MIRA
INFORM REPORT
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Report Date : |
05.04.2012 |
IDENTIFICATION DETAILS
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Name : |
JSW STEEL LIMITED (w.e.f. 16.06.2005) |
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Formerly Known
As : |
JINDAL VIJAYNAGAR STEEL LIMITED |
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Registered
Office : |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
15.03.1994 |
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Com. Reg. No.: |
11-152925 |
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Capital
Investment / Paid-up Capital : |
Rs. 5631.800
Millions |
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CIN No.: [Company Identification
No.] |
L27102MH1994PLC152925 |
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TAN No.: [Tax Deduction &
Collection Account No.] |
MUMJ05285A / PNEJ05353F |
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PAN No.: [Permanent Account No.] |
AAACJ4323N / AACT4323N |
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Legal Form : |
A Public Limited Liability
Company. The Company's Shares are Listed on the Stock Exchanges |
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Line of Business
: |
Manufacturer,
Exporter and Importer of Steel Plates. |
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No. of Employees
: |
8925
(Approximately) |
RATING & COMMENTS
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MIRA’s Rating : |
B (31) |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Maximum Credit Limit : |
USD 690000000 |
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Status : |
Deteriorating |
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Payment Behaviour : |
Slow |
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Litigation : |
Exists |
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Comments : |
Subject is a well established and reputed company having deteriorating
track. Recently the activities of the company are deteriorating day by day.
However, trade relations are reported as fair. Business is active. Payments
are reported to be slow. The company can be considered for business dealings with some caution. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
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Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
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Registered/ Regional Office: |
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Tel. No.: |
91-22-23513000 / 23520980 / 43437199 / 43437262 |
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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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Corporate Office 1: |
Victoria House, 2nd Floor, Pandurang Budhkar Marg, Lower Parel,
Mumbai – 400013, Maharashtra, India |
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Tel No. : |
91-22-24927000/ 43437800 |
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Email : |
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Corporate Office 2: |
The Enclave, Maratha
Udhog Bhavan, New |
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Tel No. : |
91-22-6783 8000 |
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Fax No. : |
91-22-2432 0740 |
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Factory 1 : |
Vijayanagar
Works P.O. Vidyanagar, Toranagallu Village, Sandur Taluk,
District Bellary- 583 275, Karnataka, India |
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Tel. No.: |
91-8395-250120 to 30 |
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Fax No.: |
91-8395-250138 / 250665 |
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Factory 2 : |
Vasind
Works Shahapur Taluk, District Thane- 421 604, Maharashtra,
India |
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Tel. No.: |
91-2527-220022 to 025 |
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Fax No.: |
91-2527-220020 / 84 / 92 |
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Factory 3 : |
Tarapur
Works MIDC Boisar, District Thane– 401 506, Maharashtra, India |
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Tel. No.: |
91-2525-270147 / 270149 |
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Fax No.: |
91-2525-270148 |
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Factory 4 : |
Pottaneri, M. Kalipatti Village, Mecheri Post, Mettur Taluk,
District Salem- 636 453, Tamilnadu, India |
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Tel. No.: |
91-4298-278400 to 404 |
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Fax No.: |
91-4298-278618 |
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Branches : |
Located at :-
· Karnataka · Tamilnadu · Andhra Pradesh ·
·
· Madhya Pradesh |
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Additional Main Office : |
Located at: · Mumbai ·
· Rajasthan |
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Overseas Office : |
JSW Steel (USA) Inc.
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DIRECTORS
(AS ON 31.03.2011)
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Name : |
Mrs. Savitri Devi Jindal |
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Designation : |
Chairperson |
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Name : |
Mr. Sajjan Jindal |
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Designation : |
Vice Chairman and Managing Director |
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Name : |
Mr. Seshagiri Rao M.V.S. |
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Designation : |
Joint Managing Director and Group Chief
Finance Officer |
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Date of Birth/Age : |
15.01.1958 |
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Qualification : |
AICWA, LCS, CAIIB, Diploma in Business Finance. |
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Date of Appointment : |
06.04.1999 |
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Name : |
Dr. Vinod Nowal |
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Designation : |
Director and Chief Finance Officer |
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Name : |
Mr. Jayant Acharya |
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Designation : |
Director (Commercial and Marketing) |
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Date of Birth/Age : |
25.01.1963 |
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Qualification : |
BE (Chemical), M. Sc (Physics), MBA
(Marketing). |
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Date of Appointment : |
07.05.2009 |
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Name : |
Mr. M. Maheshwar Rao, IAS |
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Designation : |
Nominee Director of KSIIDC |
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Name : |
Mr. Yasushi Kurokawa |
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Designation : |
Nominee Director of JFE Steel Corporation,
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Name : |
Mrs. Zarin Dariwala |
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Designation : |
Nominee Director of ICICI Bank Limited |
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Name : |
Dr. S K Gupta |
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Designation : |
Director |
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Name : |
Mr. Anthony Paul Pedder |
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Designation : |
Director |
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Name : |
Dr. Vijay Kelkar |
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Designation : |
Director |
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Name : |
Mr. Uday M Chitale |
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Designation : |
Director |
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Name : |
Mr. Sudipto Sarkar |
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Designation : |
Director |
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Date of Birth/Age : |
21.03.1946 |
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Qualification : |
B.Sc. (Maths - Hons), BA (Law Tripos), LLM
(International Law), MA (Law) Barrister, Gray’s |
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Date of Appointment : |
09.05.2005 |
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Name : |
Mr. Kannan Vijayaraghavan |
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Designation : |
Director |
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Date of Birth/Age : |
04.05.1959 |
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Qualification : |
Fellow Member of the |
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Date of Appointment : |
16.06.2008 |
KEY EXECUTIVES
|
Name : |
Lancy
Varghese |
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Designation : |
Company
Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.12.2011
|
Category of Shareholders |
No. of Shares |
% of No. of
Shares |
|
(A) Shareholding of Promoter and Promoter Group |
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|
3971563 |
1.78 |
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|
907952 |
0.41 |
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73560612 |
32.97 |
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5704612 |
2.56 |
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(B) Public Shareholding |
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583123 |
0.26 |
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9862290 |
4.48 |
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1237500 |
0.56 |
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45139387 |
20.51 |
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|
10671791 |
4.85 |
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15464798 |
7.03 |
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5326149 |
2.42 |
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3224516 |
1.47 |
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41201389 |
18.73 |
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40712 |
0.02 |
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3134992 |
1.42 |
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(C) Shares held by Custodians and against which Depository Receipts
have been issued |
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-- |
-- |
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3085814 |
1.38 |
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Total |
223117200 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
Individual shareholders holding nominal
share capital up to Rs.0.100 million BUSINESS DETAILS
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Line of Business : |
Manufacturer, Exporter
and Importer of Steel Plates. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
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Particulars |
Unit |
Installed Capacity |
Actual Production |
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Ms Slabs |
Tonnes |
6800000 |
5042838 |
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Hot Rolled
Coils/Steel Plated/Sheets |
Tonnes |
6700000 |
4787770 |
|
Hot Rolled Steel
Plates |
Tonnes |
320000 |
151739 |
|
Cold Rolled Coils
/ Sheet |
Tonnes |
1825000 |
1669884 |
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Galvanised/Galvalum
Coils / Sheet |
Tonnes |
900000 |
908498 |
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Colour Coating Coils/Sheets |
Tonnes |
232000 |
159583 |
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Steel Billets And Bloom |
Tonnes |
2500000 |
1384107 |
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Long Rolled Products |
Tonnes |
2200000 |
1134004 |
NOTE:
1. Licensed capacity is not applicable in view of the Company’s
products having been delicensed as per the licensing policy of the Government
of India.
2. Installed capacity is as certified by the management and
accepted by auditors, being a technical matter.
3. Production of Galvanized/ Galvalume Coils/ Sheets
includes 85381 tonnes from third parties on a job work basis.
GENERAL INFORMATION
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No. of Employees : |
8925
(Approximately) |
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Bankers : |
· Allahabad Bank ·
Bank of ·
Bank of · ICICI Bank Limited · IDBI Bank Limited · Indian Bank · Indian Overseas Bank · Punjab National Bank ·
State Bank of ·
State Bank of ·
State Bank of ·
State Bank of ·
Union Bank of ·
Vijaya Bank |
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Facilities : |
NOTES: 1.
Terms of Redemption ·
The 7.10% Redeemable Secured NCDs of Rs.1.000
million each aggregating to Rs.5000.000 Millions are redeemable as under: - Rs.2500.000 millions on
15.04.2011. - Rs.2500.000 millions on
18.04.2011. ·
The 10.10% Redeemable Secured NCDs of
Rs.1.000 million each aggregating to Rs.10000.000 Millions are partly
redeemable in 16 quarterly installments of Rs.312.500 millions each from
04.02.2014 to 04.11.2017 and partly redeemable in 16 quarterly installments
of Rs.312.500 millions each from 15.06.2014 to 15.03.2018. ·
The 10.20% Redeemable Secured NCDs of
Rs.1.000 million each aggregating Rs.409.500 millions are redeemable in 21
quarterly installments of Rs.19.500 Millions each from 15.04.2011 to
15.04.2016. ·
The 10.20% Redeemable Secured NCDs of
Rs.1.000 million each aggregating Rs.314.100 millions are redeemable in 15
quarterly installments of Rs.20.900 Millions each from 01.07.2011 to
01.01.2015. ·
The 10.25% Redeemable Secured NCDs of
Rs.1.000 million each aggregating Rs.5000.000 millions are redeemable in 3
equal annual installments of Rs.1666.700 Millions each from 17.02.2016 to
17.02.2018. ·
The 10.60% Redeemable Secured NCDs of
Rs.1.000 million each aggregating Rs.3500.000 millions are partly redeemable
in 8 half yearly installments of Rs.218.750 Millions each from 02.01.2016 to
02.07.2019 and partly redeemable in 8 half yearly installments of Rs.218.750
Millions each from 02.08.2016 to 02.02.2020. 2.
Details of Security ·
The 7.10% NCDs aggregating
Rs.5000.000 millions are secured by pari passu first charge by way of legal
mortgage on land situated in the State of ·
The 10.10% NCDs aggregating
Rs.10000.000 millions are secured/ to be secured by: - pari passu first charge by way of legal mortgage on all
immovable properties both present and future located at Tarapur Works and
Vasind Works in the State of Maharashtra. - pari passu first charge on all immovable properties and
movable assets both present and future located at Salem Works in the State of
Tamilnadu. ·
The 10.20% NCDs aggregating
Rs.409.500 millions are secured by: - pari passu first
charge by way of legal mortgage on a flat situated at Mumbai, in the State of
- pari passu first charge by way of equitable mortgage of
the Company’s immovable properties relating to the 100MW and 130MW Power
Plants at Toranagallu village in the State of Karnataka. ·
The 10.20% NCDs aggregating
Rs.314.100 millions are secured by: - First charge on land situated in the State of - Second charge on Fixed Assets situated at Salem Works in
the state of Tamil Nadu. ·
The 10.25% NCDs aggregating
Rs.5000.000 millions are secured by way of mortgage in respect of all
immovable and movable properties both present and future located at Tarapur
Works and Vasind works in the State of ·
The 10.60% NCDs aggregating Rs.3500.000 millions
are secured/to be secured by: - pari passu first charge by way of legal mortgage on land situated in
the State of - pari passu first charge by way of equitable mortgage on fixed assets
of the new 5 mtpa Hot Strip Mill at Toranagallu village in the State of
Karnataka. ·
The Rupee Term Loans from Banks aggregating
Rs.753.800 millions, Rupee Term Loan from financial Institution aggregating
Rs.38.200 millions and Foreign Currency Term Loans from Banks aggregating
Rs.2366.500 millions are secured by: - pari passu first charge by way of equitable mortgage in respect of
immovable properties of Upstream Division situated at Vaddu, Kurekuppe and
Toranagallu villages in the State of Karnataka and - pari passu first charge by way of hypothecation of movable
properties of Upstream Division both present and future excluding inventories
and book debts. ·
The Rupee Term Loans from banks aggregating
Rs.200.900 millions and Foreign Currency Term Loans from banks aggregating
Rs.1857.700 millions are secured by a first charge supported by an
equitable/registered Mortgage of movable and immovable properties and assets
situated at Salem Works in the state of Tamil Nadu and a second pan passu
charge on the current assets at Salem Works. ·
Rupee Term Loans from Banks/Foreign Currency Term
Loan from Bank are secured/to be secured as under: - Rupee Term Loans aggregating Rs.2717.500 millions and Foreign
Currency Term Loans aggregating Rs.2902.300 millions by exclusive first charge
by way of equitable mortgage in respect of all movable and immovable
properties of Cold Rolling Mill Complex at Toranagallu village in the State
of - Rupee Term Loans aggregating Rs.297.000 millions and Foreign
Currency Term Loans aggregating Rs.3195.000 millions by exclusive first
charge by way of equitable mortgage in respect of all movable and immovable
properties both present and future of 2.8 mtpa expansion project at
Toranagallu village, in the State of Karnataka. - Foreign Currency Term Loans aggregating Rs.7813.800 millions by
exclusive first charge by way of equitable mortgage in respect of all movable
and immovable properties of Hot Strips Mill at Toranagallu village in the
State of Karnataka. - Rupee Term Loans aggregating Rs.233.500 millions by pari passu first
charge by way of legal mortgage in respect of all movable and immovable
properties both present and future, first charge/Assignment of all the assets
and first charge on all the Bank Accounts of 3.2 mtpa expansion project at
Toranagallu village in the State of Karnataka. - Rupee Term Loan aggregating Rs.150.000 millions by exclusive first
mortgage and charge on all movable and immovable properties both present and
future, and first charge on the Bank Accounts of the 300 MW Power Plant - CPP
IV at Toranagallu village in the State of Karnataka. - Rupee Term Loan aggregating Rs.2950.000 millions by first mortgage
and charge of all immovable properties both present and future, and a first
charge by way of hypothecation of all movable properties both present and
future of the Beneficiation Plant (6 x 500 tph) and Pellet Plant (4.2 mtpa)
at Toranagallu village in the State of Karnataka. ·
Foreign Currency Term Loans from Bank aggregating
Rs.122.500 millions are secured by way of equitable mortgage in respect of
all immovable and movable properties both present and future located at
Tarapur Works and Vasind Works, in the State of ·
Rupee Term Loan from Financial Institution
aggregating Rs.477.000 millions are secured by exclusive first charge by way
of hypothecation of Bombardier Challenger 300 aircraft. ·
Working capital loans aggregating Rs.3342.400
millions by: - pari passu first charge by way of hypothecation of Stocks of Raw
Materials, Finished Goods, Work-in-Progress, Consumable Stores and Spare and
Book Debts / Receivables of the
Company, both present and future. - pari passu second charge on movable properties and immovable
properties forming part of the Fixed/Blocked assets of the Company, both
present and future except such properties as may be specifically excluded. ·
Certain Working capital loans are collaterally
secured by pari passu second charge on the immovable property of a third
party. 3. Out of the
above, Foreign Currency Term Loan from Banks aggregating Rs.122.500 millions
along with interest there on are personally guaranteed by the Vice Chairman
and Managing Director of the Company.
NOTE: The FCCB’s are convertible into Equity Shares at the
option of the bondholders at any time on or after 7 August, 2007 and prior to
the close of business on 21 June, 2012 at Rs.40.28 = 1 US $. |
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Banking
Relations : |
-- |
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Auditors : |
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|
Name : |
Deloitte Haskins
and Sells Chartered
Accountants |
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Joint Ventures : |
· Vijayanagar Minerals Private Limited · Rohne Coal Company Private Limited · Gourangdih Coal Limited · Toshiba JSW Turbine and Generator Private Limited ·
MJSJ Coal Limited · JSW Severfield Structures Limited Address: 302, Naman Centre, Plot No. C-31, G-Block, Bandra Kurla Complex,
Bharat Nagar, Mumbai, |
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Subsidiaries: |
·
JSW Steel ( ·
JSW Steel Service Centre ( · Argent Independent Steel (Holdings) Limited · JSW Natural Resources Limited · JSW Natural Resources Mozambique Limited ·
JSW Steel ( ·
JSW Steel Holding ( ·
JSW Steel ( · Periama Holdings LLC (West Virginia LLC) (w.e.f. 03.05.2010) · Planck Holdings LLC (w.e.f. 03.05.2010) · Rolling S Augering LLC (w.e.f. 03.05.2010) · Carreta Minerals LLC (w.e.f. 03.05.2010) · Periama Handling LLC (w.e.f. 03.05.2010) · Lower Hutchinson Minerals LLC (w.e.f. 03.05.2010) · Purest Energy LLC (w.e.f. 03.05.2010) · Meadow Creek Minerals LLC (w.e.f. 03.05.2010) · Keenan Minerals LLC (w.e.f. 03.05.2010) · Hutchinson Minerals LLC (w.e.f. 03.05.2010) · RC Minerals LLC (w.e.f. 03.05.2010) · Peace Leasing LLC (w.e.f. 03.05.2010) · Prime Coal LLC · JSW Panama Holdings Corporation · Inversiones Eurosh Limited ·
· Santa Fe Puerto S.A. · JSW Steel Processing Centers Limited · JSW Jharkhand Steel Limited · JSW Bengal Steel Limited · Barbil Benefication Company Limited ·
JSW Building Systems Limited ·
JSW Natural Resources India Limited ·
JSW ADMS Carvo Limited |
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Associates: |
·
Jindal Praxair Oxygen Company Private Limited. ·
JSW Energy ( ·
Ispat Industries Limited (w.e.f. 24.01.2011) |
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|
Enterprises over
which Key Management Personnel and Relatives of such personnel exercise
significant influences : |
· JSW Energy Limited · JSL Limited · JSW Realty and Infrastructure Private Limited · Jindal Saw Limited · Jindal Steel and Power Limited · Jindal South West Holdings Limited · JSOFT Solutions Limited · Jindal Industries Limited · JSW Energy (Ratnagiri) Limited · JSW Cement Limited · JSW Jaigarh Port Limited · Nalwa Sons and Investments Limited · JSW Investments Private Limited · Reynold Traders Private Limited · Raj West Power Limited · JSW Power Trading Company Limited · JSW Aluminium Limited · P Jindal Foundation · JSW Infrastructure and Logistic Limited · South West Port Limited · JSW Techno Projects Management Limited · Sapphire Technologies Limited |
CAPITAL STRUCTURE
(AS ON 31.03.2011)
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 |
|
|
|
|
|
|
223117200 |
Equity shares |
Rs.10/-each |
Rs. 2231.200
millions |
|
|
Add: Equity shares Forfeited |
|
Rs. 610.300
millions |
|
279034907 |
10%
Cumulative Redeemable Preference
Shares |
Rs.10/-each |
Rs. 2790.300
millions |
|
|
|
|
|
|
|
Total |
|
Rs. 5631.800 Millions |
NOTES:
· 7,70,27,049 equity shares are allotted 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.
· 3085814 equity shares represent the shares underlying outstanding Global Depository Receipts (GDRs). Each GDR represents 1 underlying equity share.
·
The 10% Cumulative Redeemable Preference Shares
are redeemable at par in four equal quarterly installments commencing 15th
December, 2017.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
5631.800 |
5271.100 |
5370.100 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Share Warrants |
5293.800 |
0.000 |
0.000 |
|
|
4] Reserves & Surplus |
161327.100 |
91792.300 |
74222.400 |
|
|
5] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
172252.700 |
97063.400 |
79592.500 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
76758.200 |
89875.100 |
82146.100 |
|
|
2] Unsecured Loans |
42755.200 |
25975.900 |
30580.200 |
|
|
TOTAL BORROWING |
119513.400 |
115851.000 |
112726.300 |
|
|
DEFERRED TAX LIABILITIES |
23170.400 |
19649.500 |
14211.600 |
|
|
|
|
|
|
|
|
TOTAL |
314936.500 |
232563.900 |
206530.400 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
211021.500 |
168661.400 |
130864.400 |
|
|
Capital work-in-progress |
61690.500 |
66842.700 |
92420.600 |
|
|
|
|
|
|
|
|
INVESTMENT |
40988.100 |
17683.500 |
12501.100 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
41384.100
|
25857.700
|
20514.200
|
|
|
Sundry Debtors |
8386.500
|
5632.500
|
3981.400
|
|
|
Cash & Bank Balances |
18868.800
|
2871.100
|
4199.600
|
|
|
Other Current Assets |
0.000
|
0.000
|
172.400
|
|
|
Loans & Advances |
33244.300
|
21233.900
|
17448.800
|
|
Total
Current Assets |
101883.700
|
55595.200
|
46316.400 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
20306.500
|
15893.500
|
16444.300
|
|
|
Other Current Liabilities |
76366.800
|
57683.200
|
58318.500
|
|
|
Provisions |
3974.000
|
2642.200
|
809.300
|
|
Total
Current Liabilities |
100647.300
|
76218.900
|
75572.100
|
|
|
Net Current Assets |
1236.400
|
(20623.700)
|
(29255.700)
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
314936.500 |
232563.900 |
206530.400 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Net Turnover |
231632.400 |
182024.800 |
140012.500 |
|
|
|
Other Income |
2826.400 |
5290.800 |
2595.600 |
|
|
|
TOTAL (A) |
234458.800 |
187315.600 |
142608.100 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Materials |
142541.000 |
104606.800 |
84501.000 |
|
|
|
Employees’ Remuneration and Benefits |
5344.700 |
3652.000 |
2887.500 |
|
|
|
Manufacturing and Other Expenses |
38011.400 |
31037.000 |
24292.900 |
|
|
|
Exceptional Items |
0.000 |
0.000 |
7901.300 |
|
|
|
TOTAL (B) |
185897.100 |
139295.800 |
119582.700 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
48561.700 |
48019.800 |
23025.400 |
|
|
|
|
|
|
|
|
|
Less |
NET FINANCE
CHARGES (D) |
6951.800 |
8589.200 |
7972.500 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
41609.900 |
39430.600 |
15052.900 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/ AMORTISATION (F) |
13787.100 |
11234.100 |
8276.600 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
27822.800 |
28196.500 |
6776.300 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
7716.100 |
7969.100 |
2191.300 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
20106.700 |
20227.400 |
4585.000 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
53277.800 |
38831.500 |
35058.600 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to Debenture Redemption Reserve |
0.000 |
1250.000 |
(204.500) |
|
|
|
Transfer to Capital Redemption reserve |
0.000 |
99.000 |
0.000 |
|
|
|
Dividend on Preference Shares |
279.000 |
289.200 |
289.900 |
|
|
|
Proposed Final Dividend on Equity Shares |
2733.200 |
1777.000 |
187.100 |
|
|
|
Corporate Dividend Tax |
488.700 |
343.100 |
81.100 |
|
|
|
Transfer to General Reserve |
42000.000 |
2022.800 |
458.500 |
|
|
BALANCE CARRIED
TO THE B/S |
27883.600 |
53277.800 |
38831.500 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Exports |
33282.500 |
26837.800 |
41131.500 |
|
|
|
|
386.700 |
602.100 |
485.800 |
|
|
|
Interest Income |
457.600 |
280.300 |
329.700 |
|
|
TOTAL EARNINGS |
34126.800 |
27720.200 |
41947.000 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Capital Goods |
14829.900 |
19358.500 |
16040.000 |
|
|
|
Raw Materials |
87326.400 |
63337.200 |
60321.900 |
|
|
|
Stores and Spare Parts |
2784.400 |
1728.200 |
1825.600 |
|
|
TOTAL IMPORTS |
104940.700 |
84423.900 |
78187.500 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
|
|
|
|
|
|
Basic |
97.17 |
106.34 |
22.70 |
|
|
|
Diluted |
96.33 |
105.94 |
22.70 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 1st
Quarter |
30.09.2011 2nd Quarter
|
31.12.2011 3rd
Quarter |
|
|
|
|
|
|
Net Sales |
70693.800 |
76321.300 |
78764.800 |
|
Total Expenditure |
56754.900 |
63360.200 |
66238.600 |
|
PBIDT (Excl OI) |
13938.900 |
12961.100 |
12526.200 |
|
Other Income |
168.800 |
368.400 |
7.600 |
|
Operating Profit |
14107.700 |
13329.500 |
12533.800 |
|
Interest |
1966.100 |
2343.800 |
2818.400 |
|
Exceptional Items |
0.000 |
(5129.800) |
(5001.100) |
|
PBDT |
12141.600 |
5855.900 |
4714.300 |
|
Depreciation |
3878.900 |
4038.800 |
444.200 |
|
Profit Before Tax |
8262.700 |
1817.100 |
270.100 |
|
Tax |
2479.500 |
545.900 |
(1412.300) |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
5783.200 |
1271.200 |
1682.400 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.00 |
|
Other Adjustments |
0.000 |
0.000 |
0.00 |
|
Net Profit |
5783.200 |
1271.200 |
1682.400 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
8.58
|
10.80
|
3.22 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
12.01
|
15.49
|
4.84 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
8.89
|
12.57
|
3.82 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.16
|
0.29
|
0.09 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.28
|
1.98
|
2.37 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.01
|
0.73
|
0.61 |
LOCAL AGENCY FURTHER INFORMATION
FINANCIAL RESULTS
The Company achieved a favourable product mix during the year, mainly
due to increase in rolled products, with the rolling of most of the available
cast products. This helped in reducing the sale of semis (cast products) in the
overall product mix to around 6%(vis-a-vis 22% in last year) which in turn
helped in improvement in blended sales realization compared to that of with
previous year.
The Company achieved a volume growth over previous year of 7% in crude
steel production during the current year. It had achieved crude steel
production of 6.427 Million tones (the overall production was 6.506 Million
tonnes, considering trial run production from the expansion project) and volume
of sales of 6.099 million tonnes.
The interest cost has come down due to prepayment and repayment of high
cost debt out of proceeds of equity investment by strategic investor JFE
Corporation,
The Gross Turnover and Net Turnover for the year stood at Rs.251307.600
millions and Rs.231632.400 millions, respectively, showing a growth of 29% and
27% over the previous year mainly driven by growth in volumes and improved
product mix and increase in blended sales realizations.
The EBIDTA for the year was Rs.48561.700 millions and EBIDTA margin for
the year was20.8%. The Company posted PAT of Rs.20106.700 millions.
As per the Consolidated Financial Statements, the Gross Turnover, Net
Turnover, EBIDTA and PAT of the Company are Rs.258678.000 millions,
Rs.239002.400 millions, Rs.49467.700 millions and Rs.17539.800 millions,
respectively. The PAT on consolidated basis was lower than the standalone net
profit, due to losses in overseas subsidiaries attributable to slow recovery
from global meltdown.
SCHEME OF
ARRANGEMENT AND AMALGAMATION
The Company concluded the Scheme of Arrangement and Amalgamation
approved by the Hon’ble High Courts of Bombay and Karnataka vide order dated
3rd September, 2004 and 20th January, 2005 respectively with the merger of
steel business of Jindal Iron and Steel Company Limited with the Company.
The merger, undertaken to unleash value for shareholders, has created
The Directors are optimistic that this merged entity possesses
attractive economies of scale, cost, gearing and synergy straddling a whole
value chain; this will enable the Company to compete successfully across
periods, segments and geographies.
PROJECTS AND EXPANSION PLANS
The status of progress made on various Projects of the Company was as
follows:
VIJAYANAGAR WORKS
(a) Projects commissioned during FY 2010-11
·
The implementation of the state-of-the art new Hot Strip
Mill with a capacity of 5mtpa was taken up in two phases. Phase-I with a
capacity of 3.5 mtpa was successfully commissioned on March 28, 2010. After
successful trial runs, the Mill commenced commercial operations on April 10,
2010. Phase II implementation is progressing well.
·
The 3.2 mtpa expansion project at Vijayanagar Works
is progressing in full swing. The overall crude steel capacity of the Company
will go up to 11 mtpa on completion of this project. The following facilities
were commissioned / part commissioned during the year:
- Ladle
Heating Furnace-3 and 4, Converter-3 and 4 and Caster-3 and 4 were
commissioned in phases by March 2011.
- Sinter plant
3 (5.75 mtpa capacity) was commissioned in February 2011 – the largest
such facility in
- 300MW
captive power plant (CPP 3) was commissioned in September 2010.
- Two of the
four batteries (
- First phase
of the 20 mtpa beneficiation plant was commissioned in phases in April
2011.
(b) Projects under Progress
Following projects are under different stages of implementation:
·
The balance units of 3.2 mtpa expansion project
viz, Blast Furnace 4, Lime plant, Water pipeline will be commissioned by June
2011.
·
Second phase (capacity of 1.5 mtpa) of the new HSM,
taking the rolling capacity of this facility to 5 mtpa by September 2012.
·
Pellet plant 2 (capacity 4.2 mtpa) expected to be
commenced by June 2011.
·
Second phase of the Beneficiation plant by November
2011, taking the total capacity of beneficiation to 20 mtpa.
·
300 MW Captive Power Plant (CPP4) at Vijayanagar,
to be commissioned by December 2011.
(c) Projects proposed
New Cold Rolling Mill Complex
The Company has decided to set-up a new Cold Rolling Mill Complex of 2.3
mtpa in two phases at its Vijayanagar Works, considering the growing demand
from consumer durable and automobile segment for CRCA products. The proposed
complex will have 2.3 mtpa of Picklingcum coupled tandem Cold Rolling Mill, 1.9
mtpa (two lines of 0.95 mtpa each) of State of the art Continuous Annealing
lines and 0.4 mtpa of Galvanising cum Galvannealing line.
Total investment is about Rs.40250.00 millions, and is proposed to be
funded by a debt equity ratio of 2:1. The target date of completion is 01
2013-14 for Phase-I and 012014-15 for Phase-II.
Augmenting crude steel capacity from 10 mtpa to 12 mtpa at Vijayanagar
works
The Company has made assessment of the existing facilities at
Vijayanagar Works and based on the Endings, it has been decided to increase the
capacity by an additional 2mtpa.
The proposed project cost is about Rs.26950.000 millions and is to be
financed out of cash accruals of Rs.9450.000 millions and the balance by debt
and is expected to be commissioned by June 2013.
(a) Projects commissioned during FY 2010-11
Phase I of the Blooming Mill (capacity 0.25 mtpa) was commissioned in
September 2010.
(b) Projects under progress
Phase II of the Blooming Mill (capacity 0.25 mtpa) is in progress and
the same is expected to be commissioned by September 2011. On completion of phase
II the Company will have matching rolling capacity for cast product at Salem
unit.
VASIND WORKS
Projects under progress
·
Railway siding project is in an advanced stage of
completion.
·
Project RLNG to replace expensive fuel usage, is
expected to be completed by June 2011.
SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
INDIAN SUBSIDIARIES
·
JSW
Bengal Steel Limited (JSW Bengal), its Subsidiaries Barbil Beneficiation
Company Limited, JSW Natural Resources India Limited and its Associate JSW
Energy (Bengal) Limited (JSWEBL)
JSW Bengal Steel Limited was incorporated for setting up an Integrated
Steel Plant in the State of
JSW Bengal is planning to invest Rs.160000.000 millions in phase I of
this project. The Company is drawing up plans for achieving financial closure.
·
JSW
Jharkhand Steel Limited
JSW Jharkhand Steel Limited was incorporated for setting up a steel
plant in the State of
·
JSW Steel
Processing Centres Limited (JSWSPCL)
JSWSPCL is a 100% subsidiary of the Company. The subsidiary company was
set up as Steel Service Centre consisting of HR/ CR Slitter and cut to length
facility with annual slitting capacity of 5,00,000 tonnes. The Company
processed 4,97,112 tonnes of steel during the FY 2010-11, as compared to
3,04,718 tonnes in the previous year.
During the previous year, JSWSPCL purchased 3 Slitting Lines and 1 Multi
Strand Blanking lines from its fellow subsidiary JSW Steel Service Centre (UK)
Limited.
·
JSW
Building Systems Limited (JSWBSL)
JSWBSL, a 100% subsidiary, was incorporated with its main object as to
design, make, prepare, develop, create, alter, replace, repair pre-fabricated
building systems and technologies.
OVERSEAS SUBSIDIARIES
·
JSW Steel (
JSW Netherlands is a holding Company for
·
JSW Steel
Holding (USA) Inc. and its subsidiaries viz. JSW Steel (USA) Inc – Plate and
Pipe Mill Operation and Periama Holdings LLC and its subsidiaries - West
Virginia, USA based Coal Mining Operation.
Plate and Pipe Mill operation
For the year 2010-11, the Subsidiary Company produced 119,887 net tonnes
of Plates and42,148 net tonnes of Pipes and achieved capacity utilization of
11% and 8% respectively. Considering the signs of improvement in
Coal Mining operation
During the previous year, JSW Steel Holding (USA) Inc. acquired 100%
equity interest in West virginia, USA based coal mining concessions along with
barge load out facility.
Out of the total seven mines acquired, one mine is currently
operational. For other mines, process of getting statutory clearance/permits is
at an advanced stage of approval.
It is expected to produce approximately 0.50 million tonnes of Coal in
the FY 2011-12subject to receipt of requisite permits, which is planned to be
ramped up to 3 million tonnes in over 3 years.
·
JSW Steel
(UK) Limited and its Subsidiaries namely Argent Independent Steel (Holdings)
Limited and JSW Steel Service Centre (UK) Limited
While the European economy is still struggling to come out of
recessionary condition, there is growth of Auto and Consumer Durables Industry
in India and there is a logical growth of 'Steel Stockholding and Service
Centre Industry' in India. In these circumstances, Plant and Machinery of UK
Service Centre consisting of 3 Slitting Lines and 1 Multi Strand Blanking lines
was sold to JSW Steel Processing Centres Limited, a subsidiary of the Company
for relocation and use in India.
·
JSW
Panama Holdings Corporation and its Chilean subsidiaries namely Inversiones
Eurosh Limited (lEL), Santa Fe Mining (SFM) and Santa Fe Puerto S.A (SFP)
During the financial year 2010-11, SFM commenced the contract mining
activity through dry process route with a capacity of 1 mtpa. The first
shipment of Iron ore concentrate was made in April 2011. Work on putting up a
wet beneficiation plant of 2.5 mtpa is currently being examined and necessary
statutory and environmental approvals are being applied for.
SFP, a subsidiary of SFM received maritime concession in April 2011 for
developing acape size port in North Caldera. The environmental and other
regulatory approvals are applied for and are in progress.
·
JSW Natural Resources Limited (JSWNRL) and its
Subsidiaries JSW Natural Resources Mozambique Limited (JSWNRML), JSW ADMS
Carvao Limited
JSW Natural Resources Limited was incorporated in Mauritius to pursue
acquiring coal assets/other assets relating to steel business.
JSW Natural Resources Limited formed a wholly owned subsidiary - JSW
Natural Resources Mozambique Limited in Mozambique to acquire Coal assets and
engaging in the business of prospecting and exploration of Coal, Iron Ore and
Manganese.
In one of the mining concession where coal is found, Company has started
with detailed drilling activities to establish JORC compliant reserve
estimates.
JSW Natural Resources Mozambique Limited a incorporated JSW ADMS Carvao
Lda on October 8,2010 wherein 85% stake is owned by JSWNRML and remaining 15%
stake is with minority shareholder. It has a mining concession in
JOINT VENTURE COMPANIES
·
Geo Steel
LLC
Georgia based Joint Venture Geo Steel LLC in which the Company holds 49%
equity through JSW Steel (Netherlands) B.V, has set up a steel rolling mill in
Georgia with annual production capacity of 175,000 tonnes across 13.50 hectares
in the industrial area of Rustavi in Georgia. The plant became operational
during year 2009-10. It is designed to produce rebar through hot rolling
process by using steel billets produced through the Electric Arc Furnace Route.
Geo Steel produced 85,449 tonnes of Rebar and 95,901 tonnes of Billets
during the FY2010-11.
·
Rohne
Coal Company Private Limited
The Company holds 49% equity in Rohne Coal Company Private Limited. (JSW
group is holding 69.01%, including that of the Company), which is a Joint
Venture with three other partners (two partners from outside the Group). Forest
clearance and Mining lease proposal is being pursued with Government
authorities.
·
MJSJ Coal
Limited
In terms of the Joint Venture Agreement to develop Utkal - A and Gopal
Prasad (West)thermal coal block in Orissa, the Company agreed to participate in
the 11% equity of newly formed MJSJ Coal Limited, Orissa along with four other
partners. The Government of India has decided to allot 1,522 acres of Gopal
Prasad west area to MJSJ Coal Limited. Mahanadi Coalfields Limited, a Public
sector company holds 60% of the equity. Land acquisition process is under
progress.
·
Gourangdih
Coal Limited
Gourangdih Coal Limited (GCL) is a 50:50 Joint Venture between JSW Steel
Limited and Himachal EMTA Power Corporation Limited (HEPL) incorporated for
development and mining of coal from Gourangdih ABC Thermal coal block in the
state of West Bengal. It is currently progressing on pre mining activities.
·
Toshiba
JSW Turbine and Generator Private Limited
Toshiba JSW Turbine and Generator Private Limited has been incorporated
with a shareholding of 75% by Toshiba Corporation Limited, Japan, 20% by JSW
Energy Limited and 5% by the Company, to design, manufacture, marketing and
maintenance services of mid to large sized Supercritical Steam Turbines and
Generators of size 500 MW to 1,000 MW.
Trial production of blades started on March 2011. The construction and
erection of main plant equipment erection is progressing well.
·
Vijayanagar Minerals Private Limited (VMPL)
During the financial year 2010-11, VMPL supplied 2.20 million tonnes of
·
JSW
Severfield Structures Limited and its Subsidiary JSW Structural Metal Decking
Limited
JSW Severfield Structures Limited (JSSL) has set up a
JSW Structural Metal Decking Limited (JSWSMD), a subsidiary company of
JSSL is engaged in business of the design, roll forming and installation of
structural metal decking and ancillaries, including shear connectors, for
construction projects with a total plant capacity of 10,000 tonnes per annum at
Bellary in the State of Karnataka and started its commercial production in
October 2010.
ASSOCIATE COMPANIES
·
Jindal
Praxair Oxygen Company Private Limited (JPOCPL)
The oxygen plants of JPOCPL have been working satisfactorily primarily
to meet the requirement of the steel plant operations at Vijayanagar Works.
During the financial year 2010-11, the combined production of the oxygen plant
module #1 and module # 2 of JPOCPL was: Gaseous oxygen - 1003.17 million Nm3;
Gaseous nitrogen - 361.26 million Nm3; Liquid oxygen - 23.06 million Nm3;
Liquid nitrogen - 30.25 million Nm3 and Argon - 11.01 millionNm3.
· Ispat Industries Limited (IIL)
IIL re-started its operations in December 2010. It produced 0.729
million tonnes of HR Coils during the Quarter January to March 2011, and
capacity utilization achieved was 88%.The volume of sales including downstream
products improved to 0.712 million tonnes with an EBIDTA of Rs.4070.000
millions. Rejecting the synergies of acquisition, IIL turned into a profit
making Company reporting a net profit of Rs.700.000 millions.
The Board of Directors have taken note of the matters to which the
Auditors of IIL have drawn attention in their report, regarding overdue sundry
debtors amounting to Rs.5716.000 millions, non-reconciliation of credit
balances of Rs.1186.900 millions and raw material in-transit amounting to
Rs.1048.300 millions.
The Board of Directors have also taken note of the confidence expressed
by the management of IIL confirming that these matters will not have any
material impact on the financial statements of IIL and relying on this, no
provisioning has been considered necessary by the Board in respect of these
items.
ACQUISITION OF MAJORITY STAKE IN ISPAT INDUSTRIES LIMITED
Ispat Industries Limited (IIL), with a production capacity of 3.3 mtpa,
is inherently seen as a pioneering company that brought new technologies into
India like the Twin Shell Con Arc furnace and Thin Slab Casting facility. The
Twin Shell Con Arc furnace provides the steel making facility with a great
amount of flexibility. Along with the state-of-the-art Compact Strip Mill,
Ispat also has an in-house jetty, with a cargo handling capacity of 12mtpa,
which gives it an added advantage.
IIL has been incurring losses constrained by inadequate working capital,
lack of integration and expensive debt and has been looking for a strategic
investor to carry forward the business and growth of the Company. The Company
in turn has been looking at growth opportunities/expansions to reach 34 mtpa by
2020 and has plans to further expand steelmaking capacity in West Bengal and
Jharkhand with 10 mtpa capacity each. Any green field project has a gestation
period of about 3-4 years. While many green field projects have been announced
and MOUs executed, however due to challenges towards land acquisition,
environmental and various other Government clearances, not many Green field
projects are expected to get into operations in the near future.
Considering the synergies and strategic fit, the Company initiated
dialogue with the management of IIL for strategic collaboration and arrived at
a proposal whereby the Company would acquire a majority stake in IIL.
Accordingly, in accordance with the Subscription cum Shareholders
Agreement dated December 20, 2010, the Company has acquired 1,08,66,49,874
equity shares of Ispat Industries Limited (IIL) on January 24, 2011 (aggregating
to 45.53% of the equity share capital of IIL as on date).
In view of the above, the Company also made a mandatory open offer for
the shares of IIL ("Open Offer”) under Regulations 10 and 12 of the Securities
and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997("Takeover Regulations"). The Open Offer was made to
the shareholders of IIL to acquire 64,72,38,458 Equity Shares of IIL of face
value of Rs.10 each representing in the aggregate 20% of the Fully Diluted
Equity Share Capital of IIL at a price of Rs.20.54(Rupees twenty and paise
fifty four only) per fully paid up equity share, which was further revised to
Rs.22.25 (Rupees twenty two and paise twenty five only) per fully paid up
equity share on March 24, 2011.
The Offer was open from March 17, 2011 to April 05, 2011 during which
time the Company received valid applications for sale of 8,99,40,890 equity
shares from the shareholders of IIL. The Company has accepted all such valid
applications and transferred the full amount of the purchase consideration to
the Special Account opened for payment to the successful applicants on April 8,
2011.
Post the above acquisition, the Company holds 1,17,65,90,764 shares
representing 49.30%of the total paid-up capital of Ispat Industries Limited as
on that date.
The Company has also put in a systematic plan to turnaround Ispat
Industries by developing synergies in the competitive steel market. The Company
will also facilitate sourcing of key inputs like coke, pellet and power which
will bring down the cost of production substantially. The Company's extensive
Pan India Network will provide IIL with better market penetration. By improving
the levels of efficiency and by rationalizing the sourcing of Iron ore lumps
and fines, the Company will reduce the cost of production.
AWARDS AND ACCOLADES
The Company and its employees received the following awards during the
year:
·
PM's Trophy Award: (Runners-up Trophy
known as Steel Minister's Trophy) for the best performing integrated Steel
Plant in the country for the year 2007-08, awarded on July 31, 2010.
·
National Award for Excellence in Energy Management
2010: Excellent Energy Efficient Unit Award 2010 at National Award for Excellence
in Energy Management 2010conducted by CII - Godrej GBC on September 1 and 2,
2010 at Chennai Trade Centre, Chennai.
·
National Sustainability Award 2010: First Prize
amongst the Integrated Steel Plants Category. The award was presented at 48th
National Metallurgists' Day Celebrations and 64th Annual Technical Meeting of
Indian Institute of Metals, on November 14, 2010 at
·
CII-EXIM Award 2010: "Commendation
Certificate for Significant Achievement" for Business Excellence by
Confederation of Indian Industries, on November 14, 2010 at
·
National Award for Excellence in Water Management
2010: Excellent Water Efficient Unit Award 2010 at National Award for
Excellence in Water Management 2010 conducted by CII, on December 10 and 11,
2010 at Hyderabad.
·
IMC Ramkrishna Bajaj National Quality Award 2010: Commendation
Certificate in the manufacturing category on March 16, 2011 at Mumbai.
·
Global HR Excellence Award 2010 for Innovative HR
Practices at Asia Pacific HRM Congress held on September 3, 2010 at Bangalore.
·
Best Practices in Talent Management Award at Talent 2010
hosted by Osney Media Limited on November 10 and 11, 2010 at
·
"Institution Building Award" at Global HR Excellence
Awards World HR hosted by World HR Congress on February 11, 2011 at Taj Lands
End, Mumbai.
MANAGEMENT
DISCUSSION AND ANALYSIS
ECONOMY AND STEEL
SECTOR
GLOBAL ECONOMY
OVERVIEW
The global economy
expanded by 5.0% in 2010 as against 0.5% in 2009. This recovery was
characterized by:
·
Moderate growth in
advanced economies, spurred by stimulus measures. Private consumption which
fell sharply during the crisis picked up.
·
Growth in emerging and
developing economies remained robust buoyed by resurgent capital inflows due to
abundant global liquidity and strong domestic demand.
·
Global liquidity
improved, credit spreads narrowed, equity and debt capital markets opening up
enabling several corporations to raise capital to meet funding requirements.
Challenges
Pockets of
vulnerability persisted; real-estate markets and household incomes remained
weak in some major advanced economies. Volatility and uncertainty re-emerged in
Euro area.
Concerns about banking
sector losses and fiscal sustainability triggered by crisis in
The turmoil in
mid-2010 in the Euro zone led to a spike in global risk aversion and scaling
back of capital allocation by fund managers to emerging markets. However,
during the recent bout of turbulence, the financial stress was limited
primarily to the periphery of the Euro area. Quantitative easing and stimulus
packages by several countries created huge liquidity in financial markets and
Central banks in emerging economies faced the challenge of high inflation and
started pursuing a hawkish monetary policy by raising reserve ratios and hiking
policy rates.
Natural disasters
across the globe posed a significant challenge for global economic growth.
Floods, earthquakes and drought among others took a massive toll on human life,
resulting in wealth erosion.
Estimates for
2011
The global economy
is on a recovery path while Advanced economies are expected to pickup growth
momentum. The emerging economies will consolidate with moderate growth as the
focus is shifted to contain inflation rather then pursuing growth.
Advanced economies: The growth is projected
at 2.6% in 2012. The new fiscal packages passed in late 2010 in the
Emerging and developing economies: In 2011, growth in emerging and developing economies is expected to be
at 6.5%, a modest drop from 7.30% registered in 2010.Developing
GLOBAL STEEL
INDUSTRY
The CY 2010 could
be rated as the year of 'broad based recovery', in terms of economic revival,
steel production, trade and consumption, except the threat of sovereign
defaults in parts of
The Global Steel
Industry reached a new high in 2010 after a disastrous 2008. The global demand
growth was at 13% after a steep fall in 2008.
The steel demand
in advanced economies recovered, stimulated from social spending by
governments, the demand in rest of the world, including
The contribution
of emerging economies to the growth in world steel production and consumption
is evident as stated hereunder:
|
World crude
steel production |
: +184 MnT (+15%
YoY) with advanced market economies contributing ~45% while emerging market
economies excl. China at 26% and China at 29%. |
|
World finished
steel consumption |
: +149 MnT
(+13.1% YoY) with advanced market economies contributing 41% while emerging
market economies excl. China at 40% and China at 19%. |
Surplus
production from China and advanced economies was absorbed by growing imports
from rest of the emerging world.
Production
In 2010, global steel
production grew 15%, to 1,414 MnT. The growth is significant considering the
huge downslide in steel production and consumption in the last quarter of2008
(due to the global economic crisis). The growth in 2010 exceeded the previous
record set in 2007. Interestingly, the most significant rise in steel
production in 2010 was in those geographies where it had contracted the maximum
in 2008 and 2009, namely North
INDIAN ECONOMY
The Indian
economy was one of the fastest growing economies to recover from the economic
crisis, registering a second year of accelerated growth. The Indian economy
grew at a robust rate of 8.50% in 2010-11 (8% in 2009-10).
Year 2010-11
witnessed fairly strong economic growth at 8.50% contributed by a strong growth
in agriculture at 6.60%. Industry witnessed a moderation in growth from at 8%
in2009-10 to 7.90% in 2010-11. Services continued to support the overall
economic growth contributing around 58% to overall GDP.
Private
consumption expenditure grew significantly in 2010-11, as a consequence of
increasing disposable income. The growth was 22% and 26% respectively in
consumer durables and passenger car segments.
In 2010-11,
exports grew 37% to USD 246 billion against USD 179 billion in 2009-10; imports
grew 22.6% to USD 351 billion in 2010-11 against USD 288 billion in 2009-10
-resulting in a trade deceit of USD 104 billion in 2010-11 against USD 109
billion in2009-10.
The confidence in
the Indian growth story was rejected by the record Full inflows into the
economy and the revival in investor confidence, helping the Indian stock
markets regain pre-crisis record levels. Net capital inflows increased to US$
36.7 bn as on March31, 2010; foreign exchange reserves grew by US$ 20 bn to US$
303.50 bn.
Challenges
Even though the
macro economic data displayed a strong performance, they were marked by
significant volatility, as evident from the data points and the sentiments
primarily driven by global clues and policy responses to moderate inflation.
The headline
inflation witnessed a relentless rise during the first half of 2010 and
remained in double digits for almost five months in 2010. The uneven monsoon
during 2009and domestic supply side constraints coupled with rising
international food grain prices pushed the prices of primary food articles,
manufactured goods and services.
As
Optimism for
2011-12
Given the strong
underlying growth momentum of the Indian economy, the outlook remains positive
with a sustained increase in service sector growth, normalizing agricultural
output due to expected favourable monsoon and robust private consumption.
Further, the substantial governmental outlays on building physical and social
infrastructure with thrust on PPP model of development is expected to lead to
sustained growth in industrial sector.
Economic activity
is expected to take a step forward towards a high growth trajectory with GDP
expected to grow at around 8.8% during 2011, as private demand gathers momentum
and supports overall growth process.
INDIAN STEEL
INDUSTRY
Snapshot
(2010-11)
OVERVIEW
The Indian steel
industry ranks fifth in the world with an estimated crude steel production of
63 MnT in FY 2010-11. Integrated steel producers contributed 55% of the total
crude steel production in 2010-11 and 45% by secondary producers.
During the period
from 1997-98 to 2000-01, steel production witnessed a marginal growth of 3%
CAGR. However, during 2001-02 to 2007-08, owing to a boom in the infrastructure
and auto mobile sectors, the industry witnessed a sharp turnaround and
registered a steep hike of 12% CAGR.
In 2010-11, steel
consumption grew at a healthy 10% from 59 MnT in 2009-10 to 66 MnT, owing to
strong demand from the infrastructure, construction, automobile, and industrial
sectors. Rising production capacities has reduced
Capacity addition
programme
According to estimates
by the Ministry of Steel, India is slated to add around 200 MnT of capacity
during the next decade, increasing overall crude steel capacity from 78 MnT
in2010-11 to around 280-290 MnT by 2020. Certain estimates suggest that
Per Capita
Consumption
i) Construction
and Infrastructure
Infrastructure is
the key to sustain
The Eleventh Five
Year Plan emphasized the importance of investment in infrastructure for
achieving a sustainable growth of 9 to 10% in GDP over the next decade. In this
context, it envisaged an increase in investment in physical infrastructure from
about 5%of GDP witnessed during the Tenth Plan to about 9% of GDP by 2011-12
(terminal year of the Eleventh Plan). This requires an estimated investment of
Rs.20561500.000 millions (US$ 514 bn) during the Eleventh Plan period as
compared to an estimated investment of Rs.8714450.000 millions (US$ 218 bn)
during the Tenth Plan period. An ambitious target of Rs.40992400.000 millions
(US$ 1,025 bn) has been set for the Twelfth Five Year Plan.
Investment in
infrastructure in the first 3 years of the Eleventh Plan Period well exceeded
the target of Rs.9811190.000 millions. The actual investment was
Rs.10658280.000 millions, which is 7.1% of the GDP and 9% over the planned
expenditure. Investments in the power, telecommunications, irrigation and Oil
and Gas pipelines have exceeded the target during this period.
The total bank
lending to infrastructure has gone up from 12.5% of total nonfood credit at
end-March 2010 to 14.4% by end-Feb, 2011, registering an impressive growth of
34%.
ii) Capital Goods
The development
of a strong and vibrant engineering and capital goods sector has been at the
core of the industrial strategy in
The engineering
sector employs about 2.6 million people directly, which accounts for 29% of the
total workforce engaged in the organized sector. The industry is largely
dominated by organized players, as the sector demands a high level of
investment.
The growing
industrialization and demand from the various infrastructure sectors synergized
the growth of the capital goods industry. The capital goods sector in the
country registered a growth of 15% in 2010-11.
Since 100% FDI is
permitted through the automatic route and considering the growth potential in
iii) Auto and
Auto Components
In
The brilliant
performance of the automotive sector is attributed to improving infrastructure,
excise duty reduction on passenger vehicles, easy financing of second hand
vehicles, access to finance in rural and semi-urban areas and the emergence of
·
·
Foreign players are
investing in the auto industry to create additional capacities.
·
Two- wheeler motorcycles
contribute 80% of the segment size.
·
Unlike in the
·
2/3rd of auto components
production is directly consumed by the OEM's.
·
·
·
·
·
·
India ranks 6th in
passenger vehicles in the world after China, Japan, Germany, Korea and Brazil.
Subsequent to
liberalization, the automobile sector has been aptly described as the 'sunrise
sector' of the Indian economy since it has witnessed tremendous growth. At
present 100% FDI is permissible under automatic route in this sector. The FDI
in slows into this sector is around US$ 6 billion during 2010-11 (Apr-Feb).
Since 1991, the number of manufacturing facilities in the automobile sector in
The domestic sales of auto industry
achieved a growth of 26% during 2010-11. Exports constitute around 12% of total
sales, registering a growth of 30% in 2010-11.
Challenges
Iron ore: Although,
Coking coal: A primary ingredient for steel making, is in short supply. It accounts
for only 12% of
Water: 1 tonne of steel production requires around 2.6 cubic metres of water,
depending upon recycling of efficiency levels. Accordingly, water as a
resource, is immensely significant for producing steel.
Logistics: Every 1 tonne of steel generates a traffic of
around 5 tonnes including the inbound and outbound material flow. Accordingly,
logistic infrastructure is of immense importance for the Indian steel sector
for a number of reasons 1) raw material needs to be met largely through
imports, 2) steel consumption is widely dispersed across the country involving transportation
of finished steel to consumption locations and 3) high logistics costs make
transportation a huge challenge. The Indian railway network is in adequate;
rakes are in short supply and port infrastructure is unable to cope up with
increased volumes. Increasing fuel prices makes road transport costs
prohibitive.
Expansion clearances: Land allocation, Mining leases, Environment
and Forest clearances and Infrastructure connectivity for
Product development:
Based on the recommendations of the Working
Group on Steel Industry, a new scheme i.e., Scheme for Promotion of R and D in
Iron and Steel Sector has begun with an outlay of Rs.1180.000 millions for the
11th Five Year plan. Under this scheme, R and D is being pursued in three major
areas namely:
i)
Development of
innovative/path breaking technologies.
ii)
Beneficiation and
utilizing of Indian iron ore fines and non-coking coal.
iii)
Improvement of steel
quality produced through induction furnace route.
Environment: Environment management and energy efficiency
constitute an important benchmark for assessing any sector or company
performance, both globally and in
Subject has taken steps in each of these
areas to remain competitive as explained in the following sections.
STEEL MAKING AT JSW
OPERATIONAL PERFORMANCE
Subject is
Performance, 2010-11
The Company registered an improved
performance in 2010-11, rejected in an increase in output - hot metal
production increased by 8.5%, crude steel production increased by 7.4%and HR
coil/sheets production increased by 41%. New facilities were commissioned,
capacity was added, new products and new customers were introduced.
At Vijayanagar, ore availability improved
from captive mines. As a result of stabilization of operations at HSM 2, the
volume of HR products has increased significantly. Salem Works emerged as the
largest special steels unit in
Vijayanagar Works
Vijayanagar Works, which is subject's
flagship unit has an annual capacity of 6.8mtpa which will increase to 10 mtpa
in Q1 2011-12. It is Karnataka's only integrated steel facility and is widely
acknowledged as a centre of steel making innovation.
This state-of-the-art facility is driven by a
simple philosophy: 'Question every convention, replace the often quoted 'why'
with the bolder 'why not''. The facility possesses contemporary technologies,
has produced 5.77 million tonnes of steel (5.04million tonnes flat and 0.73
million tonnes long) in 2010-11 and redefined a number of global steel manufacturing
benchmarks.
Different league
The Vijayanagar Works is the only landlocked
integrated steel plant in the world with an annual capacity of 6.8 mtpa (will
become 10 mtpa by Q1 2011-12). It is the largest steel manufacturing facility
at a single location in
Preparatory section
Considering declining raw material volumes
from any one vendor and deteriorating input quality, the beneficiation plant
will play a very critical role in upgrading the inferior iron ore to superior
feed for iron making units.
Highlights, 2010-11
·
Witnessed a 16% increase
of in-house manufactured coke from 2.32 million tones in 2009-10 to 2.70
million tonnes, reducing dependancy on high-cost imported coke.
·
Commissioned a pilot
coke oven facility to blend coal for sustaining coke quality and productivity.
·
Entered into long-term
arrangements for the sale of tar and sulphur.
·
Enhanced pellet
production by 14% from 3.17 million tonnes in 2009-10 to 3.62million tonnes in
2010-11.
·
Commissioned the
beneficiation plant for up-gradation of Iron ore quality.
·
Increased sinter
production by 13% from 4.62 million tonnes in 2009-10 to 5.24million tonnes;
sinter quality improved considerably.
Key initiatives, 2010-11
The preparatory segment undertook a number of
initiatives:
·
Optimized coal cake
charge in coke ovens 1 and 2, enhancing coke productivity.
·
Reduced coal cake
height, facilitating gas penetration throughout the cake; educed losses from
the cake's core (not completely coked), improving coke yield and coke quality.
·
Increased the semi
soft-coking coal content in the coal cakes to 10%; optimized coal blend by
using US coals for the first time.
·
Improved utilization of
coke oven gas commissioning of the gas mixing station.
·
Eliminated coke
screening at coke oven; thereby improving usable coke yield.
·
Altered the pellet
making process, which eliminated dust generation in the pellet making process -
a positive impact on the environment.
·
Improved feed quality
from beneficiation plants II and process modification, enhancing pellet
production.
·
Stabilized operations of
sinter plant 3, the largest such facility in India; achieved a capacity
utilization of 66% within six weeks of commissioning.
·
Ground and homogenized
the sinter unit feed to the right size.
·
Increased the quantum of
mill scale into the sinter feed; increased process waste volume in sinter,
reducing cost.
·
Revamped the ESP at the
sinter plant 1 for improved environment management.
Road ahead, 2011-12
·
Commission the second
phase of beneficiation plant II to process low grade fines to reduce costs.
·
Modernize beneficiation plant
I in line with the technology of beneficiation plant II, enabling it to upgrade
iron ore quality.
Iron making zone
This segment constitutes the largest cost
component in steel manufacture and its criticality lies in maximizing the plant
availability and optimizing costs.
Highlights, 2010-11
·
Witnessed a 11% increase
in Hot metal production from 5.57 million tonnes in2009-10 to 6.19 million
tonnes in 2010-11.
·
Commissioned a coal
briquetting unit to reduce hot metal production cost.
·
Registered the highest
metal production through BF 1 and 2 at 2.12 million tonnes (1.93 million tonnes
in 2009-10).
·
Stabilized BF3
operations and reported the highest monthly production of 9018TPD (March 2011),
which is higher than the rated capacity.
·
Achieved continuous tapping
practice at BF3 for 30 hours every day (both taps functional 24 hours and some
additional time of simultaneous operation); plant availability increased from
90% in 2009-10 to 97.5% in 2010-11.
·
Manufactured and
supplied more than 150,000 tonnes of API X grade steel (for pipe manufacturing)
to domestic and international markets.
Key initiatives, 2010-11
The team undertook a number of productivity
enhancement and cost optimization initiatives:
·
Sustained optimum
operation parameters in the corex units despite using coal from diverse
sources.
·
Reduced slag generation,
increased hot metal production and reduced the fuel rate.
·
Commissioned additional
bunkers in the stock house for material storage; increased the minimum stock
level in the bunkers which reduced fines generation when material was stored in
bunkers.
·
Installed one turbo
blower which will act as standby for both Blast furnace 1and 2.
·
Replaced the electrical
actuated system used for operating stoves in BF 1 with hydraulic systems; this
provided consistent air flow to the furnace and improved productivity.
·
Replayed thermo couples
(instruments used to measure the temperature in the furnace with a usable life
of around 6 months) in the stove dome with pyrometers(indefinite life),
improving furnace availability.
·
Upgraded the boiler
control in BF 1 from manual to PLC-based control, improving furnace
availability.
·
Replaced calibrated ore
with sinter in the furnace feed in BF 1 and 2, saving costs.
·
Developed an ore washing
facility in BF 3 which washed out the fines from the furnace feed, improving
furnace productivity.
·
Replaced single chamber
tuyere by double chamber tuyere in BF 3 - a buffer arrangement that eliminated
the need of furnace shutdowns/ process interruptions due to tuyere burning.
·
Altered the nut coke
screen in BF 3, enhancing net nut coke consumption and lowering the cost of
screening fines.
·
Reused blow water from
BF gear box, secondary cooling circuit of BF 3, in GCP, saving 500 m3/day of
make-up water; replaced industrial water with seepage water in slag granulation
unit which saved 200 m3/day of make-up water.
Road ahead, 2011-12
·
Convert the burden
distribution technology in BF 2, expected to improve productivity.
·
Measure the carbon
footprint of every product and process, a European regulation expected to
cascade to the Indian environment.
Steel melting shop
This zone converts hot metal to steel in
various grades, each grade with a specific chemical composition that will allow
its use for that particular application. Hence, in the steel melting shop,
better productivity (through higher plant availability) and value-addition
remain the team's focus.
Highlights, 2010-11
Produced 5.77 million tonnes of crude steel
from the SMS facilities, 11% higher than crude steel production in 2009-10;
reduced hot metal handling loss from 1.68% in April 2010 to 1.62% in March
2011.
Key initiatives, 2010-11
·
Enhanced converter
utilisation, increasing average heats per day from 70 in2009-10 to 73 in
2010-11.
·
Introduced lime fine
injection at the desulphurising station, reducing overall calcium carbide
consumption in the SMS facilities.
·
Installed the auto
scaring equipment which prevents oxygen contact with slab surface, minimising
scale formation and enhancing surface quality.
·
Developed 32 new grades
of value-added steel.
·
Improved gas recovery
from 0.168 Gcal/TIs in 2009-10 to an average 0.176Gcal/Tls, which was used in
generating power and other processes.
Road ahead, 2011-12
Commission SMS 2 with additional caster in Q1
2011-12.
Rolling section
These facilities add value to basic steel
forms to create user-convenient forms; product grades (thickness and sizes) are
customized to user applications; mill productivity is of prime importance to
product quality and organizational profitability.
Highlights, 2010-11
·
Recorded an increase in
the proportion of HR products in the HSM 1 –thinner gauge products accounted
for 32% of the production against 27% in 2009-10.
·
Rolled 17 new product
grades in HSM 1, catering to diverse user requirements.
·
Commissioned HSM 2 with
single furnace operations; achieved optimum capacity utilization with single
furnace; commissioned second furnace in
February 2011, taking the mill's operational capacity to 3.5 mtpa.
·
Received JFE Audit
Certification at HSM 2 for being perfectly suited for rolling auto grade steel.
·
Production at CRM
increased by 18% from 0.735 million tonnes in 2009-10 to 0.87million tonnes in
2010-11.
·
Commenced rolling
special grades for leading automobile OEMs namely Ford Motors, Ashok Leyland, M
and M and GM, among other leading brands; increased supplies to Hyundai Motors
significantly.
·
Developed new products,
namely, steel for welding electrodes and leaded grade steel (exported to the
·
Developed special TMT
bars (500 ys and 550 ys grade) suited for infrastructure projects.
·
Received the BIS
Certification for welding grade steel and for TMT rods, expected to strengthen
product acceptance for projects by institutional clients.
Key initiatives, 2010-11
Hot strip mill: The Company has two hot strip mills with a total cumulative label
capacity of 6.7 mtpa. The first unit is capable of rolling products up to 1,350
mm width while the second HSM unit is the widest mill in
·
Improved operation and
maintenance practices in HSM 1 strengthened plant utilization from 84.9% in
2009-10 to 86.08% in 2010-11; prime yield also improved from94.67% in 2009-10
to 95.66% in 2010-11, bringing non prime/NCO to the new benchmark level of
below 2.5%.
·
Developed 17 new grades
of steel to cater to diverse end user segments.
Cold rolling mill: The cold rolling mill is a state-of the-art
mill with contemporary technology, the first-of-its-kind in
·
Increased jumbo HR coils
feed in the cold roll mill; reducing material feeding time and improving mill
productivity.
·
Developed 13 new product
grades, namely low carbon grades (extra deep drawn and deep drawn), IF grades,
dual-phase trip steel (980 mpa strength) and HRPO 400/440, among others.
·
Improved checklist and
enhanced preventive care, resulting in better equipment utilization; from 83%
in 2009-10 to 86% in 2010-11.
·
Optimized automatic
sequence to increase productivity (from 121 tonnes per hour to about 129 tonnes
per hour) and safety.
·
Achieved crane centre
marking; eliminating operational delay and enhancing productivity.
·
Optimized packing cost
though unique initiatives in packing practices.
Wire rod mill: The Company's wire rod mill is the fastest of
its kind in India (drawing wire at 110m/sec); developing the largest product
range (5.5 mm -22 mm) and roviding the maximum yield. It is also the only mill
in
·
Formed 25 cross
functional teams within the wire rod mill for identifying and arresting minor
problem areas in the mill.
·
Reduced the overall gas
consumption 13.7% by altering furnace temperature inline with the product
thickness being rolled (low thickness products would imply low temperature in
the furnace); it also reduced scaling on the billet.
·
Reduced cobbles in the
final product by undertaking timely preventive maintenance of the equipment.
·
Reduced process wastage
due to cobble, by pushing the billet nearest to the furnace exit door back into
the furnace on the detection of a cobble.
Bar rod mill: This is the highest speed and widest range
bar rod mill in
·
Augmented cooling
facilities for converting the entire TMT production to 500grade TMT products
(earlier about 75% was the 415 grade TMT).
·
Developed the 50x50x6
angles and engineering round (4 sizes) for the first time- these products found
strong acceptance from user segments.
·
Adhered strictly to
preventive maintenance schedules and minor process improvements, increasing
yield from 93.5% in 2009-10 to about 96% in January 2011 and reducing the
conversion cost in the bar rod mill.
Road ahead, 2011-12
The road ahead for the rolling mills would be
towards productivity enhancement, developing superior product grades and
optimizing operational expenses:
In the hot rolling section, the team is
working to ramp up the operations of the recently commissioned HSM 2 unit which
will primarily roll high strength steel to be used in niche automotive
applications.
The blueprint for the cold rolling section
encompasses the following measures, enabling the Company to scale the value
chain and cater to quality-stringent customers:
·
Further enhance yield in
the mills.
·
Develop new product
grades namely, EDD and IF grades skin panel for catering to MNC automobile
clients.
·
Roll substrata sourced
from JFE facilities for meeting the requirements of global automotive players.
·
Establish an electrolyte
line for superior surface qualities.
·
Set up the new 2.3 mtpa
cold rolling mill which will roll high end products demanded by the automotive
sector, namely dual-phase steel and strip steel.
The wire rod mill expects to enhance capacity
utilization, which was impacted in2010-11 owing to the non-availability of
billets. The bar rod mill is working on up grading TMT production to 100% 500D
grade from the present 500 grade, strengthening realizations. As a branding
exercise, the team expects to add equipment which will engrave the JSW brand
and grade on the TMT product.
Achievements, 2010-11
Operations
·
Successfully stopped the
production of TMT bars in December 2009 which was replaced with special steels
completely.
·
Improved overall coke yield
from 69.18% in 2009-10 to 69.98% in 2010-11; reduced coke fine generation.
·
Achieved record coal
fines injection of 139 kg per tonne of hot metal in the blast furnace in
October 2010.
Products and
markets
·
Received product
approvals from leading global automotive giants.
·
Developed creep
resistant boiler grade steel (T-11).
·
Received approval for
products developed for Indian Railways.
Key Initiative, 2010-11
·
Modified the waste heat boiler
of the coke oven plant which allowed 10% more waste heat to be recovered for
onward power generation.
·
Improved the stamp
charging technique, increasing the BF coke percentage chargeable to the blast
furnace from 90% in 2009-10 to 91.5% in 2010-11.
·
Developed the Basket
Test equipment to predict coke quality from coal blends, resulting in superior
coke manufacture.
·
Introduced a chemical
binder in the sinter (when using large quantity of ore super fines as input);
used granulated steel slag as the hearth layer in the sinter plant. These
improvements enhanced sinter productivity from 2,800 tonnes per day in 03
2010-11 to about 3,100 tonnes per day in 04 2010-11.
·
Increased the proportion
of sinter in the blast furnace input from an average 57% in 2009-10 to an
average 62% in 2010-11, reducing the use of coke and calibrated ore in the
blast furnace which optimized production costs.
·
Increased the injection
of coal fines and dust to optimize costs.
·
Injected chemical fluxes
with coal fines in the blast furnace, reducing silicavariations in the hot
metal and improving productivity in the steel making shop, a first for the
Indian Steel Industry.
·
Blended bed-recovered
coal (coal spillage at various plant locations) with coal fines for injection
as PCI in the blast furnace.
·
Developed a unique
air-conditioner which performed very well in dust-prone areas- example, hot
metal zones, crane cabins, resulting in improved working conditions and
productivity.
·
Developed in-house, a
unique burden probe mechanism that checked temperature and air flow at the top
of the blast furnace (essential for monitoring complete combustion of the blast
furnace burden) at a third of the prevailing cost.
·
Optimized processes with
minimal variations; modified process parameters in the ladle furnace, reducing
oxygen in steel by 3 ppm and nitrogen by 8 ppm. This helped develop a larger
number of grades and guarantee steel with an oxygen content <12 ppm(an
international benchmark).
·
Modified the billet
caster to cast longer billets suited for the Vijayanagar wire rod and bar
mills. This initiative minimized billet shortfall in Vijayanagar and what was
sold as billets was now marketed as rolled products.
·
Increased mill scale
utilization in the sinter manufacturing process as a cost effective replacement
for iron ore without impacting product quality.
Products and clients
Developed more than 100 product grades for
diverse customer requirements, largely focused on the automotive and
auto-component sectors; each grade being customized for a specific customer.
Road ahead, 2011-12
·
Implement modifications
in the waste heat recovery boilers at the coke ovens for cost-effective power
generation.
·
Design a simplified test
for determining coke fluidity from coal blends, which is expected to reduce testing
time.
·
Work with automotive
OEMs to develop high-strength steel for leaf springs, reducing steel
consumption and increasing fuel consumption per vehicle.
·
Accelerate product
approvals from OEMs.
·
Work closely to develop
automotive gear steels for application which are being imported.
·
Implement automated
testing facility for steel bar, thereby avoiding operator bias for OEM.
Environment management at Salem
·
Replaced two-thirds of
river sand used in the blast furnace runner with EOF slagfines, facilitating
waste recycling.
·
Introduced flue dust
from the blast furnace as an additive in cement manufacture, which improved
cement productivity for the cement company and dispose a process waste for the
steel maker.
Downstream units focused on brand building
Subject’s Tarapur and Vasind facilities focus
on value-addition, providing a wide product range (HR Pickled and Oiled coils,
HR plates, CRCA products, galvanised, plain and corrugated products and
colour-coated products) for multi-sectoral applications.
Subject possesses
Highlights, 2010-11
·
Renamed Jindal Vishwas
as JSW Vishwas and Jindal Vishwas Plus as JSW Vishwas Plus to strengthen the
JSW recall.
·
Achieved the highest
plant load factor of 102.56% (December 2010) in the newly commissioned 30 MW
power plant at Tarapur.
·
Increased the production
of thinner gauges (< 0.20 mm) at Tarapur for export.
·
Launched Pragati, a new
product with lower zinc and paint coating for roofing application; this product
was launched in West Bengal, Maharashtra and
·
Conducted 1,000 hours of
salt-spray test on the anti-finger print galvalume product.
Key initiatives, 2010-11
'Where change is constant' - This phrase fits
best for the company team, where the labeled capacity is only the start to great
achievements. The ability to see things differently and draw more from
equipment is what sets JSW apart from other players in the Indian steel
industry. In keeping with this passion, the teams operating the downstream
units undertooka number of improvement/modification initiatives resulting in
superior products, productivity and profitability.
Tarapur
·
Replaced DC drives with
AC drives in one galvanising line, saving 4 units of power per tonne and
reducing breakdowns.
·
Increased handling
capacity at the entry section of the two colour-coated lines from 10 tonnes per
coil to 25 tonnes, resulting into productivity and yield improvement.
·
Commissioned the
Trapezoidal Profile facility.
·
Introduced the Eloguard
chemical in the water used in the boiler, reducing DM water consumption in the
power plant by 40%.
·
Commissioned the Ammonia
Injection system to ensure the SPM level from stack remains within the
permissible incase of non-functioning of the ESP - an important environment
management initiative.
·
Commissioned a dry fog
system in the coal and ash handling system to control coal and ash dust
emissions.
·
Installed islanding
relay at the 11KV grid incoming feeder; completed relay setting with proper
protection coordination for the successful islanding of the power plant against
disturbances in the 132KV state power grid.
Vasind
·
Commissioned the 1220 mm
wide sophisticated Senfung machine, which provides multiple proxies to
galvanised sheets. The equipment is equipped with flying-type profile shear,
hydraulic system with variable speed and automatic roller type stacker
arrangement which can cut up to 16 ft length sheets. This equipment generates
scratch-free sheets with uniform profile and precise length accuracy.
·
Installed and designed a
plate length measuring device in the hot rolling plate mill, resulting in
precise finished plate lengths with minimal rejections.
·
Installed permanent
electro-magnets in two cranes in the hot rolling plate mill for secure material
lifting, enhancing the safety quotient in the plant.
·
Commissioned new belt
wrapper assembly in the galvanising line which reduced the scratches in the
tail end of the coil, maintained coil tension right throughout winding,
resulting in superior surface quality and improved yield of galvanised
products.
·
Developed and installed
an auto soot blowing system in a waste heat recovery boiler for superior
operations.
·
Replaced existing
electrical drives with energy efficient variants.
·
Replaced flat belts for
pulley drives leading to energy savings; replaced conventional acid pumps with
energy-efficient variants.
·
Established an
environment control laboratory to check ambient air, stack and in-plant
sampling, drinking water and effluents.
Road map, 2011-12
The downstream unit teams will draw up blueprints
comprising, capacity addition and modifications to existing facility, enhancing
value from downstream units.
Tarapur
·
Upgrade the TM2 mill for
higher production (output of 5000 t/ month CR > 0.25mm); install Thyristor
drive in the mill, entry tension reel, delivery tension reel and pay-off reel.
·
Modify the flux line in
the 'heat to coat' furnace continuous coating line, boosting production by
around 2,900 tonnes a month.
·
Install Regenarating
Re-generative Thermal Oxidiser in the colour coating line(CCL1) to reduce LPG
consumption.
·
Enhance the furnace
capacity of CSD1 from 12 TPH (full hearth) to 16.5 TPH, permitting the team to
develop new product grades.
·
Install a Mangalorian
Tile Profile machine to eliminate the need for external job working.
Vasind
·
Commission the railway
siding at Vasind.
·
Commissioning of Natural
gas project (from LPG/Furnace oil to natural gas); the gas pipeline is being
routed by GAIL. The fuel conversion will be at the HR plate mill(furnace oil to
natural gas) and the galvanising facility (from LPG to natural gas).
·
Initiate product
diversification, adding value-added produces to the product basket namely,
galvanised products (EDD grades) for automobile and appliances and
colour-coated sheets for structural application and appliances.
·
Modification of CG1 for
manufacturing EDD grade products to be value-added in new coating lines.
OUTLOOK
On macro scale, 2011 could be viewed as the
year continuing to witness economic recovery, revival, resurgence, challenge of
surging commodity prices, inflation and sovereign crisis. International
Monetary Fund - IMF has projected Global Economic growth rate to marginally
slow down from 5% in 2010 to 4.4% in quantitative terms the world output is
estimated to grow by US $ 5.7 trillion. Advanced world as well as the Emerging
and the Developing world are slated to witness a marginal reduction in economic
growth rates at 2.4% and 6.5% respectively.
The year commenced with an unprecedented
wrath of the natural calamities including the historic 3/11 catastrophe in
Steel Industries having strong linkages to
the profile and growth rates of global economic expansion, is slated to show
growth both in production and demand. However there is expected to be a
marginal imbalance between the production rate vis-a-vis demand.
World Steel Association has projected the
World Steel Demand growing by 77-MnT / 6% to1360-MnT, while China is expected
to continue its Global dominance at 44% while growing at5% to 605-MnT. Advanced
World is slated to witness demand growth at 5.3% while the Emerging and
Developing world at 6.3%.
Indian Steel will see capacity additions to
meet the accelerating domestic demand led by rising investments and consumption
supplemented by growing export opportunities for value-added engineering
products. As per the projection of world steel, Indian steel demand is
estimated to grow on a strong footage @ 13.3% in CY 2011, while witnessing a
growth of10.6% in production to 66-MnT in FY 2010-11.
Major challenges for Global Steel Industry in
near term shall be sustainability of demand under rising inflationary pressure
while cost pressures stueezing the margins. On the other hand, the bigger
challenge going forward for the Global Steel Producers shall be to explore
innovative technologies and processes for iron and steel making adapting
alternate energy solutions with improved energy efficiency and low emission
intensity.
FIXED ASSETS
·
·
·
Building
·
Plant and
Machinery
·
Furniture And
Fixtures
·
Vehicles and
Aircrafts
·
Software
WEBSITE
DETAILS
PROFILE
JSW
is part of US $10 billion O. P. Jindal Group. It has grown to US$ 5 billion in
little over a decade and has presence across various sectors – Steel, Energy,
Minerals, Port and Infrastructure, Cement, Aluminium and IT.
Subject,
the flagship company of the JSW Group, is today an integrated steel
manufacturer. Subject is the largest private sector steel manufacturer in terms
of installed capacity.
The
Group set up its first steel plant in 1982 at Vasind near Mumbai. Soon after,
it acquired Piramal Steel Limited, which operated a mini steel mill at Tarapur
in
Subject
is one of the lowest cost steel producers in the world. It has established a
strong presence in the global value-added steel segment with the acquisition of
steel mill in US and a service center in
Subject
offers the entire gamut of steel products – Hot Rolled, Cold Rolled,
Galvanized, Galvalume, Pre-painted Galvanised, Pre-painted Galvalume, TMT
Rebars, Wire Rods and Special Steel Bars, Rounds and Blooms. Subject has
manufacturing facilities at Toranagallu in Karnataka, Vasind and Tarapur in
Maharashtra and
By 2020, the Company aims to produce 34 million tons of steel annually
with
PRESS
RELEASE
JSW forays into Electrical Steel
March 12, 2012, Mumbai: JSW Steel, in line with the strategy of increasing its
portfolio of value added products, is now foraying into the manufacture of
Electrical Steel.
The company is planning to set up an electrical steel manufacturing
facility of 0.6 MTPA capacity at its integrated steel works at Vijayanagar.
Initially, this facility shall produce 0.4-0.5 MTPA of Cold Rolled Non-grain
Oriented (CRNO) grade electrical steel.
The company will also take sight on the production of Cold Rolled Grain
Oriented (CRGO) grade in future. Implemented in a phased manner, JSW envisages
becoming the largest Electrical Steel producer in the country.
The first phase of the facility shall produce 0.2 million tonnes per
annum CRNO and which shall be expected to get commissioned in next 24 months
from the date of receiving requisite approvals.
JSW and JFE signed a strategic collaboration agreement in the year,
2010. In line with this agreement, both companies have already entered into
agreement to collaborate in automotive steel manufacturing at Vijayanagar works
and now intend to extend its collaboration to Electrical Steel.
JFE is one of the largest integrated steel producers in Japan with
extensive experience and access to advanced technologies required for the
production of high quality steel products, energy management and environmental
management.
JSW aspires to fully equip in order to adhere to the stringent quality
standards required Electrical Steel with the support of JFE.
Electrical Steel – Supply and Demand Scenario
Electrical Steel is a high grade product which has seen scant development
in India as the technology required is largely inaccessible. Due to the
technological constraints involved in the production of Electrical Steel, the
market is significantly dependant on imports.
With the focus on energy efficient products, the Ministry of Steel as
well as the Ministry of Power are pursuing aggressively with steel makers in
the country to encourage domestic production of Electrical Steel. Major
consuming sectors for this product are power, capital goods, consumer durables
and motors for automobiles etc.
The present demand of Electrical Steel is about 0.5 MTPA and it is
expected to double by the year, 2016-17. The demand for CRGO grade electrical
steel is met purely via the import route while CRNO grade is increasingly
dependent on imports as availability from domestic sources remains consistently
insufficient.
The demand of Electrical Steel is expected to grow at a CAGR of 15%.
Commensurate with this rise in demand JSW expects to cater to the growth by
scaling its manufacturing facilities.
About JSW Steel Limited:
JSW Steel Limited, belonging to JSW group, part of the 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, port
facilities, Aluminium, Cement and Information Technology. JSW Steel Limited is
engaged in manufacture of flat and long products viz. H R Coils, C R Coils,
Galvanised products, Galvalume products, auto grade / white goods grade CRCA
Steel, Bars and Rods. Incorporated in 1994, it has grown to US $ 9 billion in
little over fifteen years. JSW Steel Limited has the largest galvanizing and
colour coating production capacity in the country and is the largest exporter
of galvanized products with presence in over 100 countries across five
continents
JSW STEEL LIMITED INKS JV WITH MARUBENI-ITOCHU STEEL INC
OCTOBER 12,
MUMBAI (India): JSW steel Limited, Mumbai
(JSW) and Marubeni-Itochu Steel Inc. Tokyo, (MISI) have signed a joint venture agreement
to set-up a state–of-the -art steel processing center in North India, under the
name of “JSW MI STEEL SERVICE CENTER PRIVATE LIMITED”.
JSW
will hold 50% of the equity and the other 50% will be held by MISI. The project
will be set up at a capital cost of Rs 1220.000 millions and will be funded
through 50% equity; equally from both the partners and the 50% debt element
would be raised from banks.
The
first phase of the project is expected to come on stream in FY-2013 with an
initial installed capacity of 180,000 tonnes per annum. The JV Company will be
equipped to process flat steel products such as hot rolled, cold rolled and
coated products with a view to offer just in time solutions to the automotive,
white goods, construction and other value added segments.
Both
JSW Steel and MISI have a history of cooperation in areas of mutual interest
and this partnership will be further strengthened through the formation of the
joint venture.
Commenting
on the joint venture, Mr. Seshagiri
Rao, Joint Managing Director and Group Chief Financial Officer, JSW Steel,
stated that the rapid growth of the Indian steel industry offers tremendous
opportunity for supply of high end processed steel and through the JV, we could
leverage the global sales network of Service Center Operations of MISI and the
World Class Technology Products manufactured by JSW.
About
JSW:
The
JSW Group is one of the fastest growing business conglomerates in India with a
strong presence in the core economic sector. Part of US $ 15 billion, O.P
Jindal Group, JSW has diversified interests in Steel, Energy, Infrastructure,
Mining, Cement, Aluminum and Information Technology. JSW Steel’s manufacturing
facilities are situated at Vijayanagar (Karnataka), Vasind and Tarapur
(Maharashtra) and Salem (Tamilnadu).
The
company has acquired a majority stake in Ispat Industries having its
manufacturing facilities at Dolvi and Kalmeshwar in Maharashtra. JSW Steel and
JSW Ispat combined, is now the largest steelmaker by capacity (14.3 million
tones per annum) in India. JSW Steel has also entered into a strategic
collaboration agreement with JFE Steel Corporation, Japan for the development
and manufacture of High-End Automotive Steel.
The
manufacturing range of JSW Steel includes a wide basket of products ranging
from hot rolled, cold rolled, galvanised, galvalume, colour coated, TMT bars,
wire rods and speciality steels.
With
its upcoming Greenfield steel plants in West Bengal and Jharkhand, the company
plans to produce 40 million tones per annum steel by 2020.
About
Marubeni-Itochu Steel inc.
Marubeni-Itochu
Steel Inc. (MISI) was founded in October 2001 (with its share of 50% of Itochu
Corporation and 50% of Marubeni Corporation) recorded its sales of US $20.9
billion in FY2010 and has more than 100 offices, subsidiaries and several tens
of thousands of business partners both within and outside Japan.
MISI integrates information, distribution, finance and human
resources using a global network that combines the capabilities of general
trading companies Itochu Corporation and Marubeni Corporation. MISI is a
leading iron and steel company set up as a general producer geared to iron and
steel distribution in the new era.
JSW STEEL MAY SHUT BELLARY PLANT ON IRON ORE SUPPLY WOES
New Delhi, Sept 27:
JSW Steel Limited said on Tuesday that
it might have to shut down its Vijayanagar Plant in Bellary if the disruption
of iron ore supplies continues in Karnataka.
“We are operating at a minimum level of
30 per cent. If the situation continues, we may have to shut the plant,” Mr
Sajjan Jindal, Vice-Chairman, JSW Steel, said. He was speaking to reporters on
the sidelines of the Assocham conference on ‘Technology infusion and
sustainability issues' in mining sector.
Supply
disruption
JSW Steel operates a 10 million tonnes
per annum capacity steel plant at Bellary. In July, the company had
commissioned its fourth furnace of 3.2 mtpa. The iron ore supplies to the
Vijaynagar plant have been disrupted since July after the Supreme Court imposed
a ban on iron ore mining and transportation in Bellary on environmental
grounds.
The Court had subsequently directed
state-run NMDC to supply one million tonnes of iron ore per month to the
industry in the region, which hasn't been fulfilled by the mining giant. The
court had also ordered release of 1.5 million tonnes of iron ore from the
stockpile through e-auction.
“The industry cannot run on
auction-based supply of iron ore. It has to run on continuous and regular
supplies. No industry in the world runs on auction-based supplies,” Mr Jindal
said.
Shares of JSW Steel ended 1.29 per cent
lower on the BSE at Rs 610.50 on Tuesday. The disruption in supplies will force
the company to reset its production target for the current fiscal, Mr Jindal
said without elaborating.
JSW Steel is currently forced to
operate its plant by procuring iron ore from States such as Orissa, Chattisgarh
and Jharkhand, which has increased its operational costs.
In the meanwhile, the Steel Secretary,
Mr P.K. Misra, said the steel industry in Karnataka has been asked to present
facts on the fallout of the mining ban in Bellary over the next few days. “Once
we get the facts from the steel industry, we will place it before the Court,”
Mr Misra said.
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records 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. 51.04 |
|
|
1 |
Rs. 81.08 |
|
Euro |
1 |
Rs. 67.39 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
4 |
|
PAID-UP CAPITAL |
1~10 |
4 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
4 |
|
--LIQUIDITY |
1~10 |
3 |
|
--LEVERAGE |
1~10 |
3 |
|
--RESERVES |
1~10 |
3 |
|
--CREDIT LINES |
1~10 |
2 |
|
--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 |
|
31 |
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 |
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 |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.