MIRA
INFORM REPORT
|
Report Date : |
24.05.2008 |
IDENTIFICATION
DETAILS
|
Name : |
JSW STEEL LIMITED |
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Formerly Known As : |
JINDAL VIJAYNAGAR
STEEL LIMITED |
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Registered Office : |
Jindal Mansion, 5A, Dr. G. Deshmukh Marg, Mumbai - 400026. Maharashtra |
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Country : |
India |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
15.03.1994 |
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Com. Reg. No.: |
11-152925 |
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CIN No.: [Company
Identification No.] |
L27102MH1994PLC152925 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
MUMJ05285A |
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PAN No.: [Permanent
Account No.] |
AAACJ4323N |
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Legal Form : |
Public Limited Liability
Company. The company's shares are listed on the Stock Exchanges |
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Line of Business : |
Manufacturers of
Hot Rolled Coils/Steel Plates. |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 2228916 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow and Correct |
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Litigation : |
Clear |
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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. Its 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
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Registered
Office / Regional
Office: |
Jindal Mansion, 5A, G. Deshmukh Marg, Mumbai - 400026, Maharashtra,
India |
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Tel. No.: |
91-22-23513000/23520980 |
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Fax No.: |
91-22-23526400/23522600 |
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E-Mail : |
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Website : |
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Factory : |
· P.O.
Toranagallu, Sandur Taluk, Bellary District, Karnataka - 583123. · Vasind, Shahapur
Taluk, Thane - 421 604., Maharashtra ·
Tarapur, MIDC Boisar, Thane - 401 506, Maharashtra. |
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Branches : |
Located at :- · No. 121, The ‘Estate’, Dickenson Road, 3rd
Floor, Bangalore – 560042, Karnataka Tel. No. 91-80-25559869-73 Fax. No. 91-80-25598898 · 6-C, Century Plaza, 560-562 Anna Salai,
Chennai – 600018, Tamilnadu Tel. No. 91-44-24331930/24362691 Fax. No. 91-44-24339130 · 201, Mahavir House, 3-6-322, Hyderguda,
Hyderabad – 500029, Andhra Pradesh Tel. No. 91-40-23225252/23227240 Fax. No. 91-40-23225252/7240 · Aishwaria, 196/43, T. V. Swamy Road
(West), R. S. Puram, Coimbatore – 641002 Tel. No. 91-422-2550602/2550013 Fax. No. 91-422-2550602 · Jindal Centre, 12, Bhikaji Cama Place, New
Delhi – 110066 Tel. No. 91-11-26188345-60 Fax. No. 91-11-26170691 · 402 Royal Gold, 4A, Yeshwant Niwas Road,
Indore, Madhya Pradesh Tel. No. 91-731-5043586/25043613 Fax. No. 91-731-5043586 |
DIRECTORS
|
Name : |
Mrs. Savitri
Devi Jindal |
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Designation : |
Chairperson |
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Date of Birth
: |
30/03/1949 |
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Date of
Appointment : |
18/04/2005 |
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Qualification
: |
Under graduate |
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Other
Directorship : |
Rohit Towers
Building Limited |
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Name : |
Mr. Sajjan
Jindal |
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Designation : |
Vice Chairman
and Managing Director |
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Date of Birth
: |
45 years |
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Experience : |
24 years |
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Qualification
: |
B. Engineering
(Mech.) |
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Date of
Appointment : |
04/07/1922 |
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Name : |
Dr. B.N. Singh |
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Designation : |
Jt. Managing
Director and CEO (Upstream Sbu) |
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Date of Birth
: |
01/06/1948 |
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Date of
Appointment : |
13/10/2003 |
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Qualification
: |
BSc (Metallurgy),
M.Tech (Metallurgy) , MBA and Doctorate in Metallurgy. |
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Name : |
Mr. Seshagiri
Rao M.V.S |
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Designation : |
Director
(Finance) |
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Name : |
Dr. S.K. Gupta |
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Designation : |
Director |
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Date of Birth
: |
18.03.1938 |
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Date of
Appointment : |
25.04.1994 |
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Qualification
: |
B.Sc (Met. Engg),
Ph. D(Tech) and 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) |
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|
Name : |
Mr. Anthony Paul
Pedder |
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Designation : |
Director |
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Date of Birth
: |
28/06/1949 |
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Date of
Appointment : |
18/04/2005 |
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Qualification
: |
B.Sc (Maths) M.Sc
(Operation Research and Management Studies) |
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|
Name : |
Mr. I. M.
Vittala Murthy, Ias |
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Designation : |
Nominee Director
Of (KSIDC) |
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Name : |
Mrs. Sobha
Nambisan |
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Designation : |
Nominee (KSIDC) |
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Name : |
Dr. Vijay Kelkar |
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Designation : |
Director |
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Date of Birth
: |
15/05/1942 |
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Date of
Appointment : |
09/05/2005 |
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Qualification
: |
BS MS and PhD |
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Other
Directorship : |
IDFC Asset
Management Company Limited Tata Chemicals
Limited Jet 'Airways
(India) Limited Development
Credit Bank Hero Honda Motors
Limited |
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|
Name : |
Mr. Sudipto
Sarkar |
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Designation : |
Director |
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Date of Birth
: |
21/03/1946 |
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Date of
Appointment : |
09/05/2005 |
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Qualification
: |
B.Sc.
(Maths-Hons) BA (Law Tripos) LL.M.
(International Law) M.A. (Law) Barrister, Gray's
Inn, Louder |
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Name : |
Mr. Jambunathan,
I As (Retd.) |
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Designation : |
Nominee Director
Of Uti Asset Management Company Private Limited |
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Name : |
Mr. K. V.
Krishnamurthy |
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Designation : |
Nominee Director
of Industrial Development Bank of India |
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Name : |
Mrs. Zarin
Daruwala |
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Designation : |
Nominee Director
of ICICI Bank Limited |
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Name : |
Mr. Uday Chitale |
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Designation : |
Director |
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Name : |
Mrs. Lancy
Varghese |
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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% |
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|
|
|
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TOTAL |
156975517 |
100.00 |
BUSINESS DETAILS
|
Line of
Business : |
Manufacturers of
Hot Rolled Coils/Steel Plates. |
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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 |
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Exports : |
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Countries : |
·
Africa ·
Europe ·
South East
Asia |
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Imports : |
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Countries : |
·
Austria ·
Germany ·
USA |
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 |
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Bankers : |
· Allahabad Bank · ICICI Bank
Limited · Punjab National Bank · State Bank of
Indore · State Bank of
Mysore · State Bank of
Patiala · Vijaya Bank · Barclays Bank,
Plc, Vereinigtes Konigreich · State Bank of
India Address: MG Road, Bangalore, Karnataka |
|
Banking Relations : |
Satisfactory |
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Auditors : |
STATUTORY AUDITORS Lodha and Company Chartered Accountants 6, Karim Chambers, 40A, Doshi Marg (Hamam Street), Mumbai – 400023 CONCURRENT AUDITORS S. R. Batliboi
and Company Chartered Accountants |
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Associates : |
·
JSW Energy Limited
(Formerly Known As Jindal Thermal Power Company Limited) (JSWEL) · Jindal Praxair Oxygen Company Private
Limited · Vijayanagar Minerals (Private) Limited · Jindal Iron and Steel Company Limited · Jindal Strips Limited · Jindal Steel and Alloys Limited · Saw Pipes Limited · Jindal Stainless Limited · Jindal Steel and Power Limited · Saw Pipes USA INC · Jindal United Steel Corporation- |
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Parent Company
: |
Jindal Group |
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Memberships : |
Confederation of
Indian Industry |
CAPITAL STRUCTURE
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
3000000000 |
Equity shares |
Rs. 10/- each |
Rs.30000.000 millions |
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Issued, Subscribed
& Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
504048500 |
Equity shares |
Rs. 10/- each |
Rs. 5040.485 millions |
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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 |
|
|
|
|
|
|
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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 |
SUMMARISED RESULTS
|
Year |
|
|
31.03.2008 |
|
Type
|
|
|
Full
Year |
|
Sales Turnover |
|
|
114200.000 |
|
Other Income |
|
|
2571.400 |
|
Total Income |
|
|
116771.400 |
|
Total Expenditure |
|
|
80654.000 |
|
Operating Profit |
|
|
36117.400 |
|
Interest |
|
|
4404.400 |
|
Gross Profit |
|
|
31713.000 |
|
Depreciation |
|
|
6871.800 |
|
Tax |
|
|
7559.300 |
|
Reported PAT |
|
|
17281.900 |
|
Dividend (%) |
|
|
1400.000 |
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 |
LOCAL AGENCY
FURTHER INFORMATION
History
Subject was
incorporated on 15th March 1994 at Bellary in Karnataka having
Company Registration Number 15365.
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 the Corex-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 issues 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.
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.
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 and 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
* India is the 2nd fastest growing economy in the world. The steel
consumption in the last year grew at 12%. The automotive, consumer durables,
auto components, infrastructure, construction and housing sectors are showing
double digit growth which drives up steel demand. The total consumption of
steel in India is expected to reach 70 million tonnes by 2011 even assuming a
conservative growth rate of 10%. As no big green field capacity is expected to
be operational in the foreseeable future, their Company is in a distinct
advantage to undertake brown field expansions and make them operational to
leverage this opportunity.
* 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 West Bengal Steel Project
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 and 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 and 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 China will decline to approximately 10 million tones
vis-a-vis 25 million tones in 2006. The weakening US Dollar is expected to keep
the steel prices in Dollar terms at higher levels. Shortage of metallics,
surging freight costs will continue to keep the cost of production high for
steel manufacturers. The world economy is estimated to grow at 3.5% in 2007 as
per IMF which is again a big positive for the steel industry. At the back drop
of clocking 9.2% growth in GIMP in 2006-07, India is poised to maintain the
growth momentum. in this environment, 2007 is expected to be a good year for
the steel industry.
FORMATION OF SUBSIDIARIES
The Board of Directors of their Company at its meetings held on
19.10.2006 and 22.01.2007 approved the formation of subsidiaries to augment its
expansions & global reach.
Accordingly, the
following subsidiaries were formed during the year 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 Africa subject to satisfactory due diligence. Following the encouraging due
diligence reports, further MOUs were signed in March 2007 to acquire 2 more
Licenses to increase the presence in Africa to achieve self sufficiency in
coking coal gradually.
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 Newport, South Wales, and UK and is about 2 Kms away from the seaport. This
Company is involved in slitting, blanking, recoiling processes of steel.
Products and is ISO 9001 and TS 16949 certified. The annual steel processing
capacity of the Company is 0.15 MTPA. This Company 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 UK and European markets
and also to further widen and consolidate future acquisition strategies in
Europe.
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 Iron Ore from
Thimmappanagudi, which is 10% higher than the earlier years. VMPL has secured
an approval for 2.5 MTPA of production from Government of Karnataka and
Government of India and is planning to increase the production accordingly.
VMPL has bagged Excellency Award for Community Development during Mines
Environment and 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 and 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. India Manufacturing Excellence Award - 2006: Corporate Gold
Award in Metals Category by Frost and Sullivan.
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: Second Place
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 USA and Europe.
Since a substantial part of the total revenue is generated through exports,
their Company has a natural hedge covering the cost of imports there by
insulating it from risks related to exchange fluctuations.
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
India's steel industry was controlled until 1991, following which
fast-track reformation compelled it to compete globally. The fact that the
industry has emerged as globally competitive despite decades of control
represents an exemplary case study.
Today, India is considered a preferred global destination for various
international steel players for the following reasons: growing economy, rich
mineral resources, young demographics and cheap labour. Going ahead, India's
domestic demand for steel is at an inflection point, driven by strong internal
developments.
* 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, India holds immense opportunities in
urban, semi-urban and rural development through the installation of pipelines
for water transportation as well as the oil and gas sectors. These will result
in enhanced steel demand
Fixed
Assets
- Freehold Land
- Leasehold Land
- Buildings
- Plant and
Machinery
- Furniture and
Fixtures
- Vehicles and
Aircraft
AS PER WEBSITE
Subject is today a fully
integrated steel plant having units across Karnataka and Maharashtra producing
from pellets to colour coated steel.
The company
history can be traced back to 1982, when the Jindal Group acquired Piramal
Steel Limited which operated a mini steel mill at Tarapur in Maharashtra. The
Jindals, who had wide experience in the steel industry, renamed it as Jindal
Iron and Steel Company Limited (JISCO) now known as JSW Steel Limited
(Downstream)
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 Bangalore,
and well connected to Goa and Chennai ports.
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 greenfield project to have 'COREX' as a mainstream facility. (Others
elsewhere in the world, who had it as part of brownfield expansion, included
ISCOR of South Africa, and POSCO of South Korea).
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-ŕ-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 and Steel Private Limited. The Blast Furnace, on its commissioning will
be operated by JVSL under Operations and 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 and 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-ŕ-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.
Press Release
05.05.2008
JSW
Steel reports squeeze in margins
JSW Steel Limited posted a net profit of Rs.461.000 Millions and
Rs.1,7281.900 Millions forthe Q 4 2007-08 and financial year ended March 2008
respectively. The surginginput costs squeezed the EBIDTA margins in Q4 by 11.6%
and for the year endedMarch 2008 by 2.66%. The financial results for the
quarter and year underconsideration are not comparable with that of the
previous corresponding period asthe current period results include the
financial results of erstwhile Southern Iron & Steel Co. Ltd. (SISCOL)
which was merged with the Company with appointed date as of 1st of April 2007
pursuant to Scheme of Amalgamation approved by the
Hon’ble High Court of Bombay
.
The Key performance highlights are as under:
|
|
Q4 FY 07-08 Vs Q4 FY 06.07 Growth |
Gy 07-08 Vs FY 06-07 Growth |
|
Volume growth (Crude Steel Production) |
82 % |
37 % |
|
Saleable Steel sold |
61 % |
27 % |
|
Net sales |
68% |
33% |
|
Blended Sales Realization |
9% |
8% |
|
Blended Cost of Production |
27% |
16% |
|
EBIDTA |
9.3% |
23.6% |
|
EBIDTA margin |
11.6% |
2.66% |
The un-precedented rise in input cost viz. iron ore by 68% and coke 66% has
exerted tremendous pressure on the EBIDTA margins of the Company. However, in
absolute terms, the Company has shown increase in EBIDTA, cash profit and net
profit mainly on account of volume growth and efficiency in
operations.
Operational
Performance
The significant volume growth during Q4 and financial year ended March
2008 is due to:
�� The stabilization of brown field expansion from 2.5
MTPA to 3.8 MTPA.
�� The stabilization of modernized Hot Strip mill from 2
MTPA to 2.5 MTPA.
�� Commissioning of 1 MTPA of CRM complex enhancing the
product mix.
�� Capacity addition coming from acquisition of SISCOL (1
MTPA long product capacity) pursuant to a Scheme of Amalgamation.
The cost reduction initiatives resulted in to lower power consumption by
4.5%, lower fuel consumption in Corex by 1.2%, lower fluxes consumption by 21%
and higher LD gas recovery by 67%. In spite such cost reduction and
efficiencies along with an increase of 8% in blended realization, the margins
dropped substantially due to surging input costs namely, Coke, Iron ore, Coking
coal, Ferro alloys and transportation cost.
Financial
Performance
The net sales for the year ended 31.3.2008 stood at Rs.114.200 Millions
showing a growth of 33% over previous year. The increase in net sales is
accounted by a growth of 27% in the volume of saleable steel and higher blended
sales realization of 8%. The Company could not maintain its margins in spite of
impressive growth in volume and higher realization as the cost of production has
in fact gone up by 16%. This led to a drop of 2.66% in the EBIDTA margin which
stood at 30.93% for the year ended March 2008. The Company has a net
foreign exchange gain of Rs.1048.900 Millions for the year ended March
2008 after netting out the foreign exchange losses of Rs.929.900 Millions in Q4
FY 2007-08 arising mainly on account of translation of outstanding foreign
currency liabilities.
As the Company has advanced the commissioning of its brown field
expansion from 3.8 MTPA to 6.8 MTPA by almost 6 months ahead of schedule
(scheduled date of commissioning 31ST march 2009), the Company has drawn
additional loans to meet the accelerated capex programme. This resulted into a
higher debt gearing of 0.93 as against 0.75 as on 31.3.2007. The weighted average
cost of debt was at 7.34%.
The Company has reported a consolidated turn over, EBIDTA and net profit
of Rs.136655.600 Millions, Rs.37395.900 Millions & Rs.16404.400 Millions
respectively after incorporating the financials of subsidiaries, joint ventures
and associates. The net profit for the consolidated Company is lower at
Rs.1640.000 Millions compared to Rs.1728.000 Millions in the stand alone
Company mainly due to netting off un realized profits attributable to inventory
related to inter Company sales. The consolidated debt gearing was at 1.49
considering the loans raised by the Company for acquiring Mining rights in
Chile and Plate and pipe mill in USA.
Value Accretive
initiatives
A) Volume : - Brown field
expansion from 3.8 MTPA to 6.8 MTPA to be completed by September 2008 (6 months
ahead of schedule).
- Commissioning further capacity expansion to 10 MTPA from 6.8 MTPA by
March 2010 (once again 6 months ahead of schedule).
B) Product Mix
Enrichment :
- Commissioning of 2nd colour coating line with 0.1 MTPA by September
2008.
- Conversion of two Galvalnising lines at Tarapur to Galvalume in fiscal
2008-09.
- Setting up new Blooming mill at Salem works in fiscal 2008-09
increasing the capacity of rolled products from 0.45 MTPA to 0.9 MTPA.
- Modernization of HSM - I from 2.5 MTPA to 3.2 MTPA in FY 2008-09.
- Commissioning of new Hot strip mill with 3.5 MTPA capacity (Phase – I)
by September 2009. Phase – II to expand it to 5 MTPA by September 2010.
C) Cost reduction
initiatives :
-
Commissioning of 30 MW captive power plant to meet the
-
power requirement at Downstream unit to be commissioned by October 2008.
-
Commissioning of railway siding at Vasind by December2008.
-
Setting up 20 MTPA beneficiation plant to be completed in 2
-
phases of 10 MT each by March 2010.
-
Setting up new captive power plant of 300 MW to achieve self-sufficiency
at Vijayanagar works by 2010.
D) Raw material
security : - The Company has been working to develop the iron ore mines in Chile,
Coal mines in Mozambique, Coal mines in Jharkhand, Orissa and West Bengal in
India to increase the self sufficiency by operationalising the Mines over 36
months.
Dividend
The Board has, subject to the approval of the Members at the ensuing
Annual General Meeting, recommended dividend :
·
at the stipulated rate of 10%, on the 27,90,34,907 10% Cumulative
Redeemable Preference Shares of Rs.10/- each of the Company, for the year ended
31.03.2008; and
·
at the stipulated rate of 11%, on the 99,00,000 11% Cumulative
Redeemable Preference Shares of Rs.10/- each (11% CRPS) of the Company, for the
year ended 31.03.2008, along with arrears for the period 10.03.2007 to
31.03.2007.
The Board has also, considering the performance of the Company for the
year under review and the financial position of the Company, recommended
dividend @. 140% (Rs.14 per Equity Share) on the 18,70,48,635 Equity Shares of
Rs.10/- each of the Company for the year ended 31.03.2008, subject to the
approval of the Members at the Annual General Meeting.
Together with the Corporate Tax on Dividend, the total outflow on
account of Equity Dividend is Rs.3063.700 Millions, vis-ŕ-vis Rs.2337.300
Millions paid for
FY 2006-07, an increase of 31%.
Outlook
The world economy showed signs of slow down following the tightness in
credit markets triggered by sub prime crisis in USA, rising food and commodity
prices spiraling inflation across the world. The inflationary pressure, surging
oil prices and tightening credit and capital markets are expected to have some
dampening effect on the world economic growth. The strong fixed asset
investment and infrastructure spend in emerging economies are expected to
support the secular trend growth momentum. The estimated growth of 3.3% in the
world economy
by IMF for the calendar year 2008 is encouraging.
While the apparent finished steel consumption is estimated to grow by
6.7% (1.252 billion tones) in calendar year 2008, the steel consumption in
India is growing at a much faster pace due to robust investment in pipe line
and the thrust on infrastructure building. India has already become net
importer of steel
of about 2 million tones in fiscal 2007-08.
The international long term prices for the key inputs, namely; iron ore
and coal have been settled at historically high levels of 70%, 210%, over last
year, respectively. The prices of coke, scrap and ferro alloys are
skyrocketing. While the international steel product prices are rising in
sympathy with the increase in the cost of inputs the steel producers in India
refrained themselves in hiking the
steel product prices sharing the concern of the Government of India in
containing inflation. Besides, some Indian steel producers reduced the prices
responding to the Government of India initiative of removing custom duties on
import of certain raw materials. The reduction in custom duties on
imports has been passed on by Indian steel producers, in spite of certain raw
material suppliers in India bench marking their realizations to international
prices.
The fiscal measures announced by the Govt. of India relating to steel
sector, particularly imposing export duties on export of steel products are
expected to be temporary to contain inflation. The strong demand growth for
steel products across the world and the surging input cost will push up the
international steel prices further. While certain Indian steel producers are
exercising self restraint in hiking finished goods prices, in a challenging
environment of rising input costs, there will be a significant growth in
volumes coming out of brown field expansions.
Guidance
The Company targets to produce the following volumes for FY 2008-09.
(Million
tons)
|
Products |
FY 07-08 Actual |
FY 08-09 Estimates |
Growth |
|
Productions: |
|
|
|
|
Billets/ Blooms/ Slabs |
3.626 |
5.537 |
53% |
|
Saleable steel |
|
|
|
|
Semis |
0.291 |
1.614 |
454% |
|
Rolled Products |
3.109 |
3.885 |
25% |
|
Total |
3.400 |
5.499 |
62% |
About JSW Steel
Limited
JSW Steel Ltd., belonging to JSW group, part of the US $ 8 billion O P
Jindal Group, is one of the lowest cost steel producers in the world. The group
has diversified interest in Mining, Carbon, Steel, Power, Industrial gases and
Port facilities. JSW Steel Limited is engaged primarily in manufacture of flat
products viz. H R Coils, C R Coils, Galvanised products, auto grade / white
goods grade CRCA Steel and Power. Incorporated in 1994, it has grown to US $
3.50 billion in little over a decade. JSW Steel Limited has the largest
galvanizing production capacity in the country and is the largest exporter of
galvanized products with presence in over 74 countries across five continents.
Forward looking and Cautionary Statements:
Certain statements in this release concerning our future growth
prospects are forward looking statements, which involve a number of risks, and
uncertainties that could cause actual results to differ materially from those
in such forward looking statements. The risks and uncertainties relating to
these statements include, but are not limited to, risks and uncertainties
regarding fluctuations in earnings, our ability to manage growth, intense
competition within Steel Industry including those factors which may affect our
cost advantage, wage increases in India, our ability to attract and retain
highly skilled professionals, time and cost overruns on fixed-price, fixed-time
frame contracts, client concentration, restrictions on immigration, our ability
to manage our internal operations, reduced demand for steel, our ability to
successfully complete and integrate potential acquisitions, liability for
damages on our service contracts, the success of the companies in which – has
made strategic investments, withdrawal of fiscal governmental incentives,
political instability, legal restrictions on raising capital or acquiring
companies outside India, unauthorized use of our intellectual property and
general economic conditions affecting our industry. The company does not
undertake to update any forward looking statements that may be made from time
to time by or on behalf of the company.
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.42.84 |
|
UK Pound |
1 |
Rs.84.78 |
|
Euro |
1 |
Rs.67.32 |
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 |
|