Jindal Stainless Ltd


BSE: 532508 | NSE: JSL | ISIN: INE220G01021 
Market Cap: [Rs.Cr.] 843 | Face Value: [Rs.] 2
Industry: Steel - Large

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Director's Report

Directors

TO

THE MEMBERS,

Your Directors have pleasure in presenting the 33rd Annual Report on the business andoperations of your Company together with the Audited Statement of Accounts for the yearended 31st March, 2013.

Financial Results

Your Company’s performance for the financial year ended 31st March, 2013 is statedbelow:

(Rs. in Crores)

Particulars Standalone Consolidated
Year Ended 31.03.2013 Year Ended 31.3.2012 Year Ended 31.03.2013 Year Ended 31.3.2012
Revenue from operations (Gross) 11,121.88 8,498.33 12,128.47 9,364.29
Less: Excise Duty on sales 835.67 607.28 823.73 598.98
Revenue from Operations (Net) 10,286.21 7,891.05 11,304.74 8,765.31
Profit before other Income, Finance Cost, Depreciation, Exceptional Items, Tax & Amortisation (EBIDTA) 614.97 904.04 708.56 947.65
Add: Other Income 44.13 75.31 35.04 57.88
Less: Finance Costs 990.29 516.80 1,043.44 570.17
Less: Depreciation / Amortisation 701.31 408.61 740.14 448.50
Profit /(Loss)Before Tax & Exceptional Items (1,032.50) 53.94 (1,039.99) (13.14)
Add: Exceptional Items – Gain/(Loss) (166.96) (207.76) (183.99) (231.45)
Profit/(Loss) Before Tax (1,199.46) (153.82) (1,223.98) (244.59)
Less: Tax Expenses (378.64) (49.91) (381.94) (63.15)
Net Profit /(loss) after Tax (820.82) (103.91) (842.04) (181.44)
Share in Profit / (Loss) of Associate - - (0.41) (1.22)
Minority Interest - - 1.74 2.89
Net Profit / (Loss) (After Adjustment for Associate & Minority Interest) (820.82) (103.91) (840.71) (179.78)
Add:
Amount brought forward 618.69 716.58 530.87 704.63
Debenture Redemption Reserve written back 3.77 6.01 3.77 6.01
Amount available for Appropriation (198.36) 618.69 (306.07) 530.87
General Reserve - - 0.08 -
Less: Being deficit, Set off from General Reserve (198.36) - (306.15) -
Net surplus in statement of Profit & Loss - 618.69 - 530.87

During the year, the Gross Revenue from operations of your Company on standalone basishas increased by 31% at Rs. 11,121.88 crore as compared to Rs. 8,498.33 crore duringprevious financial year 2011-12. The Profit before other income, Finance Cost,Depreciation, Exceptional Items, Tax & Amortisation on standalone basis stood at Rs.614.97 crore as compared to Rs. 904.04 crore during previous year.

Further, during the year, the Consolidated Gross Revenue from operations of yourCompany has increased by 30% at Rs. 12,128.47 crore as compared to Rs. 9,364.29 croreduring previous financial year 2011-12. Consolidated Profit before other income, FinanceCost, Depreciation, Exceptional Items, Tax & Amortisation stood at Rs. 708.56 crore ascompared to Rs. 947.65 crore during previous year.

The financial results of the Company during the year 2012-13 have been adverselyimpacted inter-alia on account of (i) Economic slowdown in Europe and most large countriesin Asia, resulting into weak demand for Stainless Steel internationally, squeezing marginsin markets; (ii) Over capacity in China and dumping of Stainless Steel material into Indialeading to reduced margins in the Company’s markets; (iii) Owing to above factors,the Company slowed down the ramp-up of Jajpur, Odisha Stainless Steel operations leadingto lower margins as the Company could not enjoy economies of scale at that plant; and (iv)Monopolistic pricing policies of certain PSU companies leading to erosion of margins inferro chrome unit.

Operations

(A) Hisar Division:

Despite the slowdown in Global economy Hisar plant has been able to achieve 98% of itsplanned capacity at Steel melting shop by producing 719,353 MT of steel as compared to723,418 MT during financial year 2011-12. Hot Rolling Mills were utilized as per marketdynamics and produced 523,200 MT as compared to 540,671 MT during financial year 2011-12.During the year, Cold Rolled Annealed Pickled production was 243,458 MT as compared to257,335 MT during financial year 2011-12.

Your Company focused on effective utilization of available resources and productivityimprovement at various lines to achieve cost efficiency. Steel melting shop has achievedlandmark of 50 heats in a day, similarly others lines have also performed efficiently inthis slow down period to meet the expectations.

During the year, two new Grades JSLU – DD & JSLU - SD have been launched tocater to utensils market. Now, these Grades are welcomed and accepted by markets and arein regular production. During the year no major capital expenses have been incurred andongoing projects have been completed in Special product division.

(B) Odisha Division

Your Company has been successfully operating stainless steel making facility at Jajpur,Odisha, with a capacity of 800,000 tons per annum and has been rolling of stainless steelproducts from this facility for over two years. The ramp-up and stabilization of finishingfacilities are in progress. During the year under review, steel melting shop produced313,258 tons, hot strip mill processed 300,435 tons and facilities in cold rolling millprocessed 255,130 tons of stainless steel. The stainless steel facilities under operationsat Odisha are state of art facilities and have substantially enhanced the productportfolio of the Company including wider width products of upto 1600 mm.

The ferro alloys production during the year stood at 83,290 tons. There were challengesin procuring the chrome ore from domestic sources at cost effective prices, which impactedthe overall production and the capacity utilizations during the year. However, in order toreduce the costs, the Company worked on imported low Grade chrome ore from Gulf, improvingchromium recoveries & higher usage of hard lumpy ore & replacing usage of cokewith anthracite coal. The Company has also taken up the matter with various Governmentagencies to rationalize the chrome ore bidding process. The operations at 250 MW thermalpower plant were adversely affected on account of higher input prices of thermal coal anddrop in prices of surplus power sold to the state Grid. It operated mostly on imported lowash coal from Indonesia blended with Indian coal. Both the two power plants were producingpower and generated around 1089.53 million units (net), of which around 34.13 millionunits were exported to Hisar plant. The power plant has achieved highest ever PLF of107.19% on 22nd January, 2013. It also achieved PLF of more than 100% for many daysconsistently during the 4th Quarter. The production at 14 MW power plant was 50.32 millionunits (net).

Jindal Chromite Mine produced 28,955 MT of chromite ore concentrate from itsbeneficiation plant and also achieved 96,022 MT chrome ore from Mines pit for the year,which is much higher than previous year production. The mines dispatched 20,568 MT ofconcentrate ore and 23,099 MT of chrome ore to Vizag plant during the year.

The coke oven facility was operated under lease with work arrangement for conversion ofcoal into coke. The coke oven battery successfully produced metallurgical coke withgradual ramp-up. For the year, the total production out of the coke oven facility stood at251,593 tons of coke.

(Rs.) Vizag Division

The Vizag Plant produces High Carbon Ferro Chrome with annual capacity of 40,000 Tonsper annum. Vizag Unit uses Chrome Ore supplied from captive Sukhinda Chromite Mines andtransfers the output to Hisar Plant. The division has achieved 50% of the installedcapacity by producing 20,169 tons of High Carbon Ferro Chrome during the year 2012-13 ascompared to 24,832 tons during the preceding year. The production was less during the year2012-13 due to Power restrictions being imposed by the APEPDCL from September’2011onwards. Further Vizag Unit despatched 21,069 tons to JSL, Hisar during the year 2012-13as compared to 24,805 tons during the preceding year on Job work account.

Debt Restructuring

During the year, your Company’s proposal in relation to re-work of its term debtobligations ("Rework Scheme") under CDR mechanism was approved by CDR EG andRework Letter of Approval ("Rework LOA") was issued on September 18, 2012. TheRework Scheme inter-alia includes reworking of repayment schedule, interest funding,adjustments in interest rates to ensure protection of net present value of the respectivefacilities, etc. w.e.f. 31st March, 2012 ("Reworking Cut-off Date").Consequently, the Amended & Restated Master Restructuring Agreement ("AmendedMRA") has been executed on September 25, 2012 with certain lenders. As on date ofthis report, except HDFC Bank, all CDR lenders have executed the necessary documents.

Besides reworking of its domestic term debt obligations, your Company during the yearhas also successfully completed the restructuring of its debt obligations in relation toECB facilities of USD 250 million availed for the part financing of Odisha Phase IIproject and has executed requisite amendment agreements with all the ECB lenders. Therevised terms inter-alia include deferment of repayment schedule and increase in interestrates etc.

Share Capital

During the year under review, the Company allotted 10,21,922 equity shares uponconversion of 560 Convertible Bonds of US$ 5,000 each.

Further, in order to meet the requirements of approved Reworked Corporate DebtRestructuring (CDR) Scheme, the Company had obtained approval of the Shareholders by meansof Special Resolutions passed through Postal Ballot on 15th February 2013, for issuance ofequity shares to a Promoter Group Company (hereinafter referred to as "the proposedallottee" in following manner: (i) 1,35,50,000 equity shares of face value of Rs. 2/-each on or before 31st March, 2013, and (ii) 1,35,50,000 equity shares of face value ofRs. 2/- each on or before 30th June, 2013.

Pursuant to the aforesaid Shareholders’ approval, the Company allotted the 1sttranche of 1,35,50,000 equity shares of face value of Rs. 2/- each at an issue price ofRs. 74/- each (including a premium of Rs. 72/- per equity share) amounting to Rs. 100.27crore on preferential basis to a promoter group company, on 30th March, 2013.Consequently, the paid-up share capital of the Company has increased from Rs. 38,10,55,094to Rs. 40,81,55,094 divided into 20,40,77,547 equity shares of Rs. 2/- each. However, uponrequest of the proposed allottee, the Board of Directors, subject to necessaryshareholders’ approval, has approved the infusion of balance amount of Rs. 100.27crore by way of preferential allotment of 1,35,50,000 equity shares at an issue price ofRs. 74/- each (including a premium of Rs. 72/- per equity share) on or before 31st March,2014 instead of 30th June, 2013. This will align with the requirement of Reworked CDRapproval which stipulates that the balance capital be infused into the Company on orbefore 31st March, 2014.

Dividend

The Board, considering the Company’s performance and financial position for theyear under review, has not recommended any dividend on equity shares of the Company forthe year ended 31st March, 2013.

Transfer to Investor Education and Protection Fund

Pursuant to section 205C of the Companies Act, 1956, the Company has transferredunclaimed and unpaid amounts aggregating to Rs. 20,13,600 to Investor Education andProtection Fund of Government of India during the year 2012-13.

Employees Stock Option Scheme

During the year under review, 5,34,771 stock options were vested in eligible employees.The ESOS Compensation Committee granted 1,50,000 stock options to eligible employees underthe ESOP Scheme of the Company. The disclosure, under Clause 12 of Securities and ExchangeBoard of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines, 1999 is set out in Annexure to this Report.

Information Technology

During the year, the Company has completed the implementation of SAP ECC 6.0 version.This SAP-ERP implementation project named as "Project Manthan" has gone livefrom 1st May, 2013. This project will integrate all business processes of your Companyacross all the locations, on a real time basis and help in quick transactional anddecision making processes and ultimately assist the management in enhancingstakeholder’s value. With this SAP Go-live, the IT & Manthan teams have initiateda New SAP era and have laid a foundation for further IT lead business benefit projects inyour Company.

Subsidiary Companies

As on 31st March, 2013, your Company has 17 direct and step down subsidiaries, namely(i) Jindal Stainless UK Limited; (ii) Jindal Stainless FZE, Dubai; (iii) PT JindalStainless Indonesia; (iv) Jindal Stainless Italy S.r.l.; (v) Jindal Stainless MadencilikSanayi VE Ticaret A.S., Turkey (vi) Jindal Stainless Steelway Limited; (vii) JSL LifestyleLimited; (viii) JSL Architecture Limited; (ix) Green Delhi BQS Limited; (x) JSL MediaLimited; (xi) JSL Group Holdings Pte. Ltd., Singapore; (xii) JSL Ventures Pte. Ltd.,Singapore; (xiii) JSL Europe S.A., Switzerland; (xiv) JSL Minerals & Metals S.A.,Switzerland; (xv) Jindal Aceros Inoxidables S. L., Spain; (xvi) JSL Logistics Limited; and(xvii) Iberjindal S.L., Spain.

Pursuant to the general circular No. 51/12/2007-CL-III dated 8th February, 2011 issuedby the Ministry of Corporate Affairs, Government of India, the balance sheet, profit andloss account and other documents of the subsidiary companies are not attached with thebalance sheet of your Company. The annual accounts and other related documents of thesubsidiaries are available at the website of the Company and will be made available to anymember of the Company who may be interested in obtaining the same. The annual accounts ofthe subsidiary companies will be kept open for inspection by any shareholder at theregistered office of the Company during normal business hours. The consolidated financialstatements of the Company include the financial results of all the subsidiary companies.

The members, if they desire, may write to Company Secretary at O.P. Jindal Marg, Hisar– 125005 (Haryana) to obtain the copy of the annual report of the subsidiarycompanies.

Directors

The Board of Directors has appointed Mr. Uday Kumar Chaturvedi as an additionaldirector and designated him as "Chief Executive Officer" with effect from 27thMay, 2013. The Company has received Notice pursuant to section 257 of the Companies Act,1956, from a member signifying his intention to propose Mr. Chaturvedi as a candidate forthe office of Director. The Board has also approved appointment and terms of remunerationof Mr. Chaturvedi as Whole Time Director designated as Chief Executive Officer of theCompany, subject to the approval of the Shareholders. The said appointment andremuneration of Mr. Uday Kumar Chaturvedi is recommended for the approval of theShareholders in the Notice forming part of this Annual Report.

As on the date of this report, Mr. Jurgen Hermann Fechter, Mr. Ramesh R. Nair and Mr.Subash Singh Virdi resigned from the Board of Directors of the Company w.e.f. 6thFebruary, 2013, 2nd April, 2013 and 27th May, 2013 respectively. The Board places onrecord its sincere appreciation for the valuable contributions made by them during theirtenure.

Mr. Suman Jyoti Khaitan, Mr. T.S. Bhattacharya and Mr. James Alistair KirklandCochrane, Directors, will retire by rotation at the ensuing Annual General Meeting of theCompany and, being eligible, offer themselves for re-appointment.

Brief resumes of the Directors being appointed / re-appointed, nature of theirexpertise in specific functional areas, details of Directorship in other companies and themembership/ chairmanship of committees of the board, as stipulated under Clause 49 of thelisting agreement with the stock exchanges, are given in the Notice forming part of theannual report.

Fixed Deposits

The Company has accepted/renewed deposits amounting to Rs. 21,12,61,000/- during theyear under review. There were no overdue deposits on 31st March, 2013, except Rs.92,87,000/- which remain unclaimed.

Particulars Regarding the Conservation of Energy, Technology Absorption, ForeignExchange Earnings and Outgo

The Information relating to energy conservation, technology absorption, foreignexchange earnings and outgo required to be disclosed under The Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988 is given in Annexure – 1forming part of this report.

Particulars of Employees

As required by the provisions of section 217(2A) of the Companies Act, 1956, read withthe Companies (Particulars of Employees) Rules, 1975, as amended, the names and otherparticulars of the employees are set out in the annexure to the Directors’ report.However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, thereport and accounts are being sent to all the Shareholders of the Company excluding theaforesaid information. Any Shareholder interested in obtaining such particulars may writeto the Company Secretary at the registered office of the Company.

Auditors and Auditors’ Report

M/s. Lodha & Co. and M/s. S.S. Kothari Mehta & Co., joint statutory auditors ofthe Company, hold office until the conclusion of the ensuing annual general meeting andare eligible for re-appointment. The Company has received letters from them to the effectthat their appointments, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956 and also that they are not otherwise disqualified withinthe meaning of sub section (3) of section 226 of the Companies Act, 1956, for suchappointment.

The notes to the accounts referred to in the auditors’ report are self-explanatoryand, therefore, do not call for any further comments.

Cost Auditors

The Board of Directors has re-appointed M/s. Ramanath Iyer & Co., Cost Accountants,the cost auditors for conducting the audit of cost audit records in respect of Steelbusiness for the financial year 2013-14 subject to approval of the Central Government.Particulars of Cost Auditor and Cost Audit Report, as required vide General Circular No.15/2011 dated 11th April, 2011 issued by Cost Audit Branch, Ministry of Corporate Affairs,Government of India, are as under:

Name of the Cost Auditor: M/s. Ramanath Iyer & Co. Cost Accountants, 808,Pearls Business Park, Netaji Subash Place, Pitampura, New Delhi – 110 088
Names and Membership No. of Partners of Firm Ms. R. Parvathy, M. No. 13848
Dr. D. Jagannathan, M. No. 5839
Mr. V. A. Sundaram, M. No. 818
Mr. S. Laxminarayana, M. No.7664
Ms. Sona Sharma, M. No. 31446
Due date for filing of Cost Audit Report for the financial year 2011-12 by the Cost Auditor with the Central Government Within 180 days from the close of company’s financial year, i.e. upto 27th September, 2012. However, Central Government vide its various circulars issued from time to time extended the date of filing of Cost Audit Report in XBRL format upto 28th February, 2013.
Date of actual filing of Cost Audit Report for the financial year 2011-12 with the Central Government. Cost Audit Report for the financial year 2011-12 was filed by the Cost Auditor with the Central Government on 18th January, 2013.

Directors’ Responsibility Statement

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956 withrespect to directors’ responsibility statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards havebeen followed;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March, 2013 and of the profitof the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and

(d) the Directors have prepared the annual accounts of the Company on a ‘goingconcern’ basis.

Corporate Governance

A separate section on Corporate Governance and a certificate from the practicingcompany secretary regarding compliance of conditions of corporate governance as stipulatedunder clause 49 of the listing agreement with the stock exchanges, forms part of theannual report.

Management Discussion and Analysis Report

Management discussion and analysis report as required under the listing agreements withthe stock exchanges is enclosed with this report.

Acknowledgement

Your Directors would like to express their gratitude for the valuable assistance andco-operation received from shareholders, banks, government authorities, customers andvendors. Your Directors also wish to place on record their appreciation for the committedservices of all the employees of the Company.

For and on behalf of the Board of Directors
Place : New Delhi Savitri Jindal
Date : 27th May, 2013 Chairperson

Statement pursuant to Clause 12 of the Securities and Exchange Board of India(Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999.

Sr. No. Description Remarks
A Options granted : During the year 2012-13, 1,50,000 stock options were granted to the employees of the Company. 4,97,106 stock options lapsed due to resignation, retirement and low vesting due to performance rating during the year. No vested options were exercised by employees during the year. As on 31st March, 2013, 22,71,644 stock options were in force.
B Pricing formula : The options will be granted at either of the following exercise prices as decided by the Compensation Committee:
1) At a price upto maximum of 75% discount to the average of the closing market price (at a stock exchange as determined by the Compensation Committee) in the 30 trading days immediately preceding the date of grant of options:
2) At a price equal to the market price, being latest available closing price, prior to the date of the meeting of the Board of Directors in which options are granted/ shares are issued, on the stock exchange on which the shares of the company are listed. If the shares are listed on more than one stock exchange, then the stock exchange where there is highest trading volume on the said date shall be considered; or
3) At a price equal to the average of the closing market price (at a stock exchange as determined by the Compensation Committee) in the 30 trading days immediately preceding the date of grant.
C Options vested : 5,34,771
D Options exercised : Nil
E Total number of Ordinary Shares arising as a result of exercise of Options : Nil
F Options lapsed : 4,97,106
G Variation of terms of Options : Nil
H Money realized by exercise of Options : Nil
I Total number of Options in force : 22,71,644
J Details of Options granted to :
i) Senior managerial personnel : Enclosed as Annexure – A
ii) Any other employees who received a grant in any one year of Options amounting to 5% or more of the Options granted during that year. : N.A.
iii) Identified employees who were granted Options during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. : N.A.
K Diluted Earnings per Share (EPS) pursuant to issue of Ordinary Shares on Exercise of Options calculated in accordance with Accounting Standard (AS) 20 ‘Earning Per Share.’ : Rs. (42.97)
L i) Method of calculation of employee compensation cost : The Company has calculated the employee compensation cost using the intrinsic value method of accounting to account for stock based compensation cost as per intrinsic value method for the financial year 2012-13
ii) Difference between the employee compensation cost so computed at (i) above and the employee compensation cost that shall have been recognized if it had used the fair value of the Options. : The employee compensation cost would have been increased by Rs. 174.91 Lacs
iii) The impact of this difference on Profits and on EPS of the Company. : The effect of adopting the fair value method on the net income and earnings per share is presented below:
(Rs. in Lacs)
Net Income, as reported (82,081.80)
Add: Intrinsic Value Compensation Cost 61.44
Less: Fair value Compensation Cost 236.35
(Black Scholes Model)
Adjusted Net Income (82,256.71)
Earning per share Basic (Rs.) Diluted (Rs.)
As reported (43.15) (42.97)
As adjusted (43.24) (43.06)
M Weighted average exercise price and weighted average fair value of Options granted for Options whose exercise price either equals or exceeds or is less than the market price of the stock. : Options granted whose exercise price is less than the market price of the stock (adjusted for stock split):
Weighted average Exercise Price Rs. 75.00
Weighted average fair value Rs. 29.87
N A description of the method and significant assumption used during the year to estimate the fair values of Options : The fair value of each options estimated using the Black Scholes Options Pricing Model after applying the following key assumptions

 

i) Risk free interest rate 8.08%
ii) Expected life 5.10 years
iii) Expected volatility 37.39%
iv) Expected dividend 0
v) The price of the underlying shares in market at the time of option grant Rs. 68.30

Annexure - A

Details of Options granted to Senior managerial personnel of the Company

Sl. No. Name No. of Options Granted
1 Mr. Ramesh R. Nair * 55,000
2 Mr. Jitender P. Verma 55,000
3 Mr. Jawaid Ashraf 40,000

* Options granted to Mr. Ramesh R. Nair have lapsed due to his resignation.

ANNEXURE- I

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OFBOARD OF DIRECTORS) RULES, 1988.

HISAR

a) Conservation of Energy

Energy Conservation measures taken:

- Optimizing air / fuel ratio in various preheating furnaces.

- Reducing idle time improved per ton fuel consumption in hot rolling pre-heat furnace.

- Replaced lower efficiency pumps with higher efficiency pumps and optimize line sizesto avoid throttle of valves.

- Manual Loading –unloading of compressor changed to auto VVVF drive.

- LED lights installed in some part of shed.

b) Additional investments and proposals, if any, being implemented for reduction inconsumption of energy.

- Capacitor bank being installed at 11kv switch yard.

c) Impact of above measures.

- Harmonics in system will be reduced.

- Improved system power factor. Therefore reduced power consumption.

ODISHA

a) Conservation of Energy

With energy audit becoming mandatory for all energy intensive industries, Odishadivision has diversified its activity in the most challenging field of energy managementto cut down energy bill and save crores of money as well as natural resources. Initiativeshave been taken to optimize the specific energy consumption and unnecessary wastage ofenergy thereby ensuring effective energy management practices within the plant.

Energy Conservation measures taken:

- Supply of steam form 14 MW AFBC boiler to CRM Boilers and PFS substituting steamearlier from LPG fired boilers installed at CRM.

- Compressor by-pass line to avoid the water mixing with cracked ammonia

- Auto-switch-off of three Edge blow-off valve after 10 min of line stop.

- Providing timer for shed lights.

- Operating WHRB & Economizer in line regularly.

- Plugging steam leakages

- Minimizing furnace idle time

- Increased use of Liquid Fe-Cr in furnace

- Reduction of retention and nos. of kick back of slabs

- Optimization of media system

- Optimization of De-scaling System, DCW-H, Scale Pit Pump House and Combustion AirBlowers according to Pareto Analysis.

- Alternate fuel used on furnaces and boilers to reduce fuel consumption.

- Manual controls replaced by automation interlocks to ensure consistency.

- Power is being generated using SAF gases by running Waste Heat Recovery boiler.

- Waste Coke Oven Gas was utilised in coke oven boiler replacing LDO as fuel.

- Cooling tower running operations were optimized to save energy.

b) Additional investments and proposals, if any, being implemented for reduction inconsumption of energy.

- Installation of Variable Frequency Drive (VFD) in Boiler Feed Pump (4000 KW) ofUnit-1 & Unit - 2 of captive power plant to reduce auxiliary consumption.

- Installation of energy efficient drives for Air Compressors to reduce auxiliaryConsumption & better Air management at Supply & Delivery End.

- Energy Conservation by Condensate Extraction Pump (325 KW) destaging.

c) Impact of above measures.

Further reduction in specific energy consumption i.e. per ton of steel manufacturingand improved power quality

FORM-A

FORM FOR DISCLOSURE OF PARTICULARS TO CONSERVATION OF ENERGY

(Excluding Ferro Alloys Division being not covered)

Sl. No. PARTICULARS TOTAL TOTAL
2012-13 2011-12
A. POWER AND FUEL CONSUMPTION
1. Electricity
(a) Purchased
Units (in ‘000 Kwh)* 7,76,966.00 7,61,212.00
Total Amount (Rs. in Lacs) 38,461.23 32,614.88
Rate/Unit (Rs.) 4.95 4.28
* Net of exports to HSEB
(b) Own Generation
(i) Through diesel Generator
Units (in ‘000 Kwh)# 5,799.67 8,604.55
Unit per Litre of Oil 3.66 3.75
Cost/Unit (Rs.) 45.96 41.66
# Excluding diesel generator auxiliary consumption
(ii) Through Thermal Coal
Units (in ‘000 Kwh) 12,66,554.00 7,59,607.90
Unit per litre of oil 1.19 1.00
Cost/Unit (Rs.) 5.11 4.66
2 FUEL OILS (FO, FOLV, LDO, HSD)
Total Quantity (Kilo Litre)* 41,154.28 42,800.82
Total Cost (Rs. in Lacs) 17,180.77 16,591.97
Average Rate/litre (Rs.) 41.75 38.77
* including fuel used for Power Generation
3 COAL/COKE
Quantity (MT) 10,69,382.74 7,94,754.57
Total Cost (Rs. in Lacs) 34,278.04 27,678.04
Average Rate/Kg. (Rs.) 3.21 3.48
4 GASES (PROPANE)
Quantity (MT) 46,834.10 35,230.34
Total Cost (Rs. in Lacs) 28,952.10 18,474.42
Average Rate/Kg. (Rs.) 61.82 52.44
5 GASES (AMMONIA)
Quantity (MT) 1,527.96 1,660.01
Total Cost (Rs. in Lacs) 605.77 477.37
Average Rate/Kg. (Rs.) 39.65 28.76
B. CONSUMPTION PER UNIT OF PRODUCTION
1 ELECTRICITY
(i) for Alloy Steel Melting (unit/ton) 558.60 568.89
(ii) for Gas Manufacturing (unit/cum) 0.70 0.73
(iii) for Cold Rolled Stainless Steel Manufacturing (unit/ton) 325.46 389.35
(iv) for Blade Steel Manufacturing (unit/ton) 1,668.26 1,236.26
(v) for Fe Alloy Manufacturing (unit/ton) 3,922.47 3,993.03
2 FUEL OILS
(i) for Alloy Steel Melting (litre/ton) 3.20 5.64
(ii) for Cold Rolled Stainless Steel Manufacturing (litre/ton) 9.98 13.29
(iii) for Blade Steel Manufacturing (litre/ton) 31.91 50.15
(iv) for Fe Alloy Manufacturing (litre/ton) 10.80 14.09
(v) for Power Generation (litre/kwh) Nil Nil
3 COAL
(i) for Alloy Steel Melting (MT/ton) 0.01 -
(ii) for Sponge Iron Manufacturing (MT/ton) 0.14 0.61
(iii) for Power Generation (Kg/kwh) 0.84 1.00
4 GASES (PROPANE)
(i) for Alloy Steel Melting (Kg/ton) 3.05 32.95
(ii) for Cold Rolled Stainless Steel Manufacturing (Unit/ton) 54.79 54.83
(iii) for Blade Steel Manufacturing (Unit/ton) 42.50 39.02
(iv) for Fe Alloy Manufacturing (litre/ton) Nil Nil
5 GASES (AMMONIA)
(i) for Blade Steel Manufacturing (Unit/ton) 24.89 22.10
(ii) for Cold Rolled Stainless Steel Manufacturing (Kg/ton) 1.92 3.99

FORM – "B"

FORM OF DISCLSOURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION

1) Specific areas in which, the Company carried out Research & Development

Development of new products:

- Super Duplex Stainless Steel UNS S32750 with very high corrosion resistance.

- 304 Nitric Acid Grade with superior Inter-granular Corrosion resistance for spentnuclear fuel processing plant.

- 305 austenitic stainless steel with high chromium and nickel for high strength withnon-magnetic behaviour

- 431 highly alloyed martensitic stainless steel which exhibits high hardness andtoughness.

- 416 sulfur containing martensitic stainless steel for high machinability

- Development of more cost effective stabilized ferritic 436L and 439 Grades.

- Development of cold rolled thin Gauge UNS S32205 duplex stainless steel.

- Development of highly corrosion resistant ferritic stainless steel for roofing incorrosive environment

- Development of Clad Stainless steel plates on Lab scale.

Process Development:

- Development of 430 Grade without Bell annealing.

- Improvement in deep drawability and flaring properties of 409L

Quality Improvement

- Improvement in cold rollability, drawability and surface quality of someChrome-Manganese stainless steels.

- Improvement in surface quality of stabilized austenitic stainless steels.

2) Benefits derived:

- More diversified product mix.

- Manufacture of high value added products.

- Cost reduction

- Improved product quality.

3) Future plan of action:

- Energy conservation by warm charging of slabs.

- Improvement in yield of certain grades by reduction in grinding of slabs.

- Development of new value added products.

- Input cost reduction in certain grades.

4) Expenditure on R & D

(Rs. in Lacs)

2012-13 2011-12
a) Capital Nil Nil
b) Revenue 113.46 86.47
Total 113.46 86.41
c) Total R&D expenditure as a percentage of turnover 0.010% 0.010%

5) Technology absorption, adaptation and innovation

HISAR DIVISION

I. Efforts made, in brief, towards technological absorption, adaptation and innovation

- Entire range of Duplex Grades of Stainless Steel including Lean Grades developed. Thegrades have varied applications in Oil & Gas, Desalination and Paper Industry. Forpenetrating these markets approvals from bodies such as EIL India, PDO Oman, Qatar Oil,ARMCO, Saudi Arabia are sought and are in advanced stages of getting our product and plantapproval for Duplex Grades. Commercial supplies to these major Customers is expected tocommence shortly.

- Successful installation and deployment of Automatic Ultrasonic Testing Machine atJajpur Plant having capability to automatically scan the entire surface of the Platescritically. The System can also test plates of lower thickness down upto 6mm. This isfirst system of its kind in India and has enabled us to cater to the prestigious order ofSS Plates for Atomic Power Installation of NRB, BARC.

- Further adaption of 409L Grade to enable Automobiles Engine Exhaust SystemManufacturers to manufacture Silencer Components where shapes have become more complexafter introduction of Euro5 norms for two wheelers and passenger cars.

- TUV Nord, Germany, has granted us CPD/89/106/EEC, European Certification CE therebyaccording approval for usage of our products for construction activities in EuropeanUnion.

- Customer Complaint handling system made more effective by placing technical personsin regions to enable a faster response to the problems faced by them.

II. Benefits derived as a result of the above efforts:

- Enabling penetration of niche markets of duplex grades in oil and gas sector.

- Successfully supplied around 3000MT of SS to NRB, BARC for atomic energyapplications. This has established our products in this fast growing sector.

- Throwing open the construction sector in EU for our products through ‘CE’Certification.

- Building customers as our partners.

ODISHA DIVISION

Technology absorption, adaptation and innovation

A. Cold Rolling Mill:

I. Efforts made, in brief, towards technological absorption, adaptation and innovation

CRM Complex is a state-of-the-art facility with India’s only DRAP lines (DirectRolling & Annealing Pickling Lines) for cold rolling and finishing the entire gamut ofstainless steel flat products. In Line Rolling, Annealing

& Pickling for Black Coils in HAPL Line imparts different finishes like No. 1&2E and In Line Rolling through three (3) mill stands in tandem, Annealing, Pickling,Skin-Passing & Tension Levelling in CAPL Line imparts finishes like 2D & 2B whichare unique technologies adopted for the Cold Rolling segment. Process has been establishedand technology has been successfully absorbed. HAPL is in production since March,11.Production in CAPL was stabilized during the year.

II. Benefits derived as a result of the above efforts:

The cutting edge equipments are ensuring unmatched quality and cost effectiveness witha minimum carbon footprint to the environment. In contrast to prevailing SS productionfacilities, CRM complex with inline rolling-annealing-pickling facility has resulted inimproved quality and yield with minimal operating and maintenance costs. The abovebenefits coupled with higher coil weight and line speeds ensure cost-competitiveness.

B. Steel Melting Shop

I. Efforts made, in brief, towards technological absorption, adaptation and innovation

Usage of DPP (purging mechanism in Furnace bottom) and continuous Nitrogen purgingpractice are in use for Carbon steel manufacturing to reduce hot areas in furnace whereuse of hot-metal and profuse oxygen is done. This practice has been adopted in our furnacemaking stainless steel.

Transfer of ferro chrome liquid metal in its semi-molten state by rail ladle car waseffectively adopted for direct charging in EAF furnace. Induction Furnace was alsocommissioned at the scrap yard for quality of testing of imported scrap

II. Benefits derived as a result of the above efforts:

Use of Nitrogen for the purging from bottom has resulted in non stratification ofmolten liquid steel. This has helped in reducing bottom built-up and has led to uniformtemperature bath, reduced refractory consumption and improved Chromium recovery.

Charging of Ferro-Chrome liquid metal into EAF resulted in significant energy savings.

C. Hot Strip Mill

I. Efforts made, in brief, towards technological absorption, adaptation and innovation

Hot Strip Mill is provided with all latest features like digital controlled ReheatingFurnace for optimizing heat input for a uniform slab temperature, automatic width controlin Edger attached to the Roughing Stand, Coil Box, 6-Stand tandem Finishing Mill Groupwith Roll bending, Roll shifting with ‘Smart crown’ for controlling variablestrip crown and Level-2 controls for Mill operation. Another feature of the Mill isprovision of 2-Robot Plazma stations for accurately dividing heavy plates to customerlengths ahead of the cooling bed in the furnace area. The entire mill has beencommissioned and stabilized in the shortest possible time and the technology for a stableproduction in all grades of Stainless steel has been successfully absorbed.

Plate mill shop was commissioned to process the plates of required finish and size.

II. Benefits derived as a result of the above efforts:

Black Coils with strips having excellent gauge tolerance and flatness as perinternational standards could be produced which have a wide market in Pipe & Tubesector. Also the high quality strips provide a quality input to our Cold Rolling millgroup increasing the yield and cost competitiveness.

D. Thermal Captive Power Plant

I. Efforts made, in brief, towards technological absorption, adaptation and innovation

Both the power plants were operated successfully with 100% of low ash, high calorificvalue and low cost imported coal. It was used in blending with Indian coal to achieve PLFof more than 100%.

II. Benefits derived as a result of the above efforts:

100% of imported coal usage resulted in achieving highest ever PLF above 100% up to107% during 4th Quarter.

6) Foreign Exchange Earnings & Outgo

a) Activities relating to exports, initiatives taken to increase exports, developmentof new export markets for products and services and export plans

Financial year 2012-13 saw JSL Odisha’s Products gaining acceptance worldwide. Theexpanded product range from the new mill has opened new markets and product segments forthe Company. Company managed to gain market share in matured markets like Europe and USA.The Company also initiated approval process with Global majors in Petroleum sector and hasachieved encouraging results, the approvals are likely to come through in the first halfof 2013-14 and will enable JSL to enter the high end Petroleum projects market.

Exports grew by 73% and reached 2,41,272 MT in FY12-13 as compared to 1,39,803 MT inFY11-12. The biggest jump came from 300 series and 400 series which grew by 246% and 194%respectively from FY 11-12 to FY 12-13. In the new year, focus would be to build OEMbusiness with special focus on Auto and White Goods sector.

(Rs. in Crore)

b) Foreign Exchange Earnings 3,047.72
Foreign Exchange Outgo 4,917.92
   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
Tata Steel 39,664.22 6.44 0.72 4.90 9.4 11.4 0.50
S A I L 28,748.49 14.29 0.70 8.07 5.4 6.2 0.47
JSW Steel 24,524.91 9.89 1.25 5.07 10.4 12.6 0.88
Bhushan Steel 10,106.43 27.94 1.13 11.63 10.8 7.1 2.97
Essar Steel 5,907.69 0.00 1.09 0.00 0.0 0.0 3.49
Welspun Corp 2,049.62 0.00 0.47 6.31 1.3 5.1 0.75
Mah. Seamless 1,779.32 20.95 0.81 6.45 5.8 7.4 0.01
Jindal Saw 1,671.01 9.02 0.45 9.59 7.0 8.1 0.80
Uttam Galva 1,000.09 29.41 0.80 5.27 4.6 11.4 1.94
Jindal Stain. 843.19 0.00 0.55 23.81 -35.9 -0.4 5.69
Man Inds. 387.99 10.84 0.55 4.49 20.3 20.4 0.70
PSL 97.27 0.00 -0.52 0.00 0.0 0.0 9.01

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Key Information

Key Executives:

Savitri Jindal , Chairman Emeritus  

Ratan Jindal , Chairman & Managing Director  

Naveen Jindal , Director  

Suman Jyoti Khaitan , Director  


Company Head Office / Quarters:
O P Jindal Marg,
,
Hisar,
Haryana-125005
Phone : 91-1662-222471-83
Fax : 91-1662-220476/220499
E-mail : info.hisar@jindalsteel.com
Web : http://www.jindalstainless.com
Registrars:
Link Intime India Pvt Ltd
Narang Tower
44 Community Centre
Naraina Ind Area
New Delhi-110028

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