MIRA
INFORM REPORT
|
Report Date : |
29.05.2012 |
IDENTIFICATION DETAILS
|
Name : |
STEEL AUTHORITY OF INDIA LIMITED |
|
|
|
|
Registered
Office : |
Ispat Bhawan, |
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Country : |
|
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|
|
|
Financials (as
on) : |
31.03.2011 |
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|
|
|
Date of
Incorporation : |
24.01.1973 |
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|
|
|
Com. Reg. No.: |
55-006454 |
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Capital
Investment / Paid-up Capital : |
Rs.
41304.000 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L27109DL1973GOI006454 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
DELS2116A |
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|
|
|
PAN No.: [Permanent Account No.] |
AAAC57062F |
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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
: |
Manufacturing and marketing of Pig Iron, Crude Steel, Saleable Steel
and Calcium Ammonium Nitrate. |
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|
|
|
No. of Employees
: |
Approximately 137496 |
RATING & COMMENTS
|
MIRA’s Rating : |
Aa (77) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
Maximum Credit Limit : |
USD 1482000000 |
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|
|
|
Status : |
Excellent |
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|
|
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Payment Behaviour : |
Regular |
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Litigation : |
Exists |
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Comments : |
Subject is a Government of India company, having excellent track. Directors
are reported to be experienced and respectable businessmen. Fundamentally the company appears to be strong. Trade relations are
reported as fair. Business is active. Payments are reported to be regular and
as per commitments. Company can be considered good for normal business dealings at usual
trade terms and conditions. |
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
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered
Office : |
Ispat Bhawan,
Lodhi Road, New Delhi – 110 003, Delhi, India |
|
Tel. No.: |
91-11-24367481
(14 lines) |
|
Fax No.: |
91-11-24367015 |
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E-Mail : |
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|
Website : |
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|
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Factory : |
Integrated Steel
Plants
·
Bhilai Steel Plant, Chhattisgarh – 490 001, ·
·
Rourkela Steel Plant – 769 011, · Bokaro Steel Plant – 827 001, Jharkhand ·
P. O. Hinoo,
Special Steel
Plants
·
Alloy Steel Plants, ·
·
Visvesvaraya Iron and Steel Plant, Bhadravati, |
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|
|
|
Sail Refractory
Unit : |
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|
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Branches/
Sales Office : |
Located at: ·
Agra ·
·
·
·
·
·
·
·
·
· Mandi Gobindgarh ·
· Bhubaneshwar · Bokaro · Kolkata · Dimapur ·
· Guwahati ·
·
· Ahmedabad ·
· Bhilai ·
·
·
· Jaipur ·
· Mumbai ·
· Pune ·
·
· Chennai ·
·
·
· Tiruchirapalli ·
·
|
DIRECTORS
AS ON 31.03.2011
|
Name : |
Mr. C S Verma |
|
Designation : |
Chairman Cum Managing Director |
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|
|
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FUNCTIONAL
DIRECTORS |
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|
|
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|
Name : |
Mr. Soiles Bhattacharya |
|
Designation : |
Director (Finance) |
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|
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|
Name : |
Mr. Shuman Mukherjee |
|
Designation : |
Director (Commercial) |
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|
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Name : |
Mr. B.B. Singh |
|
Designation : |
Director (Personnel) |
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GOVERNMENT
DIRECTORS |
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|
|
|
|
Name : |
Mr. S Machendra Nathan |
|
Designation : |
Additional Secretary and Financial Adviser Ministry of Steel,
Government of India |
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|
|
|
Name : |
Mr. Upndra Prasad Singh |
|
Designation : |
Joint Secretary Ministry of Steel, Government of India |
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INDEPENDENT
DIRECTORS |
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|
|
|
|
Name : |
Prof. Deepak Nayyar |
|
Designation : |
Independent Directors |
|
|
|
|
Name : |
Mr. A K Goswami |
|
Designation : |
Independent Director |
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|
|
|
Name : |
Dr. Jagdish Khattar |
|
Designation : |
Independent Director |
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|
|
|
Name : |
Prof. Subrata Chaudhuri |
|
Designation : |
Independent Director |
|
|
|
|
Name : |
Mr. P. K. Sengupta |
|
Designation : |
Independent Director |
|
|
|
|
Name : |
Mr. P. C. Jha |
|
Designation : |
Independent Director |
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|
|
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EXECUTIVE
DIRECTOR (F AND A) AND SECRETARY |
|
|
|
|
|
Name: |
Mr. Devinder Kumar |
KEY EXECUTIVES
|
CHIEF EXECUTIVE
OFFICERS (PERMANENT INVITEES) |
|
|
Rourkela Steel Plant : |
Mr. S. N. Singh |
|
|
|
|
Durgapur Steel Plant : |
Mr. P. K. Bajaj |
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|
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Bokaro Steel Plant : |
Mr. S S Mohanty |
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|
|
|
IISCO Steel Plant |
Mr. N. K. Jha |
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|
Bhilai Steel Plant : |
Mr. Pankaj Gautam |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
AS ON 31.03.2012
|
Names of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
3,544,690,285 |
85.82 |
|
|
3,544,690,285 |
85.82 |
|
|
|
|
|
|
|
|
|
Total
shareholding of Promoter and Promoter Group (A) |
3,544,690,285 |
85.82 |
|
|
|
|
|
(B)
Public Shareholding |
|
|
|
|
|
|
|
|
29,472,697 |
0.71 |
|
|
105,380,004 |
2.55 |
|
|
184,565,173 |
4.47 |
|
|
143,413,528 |
3.47 |
|
|
462,831,402 |
11.21 |
|
|
|
|
|
|
|
|
|
|
23,632,323 |
0.57 |
|
|
|
|
|
|
|
|
|
|
77,956,270 |
1.89 |
|
|
13,593,495 |
0.33 |
|
|
|
|
|
|
7,231,169 |
0.18 |
|
|
3,517,411 |
0.09 |
|
|
3,713,758 |
0.09 |
|
|
122,413,257 |
2.96 |
|
|
|
|
|
Total
Public shareholding (B) |
585,244,659 |
14.17 |
|
|
|
|
|
Total
(A)+(B) |
4,129,934,944 |
100.00 |
|
|
|
|
|
(C)
Shares held by Custodians and against which Depository Receipts have been
issued |
- |
- |
|
|
- |
- |
|
|
590,345 |
- |
|
|
590,345 |
- |
|
|
|
|
|
Total
(A)+(B)+(C) |
4,130,525,289 |
100.00 |
(1) Indian
Central Government / State Government(s)
Individual shareholders holding nominal
share capital up to Rs.0.100 MillionBUSINESS DETAILS
|
Line of Business : |
Manufacturing and marketing of Pig Iron, Crude Steel, Saleable Steel
and Calcium Ammonium Nitrate. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
|
Particulars |
Unit |
Installed
Capacity |
Actual
Production |
|
MAIN STEEL
PLANTS |
|
|
|
|
Pig Iron |
Tonnes |
2397000 |
260829 |
|
Crude Steel (i) |
Tonnes |
12487000 |
13453059 |
|
Saleable Steel |
Tonnes |
10740000 |
12324973 |
|
|
|
|
|
|
ALLOY STEELS
PLANTS |
|
|
|
|
Pig Iron |
Tonnes |
58000 |
2341 |
|
Crude Steel |
Tonnes |
352000 |
308733 |
|
Saleable Steel |
Tonnes |
457000 |
550238 |
Notes:
i)
Crude Steel installed capacity is in terms of solid
steel as per International Iron and steel Institute.
ii)
"Licensed Capacity" Not applicable (N.A.)
in terms of Government of India Notification No.S.O.477(E) dated 25th July,
1991.
GENERAL INFORMATION
|
No. of Employees : |
Approximately 137496 |
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Bankers : |
·
Allahabad Bank ·
Andhra Bank ·
Bank of Baroda ·
Bank of India ·
Bank of Maharashtra ·
Bank of Tokyo-Mitsubishi UJF Limited ·
Baraclays Bank PLC ·
BNP Paribas ·
Canara Bank ·
Central Bank of India ·
Corporation Bank ·
Dena Bank ·
Deutsche Bank ·
IDBI Bank ·
Indian Bank ·
Indian Overseas Bank ·
Oriental Bank of Commerce ·
Punjab and Sind Bank ·
Punjab National Bank ·
State Bank of Bikaner and Jaipur ·
State Bank of Hyderabad ·
State Bank of India ·
State Bank of Mysore ·
State Bank of Patiala ·
State Bank of Travancore ·
Syndicate Bank ·
UCO Bank ·
Union Bank of India ·
United Bank of India ·
Vijaya Bank ·
Jammu and Kashmir Bank Limited ·
HDFC Bank Limited ·
ICICI Bank Limited ·
AXIS Bank Limited ·
Karnataka Bank Limited ·
ING Vysya Bank Limited ·
Indusind Bank Limited ·
The Karur Vysya Bank Limited ·
Kotak Mahindra Bank Limited ·
Federal Bank Limited ·
South Indian Bank ·
Yes Bank Limited |
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Facilities : |
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Banking
Relations : |
-- |
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|
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Auditors : |
|
|
Statutory Auditors : |
|
|
Name : |
T R Chadha and Company Chartered Accountant |
|
|
|
|
Statutory Auditors : |
|
|
Name : |
S. K. Mittal and Company Chartered Accountant |
|
|
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|
Statutory Auditors : |
|
|
Name : |
Tej Raj and Pal Chartered Accountant |
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|
|
|
Joint Ventures : |
·
SAIL Bansal Service Centre Limited ·
Mjunction Services Limited ·
UEC-SAIL Information Technology Limited ·
Romelt SAIL (India) Limited ·
N.E Steel and Galvanising Private Limited ·
Bhilai Jaypee Cement Limited ·
Bokaro Jaypee Cement Limited ·
S and T Mining Company Private Limited |
CAPITAL STRUCTURE
AS ON 31.03.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
5000000000 |
Equity Shares |
Rs.10/- each |
Rs. 50000.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
4130400545 |
Equity Shares |
Rs.10/- each |
Rs.
41304.000 Millions |
|
|
|
|
|
Note:
1,24,43,82,900 equity shares of
Rs.10 each (net of adjustments on reduction of capital) were allotted as fully
paid up for consideration other than cash.
AS ON 22.09.2011
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
5000000000 |
Equity Shares |
Rs.10/- each |
Rs. 50000.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
4130525289 |
Equity Shares |
Rs.10/- each |
Rs.
41305.253 Millions |
|
|
|
|
|
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 |
41304.000 |
41304.000 |
41304.000 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
329390.700 |
291863.000 |
240178.200 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
370694.700 |
333167.000 |
281482.200 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
118139.100 |
77559.000 |
14976.400 |
|
|
2] Unsecured Loans |
83515.800 |
87553.500 |
60651.900 |
|
|
TOTAL BORROWING |
201654.900 |
165112.500 |
75628.300 |
|
|
DEFERRED TAX LIABILITIES |
14910.700 |
14149.200 |
13332.100 |
|
|
|
|
|
|
|
|
TOTAL |
587260.300 |
512428.700 |
370442.600 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
150826.600 |
136152.800 |
123053.900 |
|
|
Capital work-in-progress |
222258.300 |
149531.300 |
65497.100 |
|
|
|
|
|
|
|
|
INVESTMENT |
6841.400 |
6688.300 |
6527.000 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
113027.900
|
90274.600
|
101611.900
|
|
|
Sundry Debtors |
41613.000
|
34939.000
|
30277.700
|
|
|
Cash & Bank Balances |
174788.600
|
224363.700
|
182646.700
|
|
|
Other Current Assets |
4895.600
|
7803.400
|
10149.600
|
|
|
Loans & Advances |
46578.500
|
34160.900
|
22071.800
|
|
Total
Current Assets |
380903.600
|
391541.600 |
346757.700 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
61187.600
|
62138.800
|
41048.700
|
|
|
Other Current Liabilities |
53561.000
|
47045.000
|
35838.000
|
|
|
Provisions |
58821.000
|
62301.500
|
94506.400
|
|
Total
Current Liabilities |
173569.600
|
171485.300 |
171393.100 |
|
|
Net Current Assets |
207334.000
|
220056.300
|
175364.600
|
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
587260.300 |
512428.700 |
370442.600 |
|
PROFIT & LOSS ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
427187.100 |
405513.800 |
432040.600 |
|
|
|
Interest Earned |
13811.700 |
18609.800 |
18329.500 |
|
|
|
Other Income |
8187.900 |
9072.500 |
7319.900 |
|
|
|
TOTAL (A) |
449186.700 |
433196.100 |
457690.000 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Accretion/ Depletion to Stock |
[13526.700] |
11610.100 |
[19345.300] |
|
|
|
Raw Material Consumed |
220764.000 |
173401.800 |
201971.900 |
|
|
|
Purchase of Finished/ Semi Finished Goods |
42.200 |
27.900 |
95.800 |
|
|
|
Employees’ Remuneration and Benefits |
76233.300 |
54168.100 |
84614.600 |
|
|
|
Stores and Spares Consumed |
33097.500 |
31634.300 |
34918.100 |
|
|
|
Power and Fuel |
35970.400 |
33693.500 |
31879.400 |
|
|
|
Repairs and Maintenance |
6700.400 |
5697.400 |
6247.400 |
|
|
|
Freight outward |
7053.300 |
6742.800 |
7689.600 |
|
|
|
Other Expenses |
28638.000 |
23272.300 |
26721.800 |
|
|
|
Inter Account Adjustment |
[36299.300] |
[25532.700] |
[26526.400] |
|
|
|
Adjustment pertaining to earlier years |
[1037.000] |
[232.200] |
[37.500] |
|
|
|
TOTAL (B) |
357636.100 |
314483.300 |
348229.400 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
91550.600 |
118712.800 |
109460.600 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
4749.500 |
4020.100 |
2594.100 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
86801.100 |
114692.700 |
106866.500 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
14858.000 |
13372.400 |
12877.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE
TAX (E-F) (G) |
71943.100 |
101320.300 |
93988.800 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
22895.700 |
33776.600 |
32284.800 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
49047.400 |
67543.700 |
61704.000 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
247742.900 |
203450.500 |
160192.300 |
|
|
|
|
|
|
|
|
|
Add |
Transferred
transfer from Bonds Redemption reserve |
0.000 |
0.000 |
355.800 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Amount Transferred to Bonds Redemption Reserve |
722.900 |
545.800 |
0.000 |
|
|
|
Amount Transferred to General Reserve |
5000.000 |
6800.000 |
6250.000 |
|
|
|
Interim Dividend |
4956.500 |
6608.600 |
5369.500 |
|
|
|
Proposed Dividend |
4956.500 |
7021.700 |
5369.500 |
|
|
|
Tax on Interim Dividend |
807.400 |
1109.000 |
900.000 |
|
|
|
Tax on Proposed Dividend |
804.100 |
1166.200 |
912.600 |
|
|
BALANCE CARRIED
TO THE B/S |
279542.900 |
247742.900 |
203450.500 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
Export Earnings |
9804.600 |
7830.000 |
8075.300 |
|
|
TOTAL EARNINGS |
9804.600 |
7830.000 |
8075.300 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
127314.800 |
102633.100 |
124124.700 |
|
|
|
Stores & Spares |
4570.500 |
4085.700 |
4561.800 |
|
|
|
Capital Goods |
123520.200 |
33893.300 |
9137.000 |
|
|
TOTAL IMPORTS |
255405.500 |
140612.100 |
137823.500 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
11.87 |
16.35 |
14.94 |
|
QUARTERLY RESULTS
|
PARTICULARS |
30.06.2011 |
30.09.2011 |
31.12.2011 |
|
|
1st
Quarter |
2nd
Quarter |
3rd
Quarter |
|
Net Sales |
109260.000 |
109796.200 |
107287.800 |
|
Total Expenditure |
96145.900 |
96524.800 |
91476.800 |
|
PBIDT (Excl OI) |
13114.100 |
13271.400 |
15811.000 |
|
Other Income |
4630.400 |
4902.600 |
3837.100 |
|
Operating Profit |
17744.500 |
18174.000 |
19648.100 |
|
Interest |
1709.500 |
2000.100 |
1854.600 |
|
Exceptional Items |
0.000 |
(5087.200) |
(4662.800) |
|
PBDT |
16035.000 |
11086.700 |
13130.700 |
|
Depreciation |
3741.600 |
3937.800 |
4093.100 |
|
Profit Before Tax |
12293.400 |
7148.900 |
9037.600 |
|
Tax |
3912.800 |
2202.500 |
2716.400 |
|
Provisions and contingencies |
0.000 |
0.000 |
0.000 |
|
Profit After Tax |
8380.600 |
4946.400 |
6321.200 |
|
Extraordinary Items |
0.000 |
0.000 |
0.000 |
|
Prior Period Expenses |
0.000 |
0.000 |
0.000 |
|
Other Adjustments |
0.000 |
0.000 |
0.000 |
|
Net Profit |
8380.600 |
4946.400 |
6321.200 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
10.92
|
16.66
|
13.48 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
16.84
|
24.99
|
21.75 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
13.53
|
19.20
|
20.01 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.19
|
0.30
|
0.33 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
1.05
|
1.05
|
0.88 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.19
|
2.28
|
2.02 |
LOCAL AGENCY FURTHER INFORMATION
|
Check List by Info Agents |
Available in Report (Yes / No) |
|
1. Year of Establishment |
Yes |
|
2. Locality of the firm |
Yes |
|
3. Constructions of the firm |
Yes |
|
4. Premises details |
No |
|
5. Type of Business |
Yes |
|
6. Line of Business |
Yes |
|
7. Promoter’s background |
No |
|
8. No. of Employees |
Yes |
|
9. Name of person contacted |
No |
|
10. Designation of contact person |
No |
|
11. Turnover of firm for last three years |
Yes |
|
12. Profitability for last three years |
Yes |
|
13. Reasons for variation <> 20% |
----- |
|
14. Estimation for coming financial year |
No |
|
15. Capital in the business |
Yes |
|
16. Details of sister concerns |
Yes |
|
17. Major suppliers |
No |
|
18. Major customers |
No |
|
19. Payments terms |
No |
|
20. Export / Import details |
Yes |
|
21. Market information |
------ |
|
22. Litigations that the firm / promoter involved |
------ |
|
23. Banking Details |
Yes |
|
24. Banking facility details |
Yes |
|
25. Conduct of the banking account |
------ |
|
26. Buyer visit details |
------ |
|
27. Financials, if provided |
Yes |
|
28. Incorporation details, if applicable |
Yes |
|
29. Last accounts filed at ROC |
Yes |
|
30. Major Shareholders, if available |
No |
FINANCIAL REVIEW
The company
increased production of value added steel and achieved the saleable steel production
of 12.9 MT representing 116% of capacity utilisation. With the help of various
management initiatives taken, the company achieved a turnover of Rs. 4704.100
Millions during 2010-11, which is higher by 7% over last year. The company has
also undertaken expansion and modernization plan, which is expected to be
completed by 2012-13, with focus on higher production of value added products.
The profit of the
company for the year 2010-11 was affected adversely, mainly due to adverse
impact of input prices consisting of imported coal, indigenous coal, limestone,
nickel, ferro alloys, aluminium, boiler coal, purchase power, increase in
royalty on minerals, salaries and wages, higher interest and depreciation.
However, the adverse impact on profitability was partially offset by higher
volume of saleable steel production, increase in net sales realisation of
saleable steel, better product mix and higher value added steel production.
The continued
thrust on optimum utilisation of funds by better fund management included
replacement of high cost short term loans with low cost debts, strategic
parking of surplus funds with scheduled banks, actions for future fund raising
etc. to meet their growth objectives. The company had liquid assets of
Rs.171420.000 Millions as on 31st March, 2011 invested in short term deposits
with scheduled banks against borrowings of Rs. 201650.000 Millions as on 31st
March, 2011. The debt equity ratio of the company increased to 0.54:1 as on
31.03.2011 from 0.50:1 as on 31.03.2010 mainly on account of increase in
borrowings for capital expenditure. The net worth of company improved
substantially and this helped in generation of internal resources for funding
expansion plans of SAIL.
The company paid
interim dividend @ 12% of the paid-up equity share capital during the year. The
Board of Directors has further recommended a final dividend @ 12% subject to
approval of shareholders, thus making the total dividend @ 24% of the paid up
equity share capital for the year 2010-11. A sum of Rs. 5000.000 Millions has
been transferred to the general reserves during the year (previous year Rs.
6800.000 Millions).
PRODUCTION REVIEW
In the year
2010-11, the plants of the company continued with their journey of relentless improvement
in production, productmix and efficiency parameters. The company recorded
higher volume of saleable steel production at 12.9 million tonnes, registering
a growth of 2% over corresponding period of last year (CPLY), with capacity
utilization of 116% during the year. Production of hot metal at 14.9 million
tonne and crude steel at 13.8 million tonne, registered a growth of 3% and 2%
respectively over CPLY. In line with market demand, SAIL produced 10.5 million
tonne of finished steel which also registered a growth of 4% over CPLY. The
production growth was achieved with better utilization of existing facilities
since the company has not added any capacity in the year 2010-11.
Higher production
of special quality and value added products at 4.8 million tonnes, a growth of
3% over CPLY, resulted in further improvement of the product-mix. Several new
products were developed which have significant demand, ready market, and good
contribution margin. Improvement in quality of products has remained an important
imperative. Some of the major new products developed to meet the customer's
requirement and enhance market share were - High Tensile thicker plates in
Normalized condition with sub-zero impact toughness and Ultrasonic soundness
for construction of sluice gate for Hydel Power Project in Uttaranchal, HT
plates in grade 450E with improved toughness and corrosion resistance for steel
super-structure of rail-cum-road bridge for the construction of steel
super-structure of the two rail-cum-road bridges being built over the river
Ganges at Patna and Munger, 45E1 Grade R260 Rails in Euronorm Specification (EN
13674-4) for export to Sri Lanka, Killed quality structurals with low
temperature impact toughness for construction of the superstructure of the
rail-cum-road bridges of Ganges, High Strength 100 mm thick pressure vessel
quality SA537Cl-1 plates with ultrasonic soundness for hydel power projects,
for the first time, EMU wheels for Indian Railways.
The Research and
Development wing of the company provided innovative technological inputs to
different units of the company, with special emphasis on productivity and
quality improvement, product development and commercialization, energy
conservation and automation. The major projects completed are: Improvement of
cast structure in blooms through optimization of EMS parameters at Bhilai Steel
Plant (BSP); Development of a reliable position display system of screw down in
Tandem Mill #1, CRM at Bokaro Steel Plant (BSL); Improving processing of low
Nickel stainless steel through simulation studies at Salem Steel Plant (SSP).
The company in its
endeavor to become energy and cost efficient, in the year 2010-11 increased
production of crude steel through continuous casting route and achieved highest
ever crude steel production through continuous casting route at 9.32 MT with a
growth of 3% over CPLY. A large number of innovations are being carried out in
plants for process improvements and cost competitiveness. In the area of
Specific Energy Conservation, the projects completed were: Introduction of
Energy Efficient Ignition System in machine #2, SP-1 and the single machine in
SP-2 at Durgapur Steel Plant (DSP); Improving thermal efficiency of ladle
heating system of BF at BSL; Selection and design of combustion system for new
in-house built normalizing furnace of Plate Mill at BSP; Introduction of new BF
gas burner in place of existing old BF gas burner in one Russian boiler of PBS
and Power Plant-I at BSP. The company witnessed highest ever Power Generation
from captive and JV power plants at 671 MW during 2010-11 registering a growth
of 1% over CPLY.
RAW MATERIALS
During 2010-11
almost total requirement of iron ore was met from captive sources, the
company's captive iron ore mines have produced about 24.45 million tonne.
However, in case of coking coal, around 25% requirement was met from indigenous
sources and balance through imports. During 2010-11, production in captive
collieries of Subject resulted in annual production of about 1.10 million
tonne. In case of flux, around 35% requirement of limestone and 41% requirement
of dolomite were met through captive sources resulted in production of fluxes
from captive sources of about 2.33 million tonnes. For thermal coal, SAIL
depends entirely on purchases from Coal India Limited (CIL) except small
quantity produced from captive mine.
Grant of Stage-I
forest clearance and final environment clearances for the Ajitaburu and
Budhaburu leases of Manoharpur Iron Ore Mines, Chiria by MoEF in Mar'11 have
paved the way for early development of 7 Mtpa state-of-the-art mechanized mines
at these leases. During 2010-11, Stage-I forest clearance for Barsua, Kalta,
Bolani and South-Central Blocks of Kiriburu-Meghahatuburu mines have also been
granted by MoEF. The company has also received final environment clearance for
integrated Barsua-Taldih-Kalta iron ore mining, beneficiation and pelletisation
plant for 8.05 Mtpa (ROM) capacity and also for development of Sitanala coking
coal mine of 0.3 Mtpa capacity by MoEF in Oct'10 and Dec'10 respectively.
Chhattisgarh
Government has accorded its approval for renewal of Baraduar Dolomite lease in
Sep'10. This will enable Subject to develop Baraduar dolomite mine for the
securitization of low silica dolomite availability for Subject.
"S and T Mining
Company Private Limited," a joint venture company of SAIL and Tata Steel
Limited, has been engaged to develop Bhutgoria mine of BCCL. The mine is
estimated to produce 0.36 Mtpa (ROM) coking coal at full capacity which will be
shared between Subject and Tata Steel. The company has submitted tender to BCCL
for construction of washery at Dugda for Non Linked Washery (NLW) coal. The JV
company is also considering
establishment of a
standalone NLW coal washery at Bhelatand with an investment of Rs. 1960.000 Millions.
The company is
also making attempts for allocation of coking coal and thermal coal blocks
under Government dispensation route for captive mining to enhance indigenous
coal availability.
India is dependent
on imports for meeting the increasing requirement of metallurgical coal as its
indigenous availability is short, both in quantity and quality. International
metallurgical coal market is controlled by few producers who regulate
production to maintain high prices extracting large margins from steel
producers. After increase of FOB price of metallurgical hard coking coal from
US $ 128 per tonne in 2009-10 to US $ 213 per tonne in 2010-11, it has further
gone up to US $ 330 per tonne in the first quarter of 2011-12 reaching historic
high and impacting returns on steel business. Further, since 2010-11, the
suppliers have imposed quarterly pricing in place of annual pricing, exposing
the steel producers to vagaries of market volatility too.
To achieve Raw
material security, import of Low Silica Limestone is now established and
regular imports are being done so as to have cost advantage/alternate source.
Similarly, International source of Low Silica Dolomite is also being
identified.
SALES AND
MARKETING REVIEW
·
The company achieved a total sales volume of 11.9
million tonnes during FY'10-11 with sales of Long products in the home market
at a record level of 4.62 million tonnes. Exports at 0.33 million tonnes
registered a growth of 2.3% over FY'09-10. Major categories where growth was
recorded in the sales included: Wire Rods- 12.1%; TMT Bars- 3.8%; Structurals-
4%; Plates >20mm- 7.1% and Railway products- 8.5%. New records were also set
in supplies of Loco wheels and Loose Axles to Indian Railways during the year.
·
During the year 2010-11 SAIL started operations at
a new Warehouse at Jagdishpur. With this, SAIL's marketing network has expanded
to 37 Branch Sales Offices (BSOs), 26 Customer Contact Offices (CCOs) and 67
Warehouses. SAIL also expanded its dealer network by 145 numbers during the
year. As on 1st April, 2011, SAIL has a wide network of 2653 dealers spread
over 637 districts of the country.
·
The company strengthened its presence in
neighbouring and traditional markets and exported 0.33 million tonnes steel
during the year. The main products exported were Billets, Plates, HR Coils, GC
Sheets, CR Coils and Rails. Exports were undertaken to Syria for the first
time. System of Ebidding was also implemented in exports during the year.
Subject re-entered the export market for its high quality rails after a gap of
over 5 years and has exported rails to Sri Lanka.
GROWTH PLAN
Keeping in view
the acceleration in demand for steel in the country, the company is currently
implementing growth plan to enhance its Hot Metal capacity from the level of
13.8 million tonnes in a phased manner. Under the ongoing phase-I of
modernization and expansion plan, hot metal production capacity will get
expanded to 23.46 million tonnes by 2012-13. The growth plan, besides targeting
higher production, also addresses the need for eliminating technological
obsolescence, achieving energy savings, enriching product-mix, reducing
pollution, developing mines and collieries, introducing customer centric
processes and developing matching infrastructure facilities.
To maintain its
current dominance in the domestic market and to meet the future challenges, the
company is working on a long term strategic plan 'Lakshya 2020', which will
steer the company towards meeting its strategic objectives of achieving
profitability through growth and customer satisfaction.
MODERNISATION
& EXPANSION PROJECTS
The modernisation
and expansion plan of the company aims at taking up capital projects related to
'Expansion', 'Value Addition/ Product Mix improvement', 'Technological
Upgradation/ Modernisation of existing assets', and 'Sustenance including
Debottlenecking, Additions, Modifications, Replacements and Environment'
related projects.
The modernization
and expansion plan envisages installation of New Coke Oven Batteries, New
Sinter Plants, New Blast Furnaces of bigger capacity with up-gradation of
existing Blast Furnaces, New Steel Melting Shops / addition of Convertor in
existing shop, installation of New Mills etc. which will increase share of
finished steel in salable steel. Along with addition of new facilities, most of
the existing facilities are also being up graded to enable production of value
added steel , reduce energy consumption and for improvement in productivity,
etc.
The expansion plan
is being implemented simultaneously in all the Plants including mines and
requires matrix planning, involvement/ coordination with a large number of
agencies, prudent fund management, selection of right technology etc. Subject
has already initiated actions and progressing smoothly towards handling this
vast complex task.
Subject Board
accorded 'in-principle' approval during the year for the Rebuilding of Coke
Oven Battery No.3 and Installation of Additional Heat Treatment facilities at
Special Plate Plant at RSP, Replacement of Converter Shell and its Assembly in
SMS-2 at BSL, Installation of additional 45 MVA Sub-merged Arc Furnace at MEL
with an estimated total outlay of around Rs. 6500.000 Millions.
Subject incurred a
capital expenditure of Rs. 112800.000 Millions, including Rs. 102100.000
Millions on modernization and expansion plan, during 2010-11. Orders have been
placed for about Rs. 527500.000 Millions under modernization and expansion plan
of SAIL. An expenditure of Rs. 250600.000 Millions has been spent on
modernization and expansion plan of Subject till 31st March, 2011. Further, the
capital expenditure planned to be incurred for the year 2011-12 is Rs.
143370.000 Millions including Rs. 126420.000 Millions for ongoing modernisation
and expansion plan.
At Salem Steel
Plant, all major production facilities envisaged under Expansion Plan have been
installed and units are now in regular production.
For Chiria Iron
Ore Mines the Forestry clearance has been accorded by Ministry of Environment and
Forest in Feb'11 and Consultants have been appointed for preparation of DPR for
Chiria as well as Taldih Iron Ore Deposits.
At Bhilai Steel
Plant, Up-gradation facilities under Plate Mill have been completed. Further,
the linked facilities like Compressed Air Station-4 and installation of CNC
Roll Grinding Machine have been completed. The Coke Oven Battery-6 has been
re-built, in compliance with pollution control norms of Government of India and
Oven Pushing has started in June'11.
At IISCO Steel
Plant, COB-10 has been re-built in Aug'10 in compliance with pollution control
norms of Govt. of India and is in regular operation. Facilities like Sinter
Plant, Pig Casting Machine, Main Receiving Station and Oxygen Plant, under
expansion plan are ready for commissioning. Other facilities envisaged are at
various stages of implementation.
At Rourkela Steel
Plant, 700 tpd Oxygen Plant and Simultaneous Blowing of Converters in SMS-II
have been completed in Oct'10 and other facilities envisaged under Modernisation
and Expansion Plan are at various stages of implementation.
At Bokaro Steel
Plant, Up-gradation of Blast Furnace No-2 has been completed in Jul'10. This
will meet the enhanced Hot Metal requirement by the down stream facilities,
post modernisation. Further, the Coal Dust Injection System for BF-2 and 3 have
been completed in Dec'10. This will lead to reduction in coke rate and
improvement of the furnace productivity. The 2nd Ladle Furnace in SMS-II has
been completed in Jul'10. The COB-1 and 2 which are being re-built in
compliance with pollution control norms of Government of India, the Oven
Pushing has been started in COB-1 in June'11. Other facilities under
Modernization and Expansion Plan are at various stages of implementation.
At Durgapur Steel
Plant, the major packages envisaged under Modernisation and Expansion Plan,
like, Bloom-cum-round Caster, Medium Structural Mill and Reheating Furnace for
Medium Structural Mill, New Dolomite Plant, Re-building of COB-2,
Debottlenecking of Coal Handling Plant and Raw Material Handling Plant, Ladle
Furnace, New Slag Yard and Civil and Structural works for Medium Structural
Mill, are at various stages of implementation.
For Raw Material
Projects, in addition to mines expansion, the beneficiation facilities and
pelletization facilities have also been envisaged to meet the post expansion
raw material requirement.
AWARDS AND
ACCOLADES
The excellent
performance of company as well as that of employees won laurels and
appreciation from several quarters during the year 2010-11. SAIL employees
continued to win maximum number of Prime Minister's Shram Awards and
Vishwakarma Rashtriya Puraskar declared by Government of India which recognizes
the creativity and innovative abilities of their employees. Employees of SAIL once
again proved their mettle. Of the 33 Prime Minister's Shram Awards announced
for 2010 by the Ministry of Labour, Government of India, 17 of which went to
PSUs, Subject employees bagged 11 awards. Of the total number of 76 awardees
for the year, 45 belong to SAIL - a remarkable distinction for any
organisation. Adding to SAIL's jubilation, all the 7 Shram Vir/ Veerangana
Awards announced in the PSU category have been bagged by its employees. Out of
a total 128 awardees who have won the prestigious Vishwakarma Rashtriya
Puraskar (VRP), 74 are from SAIL. The 15 out of 28 awards won by SAIL went to
their 74 employees for the performance year 2008, once again establishing the
zeal of their employees to excel with their creativity. Subject employees in
the International Convention on Quality Concept Circles-2010 held at Hyderabad
bagged 18 gold, 6 silver and 2 bronze awards. In addition, Subject employees
also had a rich haul of awards in the 24th National convention on Quality
Concepts (NCQC 2010) held at Visakhapattnam.
Organisational
excellence of Subject garnered recognition and accolades at various prestigious
forums. Some of the notable awards won by Subject are "SCOPE Meritorious
Awards" for Environment Excellence and Sustainable Development for 2009-
10, and Corporate Social Responsibility for 2008-09, "Asia Best Employer
Award" for 'continuous innovation in HR Strategies at work', "PSU
Excellence Awards 2010" for "Best Human Resource Management" and
"Research and Development, Technology Development and Innovation" by
Indian Chamber of Commerce, "India Pride Award" under Metals and
Minerals and Trade Award Category, "Trail blazer leader of the year"
at Global HR Excellence Awards 2010-11 and "Wockhardt Shining Star CSR
Award" in the Iron and Steel sector category, to name a few.
Subject efforts in
promoting use of Rajbhasha have been recognized in the form of 1st prize at
Town level by TOLIC for best official language implementation by Govt. of
India. 'Rashtriya Rajbhasha Shield' was also awarded to Subject for best
official language implementation by Rashtriya Hindi Academy. The inhouse Hindi
journal of SAIL, "Ispat Bhasha Bharati" bagged the 1st prize at
national level.
Subject
Plants/Units have also excelled in various areas and have won awards for their
performance, salient ones are listed as under:
·
BSP was awarded the "CII Sustainability
Award-2010" under independent unit category for performance year 2009-10
from CII-ITC in recognition of Excellent performance in the various areas of
economic, environmental and social activities.
·
BSP was recognized by Greentech Foundation in the
form of "Greentech Safety Gold Award-2010", "Greentech HR
Excellence Award" and "Greentech Environment Excellence Platinum
Award" in Metal and Mining Sector.
·
BSP has won "INSSAN Award" from INSSAN
Eastern India Chapter, in recognition of Excellence in Suggestion Scheme
besides winning the "Golden peacock eco- innovation award- 2010" for
installation of energy efficient curtain flame burners in SP-2 for the year
2009-10 by World Environment Foundation.
·
DSP bagged the "INSSAN Award" for the
year 2009-10 from INSSAN Northern Region Chapter, in recognition of effective
implementation of suggestion scheme. It also won the "Greentech Safety
Award" for the year 2008-09 "Greentech HR Excellence Award" for
the year 2009 ,"Greentech HR Excellence Award for young Managers" for
the year 2009 and "Greentech Environment Excellence Award" for the
year 2009 from Greentech Foundation.
·
DSP was awarded the "Rajiv Gandhi National
Quality Award" for the year 2008-09 by Bureau of Indian Standards, New
Delhi and "Golden Peacock National Training Award" for the year
2009-10 by Institute of Directors, New Delhi besides winning the "Safety
Innovation Award" for the year 2009 by Institution of Engineers.
·
RSP was conferred with "Greentech Environment
Excellence Gold Award-2009" for the year 2008-09 from Greentech Foundation
in recognition of Excellence in Environment Management and also won the
"Shrishti Good Green Governance Award-2009" for the year 2009-10 in
recognition of Excellence in Innovative Management of Environment.
·
BSL's improvement in productivity was recognized by
"CII (ER) Productivity Award" as HSM Group of BSL bagged the 1st
position and CCS won the 2nd position.
·
BSL team won the national competition for Business
Management Simulation by All India Management Association at 'AIMA National
Management Games-2010'. Team from BSL also won the `AIMA National Management
Quiz-2010 - Northern Zone Championship' for the year 2010.
·
SSP made SAIL proud by winning the "Greentech
Safety Award - Gold" for Best Safety Performance and "Outstanding
Contribution Award" for the year 2010 from Quality Circle Forum of India
(QCFI), Chennai Chapter.
STRATEGIC
INITIATIVES OF THE COMPANY
During the year
2010-11, the company continued its focus towards taking new business
initiatives including incorporation / formation of new JVs, mergers and
acquisitions and entering into Memorandum of Understandings (MOUs) for its long
term strategic objectives. The company has established communication channels
with renowned international technology providers for forging strategic
alliances in production of value added products. The company is continuously
adopting the path of entering into Joint Ventures (JV) with public / private
parties to attain its strategic goals of maximizing gains with optimal
utilization of resources. These include:
(a)
Merger and Acquisitions (M and A) :
(i)
Merger of Maharashtra Elecktosmelt Limited (MEL)
with SAIL: The approval of the shareholders for the Scheme of Amalgamation of
Maharashtra Elektrosmelt Limited ("MEL") was obtained in a meeting
held on 30th September, 2010. Subsequently a petition was submitted
to the Ministry of Corporate Affairs (MCA) for sanctioning the scheme of
amalgamation of MEL with SAIL. The Ministry of Corporate Affairs (MCA), New
Delhi vide its letter dated 14.6.2011 has forwarded the Order of the Central
Government sanctioning the scheme of amalgamation of Maharashtra Elektrosmelt
Limited (MEL) with Steel Authority of India Limited (SAIL) under Section
391-394 of the Companies Act, 1956. The appointed date of amalgamation is
1.4.2010. MEL has now become a unit of SAIL and it has been renamed as
Chandrapur Ferro Alloy Plant.
(ii)
Transfer of Salem Refractory Unit of Burn Standard
Company Limited to SAIL: Cabinet Committee on Economic Affairs (CCEA) in
June'10 approved transfer of Refractory Unit of BSCL at Salem and authorized
Ministry of Steel (MoS) and Department of Heavy Industries (DHI) to work out
operational steps for transfer of Refractory Unit of BSCL at Salem in
consultation with Ministry of Corporate Affairs (MCA). The outstanding issues
for the take over are being worked out by DHI before operationalization of CCEA
decision.
(b)
Joint Ventures:
(i)
After signing an MOU with M/s RITES for undertaking
a feasibility study for setting up the Wagon Manufacturing Factory in Joint
Venture, a Joint Venture Company "SAIL RITES Bengal Wagon Industry Private
Limited" has been incorporated in Decmber'2010. The work on the newly
incorporated JV Company between SAIL and RITES has already commenced. The unit
will have the capacity to manufacture 1500 wagons per annum (manufacture of
1200 wagons and rehabilitation of 300 wagons) which will include BOXN-type
wagons, specialized high-end wagons and modern stainless steel wagons.
(ii)
Subject has formally acquired 50% of the shares
held by the Government of Kerala (GoK) in Steel Complex Limited (SCL),
Kozhikode and taken over the operations of SCL on 13th February '11. SAIL-SCL
Limited, the joint venture company resulting from the acquisition, will work
towards the revival of SCL. The JV is in line with the Government's policy of
bringing together synergies of PSUs and strengthening them to be competitive in
the market.
(c)
Strategic Alliances:
(i)
Subject is simultaneously jointly working with Kobe
Steel Limited [KSL], a renowned Japanese Steel maker, for ascertaining the
feasibility of using ITmK3 technology [Iron Making Technology Mark Three]
developed by KSL for producing premium grade iron in the form of nuggets using
iron ore fines and non-coking coal. The annual production capacity of ITmk3
Plant is envisaged to be around 0.5 million tonnes to produce premium grade
Iron nuggets. The pre-feasibility report is in the final stages of completion.
(ii)
Subject and M/s Burn Standard Company Limited
(BSCL), a PSU under the charge of Ministry of Railways signed an MOU for
setting up a factory which will manufacture cast steel bogies, couplers and
other related products. The unit will come up in approximately 128 acres of
leasehold land under the possession of M/s BSCL at Jellingham, West Bengal.
Railways will provide an average assured off-take of 5,000 bogies and equal
number of couplers per annum for a period of ten years.
(iii)
Hajigak Iron Ore Deposits Owned by Government of
Afghanistan: The company has been short-listed along with 21 other companies (13
Indian companies) for the bidding process of multiple exploration concessions
of Hajigak Iron Ore Deposits invited by Islamic Republic of Afghanistan,
Ministry of Mines. Subject has formed a consortium with five other companies
for Joint Bidding.
(iv)
Expansion of Captive Power Plants of SAIL: Subject is
planning to expand the captive power generating capacity at BSP and RSP through
its Joint Venture with NTPC by installing 2x250 MW Units at BSP and 1x250 MW
Units at RSP. NSPCL is conducting feasibility studies for these power projects
and has applied for various statutory clearances like Environment Clearance and
allocation of coal and water.
v) Installation
of Renewable Energy Based Power Plants: In line with policy framework
provided by Electricity Act, 2003 and National Electricity Policy, Electricity
regulatory Commissions of various states which mandates all users of captive
power generation to either purchase / generate a specified minimum percentage
of captive power generated from renewable energy sources (Solar, Bio Mass, Wind
, Small Hydro etc). A long term strategy to meet renewable energy purchase
Obligation has been worked out and options are being evaluated for installing
Captive Power generation based on renewable energy sources.
d) Memorandum of
Understanding [MoU]/Commercial Agreements entered into with various companies:
(i) MoU signed with
Kobe Steel Limited of Japan for comprehensive strategic collaboration producing
high value products. Discussions are ongoing with M/s Kobe Steel Limited for a
steel plant at Jagdishpur which shall utilize technology of Direct Reduced Iron
making (Gas based) and Electric Arc Furnace steel making for manufacture of
value added products.
(ii) SAIL and M/s
Severstal have agreed to work jointly on Operational Benchmarking. This would
open opportunities in areas of productivity improvement, energy efficiency and
other collaborative research.
(iii) MoU signed
with IRCON International Limited, a PSU under the Ministry of Railways for
jointly working on rail
infrastructure
projects both in India and abroad.
(iv) Another MoU
signed with Hindustan Prefab Limited (HPL), a PSU under the Ministry of Housing
and Urban Poverty Alleviation, for carrying out business of prefabricated
structures in steel and cement. Actions have already been initiated in this
regard for forming a joint venture company which may undertake study in the
prefabricated structures in steel and cement. INSDAG has been appointed as a
Consultant for undertaking pre-feasibility study which will be completed by
June'11.
MANAGEMENT
DISCUSSION AND ANALYSIS REPORT
The Management of
Steel Authority of India Limited presents its Analysis Report covering the
performance and outlook of the company.
INDUSTRY STRUCTURE
AND DEVELOPMENTS
GENERAL ECONOMIC
ENVIRONMENT
World economy
registered a smart recovery in 2010 with an output growth of 5%, against a
negative growth of (-) 0.5% in 2009. IMF's growth projection of around 4.5%
p.a. for 2011 and 2012 each suggests that the growth momentum is going to
continue in the immediate future. While the developing and emerging economies
are likely to grow at a rate of 6.5% p.a. over the next 2 years, advanced
economies are projected to grow at 2.5% p.a. in this period.
The risks in the
global economic environment are on account of more than expected price increase
in commodity prices due to strong demand and supply shocks. The challenge on
this account is going to be large for the developing economies where food and
fuel have dominant share in consumption. There is also a fear that strong
demand will fuel inflation as operations are near full capacity. The other issue
confronting developing/emerging economies is that with pick up of growth in
developed economies there has been a movement of capital flows away from
emerging economies to the developed countries.
The worries in the
developed world emanate from depressed housing demand of US. There are fiscal
worries in the EU and banks have to deal with non performing assets.
Unemployment continues to be high. The impact of Tsunami in Japan on global
economy is expected to be limited. Immediate fiscal expansion is mainly to
support reconstruction. The medium term fiscal strategy in Japan will be to
reduce the public debt ratio.
INDIAN ECONOMY
The Indian economy
has recovered from the aftermath of global financial crisis in 2008-09 when the
GDP dipped to 6.8%. The economy recovered to GDP growth rate of 8% in 2009-10.
Revised estimate for GDP growth for 2010-11 is 8.5%. The revival in growth was
on account of Agriculture sector which rebounded with a growth of 6.6% for
2010-11, after near stagnant growth for past 2 years. Services posted a growth
rate of 9.4% while industry at 7.9% showed signs of slow down in the second
half of the fiscal.
Manufacturing
sector which grew at double digit rates in the first 2 quarters, slowed down to
6 & 5.5% respectively in Q-3 and Q-4. In the steel consuming segments
capital goods sector grew at 9.3% as against 20.9% in the previous year.
Construction which had a growth of 9.7% in 2009-10 slowed down marginally to
8.1% in 2010-11.
Inflation
continues to be an area of concern. Oil prices which were below US $ 80 per
barrel till September, 2010, sharply increased to US $ 114 per barrel in March,
2011. Despite RBI following a tight monetary policy, demand side pressure in
the economy continues to be major area of concern.
In the area of
foreign trade, exports at $246 billion in 2010-11 grew at 37.5% mainly on
account of engineering goods and petroleum products. Imports at $350 billion,
grew at a rate of 22% in the above period
The GDP growth
rate for 2011-12 has been projected between 8 to 8.5% for 2011-12. Although
Govt. managed to contain the fiscal deficit to 5.1% from the budgeted level of
5.5% on strength of tax buoyancy and one time receipt from 3G spectrum
allocation, inflation continues to be an area of concern.
GLOBAL STEEL
INDUSTRY
The global steel
production which had declined on account of the intervening global financial
crisis, showed a sharp pick-up in 2010. As per WSA, world crude steel
production reached a record level of 1414 million metric tons in 2010, a growth
of 15% over 2009. All the major steel-producing countries and regions showed
double-digit growth in 2010. The world finished steel consumption estimated at
1283 mmt for 2010, grew at 13% over the previous year.
Among the major
steel producing and consuming nations, India is attractively positioned with
its vast resources of iron ore and low costs underpinning its supply-side
competencies, while the low per-capita consumption levels and strong growth
drivers in the end use sectors ensure reasonably stable growth prospects.
World Steel
Association (WSA) has projected a growth rate of around 6% p.a. for the next 2
years for global steel consumption. China will continue to be the dominant
steel consuming nation in terms of its contribution to the incremental steel
demand. However, its growth rate will moderate to around 5%.
INDIAN STEEL
SECTOR
As per World Steel
Association, India was the world's 4th largest producer of crude steel globally
in 2010 with a production of approx. 68.3 MT of crude steel.
According to JPC
estimates the finished steel consumption of carbon steel in India grew by 10.8%
in 2010-11 over the previous year. There was a reduction in both finished steel
imports as well as exports as domestic steel producers expanded to cater to
emerging demand. Long products viz. bars and rods and structurals performed
strongly with high consumption growth. The growth in consumption of flat
products was modest.
Over the past few
years, consumption has been primarily driven by the continuous increase in
infrastructure related investment, leading to higher demand for steel. However,
the country's per capita consumption is still one of the lowest in the world,
presently at 51.7 kg per capita versus 427 kg for China and a global average of
approx. 203 kg, leaving a high potential of steel demand with increase in per
capita consumption linked to higher income growth.
At present, the
Indian steel industry faces a supply deficiency as capacity building has lagged
growth in consumption. Large green field projects have not been set up in India
over the past few years due to regulatory, social and infrastructure
bottlenecks. Capacity additions in the short term are primarily brown field
projects by existing players.
OUTLOOK
The medium to long
term outlook for steel in India is robust. India has entered the steel
intensive phase of economic development, with sustained investment in
infrastructure, construction, urban renewal and high activity level in
manufacturing. While there may be short term fluctuations in response to
domestic and global concerns, the medium to long term prospects appear very
bright.
REVIEW OF
FINANCIAL PERFORMANCE
FINANCIAL OVERVIEW
OF SAIL
The global economy
recovered gradually during 2010-11 after witnessing a worldwide down trend in
all spheres of business including Steel. Steel industry has been benefited by
strong worldwide and domestic demand. Subject reoriented its production in line
with market demand, increased production of value added steel and achieved the
saleable steel production of 12.9 MT representing 116% of capacity utilization.
FINANCIAL
PERFORMANCE
|
Particulars |
2010-2011 (Rs. In Millions) |
% increase(+)/ decrease(-) over Previous year |
|
Sales Turnover |
470410.000 |
7.1% |
|
PBDIT |
91550.000 |
(22.8)% |
|
Profit Before
Tax (PBT) |
71940.000 |
(29.0)% |
|
Profit After Tax
(PAT) |
49050.000 |
(27.4)% |
On account of
various initiatives taken by the company, Subject achieved the turnover of Rs. 470410.000
Millions in 2010-11, which was higher by 7.1 % as compared to previous year.
The profit of the company for the year 2010-11 was affected adversely, mainly
due to adverse impact of input prices consisting of imported coal, indigenous
coal, limestone, nickel, ferro alloys, aluminium, boiler coal, purchase power,
increase in royalty on minerals, salaries and wages, higher interest and
depreciation. However, the adverse impact on profitability was partially offset
by management initiatives such as higher volume of saleable steel production,
increase in net sales realisation of saleable steel, better product mix and
higher value added steel production.
PROJECT MANAGEMENT
With a view to increase
market share, to enhance the production capacity and to introduce
state-of-the-art technologies to produce steel of international quality at
competitive price, Steel Authority of India Limited (SAIL) is currently
implementing Modernization and Expansion Plan of its five Integrated Steel
Plants at Bhilai, Bokaro, Rourkela, Durgapur and Burnpur and Special Steel
Plant at Salem. This will increase production capacity of crude steel from
12.84 million tonnes per annum to 21.4 million tonnes per annum in the current
phase.
The plan shall
also address the issues of technological obsolescence, energy savings,
enriching product mix, pollution control, mines and collieries development to
meet higher requirement of key raw materials, introduction of customer centric
processes and create matching infrastructure facilities in the Plant to support
higher production volumes. Subject incurred a Capital Expenditure of Rs.
112800.000 Millions for 2010-11. Orders have been placed for about Rs.
527500.000 Millions under Modernisation and Expansion plan of SAIL.
The brief status
of Modernization and Expansion is as follows:
·
At Salem Steel Plant, all major production
facilities envisaged under Expansion Plan including Electric Arc Furnace, Ladle
Furnace, AOD Convertor, Slab Caster, Slab Grinder, Skin Pass Mill, Annealing
and Pickling Line, Coil Preparation Line, Acid Recovery System, Slitting Line,
Tension Levelling Line and the auxiliary facilities like Ladle Cranes, DG EOT
Crane, MRSS and LCSS have been installed. The first heat was produced on
01.08.10 and the units are now in use for production.
·
At Bhilai Steel Plant, Up-gradation
facilities under Plate Mill have been completed. Further, the linked facilities
like Compressed Air Station-4 and installation of CNC Roll Grinding Machine
have been completed. The Coke Oven Battery-6 has been re-built, in compliance
with pollution control norms of Govt. of India and Oven Pushing has started in
June'11.
·
At IISCO Steel Plant, COB-10 has been
re-built in Aug'10 in compliance with pollution control norms of Govt. of
India, is in regular operation. Facilities like Sinter Plant, Pig Casting
Machine, Main Receiving Station and Oxygen Plant, under expansion plan are
ready for commissioning. Other facilities envisaged are at various stages of
implementation.
·
At Rourkela Steel Plant, 700 tpd Oxygen
Plant and Simultaneous Blowing of Converters in SMS-II have been completed in
Oct'10 and other facilities envisaged under Modernisation and Expansion Plan are
at various stages of implementation.
·
At Bokaro Steel Plant, Up-gradation of Blast
Furnace No-2 has been completed in Jul'10. This will meet the enhanced Hot
Metal requirement by the downstream facilities, post modernisation. Further,
the Coal Dust Injection System for BF-2 and 3 have been completed by Dec'10.
This will lead to reduction in coke rate and improvement of the furnace
productivity. The 2nd Ladle Furnace in SMS-II has been completed in Jul'10. The
COB-1 and 2 are being re-built in compliance with pollution control norms of
Government of India. The Oven pushing has started in COB-1 in June'11. Other
facilities under modernization and Expansion Plan are at various stages of
implementation.
·
At Durgapur Steel Plant, the major packages
envisaged under Modernisation and Expansion Plan, like, Bloom-cum-round Caster,
Medium Structural Mill and Reheating Furnace for Medium Structural Mill, New
Dolomite Plant, Re-building of COB-2, De-bottlenecking of Coal Handling Plant
and Raw Material Handling Plant, Ladle Furnace, New Slag Yard and Civil and
Structural works for Medium Structural Mill, are at various stages of
implementation.
·
For Raw Material Projects, in addition to
mines expansion, the beneficiation facilities and pelletization facilities have
also been envisaged to meet the post expansion raw material requirement.
Various Projects taken-up at mines are as follow:
v At Bolani Iron Ore
Mines, modification and extension of Railway Line, overhead electrical work and
signaling and telecommunication work has been taken up to enhance the loading
Capacity to full rake in one stretch. This will further reduce loading time and
turnaround time
v At Meghahataburu
Iron Ore Mines, the capacity is being increased from 4.3 MTPA to 6.50 MTPA of
Iron Ore. The project is under implementation.
v At Kiriburu Iron
Ore Mines, the capacity is being increased from 4.25 MTPA to 5.50 MTPA of Iron
Ore. The project is under implementation.
v At Chiria and
Taldih Iron Ore Deposit, consultants have been appointed for preparation of DPR.
·
A Steel Processing Unit is being set up at Bettiah,
Bihar to expand the market base and increase the market share. This will also
serve the purpose of Corporate Social Responsibility by employment generation
and up-liftment of rural areas.
·
Revival of Jagdishpur SAIL Unit has been taken up
to fulfil the demand of finished and value added products in the region, to
lower the initial investment and to utilize the existing facilities and to
lower the gestation period for start of production in the plant.
In addition to
above the following Major Capital (AMR) Schemes are presently in progress are:
Bhilai Steel Plant
(BSP)
·
4th Air Separation Unit of 700 tonnes per day
capacity is being installed in Oxygen Plant-II to meet the increasing
requirement of oxygen, nitrogen and argon.
·
On-line Eddy Current Testing M/c at short rail area
in RSM is under implementation to strengthen the inspection of Short Rails and
detection of defects more than or equal to 0.5 mm depth and more than 10 mm
long.
·
Optico Visual Inspection System at short rail area
in RSM for online inspection of Rails.
·
Installation of Grinding Facilities to enhance the
production of Coal required for Coal Dust Injection in BF-6 and 7.
·
Installation of Oxygen Evacuation Facilities for
2x1250 TPD New Oxygen Plant.
Rourkela Steel
Plant (RSP)
·
Installation Coal Dust injection in Blast Furnace
No. 4 for enhanced production requirements, reduction in coke rate and
improvement of the furnace productivity.
Bokaro Steel Plant
(BSL)
·
Replacement of 6 Nos. of Battery Cyclones with 6
nos of Electrostatic Precipitators is being carried out in three machines of
the Sinter Plant. This facility is for cleaning of sinter process gas to meet
the statutory requirement of emission level of outlet dust at 150 mg/Nm3 as
prescribed by Central Pollution Control Board.
·
Installation of New Turbo Blower along with
associated facilities to meet the enhanced cold blast requirement of Blast
Furnace-2.
Alloy Steels Plant
(ASP)
·
Installation of 1 nos of New 60 T Ladle Furnace to
enhance the Stainless Steel Slab production to 1,90,000 tpa for supply to SSP.
IN-HOUSE DESIGN
AND ENGINEERING
Centre for
Engineering and Technology (CET) is providing its services in the areas of
modernisation, technological upgradation and, additions, modifications &
replacement schemes to plants and units within Subject
and clients
outside SAIL - both in India and abroad.
FIXED
ASSETS:
· Land (freehold and leasehold)
· Right and patents
· Railway lines
· Railway sidings
· Roads
· Bridges
· Culverts
· Buildings
· Plant and machinery
· Furniture, fittings
· Vehicles
· Water supply and sewerage,
· EDP equipments
· Miscellaneous articles
UNAUDITED
FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 31ST DECEMBER 2011
(Rs. In Millions)
|
|
|
Quarter ended |
Nine Months ended |
|
|
Sl. No |
Particulars |
31st December |
30th September |
31st December |
|
|
|
2011 |
2011 |
2011 |
|
|
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
|
|
|
|
|
|
1 |
(a) Net Sales / Income from operations |
|
|
|
|
|
i) Gross sales |
116859.500 |
119703.500 |
355637.300 |
|
|
ii) Less : Excise Duty |
10921.100 |
11336.700 |
33068.800 |
|
|
Sub total (a) (i-ii) |
105938.400 |
108366.800 |
322568.500 |
|
|
(b) Other operating income |
1349.400 |
1429.400 |
3929.700 |
|
|
Sub total 1 (a) + (b) |
107287.800 |
109796.200 |
326498.200 |
|
|
|
|
|
|
|
2 |
Expenditure |
|
|
|
|
|
a) Increase(-)/Decrease in
stock-in-trade and work in progress |
(12570.500) |
(4547.900) |
(20022.300) |
|
|
b) Consumption of Raw
Materials |
59908.500 |
56084.500 |
167888.800 |
|
|
c) Purchase of traded goods |
18.100 |
19.200 |
46.500 |
|
|
d) Consumption of stores &
spares |
6571.500 |
6521.000 |
19291.900 |
|
|
e) Employees' cost |
18645.400 |
19808.000 |
61114.700 |
|
|
f) Power & Fuel |
11284.700 |
11237.200 |
33141.400 |
|
|
g) Depreciation |
4093.100 |
3937.800 |
11779.000 |
|
|
h) Other Expenditure |
10768.600 |
9579.100 |
30693.200 |
|
|
i) Less: Finished Products
Internally Consumed |
3149.500 |
2176.300 |
7961.800 |
|
|
Sub total 2 (a) to (h) - (i) |
95569.900 |
100462.600 |
295971.400 |
|
3 |
Profit from operations before other income, interest and
exceptional items ( 1-2) |
11717.900 |
9333.600 |
30526.800 |
|
4 |
Other Income |
|
|
|
|
|
i) Interest earned |
3706.500 |
4337.500 |
12571.500 |
|
|
ii) Other Income |
130.600 |
565.100 |
830.200 |
|
|
Sub total (i+ii) |
3837.100 |
4902.600 |
13401.700 |
|
5 |
Profit before interest and
exceptional items ( 3+4) |
15555.000 |
14236.200 |
43928.500 |
|
6 |
Interest |
1854.600 |
2000.100 |
5566.900 |
|
7 |
Profit after interest but before
exceptional items ( 5-6) |
13700.400 |
12236.100 |
38361.600 |
|
8 |
Exceptional items-Foreign
exchange loss (-)/ gain(+) (Refer note vi) |
(4662.800) |
(5087.200) |
(9866.500) |
|
9 |
Profit from ordinary
activities before tax ( 7+8) |
9037.600 |
7148.900 |
28495.100 |
|
10 |
Tax Expense |
|
|
|
|
|
(a) Current Tax |
2719.700 |
2359.100 |
8976.200 |
|
|
(b) Deferrred Tax Liability /
Assets ( - ) |
11.800 |
(146.300) |
(113.100) |
|
|
(c) Earlier years |
(15.100) |
(10.300) |
(25.400) |
|
|
Sub-Total ( a to c ) |
2716.400 |
2202.500 |
8837.700 |
|
11 |
Net Profit from ordinary activities after Tax ( 9-10 ) |
6321.200 |
4946.400 |
19657.400 |
|
12 |
Extraordinary items (net of
tax expense Rs. Nil) |
-- |
-- |
-- |
|
13 |
Net Profit for the period (11-12) |
6321.200 |
4946.400 |
19657.400 |
|
14 |
Paid up Equity Share Capital (
Face value : Rs. 10 per share ) |
41305.300 |
41305.300 |
41305.300 |
|
15 |
Reserves (excluding revaluation
reserve) as per balance sheet of previous accounting year |
-- |
-- |
-- |
|
16 |
Basic and Diluted Earnings per
share before and after extraordinary items ( Not Annualised ) ( Rupees ) |
1.53 |
1.20 |
4.76 |
|
17 |
Aggregate of public share holding |
|
|
|
|
|
- Number of shares |
58,52,22,759 |
58,52,22,759 |
58,52,22,759 |
|
|
- Percentage of share holding |
14.17% |
14.17% |
14.17% |
|
18 |
Promoters and Promoter group shareholding |
|
|
|
|
|
(a) Pledged / Encumbered |
|
|
|
|
|
- Number of Shares |
- |
- |
- |
|
|
- Percentage of shares (as a %
of the total |
- |
- |
- |
|
|
- Percentage of shares (as a %
of the total share capital of the company) |
- |
- |
- |
|
|
|
|
|
|
|
|
(b) Non-Encumbered |
|
|
|
|
|
- Number of Shares |
3544690285 |
3544690285 |
3544690285 |
|
|
- Percentage of shares (as a %
of the total |
100 |
100 |
100 |
|
|
- shareholding of the promoter
and promoter group) |
|
|
|
|
|
- Percentage of shares (as a %
of the total share capital of the company) |
85.82 |
85.82 |
85.82 |
NOTES
i)
The
above results have been reviewed by the Audit Committee and taken on record by the
Board of Directors in their meeting held on 13th February, 2012.
ii)
The
above results have been reviewed by the Statutory Auditors, as required under
Clause 41 of the Listing Agreement.
iii)
The
information on investors’ complaints pursuant to Clause 41 of the Listing
Agreement for the quarter ended 31st December, 2011
|
Opening Balance |
Received during
the quarter |
Resolved during
the quarter |
Closing balance |
|
- |
6 |
6 |
- |
iv)
The Ministry of Corporate Affairs, vide Order dated
10th June, 2011, notified the approval of amalgamation of Maharashtra
Elektrosmelt Limited (MEL), a subsidiary company, with the Company under
Sections 391 to 394 of the Companies Act, 1956. As per the Scheme of
Amalgamation, the Appointed Date of Amalgamation is 1st April, 2010. The
Amalgamation has been given effect to in accordance with the provisions of the
scheme of amalgamation. Accordingly, as stipulated under the Scheme of
Amalgamation, balance of the Profit and Loss Account of the MEL as on 1st April,
2010, has been merged in the accounts of the Company. The profit after tax of
MEL for the year 2010-11, has also been credited to the balance of the Profit
and Loss Account of the Company. The financial results of the quarter/nine
months ended 31st December, 2010 and the year ended 31st March, 2011, do not
include the figures of the erstwhile MEL and are, therefore, not comparable
with those of the current quarter/nine months. The figures for the current
quarter/nine months include the results of erstwhile MEL, consequent to its
amalgamation with the Company.
v)
The
Board of Directors, in their meeting held on 13th February, 2012, have approved
interim dividend of Rs.1.20 per equity share for the financial year 2011-12.
The record date for payment of interim dividend has been fixed as 18th
February, 2012.
vi)
Due to unusual and steep depreciation in the
value of the Rupee against US Dollar and Euro during the current quarter/nine
months, the foreign exchange fluctuation loss on short term foreign currency
loans of Rs. 4662.800 millions for the current quarter and Rs. 9866.500
millions for the current nine months have been considered as an `Exceptional
Item’ by the Company.
vii)
In
accordance with Companies (Accounting Standards) Amendment Rules 2009, relating
to Accounting Standard – 11, notified by the Government of India on 31st March
2009 and amended from time to time, the foreign exchange fluctuation loss on
long-term foreign currency loans of Rs. 1380.1 millions for the current quarter
and Rs.2575.100 millions for the current nine months have been adjusted in the
carrying cost of the Fixed Assets/Capital Work-in-progress
viii)
Net
Sales include sales to Government agencies recognized on provisional contract
prices during the nine months ended 31st December, 2011: Rs.27617.900 millions
(corresponding nine months of previous year: Rs. 25820.000 millions) and up to
31st December, 2011: Rs.139078.600 millions (up to the corresponding nine
months of previous year : Rs.105532.100 millions).
ix)
The
matter regarding pension for non-executives remains to be decided at a later
date. The effect thereof, if any, on the financial results is not
ascertainable.
x)
a)
The matter with regard to imposition of entry tax on coal and iron ore @6% on
discriminatory basis in one of the plants of the Company, is pending in the
Hon'ble Supreme Court and is sub judice. Till 31st March, 2011, the liability
towards entry tax (including penal interest on delayed payment of entry tax)
was provided @ 6% on Coking Coal and Iron Ore. Based on the Hon'ble Supreme
Court’s order dated 9th February, 2010, the actual payment of entry tax is
being made @3%. Based on the legal opinion, the accounting treatment in respect
of imposition of entry tax was reviewed for the period 1st April to 31st
December, 2011and the liability towards entry tax has been retained in the
books to the extent @3% each and the balance liability @3% has been written
back during the current quarter, resulting in increase in profit of Rs.420
million and Rs. 1730million for the quarter and nine months respectively.
b) The writ petition before Hon'ble
Allahabad Court on entry tax in Uttar Pradesh has been dismissed on 23.12.2011.
Bank guarantees amounting to Rs.417.800 millions have been invoked and
encashed. On SLP before the Hon'ble Supreme Court of India, leave has been
granted. Pending final decision by the Hon'ble Supreme Court of India, the
amount of Rs.438.300 millions under dispute up to 31.12.2011 has been treated
as contingent liability.
xi) The figures of previous periods have been re-grouped,
wherever necessary, to conform to current quarter/nine months’s classification.
Pursuant to the amalgamation of MEL with the Company, as explained in note
(v)
Above, the figures for the current quarter/nine
months are not comparable with the corresponding period of previous year.
WEBSITE DETAILS
BACKGROUND AND HISTORY
Subject traces its origin to the formative years of an
emerging nation - India. After independence the builders of modern India worked
with a vision - to lay the infrastructure for rapid industrialisaton of the
country. The steel sector was to propel the economic growth. Hindustan Steel
Private Limited was set up on January 19, 1954.
Expanding Horizon (1959-1973)
Hindustan Steel (HSL) was initially designed to manage only
one plant that was coming up at Rourkela. For Bhilai and Durgapur Steel Plants,
the preliminary work was done by the Iron and Steel Ministry. From April 1957,
the supervision and control of these two steel plants were also transferred to Hindustan
Steel. The registered office was originally in New Delhi. It moved to Calcutta
in July 1956, and ultimately to Ranchi in December 1959.
The 1 MT phases of Bhilai and Rourkela Steel Plants were completed by the end
of December 1961. The 1 MT phase of Durgapur Steel Plant was completed in
January 1962 after commissioning of the Wheel and Axle plant. The crude steel
production of HSL went up from .158 MT (1959-60) to 1.6 MT. A new steel
company, Bokaro Steel Limited, was incorporated in January 1964 to construct
and operate the steel plant at Bokaro.The second phase of Bhilai Steel Plant
was completed in September 1967 after commissioning of the Wire Rod Mill. The
last unit of the 1.8 MT phase of Rourkela - the Tandem Mill - was commissioned
in February 1968, and the 1.6 MT stage of Durgapur Steel Plant was completed in
August 1969 after commissioning of the Furnace in SMS. Thus, with the
completion of the 2.5 MT stage at Bhilai, 1.8 MT at Rourkela and 1.6 MT at
Durgapur, the total crude steel production capacity of HSL was raised to 3.7 MT
in 1968-69 and subsequently to 4MT in 1972-73.
Holding Company
The Ministry of Steel and Mines drafted a policy statement
to evolve a new model for managing industry. The policy statement was presented
to the Parliament on December 2, 1972. On this basis the concept of creating a
holding company to manage inputs and outputs under one umbrella was mooted.
This led to the formation of Steel Authority of India Limited. The company,
incorporated on January 24, 1973 with an authorized capital of Rs. 2000 crore,
was made responsible for managing five integrated steel plants at Bhilai,
Bokaro, Durgapur, Rourkela and Burnpur, the Alloy Steel Plant and the Salem
Steel Plant. In 1978 SAIL was restructured as an operating company.
Since its inception, Subject has been instrumental in laying a sound
infrastructure for the industrial development of the country. Besides, it has
immensely contributed to the development of technical and managerial expertise.
It has triggered the secondary and tertiary waves of economic growth by
continuously providing the inputs for the consuming industry.
NEWS
PRESS RELEASE
SAIL SALES TURNOVER AT RS. 355640.000 MILLIONS REGISTERS A GROWTH OF 5 %
IN FIRST NINE MONTHS OF FY'12.
New Delhi, 13 February 2012
Interim Dividend declared at 12 per cent.
New Delhi : SAIL's turnover
for the first nine months at Rs. 355637.300 Millions was 5 % higher than CPLY.
Profits were impacted compared to CPLY, due to higher input costs and foreign
exchange variations. The company's PBT and PAT during the April-December'11
period were recorded at Rs. 28495.100 Millions and Rs. 19657.400 Millions,
lower by 42.7 % and 41.7 % respectively, over CPLY. The difference in profit
(PBT) at Rs. 21200.000 Millions, was primarily because of impact of coking coal
price increase at Rs. 18490.000 Millions, and foreign currency variation of Rs.
10790.000 Millions. SAIL's net worth grew by Rs. 25030.000 Millions to Rs.
386180.000 Millions as on 31st December'11. SAIL Board approved interim
dividend for its shareholders at 12 % of the company's paid-up capital.
Reflecting the
uptrend in performance over the preceding quarter, SAIL Q3 profit before tax
(PBT) at Rs. 9037.600 Millions and Q3 profit after tax (PAT) at Rs. 6321.200
Millions, registered a growth of 26 % and 28 % respectively, over Q2FY12. Q3
PBT was down by Rs.7244.400 Millions (44%) over CPLY, owing to impact of Rs.
5780.000 Millions on account of increase in prices of Coking Coal, and Rs.
4990.000 Millions on account of foreign exchange variation. The impact of these
two factors, among others, also brought down PAT by Rs. 4753.500 Millions (43
%). The turnover for Q3FY12 at Rs. 116859.500 Millions was 4.8 % less than
CPLY.
Several ongoing
projects in SAIL steel plants were completed in Q3FY12, including rebuilding of
Coke Oven Battery-II at Bokaro, installation of turbo-blower no. 8 at Bokaro,
installation of 60-tonne ladle furnace at ASP and Tonnage Oxygen Plants at
Rourkela and Bhilai. Commissioning activities for pickling line cum tandem cold
Mill (PLTCM) for Cold Rolling Mill at Bokaro were started.
SAIL Board has
accorded in-principle approval for bearing the expenses of two CRPF battalions
for facilitating a safe environment in Rowghat region. Tender has been floated
for a pelletisation (4 MT)-cum-beneficiation (10 MT) project at Gua iron ore
mines, and is likely to be finalized this year. This is a step towards raw
material securitisation and bringing in environment-friendly mining technology.
During Q3FY12, SAIL
moved one step ahead in its journey to become a global player. The SAIL-led
consortium AFISCO (Afghan Iron and Steel Consortium), which had submitted its
bid for mining exploration rights at Hajigak, having an estimated reserve of
1.7 billion tonnes of iron ore, won the status of 'Preferred Bidder' for blocks
B, C and D of the mines with an estimated reserve of 1.28 billion tonnes of
high-grade magnetite iron ore (with 62-64% Fe content). 'SAIL-Kobe Iron India
Private Limited' name has been approved for 0.5 million tonnes ITmK3 plant.
Subsequent to signing of term sheet for this plant, environment impact study
and site survey including soil investigation has been started at ASP, Durgapur.
At domestic front, SAIL signed a deed of transfer with Burn Standard and
Company Limited (BSCL) for the transfer of BSCL's Refractory Unit at Salem to
the newly formed subsidiary of SAIL, namely SAIL Refractory Company Limited
(SRCL). Since SAIL's requirement of refractory material is expected to increase
substantially after implementation of its modernisation and expansion plans,
the merger holds immense strategic advantage for SAIL in the long run.
A new SPV company
'SAIL-Sindri Projects Limited' has already been incorporated in November'2011,
for revival of the closed units of FCIL. SAIL is awaiting BIFR clearance for
taking further action.
SAIL was conferred
'Industry Excellence Award' by Institution of Engineers (India) in
December'2011. SAIL employees also continued their winning streak at national
performance awards. Of the 189 Shram Awards for earlier calendar years
presented by Prime Minister Dr. Manmohan Singh and Union Minister for Labour
and Employment Shri Mallikarjun Kharge at a glittering ceremony held at Vigyan
Bhawan in October'11, 103 went to SAIL employees. This translates to 54.5% of
the total number of Shram awards presented. SAIL also bagged 50% of the total
28 Vishwakarma Rashtriya Puraskar awards, which were presented to the employees
in November'2011. Recently, SAIL has been conferred MoU Excellence Award in the
Mining and Metals category by Hon'ble Prime Minister, at a function jointly
organised by DPE and SCOPE. This year, Bhilai Steel Plant of SAIL was declared
the winner of the Prime Minister's best Integrated Steel Plant trophy for
2009-10. This is the tenth time that BSP has won this coveted award.
Reviewing the Q3
performance SAIL Chairman Shri C. S. Verma said, "The uptrend over the
preceding quarter performance is an indication of the overall steel scenario
becoming positive, and internal measures yielding desired results. With prices
of coke stabilising, steel demand strengthening and increased production
volumes in the offing for SAIL, 2012 is likely to be a year of fresh
beginnings."
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. 55.26 |
|
|
1 |
Rs. 86.80 |
|
Euro |
1 |
Rs. 69.63 |
INFORMATION DETAILS
|
Information
Gathered by : |
-- |
|
|
|
|
Report Prepared
by : |
DPT |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
8 |
|
PAID-UP CAPITAL |
1~10 |
8 |
|
OPERATING SCALE |
1~10 |
9 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
9 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
77 |
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.