iron and steel has enabled the Company to
increase market share and profits.
The Government
has declared ambitious plan "Power for all by 2012" and public
private participation has been recognized as crucial to achieving this goal.
The Company is taking large strides in Power Sector and increasing its
presence. Jindal Power Limited, a subsidiary of the Company is implementing
1000 MW capacity power plant at Raigarh in the State of Chhattisgarh. It is
expected that the plant will be operational to its full capacity by
Sept.'08.The present power generation capacity of the Company is 333 MW. The
Ministry of Power, Govt. of India has identified some Ultra Mega Power Projects
with a capacity of 4000 MW each which will be given to private sector on Build,
Own and Operate (BOO basis). The Company is also making its best efforts to bid
for such projects.
The
Directors are also laying greater emphasis on mining of Iron Ore and Coal to
ensure captive availability of these two key raw materials. Applications have
been made to the concerned governments for allotment of additional Iron Ore and
Coal mines. Development of El-Mutun Iron Ore Mine in Bolivia will add new
dimension to the captive availability of Iron Ore to the Company for operating
Sponge Iron and Steel plants in India and abroad.
ENVIRONMENTAL PROTECTION:
As a conscious corporate citizen and with a view to discharge social
responsibilities effectively the Company attaches great significance to clean
air, water and environment. Sustained efforts are made to control pollution in
and around the factories and provide clean air and water. Considering the
importance of preventing and controlling pollution and realising that human
beings and creatures alike have a right to decent quality of life, a separate
department headed by a senior officer looks after the pollution related matters
and funds are earmarked for this purpose.
The Company has obtained environment clearance and consent to operate Phase II
expansion project and coal mines. Efficient technical devices have been
installed in all the plants as a result of which emission levels have been
maintained within permissible norms. Two STPs (2000 m3 & 500 m3) have been
installed for utilizing 100% treated domestic water for gardening purposes and
electro chlorinators for economic chlorination. 34 opacity meters have been
installed for continuous stack emission monitoring. Upgraded lab facilities
with XRF analyzer and micro biological lab have been installed. One online
ambient air quality monitoring station has been installed in factory complex
and the second at Raigarh town for continuous monitoring of ambient air
quality. 5,05,000 additional saplings and trees have been planted in and around
factory areas which has significantly improved the environment around factory
premises. Total number of plants and saplings planted so far is 1.500 millions with a survival rate of 80%. 391 acres of
land have been converted into green area with garden acreage being 225 acres.
The Company organized 4th Annual Horticultural Exhibition cum flower &
vegetable show to create greater awareness about environment and ecology.
The
Company has won Greentech Environment Excellence Gold Award for 2006 and
Srishti Green Cube Award for 2006.
Steel Melting Shop:
a. 6 strands Billet caster for producing rounds of dia 142, 162, 200 and 220
and billets of size 130, 150, 200 and standardization of operating parameters
to achieve desired macro structure and surface quality. b. New section of Beam
Blank (90x280x355 mm) has been developed to improve the rolling efficiency of
lower sizes of structural in RUBM.
D. Rail
& Universal Beam Mill has been upgraded with Tandem-Universal Mill (first
in the country in structural rolling), latest technology in rolling of
structural sections and rails to improve the dimensional accuracy and
productivity.
3. In
case of imported technology (imported during the last 5 years reckoned from the
beginning of the financial year) following information may be furnished.
Initiatives taken to increase
exports:
Company
is making an Endeavour to have a pan-global presence through its exports so as
to explore the market opportunities being presented by the regions which are
witnessing an impressive growth in their construction and manufacturing sector.
The
Company is also working towards acquiring various accreditations and
certifications which are mandatory for export of steel products to various
sectors such as construction, Shipbuilding and Pipeline industry in these
regions. The Rail and Universal Beam Mill (RUBM) of the Company has already
been accredited with a CE certification (as per European Construction Products
Directive norm) by TUV-NORD agency for its Structural sections. This will make
the Company's structural sections highly acceptable in Europe.
The Company's steel products were exported for the first time to UK, Greece, Belgium,
Luxembourg, Italy, Mauritius, Kenya, Tanzania, Uganda, South Korea, Jordan, and
Bangladesh last year, in addition to the existing markets of UAE, Saudi Arabia,
Kuwait, and Australia.
ii.
Development of new exports market for products and services and export
plans:
The
Company is making efforts to enter in to further export markets in Germany,
Spain, Italy, Portugal, Poland, Romania, Ghana, Nigeria for its semi-finished
products, Structural sections as well as Plates. Visits of numerous customers
from Europe and Middle-East to the Company's Raigarh works were organised
towards this end.
Discussions are also going on with various agencies for exploring export
possibilities of Rails. The Company plans to export 10 to 25% of its steel
products in line with prevailing market scenario and commercial
considerations.
b. Total Foreign, Exchange used and earned:
i. Foreign Currency used Rs.9352.800 millions ii. Foreign Currency earned
Rs.5928.400 millions
Management Discussion And Analysis Report:
Business Review:
Growth of Indian economy at 9.0 per cent in 2006-07 shows that economic
fundamentals are very strong and this has laid strong foundations for further
economic development in coming years. While agricultural growth was below expectation,
services sector maintained its vigorous growth performance and there were
distinct signs of sustained improvements on the industrial front. Higher growth
trends, particularly in manufacturing sector, have boosted sentiments, both
within the country and abroad. India's exports have been growing at a rate of
more than 20 per cent since 2002-03. The overall economic fundamentals are
robust, particularly with progress made towards fiscal consolidation and a
strong balance of payments position. Contribution of service sector and
manufacturing sector is growing. As a result, in 2006-07, while the share of
agriculture in GDP declined to 18.5 per cent, the share of industry and
services improved to 26.4 per cent and 55.1 per cent respectively.
With an upsurge in investment, the outlook is distinctly upbeat. A notable
feature of the current growth phase is the sharp rise in the rate of investment
in the economy. This sharp increase in the investment rate has sustained the
industrial performance and reinforces the outlook for growth. However, with the
restraints put by Reserve Bank of India, credit flow to various sectors of
economy will be affected and cost of borrowing has gone up.
Liquidity conditions, by and large, remained comfortable and capital flows into
India remained strong. The upsurge in foreign investment flows reflected the
bullish sentiments in the domestic capital markets. Resources were also
mobilized through private placements and Initial Public Offerings (IPOs). The
upbeat mood of the capital markets has reflected the improved growth prospects
of the economy.
Average inflation during 2006-07 remained at 5-6 per cent. Inflation, with its
roots in supply-side factors, was accompanied by growth of money and credit.
The Government and Reserve Bank India (RBI) are trying hard to put restraint on
the inflation. RBI is trying to squeeze the credit flow of the Banks into real
estate, capital market exposures etc., so that flow of credit is restricted to
productive purposes. The Government attempted to address the concerns of
inflation by maintaining and increasing the supply of the items that have shown
a price rise. The measures used were banning exports of items such as sugar and
wheat and further liberalization of the imports of wheat and pulses and ban on
the forward trading of wheat and rice. Monetary tightening measures have also
been brought into use.
Sharp economic growth in the country is being built on a frame of steel. Rising
demand by sectors like infrastructure, real estate and automobiles and Tata
Steel's takeover of UK Dutch steel company "Corus" have put Indian
steel industry on world map. The total crude steel making capacity in India
remained at over 45 million tonnes making it the seventh largest steel producer
in the world. Total production of crude steel was about 48 million tonnes.
Domestic steel prices have seen an upward trend in the year 2006-07 on the back
of robust demand pull. International steel prices across the globe especially
for long products have also shown remarkable growth during the year with prices
of semifinished products rising by 10-15% and that of finished products rising
by 15-25% across certain product categories. The price buoyancy is expected to
continue in the long term due to sustained demand. However, this will also be
subject to the ultimate impact of export control measures being taken by the
Chinese Government. Given the economic scenario in India, rising demand for
steel and internal preparedness to rise to the occasion, the Company is bound to
achieve new milestones.
Performance Review of the Company:
The overall operational performance of the Company on all fronts has been
satisfactory. Production, Sales, and Profits have all increased as compared to
previous year. Product wise performance, in brief, is given below:
i. Sponge Iron:
The production of Sponge Iron was 11,96,330 MT as compared to 10,17,746 MT in
the last year registering an increase of 18%. The Company sold 6,98,944 MT in
the open market and 5,28,316 MT of sponge iron was captively consumed for steel
making.
ii. Ferro Chrome:
The production of Ferro Chrome was 31,070 MT as compared to 32,452 MT last
year.
iii. Steel:
The production of semi-finished steel product was 8,05,675 MT and finished
steel was 2,09,417 MT as against last year's production of 5,24,369 MT and
2,87,389 MT respectively.
iv. Power:
The generation of Power has increased to 2,668 million Kwh as against 2,225
million Kwh of last year registering an increase of 20%.
v. Mining:
The production of calibrated Iron Ore was 0.604 million MT as against that of
last year's 0.504 million MT. 1.4 million MT of Iron Ore fines were exported.
Coal Mines produced 5.968 millions MT coal during the year as against 5.310
millions MT in the last year. Coal was hery has washed 2.163 millions MT of
coal during the year as against 1.797 millions in the previous year.
Opportunities and Threats:
India's GDP is projected to grow at around 9%. The steel industry is moving
ahead with a growth of over 10%. The steel ministry has also revised the target
for steel production from 65 million tonnes to 80 million tonnes by year
2011-12. The Government asserts that the country would produce 175 million
tonnes of steel by 2020 against 110 million tonnes earlier envisaged in the
National Steel Policy. The average consumption of steel in India is only 38 Kgs
compared with world average of 170 Kgs. There is a huge scope for increasing
steel production in India.
The worldwide production of crude steel in 2007 is estimated to be 1315 million
tonnes.
In India, the finished steel production for the year 2006-07 is expected to be
around 48 million tonnes against a production of 44.54 million tonnes in
2005-06. While finished carbon steel exports for the year 2006-07 is expected
to be 3.90 million tonnes, imports are expected to be around 4.65 million
tonnes. Indian steel industry will continue to grow at a rate of 7-8% annually
compared to global 3-4% for next 4-5 years. Government's thrust to develop
ports, airports, roads, railways, telecommunication facilities, generation of
power and other infrastructural facilities will give strong boost to the demand
for steel products.
The benefits of economic growth are percolating down to rural population. This
in turn has given fillip to the demand particularly in consumer durables and
automobile industry which utilize steel as its main raw material. India is also
gearing up to host international sports events like Commonwealth Games which
will result in extensive infrastructural development apart from the
construction of new sports facilities which is expected to give a further
impetus to steel consumption.
The expansion programme of the Company is going ahead and during the year under
report, has commissioned Sinter plant with 2.5 million TPA capacity, Blast
furnace with 1.25 million TPA capacity and 50 MW power plant. The enhanced
steel making capacity is in accordance with the growing demand for steel and a
step in right direction.
The Company is trying to insulate itself against the uncertainities in supply
of key raw materials like iron ore, coal and power. Present power generation
capacity of 333MW will be supplemented by 1000 MW power plant being set up by
the subsidiary company, namely, Jindal Power Limited The Company is pursuing
with the Government for allotment of some more iron ore and coal mines. The
Company has won international bid for development of El Mutun iron ore mine in
The Republic of Bolivia which contains iron ore reserves of about 20 billion MT
and will provide uninterrupted supply of iron ore.
However, the competition is growing fast and new steel plants are being set up
and production capacities are being increased at existing plants. SAIL proposes
to increase its annual production capacity of 12 million TPA to 22.5 million
TPA. Tata Steel has announced to increase its steel making capacity to 33-34
million TPA by 2015. Mittal Steel has also announced its plans to set up 12
million TPA green field steel project in Jharkhand and another 12 million TPA
green field steel project in Orissa. POSCO has also announced to set up 12
million TPA steel plant near Paradip in Jagatsinghpur in Orissa. Other steel
making companies in India are also increasing their steel making capacities.
This may result in glut in supply of steel and will put pressure on prices and
margins. As steel conglomerates like Mittal Arcelor, POSCO, Tata Steel and SAIL
are expected to control a large part of the steel market in India it may affect
price of the steel products in coming years.
Recently, the Central Government has tried to impress upon the industry to
reduce prices in order to contain inflation. Besides custom duty on stainless
steel and other alloy steel has been reduced from 10% to 7.5% making their
imports more attractive. Central Government has imposed a duty on overseas
sales of Iron Ore exports which include about 75% of Iron Ore fines. Though the
export tax has been reduced on the export of low grade Iron Ore fines from
Rs.300/- to Rs.50 a tonne, this will not boost export since low grade
constitute only 25% of the overseas sale. This will also affect export of Iron
Ore fines by the Company. Presently Manganese ore production of all grades is
1.9 million tonnes and the reserves of high grade Manganese ore with low
phosphorous are extremely low. Indian Steel Industry may experience some
shortage of Manganese ore which will affect steel production.
Outlook:
The Company has built up facilities for producing a variety of steel
products, such as, parallel flange beams and columns, crane rails and track
rails, beam blanks, rounds, billets, slabs and blooms. Plate mill is capable of
producing plates upto 3500 mm thickness which are in great demand. Production
facilities for a range of products is in itself a great strength to ward off
market fluctuations and will enable the Company to shift from one product range
to another product range in line with the market trends.
Company intends to strengthen the captive availability of key raw materials
like iron ore, coal and power. The Directors are pursuing with the Government
for allotment of additional iron ore and coal mines for meeting the
requirements of enhanced production capacities of iron and steel. The
development of El Mutun iron ore mines in Bolivia will provide strong cushion
to the growing needs of the iron ore requirements of the Company.
Increased industrialization has multiplied the demand for power which is in
short supply. 1000 MW power plant being set up by the subsidiary, Jindal Power
Limited will be commissioned in phased manner and will be fully operational by
Sept.'08. In view of huge gap in demand and supply of power, there will be no
difficulty in selling power by Jindal Power Limited The Ministry of Power is
floating bids for 4000 MW Ultra Mega Power Projects to be set up at various
places throughout India and the Company has decided to participate in these
bids. The Company is also considering setting up of 270 MW (2x135MW) power
plant in Raigarh and will also prepare a blueprint for greater participation in
power sector in near future.
Considering the rising demand of iron and steel worldwide and particularly in
India the Company is setting up 6 Million TPA steel plant in Angul, Orissa and
3 Million TPA (first phase) steel plant in Patratu, Jharkhand. The Company has
signed Memorandum of Understanding with Government of Chhattisgarh for setting
up 3.0 Million TPA steel plant and 600 MW Power Plant in Raigarh.
Steel & Power are the two major planks on which the Company will ride to
achieve new industrial heights to be perceivable on the Global Industrial map.
The Company is ready to cross borders and shake hands with the international
business community.
Financial Management:
The ongoing expansion projects and day to day operation require in-time
availability of funds which are arranged by way of borrowings and internal
accruals. Senior management periodically reviews the requirement and
availability of funds and based on the assessments, funds are arranged from
Financial Institutions / Banks on competitive terms. Without putting any
financial pressure on the operations, the internal accruals are utilized for
meeting financial requirements of expansion projects. Since funds are available
at lower cost, the Company resorts to external commercial borrowings as and
when required.
The Company arranged Rs.5450.000 millions from FIs and banks for meeting
capital expenditure in the year under report. Efforts are being made to avail
foreign currency funds for keeping interest charges at lower level. External
Commercial Borrowings of US$ 95 million (equivalent in JPY) were availed from
foreign banks / lenders.
Accounts and Finance department is working at each unit / office /
establishment and is manned by qualified and experienced personnel. All
financial transactions are properly recorded by the department and proper
financial reports are periodically sent to the senior management. Proper
controls are in place and audit is conducted regularly.
Industrial Relations and Human Resource
Management:
With the enhancement of production capacities, the number of employees has also
grown up at all levels. Human Resource Department (HRD) works continuously for
providing better facilities to the employees in office/ factory premises as
well as residential colonies. Regular trainings are being imparted to upgrade
knowledge and skills of all types of employees to suit requirements of the
company. The ultimate goal being to provide a meaningful living, HRD strives to
maintain a balance between the Company's needs and the employees' requirements.
To generate safety awareness among the employees, safety awareness campaigns
are organized at regular intervals targeting all employees. Safety campaigning
programmers are conducted to provide information about the type of hazards,
important safety measures required to encounter hazards, importance of safety
appliances and preparedness for emergency situations related to the concerned
departments.
Various facilities such as medical, education, sports, recreation clubs,
counseling, libraries are provided at factories. Senior management continuously
interacts with the staff members, sorts out their problems and provides
guidance to them in order to cope up with their work efficiently. Rotation of
employees is done in order to provide job satisfaction and increased interface
with new people. Grievance redressal system is in place and employee
suggestions are being sought to improve the operational efficiency. HRD looks
after compliance with the laws applicable to the factories/ operations.
PRESS RELEASES
Jindal Steel &
Power Wins The Tender For El Mutun Mines In Bolivia
Friday, June 02, 2006, New Delhi: Press Release
Jindal Steel &
Power Limited headed by Mr. Naveen Jindal, part of USD 4Bn OP Jindal group
today announced that it has been granted the mining rights for 20 Bn tonnes of
iron ore reserves from El Mutun iron ore Mines, Bolivia, which is one of the
largest iron ore reserves in the world. The company plans to invest USD 2.3 bn
over the next 8 years in creating an integrated steel plant, which would be
capable of producing 1.7MTPA of long products of steel, and will also have DRI
(Direct Reduced Iron /Sponge iron) Plant of capacity 6MTPA and a pellet plant
of capacity 10MTPA. The company will also be setting up supporting
infrastructure for the proposed plant including a 400 MW Power Plant. The deal
was signed after extensive negotiations between the Bolivian Government and a
senior team from JSPL led by Mr. Vikrant Gujral Vice Chairman & CEO, and
Mr. Sushil Maroo, Director Finance.
JSPL emerged as the only company which met the qualifying criteria set by the
Bolivian Government for this international tender. JSPL in line with its
philosophy of creating value for its stakeholders and local communities in
which it operates will be setting up an ultra modern, environmentally friendly
steel plant in Bolivia.
As regards the company’s presence in India, it operates the world's largest
coal-based Sponge Iron Plant while pioneering a revolution in self-sufficiency.
The company is operating captive coal and iron ore mine. By producing
economical and efficient steel and power the company is passing the benefits to
the consumer. In this endeavor, the company is actively involved in developing
basic infrastructure.
JSPL is dedicated to protecting the environment by adopting eco-friendly
processes and activities. JSPL is an ISO 14001 certified Company, committed to
environment protection as an integral part of their business activities. JSPL
has been showered with awards praising almost all its operational aspects. An
ISO-9002 certified company; JSPL is committed to conducting business safely,
ethically and in an environmentally responsible manner that protects the
natural resources and environment.
Bolivian
Breakthrough
Business Standard,
July 11, 2006 Bhupesh Bhandari / New Delhi
LUNCH WITH BS: Naveen
Jindal
Jindal Steel &
Power's executive VC and MD on bagging the biggest iron ore mines deal in Bolivia.
Naveen Jindal is not a rock star. Neither is he a post-modern guru, nor a
soccer sensation. Still, on June 2, it was because of the 36-year-old youngest
son of the late O P Jindal that the people in faraway Bolivia were dancing and
jiving on the streets. News agencies were full of reports of the celebrations
that went on till late in the day at La Paz and other cities of Bolivia, writes
Business Standard.
Jindal’s flagship,
Jindal Steel & Power, had been selected by the Bolivian government to develop
the coveted El Mutun iron ore mines in the country. Jindal, who is the
executive vice-chairman and managing director of the company, had, in turn,
announced that he would invest $2.3 billion in developing the mines and in a
brand new sponge iron and steel plant. This is the biggest foreign investment
in the country and will provide direct employment to 2,000 Bolivians and
indirect employment to another 10,000. The merrymaking in Bolivia does make
sense.
A month later, any
talk of the Bolivian acquisition is enough to bring a satisfied smile on his
youthful face. “I am learning Spanish these days. I always liked the language,”
he says, adding, on a more serious note: “It is the only place on earth where
you have iron ore as well as gas in abundance.”
We are at TK’s, the
oriental grill at the Hyatt Regency, seated at the Tapenyaki counter. Jindal
has ordered an appetiser of green salad and I have asked for Miso soup. The
deal gives Jindal control over 20 billion tonnes of iron ore. To put it in
perspective, India’s total reserves add up to around 13 billion tonnes. There
were several global players in the race for the mines that began some two years
ago, including L N Mittal. But it was Jindal who bagged the mines.
La Paz had attached
stringent conditions to the bid. But, in the last two months of negotiations,
Jindal’s team was able to dilute many of these conditions. Jindal hopes to
begin work on the mines early next year. The logistical challenges, Jindal
admits, are strong. The mines are 800 km from the nearest port; Jindal plans to
evacuate the steel and sponge iron made at the pithead plants through the river
Paraguay. The investment proposed by Jindal in Bolivia is almost four times of
his 2005-06 turnover of Rs 2,6170 Million ($580 million). Not to forget, he has
made an investment commitment of more than Rs 100000 Million in Chhatisgarh,
lined up a six million tonne steel plant in Orissa that could cost around Rs
135000 Million and signed a MoU with the Jharkhand government for another five
million tonne plant at a cost of Rs 115000 Million. Not a small amount of
money.
“How will you find
the money,” I ask Jindal as he deftly balances the salad with chopsticks. (He
has asked for a knife and fork as well, in case his fingers get tired.) “Just
like L N Mital does,” says Jindal, adding: “I am fully committed to the Orissa
plant. And there are enough people who would like to invest through debt in the
Bolivian venture.” He might also look at listing the venture at a later date,
Jindal says.
As they speak, the
cook, wearing a karate shirt and a headband, starts doing our orders: assorted
vegetables and a generous helping of cottage cheese for Jindal and salmon for
me. While Jindal watches the salmon change colour from pink to a golden brown,
my mind races back to a few years ago when Jindal used to say he wasn’t
interested in expanding outside India as the country offered enough
opportunities for growth. The traces of Swadeshi were unmistakable. “Mindsets
keep changing,” says Jindal. “But isn’t there a scare that the Areclor-Mittal
combine may devour more steel companies,” I probe. “Yes, there is. But I think
it is good for the industry. In case of a downside, the larger players will
scale down output to hold prices,” says he.
Apart from a steel
baron, Jindal is also a Parliamentarian, an ace shooter (he will be leaving for
Croatia shortly as a part of the Indian contingent), a polo player and a public
crusader for the tricolor (let’s see if he hoists the national flag at his
factory gate in Bolivia). The various avatars leave him with little time for
himself. “I haven’t been able to take a shower since last evening,” says
Jindal. About time he wore one of the other hats. A day before our lunch, the
DMK had arm-twisted New Delhi to give up its disinvestment programme. “Hasn’t
it sullied the image of the party,” I ask the Lok Sabha MP from Kurukshetra. He
dismisses the suggestion with a shake of his head: “What was there to give up?
It happens everywhere. Like in business, plans keep changing.”
How about a nice trap
for him? “The Congress is pressing hard for job reservations in the private
sector, while industry is resisting it. Where do you stand?,” I ask him. “I
think industry should be consulted before such a step is taken,” the
keep-everybody-happy line is delivered to perfection. But he did create a
flutter after getting the Congress ticket in the last general elections when he
praised the then prime minister, Atal Bihari Vajpayee. “I see it differently.
Just because I am contesting somebody in an elections, doesn’t mean that I
shouldn’t speak well of him,” says Jindal.
Our lunch is over.
Jindal decides to brave the Delhi sun and walk to his office next door,
accompanies by an armed guard from Haryana Police.
Jspl Net Up 2.63
Per Cent At Rs 1510 Millions
Business Standard,
June 08, 2006 their Corporate
Bureau / New Delhi
Steel manufacturer
Jindal Steel and Power Limited reported 2.63 per cent rise in net profit at Rs
1506.6 Millions for the quarter ended March 31, 2006,
compared with Rs 1467 Millions in
the year-ago quarter. Total income grew by 7.03 per cent to Rs 6804.8 Millions as
against Rs 6326.7 Millions , according to a company release.
The board has
recommended a final dividend of Rs 10 per equity share on shares of Rs 5 each
(200 per cent). It had also announced an interim dividend of Rs 5 per share on
shares of Rs 5 each.
For the full year,
the company’s net profit stood at Rs 5729.4 Millions compared with Rs 5157 Millions in the
previous financial year. Total income rose to Rs 2,6177.6 Millions from Rs 22821.5 Millions for
the previous fiscal.
The group’s net
profit for 2005-06 stood at Rs 5829.3 Millions ,
while total income at Rs 26176.4 Millions . The
company has done better than both Tata Steel and SAIL in the last quarter of
2005-06 with both the steel majors reporting decline in net profit.
Jindal Steel Q4
Net Up 2.69 Pc, To Pay Rs 10
Hindu Business Line,
June 08, 2006 Our Bureau, New Delhi
Jindal Steel and
Power Limited (JSPL) today announced a net profit of Rs 5729.4 Millions for 2005-06, posting an increase of 11 per
cent over Rs 5157.0 Million in 2004-05.
Net sales grew by 14 per cent to Rs 25902.5 Million .
For the fourth
quarter ended March 2006, the company posted 2.69 per cent increase in net
profit to Rs 1506.6 Million . Total income grew 7.55 per cent to Rs 6804.8
Million.
The company has also
announced a final dividend of 200 per cent amounting to Rs 10 per equity share
on shares of Rs 5 each. Along with the interim dividend of 100 per cent, the
total dividend stands at 300 per cent for the fiscal.
On Wednesday, the
JSPL scrip closed at Rs 1,506.90 on the BSE, down Rs 183.25 or 10.84 per cent.
Jindal Steel Gets Mining Rights In Bolivia
Indian Express, June
03, 2006 ENS ECONOMIC BUREAU, NEW DELHI
Bolivia has awarded
Jindal Steel and Power the development rights to a massive iron mine in the
eastern town of Puerto Suarez next to the Brazilian border. The company will
invest $2.3 billion in the production of iron and steel plates at the Mutun
mine.
According to ministry
of external affairs (MEA) officials, this is the biggest project ever awarded
to an Indian company in South America. The announcement has come a month after
President Evo Morales nationalised Bolivia’s natural gas industry, and the
Mutun bid was seen as a test of how the government would handle mining
investments.
The mine is estimated
to hold 40 billion metric tons (44 billion tons) of iron ore. Government
officials say the deal could earn the poor Andean nation more than $250 million
a year in exports and employ over 1,800 people. Bidding on the contract has
dragged out through decades of delays, the most recent of which came last
December when Bolivia’s outgoing government left the final decision to Morales’
new leftist government. The Morales administration required bidders to not only
extract the iron but also industrialise its production into steel using
Bolivia’s natural gas.
Jindal became the
lone bidder after the government disqualified an offer by Netherlands-based
Mittal Steel Company Details of the contract will be finalised in the next 60
days.
Jindal Steel Wins
Rights In Bolivia To Invest $2.3b
Times of India, June
03, 2006 New Delhi:
Here’s another example
of the growing global might of Corporate India. Jindal Steel & Power
Limited on Friday won the development rights for 20 billion tones of iron ore
reserves in Bolivia and announced plans to invest $2.3 billion over the next 10
years for mining and setting up a steel plant there.
The award to Jindal
Steel, incidentally comes just a week after the Bolivian government ruled out a
second bid for the project by Mittal Steel on the grounds that it did not meet
the demands of the tender.
Jindal Steel MD Naveen
Jindal said the firm has been awarded rights to develop half of El Mutun Mine,
a site believed to contain one of the world’s biggest iron-ore deposites. “We
would invest $1.5 billion in the next five years and $ 2.3 billion in the next
10 years,” Jindal said. This will be the biggest-ever investment in a single
project in Bolivian history.
Jindal Steel & Power Wins The Tender For El Mutun Mines
In Bolivia
PRESS RELEASE, Friday, June 02, 2006, New Delhi: Press Release
Jindal Steel & Power Limited headed by Mr. Naveen Jindal, part of USD 4Bn
OP Jindal group today announced that it has been granted the mining rights for
20 Bn tonnes of iron ore reserves from El Mutun iron ore Mines, Bolivia, which
is one of the largest iron ore reserves in the world. The company plans to
invest USD 2.3 bn over the next 8 years in creating an integrated steel plant,
which would be capable of producing 1.7MTPA of long products of steel, and will
also have DRI (Direct Reduced Iron /Sponge iron) Plant of capacity 6MTPA and a
pellet plant of capacity 10MTPA. The company will also be setting up supporting
infrastructure for the proposed plant including a 400 MW Power Plant. The deal
was signed after extensive negotiations between the Bolivian Government and a
senior team from JSPL led by Mr. Vikrant Gujral Vice Chairman & CEO, and
Mr. Sushil Maroo, Director Finance.
JSPL emerged as the only company which met the qualifying criteria set by the
Bolivian Government for this international tender. JSPL in line with its
philosophy of creating value for its stakeholders and local communities in
which it operates will be setting up an ultra modern, environmentally friendly
steel plant in Bolivia.
As regards the company’s presence in India, it operates the world's largest
coal-based Sponge Iron Plant while pioneering a revolution in self-sufficiency.
The company is operating captive coal and iron ore mine. By producing
economical and efficient steel and power the company is passing the benefits to
the consumer. In this endeavor, the company is actively involved in developing
basic infrastructure.
JSPL is dedicated to protecting the environment by adopting eco-friendly
processes and activities. JSPL is an ISO 14001 certified Company, committed to
environment protection as an integral part of their business activities. JSPL
has been showered with awards praising almost all its operational aspects. An
ISO-9002 certified company; JSPL is committed to conducting business safely,
ethically and in an environmentally responsible manner that protects the
natural resources and environment.
Rise In Sales, Production Buoys Jspl Profit 8 Percent
Business Standard, October 31, 2006
BS Reporter / New Delhi
The Naveen Jindal-controlled Jindal Steel and Power (JSPL), a part of the $4
billion Jindal group, reported 8 per cent rise in net profit at Rs 1572.3 Million for
the second quarter ended September 2006 compared with Rs 1455.3 Million for
the corresponding quarter of the previous financial year on the back of
increased production and sales.
The company’s net sales rose 23 per cent to Rs 7896.4 Million for
the quarter under review from Rs 6424.8 Million for the corresponding quarter
of 2005-06. The company attributed the fall in profitability vis-a-vis turnover
to the fact that its profitable rail and universal beam mill was shut down
during the entire September quarter.
JSPL’s exports also shot up 54 per cent to Rs 1703.4 Million in
the second quarter of 2006-07 from Rs 1108.1 Million for the same quarter last year.
During the quarter, JSPL commissioned a sinter plant with a capacity of 2.5
million tonne at its plant at Raigarh in September. It also commissioned a
blast furnace with an installed capacity of 1.25 million tonne in October.
July 19,
2007
Jindal
Steel & Power Limited signed the contract with the Government of Bolivia
for El Mutun Mine
Investment
of US $2.1 billion is the largest by an Indian company in Latin America
July 19, 2007 New Delhi: Jindal Steel & Power Limited (JSPL) along
with its subsidiary Jindal Steel Bolivia (JSB) signed the contract for
development of El Mutun iron ore mine with the Bolivian Government. The
contract has been executed on July 18, 2007 at Santa Cruz, Bolivia between Mr.
Vikrant Gujral, Vice Chairman and CEO, JSPL and Mr. Walter Chavez, President,
ESM (Empresa Siderurgica Del Mutun) and Mr. Hugo Miranda Rendon, President,
Comibol, in the presence of Evo Morales, President of Bolivia, Mr. Alvaro
Garcia Linera, Vice President of Bolivia, Finance Minister, Defense Minister
and other ministers of the cabinet.
JSPL has committed to invest US $ 2.1 Billion over 8 years time to develop an
integrated steel plant with the following facilities-
|
Pellet
Plant |
10
million tonnes per annum |
|
Sponge
Iron Plant (DRI) |
6
million tonnes per annum |
|
Steel
Plant |
1.7
million tonnes per annum |
|
Power
Plant |
450 MW |
This is
the largest investment by an Indian company in Latin America and the largest
foreign investment in a single project so far in Bolivia. This huge investment is
expected to generate large-scale employment in the country.
This is the culmination of International bidding process started by the
Bolivian Government, which JSPL won in May 2006.
The project would be set up at El Mutun Iron Ore Mine on the eastern side of
Bolivia. El Mutun is considered to be the world's largest Iron Ore Mine with
its reserves of 40 Billion Ton and 50% of the reserves has been provided to
JSPL for development. Government of Bolivia has also committed to supply
natural gas required for this project.
Jindal Steel Bolivia S.A., a subsidiary of Jindal Steel & Power Limited has
been created for the purpose of this project. The total investment of US $ 2.1
Billion would be invested in the debt equity ratio of 60:40.
The President of Bolivia, Mr. Evo Morales said "Together we are obligated
to take advantage of the natural resources for the good of the region and the
nation". Bolivia hopes this investment will ultimately provide an economic
boost that will create 12000 jobs in the city of Puerto Suarez.
Speaking in the media conference at Delhi, Mr. Naveen Jindal, EVC and MD,
Jindal Steel and Power Limited said, "This is a momentous occasion for the
company and for the nation as whole. This will open further business
opportunities for Indian corporate houses in Latin America. We would be
partnering with the Bolivian Government and the people to contribute positively
to the growth of economies of both the countries"
PRESS RELEASE
Jindal
Steel & Power Ltd awarded First Prize at the 'National Energy Conservation
Award 2007' in the Integrated Steel Plants Sector
The
award reaffirms company's culture of energy conservation
New Delhi, 14th December 2007 - Her Excellency, Hon'ble President of
India, Smt. Pratibha Devi Singh Patil awarded the first prize at the
prestigious 'National Energy Conservation Award 2007' to Jindal Steel and Power
Limited (JSPL) in a glittering function here today. Mr. PS Rana, Executive
Director, JSPL, Raigarh received the award for the company. JSPL bagged the
award in the Integrated Steel Plants Sector.
Constituted by The Ministry of Power, Government of India, the special awards
are presented to the industrial units who implement the best practices in the
field of Energy Efficiency & Conservation. The awards are presented on the
occasion of Energy Conservation Day every year.
There has been an overall improvement in all the energy parameters and
significant achievements include reduction in heat consumption at all production
units, reduction in Coke Breeze consumption at Sintering Plant, reduction in
Coke consumption at Blast Furnaces and increase in waste heat recovery through
the various energy conservation measures. This has been possible through the
active involvement of JSPL collective and adoption of quality improvement
projects exclusively for energy conservation.
Speaking on the occasion, Mr. PS Rana, Executive Director, JSPL, Raigarh said,
" It is indeed a moment of great pride & honor for the company and its
people. The award has certainly reaffirmed company's faith in the
implementation of best practices of energy conservation. JSPL is committed to
work for effective utilization of all types of energy."
Adding further, Mr. Rana Said, "The award is in sync with the company's
energy policy, which is achieved through taking specific objective of energy
conservation through process / equipment modification and using the latest and
the modern technology, monitoring of energy consumption, converting waste as
resource, benchmarking the energy consumption norms and adherence to statutory
requirements. The company has achieved 5% saving on gross sales of the year
2006-07 by adopting modern energy saving measures."
About Jindal Steel & Power
Limited
Jindal Steel & Power Limited, Raigarh is an
integrated steel plant with a steel production capacity of 2.4 million tons per
annum, wherein captive power plant of 350 Mega Watt has been established for
its own use. This plant generates power with eco-friendly manufacturing processes
while following all the energy conversation standards. The annual turnover of
the company is Rs. 35000 Millions. Company is engaged in steel production,
power generation, iron ore & coal mining and diamond exploration &
excavation. In regard to self-dependency, company is pioneer in its field while
making efforts for the infrastructure development. With a commitment of capital
investment of Rs. 100000 Millions in Chhattisgarh state, company is the biggest
investor in the state in the private sector.
CMT REPORT
(Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts, India Prisons Service,
Interpol, etc.
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. 41.38 |
|
UK Pound |
1 |
Rs. 80.76 |
|
Euro |
1 |
Rs. 63.89 |
SCORE & RATING
EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
8 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--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 |
|
67 |
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. |
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 |
|