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BSE: 532508 | NSE: JSL | ISIN: INE220G01021
Market Cap: [Rs.Cr.] 652.59 | Face Value: [Rs.] 2
Industry: Steel - Large
Your Directors have pleasure in presenting the 34th Annual Report on the business andoperations of your Company together with the Audited Statement of Accounts for the yearended 31st March, 2014.
Your Company's performance for the financial year ended 31st March, 2014 is statedbelow:
(Rs In Crores)
|Year Ended||Year Ended||Year Ended||Year Ended|
|Revenue from operations (Gross)||12,972.73||11,121.88||13,875.94||12,128.47|
|Less: Excise Duty on sales||1,019.69||835.67||1,000.74||823.73|
|Revenue from Operations (Net)||11,953.04||10,286.21||12,875.20||11,304.74|
|Profit before other Income, Finance Cost,||885.66||614.97||1016.19||708.56|
|Depreciation, Exceptional Items,|
|Tax & Amortisation (EBIDTA)|
|Add: Other Income||40.06||44.13||39.10||35.04|
|Less Finance Costs||1,234.70||990.29||1,295.13||1,043.44|
|Less: Depreciation / Amortisation||687.66||701.31||728.39||740.14|
|Profit /(Loss)Before Tax & Exceptional Items||(996.64)||(1,032.50)||(968.23)||(1,039.99)|
|Add: Exceptional Items - Gain/(Loss)||(416.90)||(166.96)||(418.74)||(183.99)|
|Profit/(Loss) Before Tax||(1,413.54)||(1,199.46)||(1,386.97)||(1,223.98)|
|Less: Tax Expenses||(23.45)||(378.64)||(20.67)||(381.94)|
|Net Profit /(loss) after Tax||(1390.09)||(820.82)||(1,366.30)||(842.04)|
|Share in Profit / (Loss) of Associate||-||-||(0.38)||(0.41)|
|Net Profit / (Loss) (After Adjustment for Associate &||(1,390.09)||(820.82)||(1368.24)||(840.71)|
|Amount brought forward||-||618.69||-||530.87|
|Debenture Redemption Reserve written back||3.14||3.77||3.14||3.77|
|Amount available for Appropriation||(1,386.95)||(198.36)||(1,365.10)||(306.07)|
|Transfer to General Reserve||-||-||0.42||0.08|
|Less: Being deficit, Set off from General Reserve||430.21||(198.36)||320.92||(306.15)|
|Net surplus/(deficit) in statement of Profit & Loss||(956.74)||-||(1,044.60)||-|
The financial results of the Company during the year 2013-14 have been adverselyimpacted inter alia on account of Continued dumping of stainless steel flat products inIndia and in particular the continued influx of cheap stainless steel from China.
Continued build up of capacity in China despite the prevailing situation ofexcess production vis-a-vis local consumption and continued slowdown in local demand.
Adverse Duty Structure for the Domestic Stainless Steel Industry, both in termsof import duty on raw materials as well as finished goods vis-a-vis other countries and inparticular with reference to China.
Increase in basic custom duty on import of Steel Scrap.
Increase in raw material cost due to volatile currency.
(A) Hisar Division
Year 2013-14, shows a little recovery and stabilization, however, was a tough year forstainless steel industry on account of surplus capacities in other countries and dumpingby China all around the world. JSL, Hisar Unit is able to achieve its highest everdispatches of 673,254 MT in the year and crossed land mark achievement of 1.0 Million TonStainless steel dispatches from the organization. All the production facilities arealigned to serve value added products. The total steel melting shop production was approx.7.20 Lac ton for the year.
The focus of the Company during the year for Hisar plant was on value added productsand the Company achieved highest ever dispatches of 3370 MT coins and 9,004 MT finishedRazor Blade Stainless strips of 0.10 mm or less thickness razor blade steel.
During the year Bright annealing facilities in CR complex has been modified &re-commissioned to cater white good sector market in feritic grade providing unit toleverage its strength and convert to higher value added products in the coming years.Others finishing facilities like slitting and eye wrapping line in SPD has been installedto cater rising market.
(B) Odisha Division
Despite slowdown in global economy the performance of Jajpur, Odisha improvedsubstantially as compared to last year. During the year under review Steel Melting Shopproduced 4,13,863 MT as compared to 3,13,258 MT, Hot Strip Mill produced 4,00,947 MTagainst 3,00,435 MT, Plate Finishing Shop produced 35,634 MT against 25,169 MT andfacilities in CRM produced 3,32,535 MT against 2,54,597 MT produced last year.
The stainless steel facilities at Odisha have substantially enhanced the productportfolio of the company including wider width products of up to 1650 mm. Our productswere are approved by many reputed organisations like IGCAR and BHEL, Trichy for 300 seriesand YAMAHA Motors India for 409L grade.
Jajpur unit received accreditations like Construction Product Regulations (CPR) andPressure Equipment Directives (PED) Certifications thereby enabling our products to sellin the European market for Construction and Pressure applications.
The production at Ferro Alloys during the year was 1,35,678 MT against 83,290 MTproduced last year which is 63% more as compared to last year. In spite of challenges inprocuring chromite ore from domestic sources at cost effective prices, we could achievethe production by consuming concentrated ore and high usage of imported hard lumpy ore.
Both the power plants (2X125MW) generated power 1,190.925 million units (net) ascompared to 1,089.53 million units (net) in the last year. Out of the total generation88.828 million units were exported to Hisar plant and 22.92 million units sold throughexchange. The Cokeoven facility was operated under lease till Oct, 2013. Total cokeproduced were 2,17,193 MT.
Jindal Chromite Mine produced 28055 MT of chrome concentrate from its beneficiationplant. The mine has reached the ultimate pit bottom so far as the friable ore is concernedand there has been no friable ore production during the year. However, lumpy chrome oreproduction from the mines was 64086 MT. The mine dispatched 39471 MT of chrome concentrateand 50237 MT of chrome ore to our Vizag Plant during the year.
(C) 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 Jindal Chromite Mine andTransfers the output to the Hisar Plant. The division has achieved 77% of the Installedcapacity by producing 30,648 Tons of High Carbon Ferro Chrome during the year 2013-14 ascompared to 20,169 Tons during the preceding year. The Production is less during the year2013-14 due to Power restrictions/holiday being imposed by the APEPDCL time to time during2013-14.
Further Vizag Unit dispatched 28,137 tons (including of 19,900 for Job Work A/c) toJSL-Hisar during the year 2013-14 as compared to 21,069 tons Job Work A/c during thepreceding year. The Job work A/c production was stopped w.e.f. 21.11.2013
Pursuant to the Reworked Corporate Debt Restructuring Scheme approved by CDR EG andRework Letter of Approval ("Rework LOA") issued on September 18, 2012, theapproved Reworked CDR package has been implemented by all CDR lenders and the Company hadexecuted all the necessary documents.
During the year under report, the Company had arranged execution of corporate guaranteeof 13 promoter group companies (out of total 30 promoter group companies) and is indiscussions with the remaining promoter group companies for resolution of pending issuesrelated to collateral security.
Restructuring / Reorganisation of the Company
The Board of Directors has constituted a 'Reorganization Committee' to explore andevaluate various options of reorganizing the Company's assets in an optimal way. The saidCommittee is empowered to work upon, determine and decide upon the relevant suitablestructure.
During the year, the Company has received conversion notice for entire remaining 300FCCBs amounting to USD 1.50 million and subsequently the company has allotted 547,458fully paid equity shares.
During the quarter ended 31st March, 2014, the Company has raised Rs 100,00,00,566, byway of issue and allotment of 1,07,50,000 equity shares of Rs 2/- each and 1,58,10,440Cumulative Compulsory Convertible Preference Shares (CCCPS) of face value of Rs 2/- eachat a price of Rs 37.65 per equity share /CCCPS (including a premium of Rs 35.65 per equityshare/ CCCPS) in accordance with SEBI (ICDR) Regulations, 2009 to JSL Overseas Limited, amember of promoter group, on preferential basis.
Consequently, the paid-up share capital of the Company has increased from Rs40,81,55,094 to Rs 46,23,70,890 divided into 215,375,005 equity shares of Rs 2/- each and1,58,10,440 Cumulative Compulsory Convertible Preference Shares (CCCPS) of Rs 2/- each.
The Board, considering the Company's performance and financial position for the yearunder review, has not recommended any dividend on equity shares of the Company for theyear ended 31st March, 2014.
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 27,19,400 to Investor Education andProtection Fund of Government of India during the year 2013-14.
Employees Stock Option Scheme
During the year under review, 4,26,024 stock options were vested in eligible employees.The disclosure, under Clause 12 of Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is set out in Annexureto this Report.
During the year, the Company's IT & SAP department has stabilized the SAP ECC 6.0environment and has established a delivery team and mechanism for the Business Support.This Support Mechanism on SAP has enabled and empowered the Business users in continuingto conduct real-time transactions and analysis, across the locations on a single platform.It is the endeavour of the SAP team to further enhance the capabilities of the JSL SAPplatform for a delightful Business User experience. The IT team of the company has alsobeen successful in providing secure and non-disruptive IT (Hardware, Network, Software)services to your company throughout the year. Many initiatives like Exchange Migrations,Multi-platform mobile solutions, Barcoding and Management Analytics, etc have been planned& delivered.
The IT & SAP department plan to rollout further Business Enhanced support &solutions to your company in the coming year as well.
As on 31st March, 2014, 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 LogisticsLimited; 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 subsidiary companies.
The Board of Directors has appointed Mr. Rajinder Parkash Jindal as an additionaldirector and designated him as Executive Director with effect from 6th January, 2014. TheBoard of Directors has also appointed Mr. Girish Sharma as an additional director witheffect from 29th May, 2014. The Board has also approved appointment and terms ofremuneration of Mr. Rajinder Parkash Jindal as Whole Time Director of the Company, subjectto the approval of the Shareholders. The said appointment and remuneration of Mr. RajinderParkash Jindal and appointment of Mr. Girish Sharma will be placed before the shareholderfor their approval.
Smt. Savitri Jindal, Chairperson has resigned from the Board of Directors with effectfrom 28th October, 2013. The Board has conferred upon her the title of "ChairpersonEmeritus" with effect from 28th October, 2013 and she will continue to provide herguidance on future endeavors of the Company.
Mr. Uday Kumar Chaturvedi, Mr. Rajeev Bakshi and Mr. James Alistair Kirkland Cochraneresigned from the Board of Directors of the Company w.e.f. 31st December, 2013, 20thFebruary, 2014 and 24th February, 2014 respectively. The Board places on record itssincere appreciation for the valuable contributions made by them during their tenure.
Mr. Naveen Jindal and Mr. Jitender P. Verma, who retires by rotation at the ensuingAnnual General Meeting under the erstwhile provisions of the Companies Act, 1956 and beingeligible offer themselves for reappointment.
Brief resume of the abovementioned Directors, nature of their expertise in specificfunctional areas, details of Directorship in other companies and the membership/chairmanship of committees of the board, as stipulated under Clause 49 of the listingagreement with the stock exchanges, are given in the Notice forming part of the annualreport.
The Company has accepted/renewed deposits amounting to Rs 13,69,70,000 during the yearunder review. There were no overdue deposits on 31st March, 2014, except Rs 1,04,76,000which remain unclaimed. The Company has stopped accepting / renewing any fresh depositswith effect from 1st April, 2014.
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 with theirwillingness to continue as auditors of the Company, if appointed and have confirmed thatthe said appointment, if made,would be within the limits prescribed under the CompaniesAct, 2013 and that they are not disqualified for re-appointment.
In terms of Rule 6 of the Companies (Audit and Auditors) Rules, 2014, M/s. Lodha &Co. and M/s. S.S. Kothari Mehta & Co. having held office as Joint Statutory Auditorsand M/s. N.C. Aggarwal & Co. having held office of Branch Auditors of Vizag divisionfor a period of more than 10 years prior to the commencement of the Companies Act, 2013,are eligible to be appointed as Auditors for a period of only three more years, that isuntil the conclusion of 37th Annual General Meeting of the Company.
The notes to the accounts referred to in the auditors' report are self-explanatory and,therefore, do not call for any further comments.
In accordance with the Order dated 30th June, 2011 issued by the Ministry ofCorporate Affairs pursuant to Section 233B of the Companies Act, 1956, your Company isrequired to get its cost accounting records audited by a Cost Auditor and has accordinglyappointed M/s. Ramanath Iyer & Co., Cost Accountants, for this purpose for FY 2013-14.The Cost Audit for FY 2012-13 was completed within specified time and report was filedwith the Central Government.
The Board of Directors at its meeting held on 29th May, 2014 has on therecommendation of the Audit Committee, re-appointed M/s. Ramanath Iyer & Co., CostAccountants for conducting the audit of cost audit records in respect of Steel business ofthe Company for the financial year 2014-15. The said appointment is subject toratification of the members in terms of Section 148 of the Companies Act, 2013 read withRule 14 of the Companies (Audit and Auditors) Rules, 2014.
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, 2014 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 'going concern'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.
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|
|Chairman and Managing Director|
|Place: New Delhi|
|Date : 29th May, 2014|
Particulars required under the companies (Disclosure of particulars in the report ofboard of directors) rules, 1988.
a) Conservation of energy
Energy Conservation measures taken:-
a. Audit of thermal and auxiliary equipments & harmonic study.
b. Installed higher efficiency pumps with VVVF Drives in Steel Melting shop.
c. Installed reactors & capacitors at 11kv to improve power factor.
d. Improved combustion efficiency in Annealing furnaces and bell annealing furnaces.
e. Energy consumption in air / N cum by 8% through optimization of air lines &compressors.
b) Additional investment and proposals, if any being implemented for reduction inconsumption of energy.
a. Laying of N2 line from O2 plant to Cracked NH3 manufacturing plant saved compressorenergy.
b. New high efficiency pumps and VVVF Drives.
c) Impact of above measures
a. Improved power factor.
b. Reduced energy consumption per ton of steel.
a) Conservation of energy
Energy Conservation measures taken:-
1. Hot Strip Mill Energy Conservation
(a) Modification in Descaling Water System with replacement of nozzles supporting lesswater flow and more impact leading to reduction in Motor Power Consumption duringOperation.
(b) Work Roll Cooling modified with reduced Motor operation from 03 to 02 Nos.;achieved through impeller trimming and improving pump efficiency.
(c) Reduced Motor Power Consumption in Laminar Cooling Water System by lowering themotor power rating as satisfactory to meet requirement.
2. Cold Rolling Mill Energy Conservation
(a) Improvement in Operation Practices through 41 Energy Saving Projects
(b) Installation of Reactive Power Compensation devices and improvement in Power Factorand Reduction in Power Demand.
3. Captive Power Plant Energy Conservation
(a) Impeller Trimming for Cooling Water Pump (02 No) as satisfactory to meetrequirement.
(b) Modification in Compressed Air line, Impeller trimming leading to operation of 02Compressor instead of 03.
4. Ferro Alloy Plant Energy Conservation
(a) Reduction in Power Rating of Root Blowers, Jacket Cooling Pump and Compressors assufficient to meet the requirement.
(b) Efficient Utilisation of Furnace Oil & Waste Oil in Briquetting Plant;Optimisation of Use of Dryer, limiting 4.8-5 kg of Oil Consumption per MT of GrossBriquette Production
(c) Increase in Capacity Utilisation of Ferro Alloy Furnaces resulting into reductionin Auxiliary Consumption. FORM - "A"
FORM FOR DISCLOSURE OF PARTICULARS TO CONSERVATION OF ENERGY (Excluding Ferro AlloysDivision being not covered)
|A. POWER AND FUEL CONSUMPTION|
|Units (in '000 Kwh)*||7,93,979.16||7,76,966.00|
|Total Amount (Rs In Lacs)||35,827.12||38,461.23|
|Rate/Unit (Rs )||4.51||4.95|
|* Net of exports to HSEB|
|(b) Own Generation|
|(i) Through diesel generator|
|Units (in '000 Kwh)# Unit per Litre of Oil||573.88 4.66||5,799.67 3.66|
|Cost/Unit (Rs )||248.05||45.96|
|# Excluding diesel generator auxiliary consumption|
|(ii) Through Thermal Coal|
|Units (in '000 Kwh)||12,26,093.02||12,66,554.00|
|Unit per Litre of Oil||1.05||1.19|
|Cost/Unit (Rs )||3.51||5.11|
|2 FUEL OILS (FO,FOLV, LDO,HSD)|
|Total Quantity (Kilo Litre)*||25,908.53||41,154.28|
|Total Cost (Rs In Lacs)||12,338.65||17,180.77|
|Average Rate/litre (Rs )||47.62||41.75|
|* including fuel used for Power generation|
|Total Cost (Rs In Lacs)||34,624.66||34,278.04|
|Average Rate/Kg. (Rs )||2.96||3.21|
|4 GASES (PROPANE)|
|Total Cost (Rs In Lacs)||40,750.08||28,952.10|
|Average Rate/Kg. (Rs )||64.15||61.82|
|5 GASES (AMMONIA)|
|Total Cost (Rs In Lacs)||583.89||605.77|
|Average Rate/Kg. (Rs )||39.27||39.65|
|B. CONSUMPTION PER UNIT OF PRODUCTION 1 ELECTRICITY|
|- for Alloy Steel Melting (unit/ton)||532.88||558.60|
|- for Gas Manufacturing (unit/cum)||0.78||0.70|
|- for Cold Rolled Stainless Steel Manufacturing (unit/ton)||321.98||325.46|
|- for Blade Steel Manufacturing (unit/ton)||1,651.93||1,668.26|
|- for Fe Alloy Manufacturing (unit/ton)||3,814.91||3,922.47|
|2 FUEL OILS|
|- for Alloy Steel Melting (litre/ton)||2.86||3.20|
|- for Cold Rolled Stainless Steel Manufacturing (litre/ton)||9.11||9.98|
|- for Blade Steel Manufacturing (litre/ton)||22.66||31.91|
|- for Fe Alloy Manufacturing (litre/ton)||13.08||10.80|
|- for Power Generation (litre/kwh)||Nil||Nil|
|- for Alloy Steel Melting (MT/ton)||0.00||0.01|
|- for Sponge Iron Manufacturing (MT/ton)||NIL||0.14|
|- for Power Generation (Kg/kwh)||
India Infoline Research
Savitri Jindal , Chairman Emeritus
Ratan Jindal , Chairman & Managing Director
Naveen Jindal , Director
Suman Jyoti Khaitan , Director
Company Head Office / Quarters:
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