MIRA
INFORM REPORT
|
Report Date : |
13.09.2008 |
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) : |
31.03.2008 |
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Date of Incorporation : |
15.03.1994 |
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Com. Reg. No.: |
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
|
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 383862500 |
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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
|
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. · Salem Works:
Pottaneri,M Kalipatti Village,Mecheri Post,Mettur Taluk,Salem,Tamil
Nadu-636453 |
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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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Age : |
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
(Quarter Ended 31.03.2008)
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
(Indian) |
|
|
|
Individuals/Hindu Undevided Family |
5447139 |
2.91 |
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Central Government/State Government |
957952 |
0.51 |
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Bodies Corporate |
75788502 |
40.52 |
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Foreign |
|
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Bodies Corporate |
5704612 |
3.05 |
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Public
Shareholding |
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Institutions |
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Mutual Funds/UTI |
3780213 |
2.02 |
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Financial Institutions/Bank |
8753767 |
4.68 |
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Central Government/State Government |
1237500 |
0.66 |
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Foreign Institutional Investors |
49308824 |
26.36 |
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Non Institutions |
|
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Bodies Corporate |
7203029 |
3.85 |
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Individuals (i)Individual shareholders holding nominal share capital
up to Rs.0.100 million |
18682118 |
9.99 |
|
(ii)Individual Shareholders holding nominal share capital in excess of
Rs.0.100 million |
1059835 |
0.57 |
|
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Any Other
(specify) |
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Trusts |
864785 |
0.46 |
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Foreign Bodies Corporate |
8218685 |
4.39 |
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Overseas Bodies Corporates |
41674 |
0.02 |
|
|
|
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Total |
187048635 |
100.00 |
Categories of Shareholders as on 31.03.2008
|
Category |
|
No. of Shares |
% of Holding |
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|
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Promoters |
|
87898205 |
46.99 |
|
NRI |
|
3535644 |
1.89 |
|
FII |
|
49308824 |
26.36 |
|
OCB |
|
41674 |
0.02 |
|
FBC |
|
8218685 |
4.40 |
|
IFI |
|
5860767 |
3.13 |
|
IMF |
|
3780213 |
2.02 |
|
Banks |
|
2893000 |
1.55 |
|
Employees |
|
42984 |
0.02 |
|
Bodies Corporate |
|
7203029 |
3.85 |
|
Public |
|
17072832 |
9.13 |
|
Trust |
|
864785 |
0.46 |
|
HUF |
|
327311 |
0.18 |
|
Transit A/C |
|
682 |
0.00 |
|
|
|
|
|
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Total |
|
187048635 |
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
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No. of Employees : |
2500 |
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Bankers : |
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Facilities : |
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Auditors : |
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Name : |
STATUTORY AUDITORS Lodha and Company Chartered Accountants 6, Karim Chambers, 40A, Doshi Marg (Hamam Street), Mumbai – 400023 M/s.Deloitte
Haskins and Sells Chartered
Accountants. CONCURRENT AUDITORS S. R. Batliboi
and Company Chartered
Accountants |
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Subsidiaries: |
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Associates: |
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CAPITAL STRUCTURE
(As on 31.03.2008)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
2000000000 |
Equity shares |
Rs.10/- each |
Rs.20000.000 millions |
|
|
|
|
|
|
1000000000 |
Preference Shares |
Rs.10/- each |
Rs.10000.000 millions |
|
|
Total |
|
Rs.30000.000
millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
187048635 |
Equity shares |
Rs.10/-each |
Rs.1870.500
millions |
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|
Add: Equity shares Forfeited |
|
Rs. 610.300 Millions |
|
|
|
|
|
|
27,90,34,907 |
10% Cumulative Redeemable
Preference Shares |
Rs.10/-each |
Rs.2790.300
millions |
|
|
|
|
|
|
9900000 |
11 % Cumulative Redeemable Preference Shares |
Rs.10/-each |
Rs.99.000
millions |
|
|
Total |
|
Rs.5370.100 millions |
Notes:
1. Of the above, 7,70,27,049 equity shares are alloted
as fully paid-up pursuant to Schemes of
Arrangement and/or Amalgamation without payment being received in cash as
follows:
a) 4,39,98,500 equity shares to the shareholders of erstwhile
Jindal Iron and Steel Company Limited.
b) 65,57,070 equity shares to the shareholders of erstwhile
Euro Ikon Iron and Steel Private Limited.
c) 50,35,767 equity shares to the shareholders of erstwhile
Euro Coke and Energy Private Limited.
d) 64,00,000 equity shares to the shareholders of erstwhile
JSW Power Limited.
e) 1,50,35,712 equity shares to the shareholders of
erstwhile Southern Iron and Steel Company Limited,
2. Of the above, 99,00,000 11% Cumulative Redeemable
Preference Shares are alloted as fully paid-up pursuant to Schemes of
Amalgamation without payment being received in cash to the shareholders of
erstwhile Southern Iron and Steel Company Limited,
3. The 10% Cumulative Redeemable Preference Shares are
redeemable at par in four equal quarterly installments commencing from 15
December, 2017.
4. The 11 % Cumulative Redeemable Preference Shares are
redeemable at a premium of 10% any time after 10 March 2010 but not later then
10 March 2012 at the option of the Company.
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
5370.100 |
5258.000 |
4970.600 |
|
|
2] Share Application Money |
0.000 |
0.000 |
38591.600 |
|
|
3] Reserves & Surplus |
71402.400 |
50682.500 |
0.000 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
76772.500 |
55940.500 |
43562.200 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
54970.800 |
36325.000 |
40587.100 |
|
|
2] Unsecured Loans |
20494.500 |
5405.300 |
373.400 |
|
|
TOTAL BORROWING |
75465.300 |
41730.300 |
40960.500 |
|
|
DEFERRED TAX LIABILITIES |
12518.400 |
10126.600 |
7420.300 |
|
|
|
|
|
|
|
|
TOTAL |
164756.200 |
107797.400 |
9194.300 |
|
|
|
|
|
|
|
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APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
109554.900 |
81891.000 |
65179.800 |
|
|
Capital work-in-progress |
56124.300 |
20029.300 |
18619.000 |
|
|
|
|
|
|
|
|
INVESTMENT |
9235.300 |
1929.400 |
850.800 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
15491.600
|
10113.500 |
9242.300
|
|
|
Sundry Debtors |
3373.900
|
2451.600 |
2291.900
|
|
|
Cash & Bank Balances |
3392.200
|
3378.000
|
988.700
|
|
|
Other Current Assets |
186.200
|
3420.400
|
9794.200
|
|
|
Loans & Advances |
8421.500
|
5428.300
|
5137.100
|
|
Total
Current Assets |
30865.400
|
24791.800 |
27454.200
|
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
36663.600
|
22105.100
|
19268.600
|
|
|
Provisions |
4360.100
|
687.700
|
3932.600
|
|
Total
Current Liabilities |
41023.700
|
22792.800 |
23201.200
|
|
|
Net Current Assets |
(10158.300)
|
1999.000 |
4253.000
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
1948.700 |
3040.400 |
|
|
|
|
|
|
|
|
TOTAL |
164756.200 |
107797.400 |
9194.300 |
|
PROFIT & LOSS
ACCOUNT
|
PARTICULARS |
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
|
Sales Turnover |
114200.000 |
85543.600 |
65630.600 |
|
|
Other Income |
2571.400 |
1452.300 |
0.000 |
|
|
Total Income |
116771.400 |
86995.900 |
65630.600 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
24841.200 |
19151.800 |
13011.400 |
|
|
Provision for Taxation |
7559.300 |
6231.800 |
4365.500 |
|
|
Profit/(Loss) After Tax |
17281.900 |
12920.000 |
8645.900 |
|
|
|
|
|
|
|
|
Imports : |
|
|
|
|
|
|
Raw Materials |
31482.100 |
26531.500 |
23394.000 |
|
|
Stores & Spares |
1250.200 |
679.600 |
0.000 |
|
|
Capital Goods |
10114.400 |
3843.300 |
0.000 |
|
|
Others |
0.000 |
0.000 |
0.000 |
|
|
Import Value |
42846.700 |
31054.400 |
23394.000 |
|
|
|
|
|
|
|
|
Export |
|
|
|
|
|
F.O.B Value of Export |
31584.500 |
33163.300 |
20494.800 |
|
|
Sale of Carbon Credits |
1111.100 |
0.000 |
0.000 |
|
|
Interest income |
291.000 |
0.000 |
0.000 |
|
|
Export Value |
32986.600 |
33163.300 |
20494.800 |
|
Total Imports |
|
|
|
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Manufacturing Expenses |
20975.700 |
15722.000 |
0.000 |
|
|
Raw Material Consumed |
56938.500 |
40299.500 |
0.000 |
|
|
Managerial Remuneration |
2739.800 |
1754.700 |
0.000 |
|
|
Interest |
4404.400 |
3995.400 |
0.000 |
|
|
Miscellaneous Expenditure |
0.000 |
1090.200 |
0.000 |
|
|
Depreciation & Amortization |
6871.800 |
4982.300 |
0.000 |
|
|
Other Expenditure |
0.000 |
0.000 |
52619.200 |
|
Total Expenditure |
91930.200 |
67844.100 |
52619.200 |
|
QUARTERLY /
SUMMARISED RESULTS
|
Year |
|
|
30.06.2008 |
|
Type
|
|
|
1
Quarter |
|
Sales Turnover |
|
|
36714.900 |
|
Other Income |
|
|
273.000 |
|
Total Income |
|
|
36987.900 |
|
Total Expenditure |
|
|
30387.000 |
|
Operating Profit |
|
|
6600.900 |
|
Interest |
|
|
1531.400 |
|
Gross Profit |
|
|
5069.500 |
|
Depreciation |
|
|
1852.100 |
|
Tax |
|
|
1023.900 |
|
Reported PAT |
|
|
2193.500 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2008 |
31.03.2007 |
31.03.2006 |
|
PAT / Total Income |
(%) |
14.79
|
14.85 |
13.17 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
21.75
|
22.38 |
19.82 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
12.07
|
14.88 |
11.60 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.32
|
0.34 |
0.29 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.51
|
1.15 |
1.56 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
0.75
|
1.08 |
1.18 |
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.
DIRECTORS REPORT
The financial results for the year under consideration are
not comparable with that of the previous year as they include the financial
results of erstwhile Southern Iron and Steel Company Limited (SISCOL) which was
merged with the Company pursuant to the Scheme of Amalgamation with appointed
date as 1 April 2007.
The Company has been expanding its capacities through Brownfield expansions
fuelling the volume growth year after year. During the fiscal 2007-08, the
Company formulated a Scheme of Amalgamation, which was sanctioned by the
Hon'ble High Court of Bombay merging SISCOL with the Company with appointed
date as 1 April 2007. This inorganic addition of 1 MTPA long product facility
alongwith Brownfield expansion led to a significant growth of 37% and 27% over
previous year in volume of crude steel production and saleable steel
respectively. This substantial volume growth resulted in expansion in absolute
terms in EBIDTA, Cash Profit and PAT relative to that of the previous year. The
Company had to absorb a part of the un-precedented increase in cost of inputs
namely; iron ore, coking coal, coke, ferro alloys and transportation cost
squeezing the margins of the Company. The cost reduction initiatives namely,
commissioning of coal drying unit, hot metal treatment plant and use of LD gas
for power generation etc. could offset only a part of the increase in cost and
the EBIDTA margin (excluding onetime income) dropped by 3.5% compared to that
of previous year. The increase in realisations has not kept pace with the
increasing input costs particularly in the domestic market in the later part of
the fiscal year 2007-08, while the international prices have seen new highs.
The Company opted to absorb part of the cost increases without passing on to
the user industry sharing the concern of Government of India in moderating
inflation. In spite of this challenging environment, the Company has registered
increase in the PAT to Rs.1,7281.900 millions with a growth of 33.76%
contributed mainly by volume growth.
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.
47/179/2008-CL-III
dated 2 May 2008 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.
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 on 'Financial Reporting of Interests in Joint Ventures'.
As per the Consolidated Financial Statements, the Gross Turnover, EBIDTA
and PAT of the Company are Rs.136655.600 millions, Rs.37395.900 millions and
Rs.16400.400 millions respectively. The PAT on consolidated basis was lower
than the standalone basis mainly on account of unrealised profit attributable
to the inventory relating to inter-company sales.
PROJECTS
AND EXPANSION PLANS
The
Phase II Modernisation of existing Hot Strip Mill to increase the capacity from 2.5 MTPA to 3.2 MTPA is
Expected
to be completed by end of second quarter of fiscal 2008-09.
The
Crude steel capacity expansion project by 2.8 MTPA to reach 6.8 MTPA at
Vijayanagar works is now planned to be commissioned by September 2008 as
against original scheduled date of March 2009.
The
State of the Art new Hot Strip Mill with 3.5 MTPA capacity (Phase I) is
scheduled to be commissioned by September 2009 and its expansion to 5 MTPA
(Phase II) is expected to be operational by September 2010.
Further
expansion of Crude steel capacity by 3.2 MTPA to reach 10 MTPA is also running
ahead of schedule and
is
expected to be commissioned prior to the scheduled date of September 2010.
Conversion
of two Galvanising lines at Tarapur to Galvalume is scheduled in fiscal
2008-09.
30 MW
Captive Power Plant is being set up at Tarapur to meet the requirement of
Downstream units. Civil work
is in
progress and the plant is scheduled to commissioned by October 2008.
New
Colour Coating Line No 2 is being set up at Tarapur and is scheduled to be
commissioned by end September 2008. ,
'
Setting
up of a Railway Siding at Vasind is in progress. Approval from Railways has
been received. The
Scheduled
date of completion is in fiscal 2008-09.
The Blooming
Mill at Safem unit will also be commissioned in fiscal 2008-09 increasing the
capacity of rolled products from 0.45 MTPA to 0.90 MTPA.
NEW
PROJECTS
a)
Beneficiation Plant 20 MTPA
The
Company has taken up implementation of a beneficiation Plant with 20 MTPA feed
capacity to be completed in two phases of 10 MTPA each by March 2010 at an
estimated cost of Rs.8500.000 millions. This beneficiation plant facilitates to
use low Fe grade iron ore to improve the Fe content to +63% and to reduce the
Alumina and Silica content. On commissioning of this project the Company stands
to benefit in reducing the procurement of cost of iron ore and also achieve the
lower fuel consumption in iron making due to lower Alumina content and higher
productivity.
b) New
Captive Power Plant 300 MW
The
Company currently operates captive power plant of 230 MW at Vijayanagar Works.
When the Crude steel capacity goes upto 10 MTPA at Vijayanagar by 2010, the
power requirement goes up by 600 MW. While 300 MW power plant is under implementation
as a part of expansion project, the balance 300 MW power plant is now proposed
to be taken up for implementation at an estimated cost of Rs.8250.000 millions
to be commissioned by October 2010.
OTHER
DEVELOPMENTS
a)
Scheme of Amalgamation
The
Company has acquired Southern Iron £ Steel Company Limited (SISCOL) through a
Scheme of Amalgamation sanctioned by the Hon'ble Bombay High Court vide its
order dated 22nd February, 2008 withappointed date as 1st April, 2007. The
erstwhile SISCOL was having a 0.3 MTPA long products plant which was expanded
to 1 MTPA (completed in the Quarter 4 fiscal 2007-08). This acquisition added 1
MTPA of production capacity thus making JSW Steel the 2nd largest Steel Company
in the private sector in India. While this unit has a rolling capacity of 0.45
MTPA, a new Blooming Mill is now being set up to increase the rolling capacity
from 0.45 MTPA to 0.90 MTPA in fiscal 2008-09.
b)
Steel Plant at Georgia, Eastern Europe
The
Company has been continuously striving for expanding its global footprint in
overseas markets. The Company has identified an opportunity for setting up a
Steel Plant for manufacturing of TMT Bars (Rebars) for
catering
to the growing needs of construction industry in Eastern European countries
mainly in Georgia, Armenia,
Azerbaijan,
Russia and former CIS Countries. It is proposed to invest to the extent of 49%
of Equity of Geo Steel LLC (GSL), a company incorporated under 11 Annual Report
2007-2008
the
laws of Georgia which is setting, up a Steel Rolling Mill facility in Georgia
initially with a capacity of 175,000 tonnes per annum (tpa) Rebars. Thejplant
is being designed to produce Rebars through hot rolling process by using
Constructional Steel Billets produced through Electric Arc Furnace Route. The
estimated project cost of USD 42 Million is proposed to be financed by way of
debt of USD, 28 Million and the balance through equity of USD 14 Million. Out
of the total equity capital of USD 14 million required for setting up of the
project, upto 49% i.e. USD 6.86 million will be invested by the Company.
c)
Rohne and Utkal Coal Blocks
The
Company has been allocated Coking Coal Block in Rohne in Jharkhand with a share
of 69% and Thermal Coal Block in Utkal in Orissa with a share .of 11%.to.meet
the captive requirements. The Company has entered into a joint venture
agreement with other two partners to develop the'Rohne Coking Coal Block
allotted in Jharkhand. This 'Coal Block will be developed in the joint venture
company, namely Rohne Coal Company Private'Limited. This joint venture company
initiated topographical survey work and environmental and sociological data
collection for preparation of Environmental Management' Plan. The Company has
also signed another agreement with other 4 partners to develop the Thermal Coal
Block at Utkal at Orissa. A draft project report for developing this mine with
a 15 MTPA capacity has been prepared and the preparation of Environmental
Management Plan is in progress.
d) Pre
Engineered Building Solutions
The
Company is considering^ foray into Pre Engineered Building solutions business
(PEBs). Pre Engineered steel
buildings
will be designed and fabricated at the plant to be set up. - The Company's
entry into this fast growing business segment will give synergy by using the
Company's products such as steel plates, galvanized, colour coated and
galvalume products as raw materials and at the same time will provide an
opportunity for the Company to enter into high end solutions using steel
products as the base,
SUBSIDIARIES
A. Indian
Subsidiaries: •
i) JSW
Bengal Steel Limited '
JSW
Bengal Steel Limited has been incorporated
with an authorized capital of Rs.1000.000 millions with a proposed
shareholding of 89% by the Company and balance.11% by West Bengal Industrial
Development Corporation (WBIDC), West Bengal Mineral Development and Trading
Corporation Limited (WBMDTC). The Company has originally planned to set,up a 3
MTPA Integrated Steel Plant in West Bengal in Phase I and expand it to 10 MTPA
in suitable phases over a period of 12 years. After evaluating various options,
it is found attractive to set up a 6
MTPA
plant upto slab stage at once considering the economies of scale and the cost
benefit analysis. The project is proposed to be implemented in Special Economic
Zone (SEZ) since a significant portion of the output from the plant is intended
to be exported. The application to implement the project in a SEZ has been
cleared by Government of West Bengal Screening Committee and has been forwarded
to Central Government. The Company has
got possession of land required for implementing this project and is in the
process of signing Coal Raising and Supply Agreement with Government of West
Bengal for getting Coal - from .certain Coal Blocks allotted to West Bengal,
Government. The project will be taken up for implementation during the fiscal
2008-09 with or without modification in the scope of project taking into
account the current prevailing volatile conditions in
financial
markets in achieving the financial closure.
ii)
JSW Jharkhand Steel Limited
JSW
Jharkhand Steel Limited was incorporated on 7 June 2007. with the main objects
to set up a 10 MTPA Integrated Iron and Steel Plant and 800 MW Greenfield
Thermal Power Plant and related. facilities in the State of Jharkhand, at an investment
of Rs. 35,0000.000 millions in phases. The Company had signed an MOU with
Jharkhand Government during November 2005.
The Company has been allotted a prospecting licence.for iron ore on 1388
acres of land in the State of Jharkhand. A site has been identified for which
application has been made to the Government. for allotment. The project will be
taken up for implementation once land acquisition is complete
and
the raw material linkages are established.
iii)
JSW Steel Processing Centres Limited
JSW
Steel Processing Centres Limited was incorporated 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.
The Service Centre is expected to be operational in first quarter of fiscal
2008-09.
B.
Overseas Subsidiaries
JSW
Steel (Netherlands) B.V.
The
Company has formed a wholly owned subsidiarSy in Amsterdam, Netherlands known
as JSW Steel (Netherlands) B.V. with the object to acquire and make investment
in all steel related and steel allied businesses.and in mining assets relating
to steel and power businesses. This Company acquired Plate and Pipe mill in USA
and iron ore mining concessions in Chile through the following step-down
subsidiaries.
JSW
Steel Holding (USA) Inc. and its subsidiary
JSW
Steel (USA) Inc.
JSW
Steel (Netherlands) B.V. has acquired three
companies in US i.e. Jindal United Steel Corporation (JUSC) having 1.2
Mn Net ton Slab feeding capacity, Saw Pipes USA (SPU) having 0.55 Mn Net ton
Pipe producing capacity and Jindal Enterprises LLC (JE) having 0.55 Mn Net ton
Double Jointing capacity along with 0.35 Mn Net ton of Coating capacity, all of
which are located in Baytown, Texas. The location of the business is in the
heart of the US oil and gas industry located in the Gulf of Mexico. Ithas a
principal competitive advantage due to its own Barge unloading facility and
excellent Rail and truck transportation facilities. JSW Steel, (Netherlands)
B.V. has formed one US subsidiary company namely JSW Steel Holding (USA) Inc.
who in turn has formed its'own subsidiary
namely
JSW Steel (USA) inc. for the purpose of this acquisition. All the above three
acquired entities were merged with JSW Steel (USA) inc. as part of acquisition
closing. The above acquisition of these three companies were completed on 5th
November, 2007. JSW Steel Holding (USA) Inc. has acquired 90% stake in the
merged entity with 10% stake being kept by the erstwhile shareholder. With this
acquisition, the Company will be able to 7 make significant value addition on
surplus slabs available at its manufacturing facilities in India by supplying
the same to its acquired US operation for further value addition in the form of
piates and pipes.
JSW Steel
(UK) Limited and its subsidiaries
Argent
independent Steel (Holdings) Limited and
JSW
Steel Service Centre (UK) Limited
The
Company acquired a 100% stake in UK based Service Centre, JSW Steel Service
Centre (UK) Limited (formerly, Argent Independent .Steel Limited) through JSW
Steel (UK) Limited and Argent Independent Steel (Holdings) Limited. The Company
has slitting and blanking facilities to cater to specific customer
requirements.
c) JSW
Panama Holding Corporation and Chilean
subsidiaries
namely Inversiones Erousrt Limitada,
Santa
Fe Mining and Santa Fe Puerto S.A.
JSW
Steel (Netherlands) B.V. has acquired 70% stake in Santa Fe Mining on 30th
January, 2008 through other step down subsidiaries. Santa Fe Mining has
interests on 124 mining concessions in 4 mines (i.e. Bellavista, Cuca, Rebote
and Vinita) along with right to use the existing port and also has right to use
new port to be constructed for which maritime concession application is already
filed. These mining concessions are divided into two projects called Bellavista
and Vinita. Bellavista project consists of mines namely Bellavista, Cuca and
Rebote. The mines are at a distance of about 70-90 Km from the port and are
connected to port through well-developed roads. Railway tracks are also available
which would require some up-gradation. The mines will be developed over a
period of next 36 months to 20 MTPA with the initial capacity of 4 MTPA.
Besides, Inversiones Eroush Limitada, Chile owns another 8 mining concessions
in mines namely Daniel and Catalina in Chile.
JSW
Steel Natural Resources Limited and its
subsidiary
viz. JSW Steel Natural Resources
Mozambique
Limitada (JSWNRML)
JSW
Natural Resources Limited was incorporated in Mauritius to pursue acquiring
coal assets/other assets relating to steel business.JSW Natural Resources
Limited has formed a wholly owned subsidiary in Mozambique to acquire Coal
assets and to develop Coal mines in Mozambique. The Company had entered into
MoUs to acquire four concessions with a Mozambican party (through its
constituted attorney), who has been allotted prospecting and exploration
licence for coal and associated minerals. The Company has started geological
survey, due diligence and other
Formalities
to start the mining activities on some of these concessions in Mozambique in
fiscal 2008-09. A Memorandum of Understanding (MoU) has also been entered into
on 14th November, 2007 between JSWNRML and CCFB (Companhia dos Caminhos de
Ferro da Beira. SARL- Railway Company of Beira) for the transportation of Coal from
Tete to Beira.
PRESS
RELEASE:
JSW
STEEL REDUCES PRICES TO CONTAIN INFLATION
In order to sustain India’s
growth momentum, stimulate consumption and encourage investment it is necessary
to contain inflation within tolerable levels. As a support to the Governments
initiative in combating inflation, JSW Steel as a responsible corporate citizen
announces a price reduction of four thousand rupees on price list as on first
of May, 2008. This includes Hot Rolled, Cold Rolled and Galvanised products.
This price reduction will be
applicable for steel consumption and sales in India except for term contracts
and material consumed for further value added exports.
Mr. Sajjan Jindal, VC and MD of
JSW Steel said, “ Keeping the overall national economic interest in mind
and as a measure of support to the Government they have decided to reduce the
prices, in spite of severe cost increase on import raw materials for them.”
With these measures JSW Steel is
confident that the common man and ultimate user will get a major relief from
inflationary pressures.
About Subject
Subject
Company 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. Subject 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
PRESS RELEASE
JSW STEEL INAUGURATES
BRANDED SHOWROOM IN GORAKHPUR
Mr.
Rakesh Chauhan – DGM – Sales and Marketing, JSW Steel, inaugurated JSW Shoppe,
an exclusive steel retail outlet in Gorakhpur today through their authorized
dealer M/s. Ashoka Steel Tubes. This exclusive showroom is JSW Steel’s second
in Uttar Pradesh.
JSW
Shoppe will have on display and sale all the products of JSW Steel ranging from
hot rolled to colour coated steels along with long products. It aims to provide
a unique experience of buying steel products through a branded distribution
channel. At this inauguration, Mr. Chauhan said, "The concept of the
shoppe originates from the fact that they want customers to get the right
quality of product at the right price and at the right place. Shoppe is an
effort to create a customer friendly ambience. This interface with the customer
will result in creating a strong relationship based on trust and reliability
with JSW steel."
This
novel marketing initiative will go a long way in creating brand awareness about
JSW Steel’s superior product quality and will ensure that the customers get
full value for money.
JSW
Steel has two shoppes at Hubli, two at Bangalore - Karnataka, one at Jaipur –
Rajasthan, –two in Maharashtra (Kolhapur, Pune), one at Ahmedabad in Gujarat
and one at Ghaziabad in Uttar Pradesh. The Company plans to open around 50 such
shoppes in a short span and subsequently will have a pan-India presence with
over 600 branded outlets.
JSW
steel is in the midst of an exponential growth. Its steel plants in Karnataka
and Tamil Nadu together produce around 4.8 million tonnes of steel per annum.
By October 2008, the capacity will increase to around 8 million tonnes per
annum. With steel plants coming up in West Bengal and Jharkhand, JSW Steel aims
to produce 32 million tonnes of steel by the year 2020.
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.45.77 |
|
UK Pound |
1 |
Rs.80.67 |
|
Euro |
1 |
Rs.64.20 |
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. |
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 |
|